<PAGE>   1




                                                                    EXHIBIT 99.1

  ADDITIONAL INFORMATION ABOUT MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES

     This Exhibit contains additional information about Morton Metalcraft
Holding Co. and its subsidiaries (collectively, "Morton") for periods ending
before January 20, 1998, the date upon which Morton Metalcraft Holding Co. was
merged with and into the Registrant.  The information includes Selected
Historical Financial Data about Morton for the six months ended December 31,
1997, and the three fiscal years ended June 30, 1997, 1996, and 1995, a
Management's Discussion and Analysis of Financial Condition and Results of
Operations for such six month and fiscal year periods, audited financial
statements for such six month and fiscal year periods, and other information.

     BACKGROUND.

     The Registrant is a Georgia corporation that was named MLX Corp. ("MLX")
prior to January 20, 1998.  On that date, Morton Metalcraft Holding Co., a
Delaware corporation ("Morton") was merged with and into MLX (the "Merger"),
which changed its name to Morton Industrial Group, Inc. (the "Company").

     The predecessor of Morton was founded in 1963 in Morton, Illinois, to
produce fabricated sheet metal products for customers located in central
Illinois.  During its first two decades Morton developed into a custom sheet
metal fabricator specializing in fast turnarounds.  In 1989, Mr. William D.
Morton, now the Chairman, Chief Executive Officer, and President of the
Registrant, and several venture capital investors acquired control of Morton.
In 1995, Morton purchased the venture capital interests as a part of a
recapitalization of the company.

     GENERAL.

     The Company, headquartered in Morton, Illinois, and operating through its
subsidiaries is a contract manufacturer and supplier of high-quality fabricated
sheet metal components and subassemblies for construction, agricultural, and
industrial equipment manufacturers located primarily in the Midwestern and
Southeastern United States.  The Company provides large original equipment
manufacturers with a wide range of services including design, prototype
fabrication, precision tool making, and fabrication of component parts.
Additional services provided by the Company include welding, painting,
subassembly, packaging, warehousing, and just-in-time delivery to customers'
production lines.  The Company combines this wide range of services with
high-quality, state-of-the-art fabrication capabilities, and has developed
close relationships with customers such as Caterpillar Inc. ("Caterpillar") and
Deere & Co. ("Deere").  (In its two most recently ended fiscal years and the
six month period ended December 31, 1997, the Company's sales to Caterpillar
and Deere have constituted between 85% and 89% of its total sales.)  The
Company works closely with its major customers on product development,
production scheduling, and just-in-time delivery.

     FABRICATION OPERATIONS.

     The Company's primary fabrication operations include cutting, punching,
bending, welding, painting, final assembly, packaging, warehousing and
just-in-time delivery of sheet metal components and subassemblies.  The Company

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also offers fully integrated ancillary services, including design engineering,
tool making and prototype fabrication.

     Within its fabrication operations, the Company's products fall into the
following seven categories of fabricated steel products and other miscellaneous
products:

      -    Sheet Metal Component Packages - includes panels, doors,
           hoods, brackets, grills, supports and covers produced primarily for
           construction and agricultural equipment.

      -    Sheet Metal Enclosures and Boxes - includes generator set
           enclosures, compressor enclosures and electrical and battery boxes
           developed in response to customers' need for environmentally sound
           enclosures that are aesthetically attractive and cost competitive.

      -    Special Weldments - includes lift arms, seat modules, guards,
           platforms and step assemblies.  This business developed primarily
           from concurrent design projects with two major customers.

      -    Fabricated Steel Tanks - includes fuel, hydraulic and water
           reservoirs.  The Company developed these products in response to
           customers' needs for flexible designs that facilitate quick response
           to changes in tank requirements.

      -    Prototype/Tooling - includes prototype, tooling and
           preproduction steps in the manufacturing process.  The Company's
           dedicated prototype and tooling departments work with customers
           throughout development efforts, allowing for a smooth introduction
           of new products and subassemblies to the focus factories.

      -    Store Fixtures - includes backframes, lights, and brackets
           used in store displays.

      -    Feeder Housings - includes feeder housings and other
           harvester components manufactured for agricultural equipment in the
           Company's Peoria, Illinois, facility.

     While these products and services currently represent the core of the
Company's business, the Company's management is evaluating opportunities for a
further broadening of the Company's offerings to customers.

     The Company's facilities are located near its key customers in the Midwest
and the Southeast.  The Birchwood Street complex in Morton, Illinois, houses
receiving, tool making, pre-production, first operations, general fabrication
and enclosure operations.  Substantially all non-production personnel,
including senior management, purchasing, engineering, sales, production control
and accounting are also located at this facility.  The Detroit Avenue plant,
located one mile from Birchwood Street, contains the production operations for
commodity products such as tanks, seat modules, and heavy fabrication
operations.  The Company produces components for agricultural equipment at its
Peoria, Illinois, facility, which opened in 1995.  The Company's Apex, North
Carolina, plant serves the operations of nearby customers and entered
production in July 1997.  At these locations, the Company employs computer
assisted design and manufacturing equipment, including laser cutting machines
and robotic welders.

     Morton combined its sales and engineering organizations in 1995.  This
sales and engineering group has primary responsibility for managing

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relationships with customers and working with them to design new products. An
account team, led by one of the Company's account managers and including
representatives from all key functional areas of the Company, works closely
with each key customer to design products, produce prototypes, schedule
production, and monitor quality and customer satisfaction.

     COMPETITION.

     The component fabrication industry is fragmented and highly competitive,
with no single supplier having significant market share.  Competition involves
product quality, price, the ability to provide just-in-time deliveries,
provision of support services, and product development capabilities.

     FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS.

     The Company's business is in the fabrication segment.

     AVAILABILITY OF RAW MATERIALS.

     The primary raw material used by the Company after the Merger is steel,
and the Company has five major steel suppliers.  The Company also purchases
fabrications and machined parts from a large number of suppliers.  All raw
materials are in adequate supply.

     PATENTS, TRADEMARKS, LICENSES, FRANCHISES, AND CONCESSIONS.

     The Company holds no material patents, trademarks, franchises, or
concessions.  The Company has been granted a number of software licenses that
it uses in its design, production, and other business operations.  All of these
licenses have customary terms and conditions.

     WORKING CAPITAL ITEMS.

     The Company's working capital requirements reflect several business
factors.  Working capital requirements are typically greater during the second
half of the calendar year because both Deere and Caterpillar  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, the Company must rely more heavily on
its credit facilities for liquidity.  The Company's rapid growth over the last
two years has also increased the Company's need for working capital to meet the
capital expenditures required to increase production capacity.


     ENVIRONMENTAL REGULATION.

     The Company's operations are subject to numerous federal, state and local
laws and regulations concerning the containment and disposal of hazardous
materials.  The Company maintains a policy of complying with all environmental
rules and regulations and  believes that it is in substantial compliance with
all applicable environmental laws and regulations.

     EMPLOYEES

     As of February 1, 1998, the Company employed 941 employees, of which 799
were hourly, 139 were salaried, and 3 were employed part-time and paid on an
hourly basis.  The Company believes that its relationship with its employees is
good.


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     PROPERTIES

     The following table summarizes the Company's manufacturing, warehouse, and
office facilities:


<TABLE>
<CAPTION>
                              Approx.           Monthly    Expiration
          LOCATION            Sq. Ft.  Acres  Lease Terms     Date
----------------------------  -------  -----  -----------  ----------
<S>                           <C>      <C>    <C>          <C>
1021 West Birchwood Street
Morton, IL .................  270,000   40          Owned        N/A

400 Detroit Avenue
Morton, IL .................   75,000  N/A        $21,164   08/31/04

Peoria, IL .................  137,000  N/A        $20,035   05/31/03

Apex, NC ...................  100,000  N/A        $37,580   11/06/06
</TABLE>

     LEGAL PROCEEDINGS

     The Company is not currently a party to any material legal proceedings
that the Company's management believes would have a material adverse effect on
the Company's financial condition or results of operations.

     SALES BACKLOG

     The Company's backlog of sales orders at December 31, 1997, totaled $74.5
million.  The Company expects that virtually all of those orders would be
shipped in the twelve months ending December 31, 1998.  This backlog level
compares to a sales order backlog of $56.5 million at December 31, 1996,
virtually all of which was shipped in calendar 1997.

     EXECUTIVE OFFICERS OF THE COMPANY

     Information about the Company's two executive officers following the
Merger is set out below.


<TABLE>
<CAPTION>
              Name                 Age                  Position
---------------------------------  ---  ----------------------------------------
<S>                                <C>  <C>
William D. Morton ...............  50   Chairman of the Board, President, and
                                        Chief Executive Officer
Daryl R. Lindemann ..............  43   Vice President (Finance), Treasurer and
                                        Secretary
</TABLE>

     WILLIAM D. MORTON joined Morton in 1988 as an Executive Vice President.
Together with other investors, he purchased Morton from Morton's founding
owners in 1989 and has served as President and Chief Executive Officer since
that date.  Mr. Morton received a Bachelors Degree in Mechanical Engineering
from the University of Illinois in 1970.  He is a member of the Society of
Manufacturing Engineers.

     DARYL R. LINDEMANN has been Vice President of Finance, Secretary and
Treasurer since he joined Morton in 1990.  Mr. Lindemann is a Certified Public
Accountant and received a B.S. in Accounting in 1976 from the University of
Illinois.  He is a member of the American Institute of Certified Public
Accountants and the Illinois CPA Society.


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                       SELECTED HISTORICAL FINANCIAL DATA
               OF MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES

     Set forth below are certain selected historical financial data of Morton
Metalcraft Holding Co. and subsidiaries ("Morton").  This information should be
read in conjunction with the financial statements of Morton and the related
notes thereto appearing elsewhere herein and "Management's Discussion and
Analysis of Financial Condition and Results of Operations of Morton."  The
selected consolidated financial data for, and as of the end of, each of the
five fiscal years ended June 30 and the six months ended December 31, 1997,are
derived from the audited financial statements of Morton.  Information for the
six months ended December 31, 1996, is derived from the unaudited financial
statements of Morton.

<TABLE>
<CAPTION>
                                                       Six Months
                                                         Ended
                                                      December 31,              For the Fiscal Year Ended June 30,
                                               -----------------------------------------------------------------------
                                                   1997          1996          1997           1996           1995       
                                               ------------  ------------  -------------  -------------  -------------  
<S>                                           <C>            <C>           <C>            <C>            <C>            
                                                         (In thousands except for share and per share data)                       
Operating data:                                                                                                         
  Net Sales ................................    $   46,598     $  32,958     $   80,762      $   59,006     $   48,568   
  Cost of sales ............................       (41,932)      (29,206)       (70,541)        (50,049)       (40,730)  
  General and administrative expenses ......       (11,552)       (2,578)        (7,003)         (4,900)        (3,951)  
  Interest income ..........................             9             -             15               7              9   
  Interest expense .........................        (1,737)       (1,628)        (3,266)         (3,297)        (2,434)  
  Other income (expense) ...................            46            31             45             194           (378)  
  (Provision) benefit for income taxes .....         3,370           282             (5)           (424)          (522)  
                                                ----------     ---------     ----------      ----------     ----------   
  Net earnings (loss) ......................    $   (5,198)    $    (141)    $        7      $      537     $      562   
                                                ==========     =========     ==========      ==========     ==========   
Supplemental disclosure:                                                                                                
  Cash flows from operations ...............    $    1,277     $   1,096     $    5,144      $    3,783     $    2,510   
  Cash flows used in investing activities ..    $   (6,229)    $  (1,599)    $   (5,592)     $   (2,853)    $   (4,282)  
  Cash flows from financing activities          $    4,886     $     257     $      323      $     (726)    $    1,865   

Per share data:                                                                                                         
  Weighted average outstanding common                                                                                   
  shares  - Basic                                1,944,444     1,944,444      1,944,444       1,944,444      3,535,006      
          - Diluted                              3,325,974     3,323,925      3,327,241       3,309,827      3,551,006      
  Earnings (loss) per share - Basic            ($     2.67)   ($     .07)             -      $      .28     $      .16   
                            - Diluted          ($     1.56)   ($     .04)             -             .16     $      .16   
Financial position (at end of period):                                                                                  
  Working capital ..........................   ($   11,315)    $   3,869     $    2,147      $    4,078     $    4,548   
 Total assets .............................     $   39,388     $  29,142         34,362          29,576         27,550   
  Long-term liabilities ....................    $   23,364     $  27,564         27,861          27,673         27,456   
  Stockholders' equity (deficit) ...........   ($   13,552)   ($   9,388)    $   (9,099)     $   (9,106)    $   (9,644)  
                                                
<CAPTION>
                                                
                                               For the Fiscal Year Ended June 30,
                                               ----------------------------------
                                                      1994          1993
                                                  ------------  -------------
<S>                                               <C>           <C>
                                       (In thousands except for share and per share data)
Operating data:                                 
  Net Sales ................................     $     39,602   $     32,774
  Cost of sales ............................          (32,673)       (27,544)
  General and administrative expenses ......           (3,806)        (2,949)
  Interest income ..........................               15             15
  Interest expense .........................           (1,172)        (1,434)
  Other income (expense) ...................               50             26
  (Provision) benefit for income taxes .....             (878)          (368)
                                                  -----------   ------------
  Net earnings (loss) ......................      $     1,138   $        520
                                                  ===========   ============
Supplemental disclosure:                        
  Cash flows from operations ...............      $     1,771   $      2,647
  Cash flows used in investing activities ..      $    (1,323)  $       (998)
  Cash flows from financing activities            $      (530)  $     (1,830)
  Per share data:                               
  Weighted average outstanding common           
  shares  - Basic                                   4,722,221      4,722,221
          - Diluted                                 4,722,221      4,722,221
  Earnings (loss) per share - Basic               $       .24   $        .11
                            - Diluted             $       .24            .11
Financial position (at end of period):          
  Working capital ..........................      $       528   $        177
  Total assets .............................           23,576         21,209
  Long-term liabilities ....................            9,168         10,390
  Stockholders' equity (deficit) ...........      $     2,564   $      1,426

</TABLE>

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


     The following discussion should be read in conjunction with the
consolidated financial statements of Morton and the notes thereto included
elsewhere in this Exhibit 99.1.

GENERAL

     Before the Merger, Morton Metalcraft Holding Co., through its
subsidiaries, was a contract manufacturer and supplier of fabricated sheet
metal components and subassemblies for U.S. construction, agricultural, and
industrial equipment manufacturers.  Morton operated four manufacturing
facilities in Illinois and North Carolina and had long standing relationships

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with its two major customers, Caterpillar Inc. ("Caterpillar") and Deere & Co.
("Deere").

OPERATIONS

SIX MONTHS ENDED DECEMBER 31, 1997, VERSUS SIX MONTHS ENDED DECEMBER 31, 1996

     Revenues for Morton for the six months ended December 31, 1997, were $46.6
compared to $33.0 for the six months ended December 31, 1996, an increase of
$13.6 million or 41.2%.  The increase resulted primarily from additional
fabrication for Deere.  Sales to Deere and Caterpillar were approximately 87.0%
and 85.1% of Morton's total sales for the six months ended December 31, 1997,
and 1996, respectively.

     Morton's gross profits for the six months ended December 31, 1997,
increased by approximately $.9 million, or 25.0%, over the same six months in
the prior year.  The gross margin achieved in the six months ended December 31,
1997, was 10.0%, compared to 11.4% for the six months ended December 31, 1996.
The decline resulted from expenses associated with the start-up of Morton's
North Carolina facility and an approximately $2.0 million downward adjustment
of inventory values.  The effect of these adjustments was partially offset by
increased productivity at the Peoria and Morton, Illinois, plants, improved
labor efficiency and better material use stemming from investments in
production technology, including laser cutting technology.  New products
manufactured for Deere required higher material content and contributed to
lower labor and overhead costs.  (The gross margins for the six months ended
December 31, 1996, were lower than those realized in earlier periods as a
result of the write-off of certain intangible assets, the downward revaluation
of inventories, and expenses associated with the development of the North
Carolina plant.)

     Selling and administrative expenses for the six months ended December 31,
1997, amounted to $11.5 million, compared with $2.6 million for the six months
ended December 31, 1996, or an increase of $8.9 million.  Of this increase,
$4.0 million was accrued bonuses to be paid to members of management and other
employees of Morton and its subsidiaries to compensate them for their prior
contributions to Morton's growth and success for which they had not been
adequately compensated.  (Until eliminated in July 1997, restrictions in the
Company's credit facilities limited the compensation Morton and its
subsidiaries could pay management.)  Morton also accrued professional fees,
investment banking costs, credit agreement fees, and other costs of the Merger
and the related bank financing that totaled approximately $2.5 million for the
six month period ended December 31, 1997, that were not incurred in the
comparable year earlier period.  Other selling and general and administrative
costs increased as a result of the increase in sales volume over the prior
year's period, approximately $.5 million of expenses related to the start-up of
operations at the North Carolina facility, and approximately $.7 million of
compensation expense associated with a stock option grant.

     Interest expense for the six months ended December 31, 1997, was $1.7
million, an increase of approximately $.1 million over the comparable six month
period in 1996.

     Income tax benefits of $3.4 million and $.3 million resulted from
operating losses of $8.6 million and $.4 million for the six months ended
December 31, 1997, and 1996, respectively.



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<PAGE>   7



FISCAL YEAR ENDED JUNE 30, 1997 VERSUS FISCAL YEAR ENDED JUNE 30, 1996

     Revenues for Morton for the fiscal year ended June 30, 1997 were $80.8
million versus $59.0 million for the fiscal year ended June 30, 1996, an
increase of $21.8 million or 36.9%.  This increase resulted from higher sales
to Deere for component packages, enclosures and boxes and feeder housings, as
well as higher sales of in-store display fixtures.  Year over year, combined
sales to Deere and Caterpillar locations decreased slightly as a percent of
total revenues from 88.8% to 88.1%.

     The gross margin achieved in the year ended June 30, 1997 was 12.7%
compared to 15.2% in the prior year.  This decline resulted from expenses
associated with the start-up of the North Carolina facility, a write-off of
$1.8 million of intangible assets, and a $.9 million downward adjustment of the
value of excess inventory.  The write-off of intangible assets resulted from a
reassessment of their future benefit to Morton in consideration of the
company's growth, its continuous design changes to existing products, its
continuous factory rearrangements and the opening of the North Carolina
facility.  The effect of these expenses and adjustments was partly offset by
increased productivity at the Peoria and Morton, Illinois facilities, improved
labor efficiency and better material use stemming from investments in
production technology, including laser cutting equipment.  New products
manufactured for Deere required higher material content and contributed to
lower labor and overhead costs.

     Selling and administration expenses for the year ended June 30, 1997
amounted to $7.0 million (or 8.7% of revenues), an increase of $2.1 million or
43% over the year earlier period.  The primary component of this increase was a
charge of $1.8 million (versus $142,000 in the earlier period) due to increased
payments under Morton's employee incentive programs.  During the year Morton
began making payments under a new incentive compensation program for all of its
employees and increased bonuses to management.  Morton expects that
approximately $1,500,000 of these incentive program expenses will be recurring
annually, and if Morton's performance improves these expenses will increase,
although at a substantially lower rate than that experienced in the year ended
June 30, 1997.

     Interest expense in the year ended June 30, 1997 amounted to $3.3 million
representing a nominal decrease from the earlier amount.

     Income taxes for the year ended June 30, 1997 decreased 98.8% from the
prior fiscal year reflecting the reduction of Morton's earnings before taxes,
primarily as a result of the write-off and adjustments described above.  Net
earnings decreased by 98.7% from those realized in the prior fiscal year.

FISCAL YEAR ENDED JUNE 30, 1996 VERSUS FISCAL YEAR ENDED JUNE 30, 1995

     Morton's revenues for the year ended June 30, 1996 amounted to $59.0
million compared to $48.6 million in the year ended June 30, 1995, an increase
of $10.4 million or 21.4%.  This increase resulted from higher sales of sheet
metal component packages, the introduction of the feeder housing product line
for Deere and slightly lower sales of display fixtures.  Year over year,
combined sales to Caterpillar and Deere rose from 84.8% to 88.8%.

     The gross margin achieved in the year ended June 30, 1996 was 15.2%
compared to 16.1% in the year earlier period.  This decrease resulted from
changes in product mix as a result of the commencement of feeder housing
production and added indirect labor and other start-up costs associated with
the opening of the Peoria facility.


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<PAGE>   8


     Selling and administration expenses for the year ended June 30, 1996
amounted to $4.9 million versus $3.9 million in the earlier year, an increase
of $949,000 or 24%.  This increase resulted primarily from higher compensation
charges and insurance expenses.  Year over year, selling and administration
expenses as a percent of revenues rose from 8.1% to 8.3%.

     Interest expense in the year ended June 30, 1996 amounted to $3.3 million
compared to $2.4 million in the earlier year.  This increase resulted from
higher borrowing stemming from the January 1, 1995 recapitalization of Morton.

     Income taxes for the year ended June 30, 1996, decreased by approximately
$0.1 million or 18.9% as a result of reduced earnings before taxes and a
decrease in Morton's effective tax rate from 48.2% to 44.1%.  Net earnings
declined a nominal amount to slightly more than $0.5 million.

FINANCIAL POSITION AND LIQUIDITY

     Morton's consolidated working capital at December 31, 1997 was ($11.3)
million compared to $2.1 million at June 30, 1997, the Company's prior fiscal
year end.  The decrease was primarily the result of a number of factors,
including (i) $5.6 million of capital expenditures, principally leasehold
improvements and equipment costs for the new North Carolina facility and costs
of the addition to the Morton, Illinois, facility, (ii) $4.0 `million of
accrued bonuses for management and employees of the Company and its
subsidiaries, (iii) $2.5 million of expenses associated with the Merger, (iv)
$.7 million of compensation expense related to the grant of a stock option, and
(v) $.5 million of expenses related to the start-up of the North Carolina
facility.

     At December 31, 1997, Morton financed its operations with cash from
operations and the use of a revolving credit facility with a bank.  The
revolving credit agreement provided for borrowings based on agreed-upon
percentages of eligible assets and an interest rate equal to 0.5% above the
bank's base rate.  At December 31, 1997, Morton's outstanding indebtedness
under the revolving credit facility was approximately $6.7 million.

     The $25 million senior notes payable that were outstanding on December 31,
1997, were issued in January 1995 in connection with a recapitalization of
Morton.  The notes bore interest at 11.5% and were due in varying annual
installments from 1998 through 2005.  The notes contained standard restrictive
covenants limiting certain actions pertaining to lease commitments and added
indebtedness.

     Subsequent Events.

     Concurrently with the closing of the Merger of Morton with MLX Corp., the
surviving company, Morton Industrial Group, Inc. (the "Company") entered into a
credit agreement with a bank group.  The credit agreement contains a $15
million term loan facility and $35 million revolving credit facility.  Twenty
million dollars of the revolving credit facility can be converted to term loans
before December 31, 2000.  In addition, if during any quarter the Company's
borrowings under the revolving credit facility exceed $15,000,000, $10,000,000
of that facility will be converted into an additional term loan facility, and
the revolving credit facility will be reduced by $10,000,000.  The initial
interest rate on both facilities is, at the Company's option, (i) the reserve
adjusted LIBOR plus the applicable LIBOR margin, fixed for 30, 60, 90, or 180
day periods, or (ii) the agent bank's base rate (which is the


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<PAGE>   9


greater of the prime rate of the Federal Funds Rate plus 0.5%) plus an
"applicable base rate margin that increases from .25% to 2.0% as the Company's
funded debt to EBITDA ratio increases.  The term loan facility, all of which
was borrowed at the Merger closing, matures on December 31, 2003.  The
Company's indebtedness under the credit agreement is secured by a security
interest in all of the assets of the Company and its subsidiaries, a mortgage
on real property owned by the Company and its subsidiaries, and a pledge of the
stock of the Company's subsidiaries. At the closing, the Company borrowed $5.7
million under the revolving credit facility.  A portion of the proceeds of the
Company's borrowings under both facilities at closing was used to pay off
Morton's pre-closing bank and institutional debt.

     The credit agreement contains standard financial covenants and other
covenants that restrict certain activities by the Company and its subsidiaries,
including a prohibition on the payment of dividends.

     The Company believes that cash generated by its operations and
availability under its credit agreement will provide the necessary liquidity
for its current operations.

     The Company is actively pursuing acquisition possibilities in its industry
and related industries.  The Company plans to use the availability under its
revolving credit facility to finance any such acquisitions, which would result
in the Company's incurring increased interest expense.  Higher debt levels may
also be incurred as a result of the Company's internal growth and related
working capital requirements.

     On March 2, 1998, the Company entered into a Stock Purchase Agreement with
the two principal owners of Carroll George, Inc., a Northwood, Iowa, supplier
of composite structures and plastic-based assemblies and components to
construction, agricultural, and industrial equipment manufacturers.  Subject to
its completion of due diligence and other conditions to closing, the Company
plans to close the acquisition of substantially all of the capital stock of
Carroll George, Inc. on or before May 1, 1998.  Additional information about
the transaction, including the financial statements of Carroll George, Inc.,
and pro-forma financial statements giving effect to the transactions will be
filed by the Company on Form 8-K.

OTHER CONSIDERATIONS

     Capital Expenditures.

     Capital expenditures for the six months ended December 31, 1997, were $5.6
million, and were principally for leasehold improvements and equipment costs
for the new North Carolina facility and costs of the addition to the Morton,
Illinois, facility.  Capital expenditures for the year ended June 30, 1997
amounted to $5.7 million.  Such expenditures were made primarily to construct
leasehold improvements and acquire equipment for the North Carolina facility,
and improve the production flow at the Morton facility.  During the year ended
June 30, 1996, capital expenditures totaled $2.1 million and included
completion of the Peoria fabrication facility and the acquisition of equipment.

     The Company has budgeted $5.0 million of capital expenditures for the
fiscal year ending December 31, 1998.  These expenditures will be, among other
things, for presses, pressbrakes, additional equipment for the North Carolina
facility, information systems additions, cranes, and other new equipment.
Acquisitions of businesses during 1998 may result in increases in the Company's
capital expenditure budget for the year.

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<PAGE>   10



     Year 2000.

     The Company has completed an internal assessment of its information
systems to determine year 2000 compliance.  While the Company's product design,
business, and application software and hardware will be able to perform in the
year 2000 and beyond, certain personal computers used for workplace data
collection and certain Company-developed software require revision to perform
in 2000.  The Company estimates that the revisions will cost a maximum of
$300,000.  The Company has acquired software to help it identify the changes
required to Company-developed software.  The Company expects to be fully year
2000 compliant by September 30, 1999.

     Other Matters.

     Most of the Company's production for Deere and Caterpillar is used in
products that those companies sell in the United States.  As a result, the
Company currently believes that the continuing economic instability in Asia
will not have a material impact on its business.

     The Company expects that it will continue to incur costs associated with
the start-up and rapid growth of its North Carolina operation that will reduce
the Company's gross margins for the current fiscal year ending December 31,
1998. The rapid growth has resulted in labor inefficiencies and increased the   
management and training time required to improve productivity.  The Company's
management has introduced a program to address these issues and is vigorously
implementing it. In addition, the Company is in the process of  establishing    
additional relationships with material suppliers located in the Southeast who
can meet the Company's just-in-time delivery requirements. Until it establishes
these additional relationships, the Company will continue to incur
transportation costs to receive supplies, including steel, at a higher cost 
than the Company experiences in its Illinois plants.


     Fiscal Year.

     The Company's fiscal year will end on December 31, commencing with the
year ending December 31, 1998.

     Recently Released Accounting and Reporting Pronouncements.

     STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 130 - Reporting
Comprehensive Income establishes standards for reporting comprehensive income
and components.  The Statement addresses certain items that affect a company's
net assets without affecting its income statement.  SFAS 130 is applicable to
the Company beginning in 1998 and should have no significant impact on the
Company's financial statement.

     STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 131 - Disclosures about
Statements of an Enterprise and Related Information redefines the way public
companies report information about their business segments.  The statement
intends to align reportable segments and certain disclosures with how the
operations are managed internally.  It also modifies certain geographic
disclosures to be identified by country instead of geographic region.  SFAS 131
is applicable to the Company beginning with its year-end reporting beginning in
1998.  The impact of this statement on the Company's disclosures is not
expected to be significant.



                                    - 10 -



<PAGE>   11


     Forward Looking Statements.

     Certain statements contained in this Exhibit 99.1, including this
Management's Discussion and Analysis, that are not related to historical
results are "forward looking statements" within the meaning of Section 27A of
the Securities Act of 1934 and Section 21E of the Securities Exchange Act of
1934 and involve risks and uncertainties.  Words such as "expects,"
"anticipates," "intends," "plans," "believes," "seeks," "estimate," or
variations of such words and similar expressions are intended to identify such
forward looking statements.  Although the Company believes that the assumptions
upon which these forward looking statements are based are reasonable, there can
be no assurance that such assumptions will prove to be accurate and actual
results could differ materially from those discussed in the forward looking
statements.  Factors that could contribute to such differences include, but are
not limited to the concentration of the Company's sales and the possibility
that one or both of its two major customers, or a single plant of either of the
two, could reduce or cease placing orders with the Company; competition with
other fabricators; customer substitution of plastic components for metal
components; the risks associated with the Company's acquisition strategy,
including unanticipated problems, difficulties in integrating acquired
businesses; diversion of management's attention from daily operations;
potential increased interest costs; and possible adverse effects on earnings
resulting from increased goodwill amortization; reduction of key customers'
sales in developing countries; the loss of key employees, introduction of new
technologies that require significant capital expenditures; and general and
business conditions.

    INDEX TO MORTON METALCRAFT HOLDING CO. CONSOLIDATED FINANCIAL STATEMENTS

            a. Report of Independent Auditors.
            b. Consolidated Balance Sheets as of December 31, 1997, and June
            30, 1997, and 1996.
            c. Consolidated Statements of Operations for the Six Months Ended
            December 31, 1997, and the Fiscal Years Ended June 30, 1997, 1996,
            and 1995.
            d. Consolidated Statements of Stockholders' Equity (Deficit) for
            the Six Months Ended December 31, 1997, and the Fiscal Years Ended
            June 30, 1997, 1996, and 1995.
            e. Consolidated Statements of Cash Flows for the Six Months Ended
            December 31, 1997, and the Fiscal Years Ended June 30, 1997, 1996,
            and 1995.
            f. Notes to the Consolidated Financial Statements.
            g. Consolidated Balance Sheet as of December 31, 1997 (audited) and
            1996 (unaudited).
            h. Consolidated Statements of Operations for the Six Months Ended
            December 31, 1997 (audited) and 1996 (unaudited).
            i. Consolidated Statements of Cash Flows for the Six Months Ended
            December 31, 1997 (audited) and 1996 (unaudited).



                                    - 11 -



<PAGE>   12


                          INDEPENDENT AUDITOR'S REPORT

Board of Directors
Morton Metalcraft Holding Co.
Morton, Illinois

We have audited the accompanying consolidated balance sheets of Morton
Metalcraft Holding Co. and Subsidiaries as of December 31, 1997 and June 30,
1997 and 1996, and the related consolidated statements of operations,
stockholders' equity (deficit), and cash flows for the six months ended
December 31, 1997 and each of the years in the three-year period ended June 30,
1997.  In connection with our audits of the consolidated financial statements,
we also have audited the financial statement schedule as listed in the
accompanying table of contents.  These consolidated financial statements and
the financial statement schedule are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these consolidated
financial statements and the financial statement schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audits 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 Metalcraft
Holding Co. and Subsidiaries as of December 31, 1997 and June 30, 1997 and
1996, and the results of their operations and their cash flows for the six
months ended December 31, 1997 and each of the years in the three-year period
ended June 30, 1997, in conformity with generally accepted accounting
principles.  Also, in our opinion, the related 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.




CLIFTON GUNDERSON L.L.C.

Peoria, Illinois
February 4, 1998







<PAGE>   13



                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                  DECEMBER 31, 1997 AND JUNE 30, 1997 AND 1996
                   (Dollars in Thousands, Except Share Data)


                                     ASSETS


<TABLE>
<CAPTION>
                                                                              JUNE 30,           
                                                  DECEMBER 31,      ---------------------------- 
                                                      1997              1997            1996     
                                                  ------------      -----------      ----------- 
<S>                                               <C>               <C>              <C>         


 

CURRENT ASSETS                                                                                    
   Cash                                           $        138      $       204      $       304  
                                                  ------------      -----------      -----------  
   Accounts and notes receivable:                                                                 
       Trade (Notes 6 and 12)                            7,678            7,818            4,933  
       Employees and other                                  90               27                5  
                                                  ------------      -----------      -----------  
                                                         7,768            7,845            4,938  
                                                                                                  
       Less allowance for doubtful accounts                100               40               10  
                                                  ------------      -----------      -----------  
              Net receivables                            7,668            7,805            4,928  
                                                  ------------      -----------      -----------  
                                                                                                  
   Inventories (Notes 2 and 6)                           7,510            8,005            8,879  
   Prepaid expenses and other current assets               815              821              975  
   Refundable income taxes                               2,060              912                -  
   Deferred income taxes (Note 10)                          70                -                -  
                                                  ------------      -----------      -----------  
              Total current assets                      18,261           17,747           15,086  
                                                  ------------      -----------      -----------  
                                                                                                  
                                                                                                  
NOTE RECEIVABLE - STOCKHOLDER (Note 3)                     250              268              253  
                                                  ------------      -----------      -----------  
                                                                                                  
                                                                                                  
DEFERRED INCOME TAXES (Note 10)                            114                -                -  
                                                  ------------      -----------      -----------  
                                                                                                  
                                                                                                  
PROPERTY, PLANT, AND EQUIPMENT (Notes 4 and 8)                                                    
   Cost                                                 28,078           22,507           16,644  
   Less accumulated depreciation                         9,265            8,171            6,642  
                                                  ------------      -----------      -----------  
              Net property, plant, and equipment        18,813           14,336           10,002  
                                                  ------------      -----------      -----------  
                                                                                                  
                                                                                                  
INTANGIBLE ASSETS, at cost, less                                                                  
   accumulated amortization (Note 5)                     1,950            2,011            4,235  
                                                  ------------      -----------      -----------  
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                  $     39,388      $    34,362      $    29,576 
                                                  ============      ===========      =========== 
</TABLE>


                                      F-1



<PAGE>   14



                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)



<TABLE>
<CAPTION>
                                                                                   JUNE 30,           
                                                            DECEMBER 31,   ------------------------- 
                                                                1997          1997          1996     
                                                            ------------   -----------   ----------- 
<S>                                                         <C>            <C>           <C>      
CURRENT LIABILITIES                                                                                   
   Note payable to bank (Note 6)                            $      6,740   $     1,666   $     1,005      
   Current installments of long-term debt (Note 7)                 2,000             -             -      
   Current installments of obligations under capital                                                      
      leases (Note 8)                                                195           196           124      
   Current installments of covenants payable (Note 9)                195           184           163      
   Accounts payable                                               11,892        10,434         7,267      
   Accrued salaries and wages                                      4,615         1,311           604      
   Accrued payroll taxes and withholding                             316           264           324      
   Accrued acquisition costs                                       1,826             -             -      
   Accrued interest payable                                        1,198         1,198         1,216      
   Income taxes payable                                                -             -            82      
   Deferred income taxes (Note 10)                                     -            47            63      
   Other                                                             599           300           161      
                                                            ------------   -----------   -----------      
             Total current liabilities                            29,576        15,600        11,009      
                                                                                                          
                                                                                                          
LONG-TERM DEBT, excluding current                                                                         
   installments (Note 7)                                          23,000        25,000        25,000      
                                                                                                          
                                                                                                          
OBLIGATIONS UNDER CAPITAL LEASES,                                                                         
   excluding current installment (Note 8)                            221           318           275      
                                                                                                          
                                                                                                          
COVENANTS PAYABLE, excluding current                                                                      
   installments (Note 9)                                             143           244           427      
                                                                                                          
                                                                                                          
DEFERRED INCOME TAXES (Note 10)                                        -         2,299         1,971      
                                                            ------------   -----------   -----------      
             Total liabilities                                    52,940        43,461        38,682      
                                                            ------------   -----------   -----------      
                                                                                                          
                                                                                                          
STOCKHOLDERS' EQUITY (DEFICIT) (Note 11)                                                                  
   Class A common stock, $.01 par value.  Authorized                                                      
      9,159,257 shares; issued 5,066,665 shares;                                                          
      1,388,889 shares reserved                                       51            51            51      
   Class B common stock, convertible, $.01 par value.                                                     
      Authorized 100,000 shares; issued 100,000 shares                 1             1             1      
   Additional paid-in capital                                      1,203           458           458      
   Retained earnings (deficit)                                   (2,037)         3,161         3,154      
   Treasury stock, 3,222,221 shares, at cost                    (12,770)       (12,770)      (12,770)      
                                                            ------------   -----------   -----------      
             Total stockholders' equity (deficit)               (13,552)        (9,099)       (9,106)      
                                                            ------------   -----------   -----------      
                                                                                                          
                                                                                                          
COMMITMENTS AND CONTINGENCIES (Note 16)                                                                   
                                                            $     39,388   $   34,362    $    29,576      
                                                            ============   ==========    ===========      
</TABLE>    
    

 These consolidated financial statements should be read only in connection with
          the accompanying notes to consolidated financial statements.

                                      F-2



<PAGE>   15


                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                   SIX MONTHS ENDED DECEMBER 31, 1997 AND THE
                   YEARS ENDED JUNE 30, 1997, 1996, AND 1995
                 (Dollars in Thousands, Except Per Share Data)



<TABLE>
<CAPTION>                                         
                                                                         JUNE 30,
                                       DECEMBER 31,    -------------------------------------------  
                                           1997             1997           1996           1995    
                                       ------------    -----------     -----------     -----------     
<S>                                    <C>             <C>             <C>             <C>         
                                                                                                   
NET SALES (Note 12)                    $     46,598    $    80,762     $    59,006     $    48,568   
                                                                                                   
                                                                                                   
COST OF SALES                                41,932         70,541          50,049          40,730   
                                       ------------    -----------     -----------     -----------     
        Gross profit                          4,666         10,221           8,957           7,838   
                                       ------------    -----------     -----------     -----------     
                                                                                                   
                                                                                                   
OPERATING EXPENSES                                                                                 
  Selling expenses                            1,202          1,832           1,529           1,278   
  Administrative expenses                    10,350          5,171           3,371           2,672   
                                       ------------    -----------     -----------     -----------     
        Total operating expenses             11,552          7,003           4,900           3,950   
                                       ------------    -----------     -----------     -----------     
                                                                                                   
        Operating income (loss)              (6,886)         3,218           4,057           3,888   
                                       ------------    -----------     -----------     -----------     
                                                                                                   
                                                                                                   
OTHER INCOME (EXPENSES)                                                                            
  Interest income                                 9             15               7               9   
  Interest expense                           (1,737)        (3,266)         (3,297)         (2,434)  
  Gain on sale of equipment                       -             18             145               -   
  Miscellaneous                                  46             27              49             (54)  
  Forgiveness of note receivable                                                                   
     from stockholder                             -              -               -            (324)  
                                       ------------    -----------     -----------     -----------     
        Total other income (expenses)        (1,682)        (3,206)         (3,096)         (2,803)  
                                       ------------    -----------     -----------     -----------     
                                                                                                   
        Earnings (loss) before                                                                     
           income taxes                      (8,568)            12             961           1,085   
                                                                                                   
                                                                                                   
INCOME TAXES (Note 10)                       (3,370)             5             424             523   
                                       ------------    -----------     -----------     -----------     
                                                                                                   
                                                                                                   
NET EARNINGS (LOSS)                    $     (5,198)   $         7     $       537     $       562   
                                       ============    ===========     ===========     ===========     
                                                                                                   
                                                                                                   
EARNINGS (LOSS) PER SHARE                                                                          
  (Note 15)                                                                                        
  Basic                                $      (2.67)   $         -     $       .28     $       .16   
                                       ============    ===========     ===========     ===========     
                                                                                                   
  Diluted                              $      (1.56)   $         -     $       .16     $       .16   
                                       ============    ===========     ===========     ===========     
                                                                                                   
WEIGHTED AVERAGE NUMBER                                                                            
  OF COMMON SHARES                                                                                 
  OUTSTANDING                                                                                      
  Basic                                   1,944,444      1,944,444       1,944,444       3,535,006   
                                       ============    ===========     ===========     ===========     
                                                                                                   
  Diluted                                 3,325,974      3,327,241       3,309,827       3,551,006   
                                       ============    ===========     ===========     ===========     
</TABLE>


 These consolidated financial statements should be read only in connection with
          the accompanying notes to consolidated financial statements.

                                      F-3



<PAGE>   16





                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                   SIX MONTHS ENDED DECEMBER 31, 1997 AND THE
                   YEARS ENDED JUNE 30, 1997, 1996, AND 1995
                             (Dollars in Thousands)



<TABLE>
<CAPTION>
                                                                               CLASS A
                                               COMMON STOCK                  COMMON STOCK
                                        ------------------------       ------------------------
                                           SHARES                         SHARES                    
                                           ISSUED       AMOUNT            ISSUED       AMOUNT      
                                        -----------  -----------       -----------  -----------       
<S>                                     <C>          <C>               <C>          <C>          
BALANCE - JUNE 30, 1994, AS                                                                        
  PREVIOUSLY REPORTED                       510,000  $       510                 -  $         -       
                                                                                                   
  Recapitalization                         (510,000)        (510)        4,622,221           46       
                                        -----------  -----------       -----------  -----------       
                                                                                                   
                                                                                                   
BALANCE - JUNE 30, 1994, AS                                                                        
  RESTATED                                        -            -         4,622,221           46       
                                                                                                   
  Acquisition of 3,222,221 Class A                                                                 
     common shares                                -            -                 -            -       
  Issuance of common shares                                                                        
     to certain stockholders                      -            -           444,444            5       
  Net earnings                                    -            -                 -            -       
                                        -----------  -----------       -----------  -----------       
                                                                                                   
                                                                                                   
BALANCE - JUNE 30, 1995                           -            -         5,066,665           51       
                                                                                                   
  Net earnings                                    -            -                 -            -       
                                        -----------  -----------       -----------  -----------       
                                                                                                   
                                                                                                   
BALANCE - JUNE 30, 1996                           -            -         5,066,665           51       
                                                                                                   
  Net earnings                                    -            -                 -            -       
                                        -----------  -----------       -----------  -----------       
                                                                                                   
                                                                                                   
BALANCE - JUNE 30, 1997                           -            -         5,066,665           51       
                                                                                                   
  Net loss                                        -            -                 -            -       
  Issuance of stock options                       -            -                 -            -       
                                        -----------  -----------       -----------  -----------       
                                                                                                   
                                                                                                   
BALANCE - DECEMBER 31, 1997                       -  $         -         5,066,665  $        51       
                                        ===========  ===========       ===========  ===========       
</TABLE>        
        
        

 These consolidated financial statements should be read only in connection with
          the accompanying notes to consolidated financial statements.

                                      F-4



<PAGE>   17



<TABLE>
<CAPTION>
                 CLASS B
              COMMON STOCK    
        ------------------------     ADDITIONAL                                                 
          SHARES                       PAID-IN     RETAINED      TREASURY                    
          ISSUED        AMOUNT         CAPITAL     EARNINGS        STOCK         TOTAL        
        ----------    ----------     ----------    ---------    ----------    ----------      
          <S>          <C>           <C>           <C>          <C>          <C>            
                                                                                        
                -      $       -     $        -    $   2,055    $        -    $    2,565      
                                                                                        
           100,000             1            463            -             -             -      
        ----------    ----------     ----------    ---------    ----------    ----------      
                                                                                        
                                                                                        
                                                                                        
           100,000             1            463        2,055             -         2,565      
                                                                                         
                                                                                         
                 -             -              -            -       (12,770)      (12,770)      
                                                                                         
                 -             -             (5)           -             -             -      
                 -             -              -          562             -           562      
        ----------    ----------     ----------    ---------    ----------    ----------      
                                                                                        
                                                                                        
           100,000             1            458        2,617       (12,770)       (9,643)      
                                                                                        
                 -             -              -          537             -           537      
        ----------    ----------     ----------    ---------    ----------    ----------      
                                                                                        
                                                                                        
           100,000             1            458        3,154       (12,770)       (9,106)      
                                                                                        
                 -             -              -            7             -             7      
        ----------    ----------     ----------    ---------    ----------    ----------      
                                                                                        
                                                                                        
           100,000             1            458        3,161       (12,770)       (9,099)      
                                                                                        
                 -             -              -       (5,198)            -        (5,198)      
                 -             -            745            -             -           745      
        ----------    ----------     ----------    ---------    ----------    ----------      
                                                                                        
                                                                                        
           100,000    $        1     $    1,203    $  (2,037)   $  (12,770)   $  (13,552)      
        ==========    ==========     ==========    =========    ==========    ==========      
</TABLE>


 These consolidated financial statements should be read only in connection with
          the accompanying notes to consolidated financial statements.

                                      F-5



<PAGE>   18


                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                   SIX MONTHS ENDED DECEMBER 31, 1997 AND THE
                   YEARS ENDED JUNE 30, 1997, 1996, AND 1995
                             (Dollars in Thousands)



<TABLE>
<CAPTION> 
                                                                                                  JUNE 30,
                                                             DECEMBER 31,     ----------------------------------------------  
                                                                 1997              1997            1996             1995      
                                                             ------------     -------------    ------------      ------------    
<S>                                                          <C>              <C>              <C>               <C>        
CASH FLOWS FROM OPERATING ACTIVITIES                                                                                 
   Net earnings (loss)                                       $     (5,198)    $           7    $        537      $        562    
   Adjustments to reconcile net earnings (loss) to net                                                               
       cash provided by operating activities:                                                                        
       Depreciation and amortization of plant                                                                        
          and equipment                                             1,094             1,541           1,339             1,131
       Other amortization                                             185               370             917               766
       Write-off of intangible assets                                 552             1,854               -                 -
       Forgiveness of note receivable from stockholder                  -                 -               -               324
       Compensation expense from issuance of                                                                                 
          stock options                                               745                 -               -                 -
       Increase (decrease) in allowance for doubtful                                                                         
          accounts                                                     60                30               -                (5)
       (Decrease) increase in deferred income taxes                (2,530)              312             180               (43)
       (Gain) loss on sale of equipment                                 -               (18)           (144)               38
       Interest income capitalized as note receivable -                                                                      
          stockholder                                                   -               (15)             (3)               (7)
       Decrease (increase) in accounts and notes                                                                             
          receivable                                                   77            (2,907)           (236)              143
       Decrease (increase) in inventories                             495               874            (348)           (1,827)
       Decrease (increase) in prepaid expenses and                                                                           
          other current assets                                          6               154             (26)             (206)
       Increase in refundable income taxes                         (1,148)             (912)              -                 -
       Increase in accounts payable                                 1,458             3,167           1,684               890
       Increase (decrease) in accrued expenses and                                                                           
          other current liabilities                                 5,481               686            (117)              744
                                                             ------------     -------------    ------------      ------------    
                                                                                                                             
              Net cash provided by operating                                                                                 
                 activities                                         1,277             5,143           3,783             2,510
                                                             ------------     -------------    ------------      ------------    
                                                                                                                             
                                                                                                                             
CASH FLOWS FROM INVESTING                                                                                                    
   ACTIVITIES                                                                                                                
   Capital expenditures                                            (5,571)           (5,707)         (2,142)            (2,568)
   Proceeds from sale of equipment                                      -               135             215               358
   Increase in intangible assets                                     (676)                -            (676)            (2,047)
   Increase in note receivable - stockholder                            -                 -            (250)               (25)
   Repayment of note receivable - stockholder                          18                 -               -                 -
                                                             ------------     -------------    ------------      ------------    
                                                                                                                             
              Net cash used in investing activities                (6,229)           (5,572)         (2,853)            (4,282)
                                                             ------------     -------------    ------------      ------------    
</TABLE> 



 These consolidated financial statements should be read only in connection with
          the accompanying notes to consolidated financial statements.

                                      F-6



<PAGE>   19


                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                   SIX MONTHS ENDED DECEMBER 31, 1997 AND THE
                   YEARS ENDED JUNE 30, 1997, 1996, AND 1995
                             (Dollars in Thousands)



<TABLE>
<CAPTION>                                                                            JUNE 30,
                                                       DECEMBER 31,  ----------------------------------------          
                                                           1997          1997          1996          1995
                                                       ------------  ------------  ------------  ------------  
<S>                                                    <C>           <C>           <C>           <C>
CASH FLOWS FROM FINANCING
   ACTIVITIES
   Proceeds from issuance of note payable to bank      $     51,726  $     79,418  $     58,182  $     51,562
   Principal payments on note payable to bank               (46,652)      (78,757)      (58,682)      (54,042)
   Proceeds from issuance of long-term debt                       -             -             -        25,000
   Principal payments on long-term debt                           -             -             -        (7,706)
   Principal payments under capital lease obligations           (98)         (170)          (81)          (50)
   Principal payments on covenants payable                      (90)         (162)         (145)         (128)
   Purchase of treasury stock                                     -             -             -       (12,770)
                                                       ------------  ------------  ------------  ------------  

              Net cash provided by (used in)
                  financing activities                        4,886           329          (726)        1,866
                                                       ------------  ------------  ------------  ------------  


NET INCREASE (DECREASE) IN CASH                                 (66)         (100)          204            94


CASH AT BEGINNING OF PERIOD                                     204           304           100             6
                                                       ------------  ------------  ------------  ------------  


CASH AT END OF PERIOD                                  $        138  $        204  $        304  $        100
                                                       ============  ============  ============  ============  


SUPPLEMENTAL DISCLOSURES OF
   CASH FLOW INFORMATION
   Cash paid during the year for:
       Interest                                        $      1,737  $      3,284  $      3,279  $      1,199
                                                       ============  ============  ============  ============  

       Income taxes                                    $        307  $        687  $        493  $        868
                                                       ============  ============  ============  ============  


NONCASH FINANCING AND
   INVESTING ACTIVITIES
   Capital lease obligations incurred for
       machinery and equipment                         $          -  $        285  $        480  $         94
                                                       ============  ============  ============  ============  
</TABLE>



 These consolidated financial statements should be read only in connection with
          the accompanying notes to consolidated financial statements.

                                      F-7



<PAGE>   20


                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              DECEMBER 31, 1997 AND JUNE 30, 1997, 1996, AND 1995
                 (Dollars in Thousands, Except Per Share Data)


NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
         POLICIES
 
(A) DESCRIPTION OF BUSINESS

The Morton Metalcraft Holding Co. holds the stock of its subsidiaries, Morton
Metalcraft Co. and Morton Metalcraft Co. of North Carolina.  The primary
business of the subsidiaries is to fabricate and bend sheet metal in its plants
located in Morton and Peoria, Illinois and Apex, North Carolina.  Morton
Metalcraft Co. of North Carolina began operations in July 1997.

(B) PRINCIPLES OF CONSOLIDATION

The consolidated financial statements as of December 31, 1997 and June 30, 1997
and 1996 and for the six months ended December 31, 1997 and each of the years
in the three-year period ended June 30, 1997 include the financial statements
of Morton Metalcraft Holding Co. (Company) and its wholly owned subsidiaries,
Morton Metalcraft Co. and Morton Metalcraft Co. of North Carolina.  All
significant intercompany transactions and balances have been eliminated in
consolidation.  The Company changed its fiscal year end to December 31
subsequent to June 30, 1997.

(C) USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS

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

(D) INVENTORIES

Inventories are stated at the lower of cost or market.  Cost is determined
using the first-in, first-out (FIFO) method on all inventories.

During 1996, the Company changed its method of determining the cost of
inventory from the last-in, first-out (LIFO) method to the FIFO method.  This
change was not retroactively applied due to the amounts being immaterial.  The
Company believes the FIFO method results in a closer matching of costs and
revenue during periods of fluctuating prices.

(E) PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment are stated at cost less accumulated
depreciation.  Equipment under capital leases is stated at the lower of the net
present value of the minimum lease payments at the beginning of the lease term
or fair value at the inception of the lease.

Depreciation of plant and equipment is calculated over the estimated useful
lives of the respective assets on the straight-line method.  The equipment held
under capital leases is amortized using the straight-line method over the
shorter of the lease term or the estimated useful life of the asset.

                                     F-8



<PAGE>   21



                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              DECEMBER 31, 1997 AND JUNE 30, 1997, 1996, AND 1995
                 (Dollars in Thousands, Except Per Share Data)


NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
         POLICIES (CONTINUED)

(F) INTANGIBLE ASSETS

Intangible assets are recorded at cost and include acquisition costs, amortized
over 20 years, covenants not to compete, amortized over 10 years, and goodwill,
amortized over 20 years.  Other intangible assets are amortized over their
estimated useful lives, typically no more than 5 years.  The Company's policy
is to continually evaluate whether later events and circumstances have occurred
that indicate the remaining useful life of intangibles may warrant revision or
that the remaining balance of intangibles may not be recoverable.  Such
evaluation is based on various analyses including cash flow and profitability
projections.  If the sum of the expected future undiscounted cash flows is less
than the carrying amount, a loss is recognized for the difference between the
fair value and carrying amount of the asset.

(G) INCOME TAXES

Deferred income taxes are provided on temporary differences between financial
statement and income tax reporting.  Temporary differences are differences
between the amounts of assets and liabilities reported for financial statement
purposes and their tax bases.  Deferred tax liabilities are recognized for
temporary differences that will be taxable in future years' tax returns.
Deferred tax assets are recognized for temporary differences that will be
deductible in future years' tax returns and for operating loss and tax credit
carryforwards.  Deferred tax assets are reduced by a valuation allowance if it
is deemed more likely than not that some or all of the deferred tax assets will
not be realized.

(H) FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company considers the recorded value of its financial assets and
liabilities, which consist primarily of cash, accounts and notes receivable,
accounts payable, notes payable, and long-term debt, to approximate the fair
value of the respective assets and liabilities.

(I) EARNINGS (LOSS) PER SHARE

Earnings (loss) per share is computed under the provisions of Statement of
Financial Accounting Standards No. 128, Earnings Per Share, which was adopted
retroactively by the Company at December 31, 1997.  Amounts reported as
earnings (loss) per share for the six months ended December 31, 1997 and for
each of the three years in the period ended June 30, 1997, reflect the earnings
available to stockholders for the year divided by the weighted average number
of common shares outstanding during the year.




                                     F-9



<PAGE>   22





                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              DECEMBER 31, 1997 AND JUNE 30, 1997, 1996, AND 1995
                 (Dollars in Thousands, Except Per Share Data)


NOTE 2 - INVENTORIES

A summary of inventories follows:


<TABLE>
<CAPTION>                                                JUNE 30,
                                 DECEMBER 31,  --------------------------
                                     1997           1997         1996
                                 ------------  ------------  ------------
<S>                              <C>           <C>           <C>

Finished goods                   $      2,588  $      2,339  $      2,220
Work in process                         1,573         2,851         4,111
Raw materials, purchased parts,                     
   and manufactured components          3,349         2,815         2,548
                                 ------------  ------------  ------------
                                                    
TOTAL INVENTORIES                $      7,510  $      8,005  $      8,879
                                 ============  ============  ============
</TABLE>



NOTE 3 - NOTE RECEIVABLE - STOCKHOLDER

At December 31, 1997 and June 30, 1997 and 1996, the Company had a note
receivable from a stockholder in the amount of $250, $268, and $253,
respectively.  The note, which is unsecured, is due April 12, 2001 and accrues
interest at 5.88 percent.


NOTE 4 - PROPERTY, PLANT, AND EQUIPMENT

A summary of property, plant, and equipment (at cost), including assets held
under capital leases as described in Note 8 to the consolidated financial
statements, is as follows:


<TABLE>
<CAPTION>                                 
                                                   JUNE 30,
                            DECEMBER 31,  --------------------------
                                1997           1997         1996
                            ------------  ------------  ------------
<S>                         <C>           <C>           <C>
                            
Land, plant sites           $        545  $        545  $        545
Land held for expansion              121           121           121
Land improvements                    203           203           131
Buildings and improvements         3,865         3,083         2,508
Leasehold improvements             1,050           592           327
Machinery                         14,694        11,397         8,026
Tooling                            5,028         4,540         3,727
Office equipment                   2,507         1,961         1,212
Automobiles and trucks                65            65            47
                            ------------  ------------  ------------
                                            
                            $     28,078  $     22,507  $     16,644
                            ============  ============  ============
</TABLE>




                                      F-10



<PAGE>   23





                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              DECEMBER 31, 1997 AND JUNE 30, 1997, 1996, AND 1995
                 (Dollars in Thousands, Except Per Share Data)


NOTE 5 - INTANGIBLE ASSETS

A summary of intangible assets, at cost, is as follows:


<TABLE>
<CAPTION>
                                                              JUNE 30,
                                       DECEMBER 31,  --------------------------
                                            1997         1997           1996
                                       ------------  ------------  ------------
<S>                                    <C>           <C>           <C>
                                          
Goodwill                               $      1,200  $      1,200  $      1,200
Organization costs                              374           374           374
Covenants not to compete                      2,136         2,136         2,136
Engineering costs                                 -             -         1,748
Specific project start-up costs                   -             -           854
Refinancing costs                               676           779           779
Factory rearrangement                             -             -           700
                                       ------------  ------------  ------------
                                              4,386         4,489         7,791
                                                          
Less accumulated amortization                 2,436         2,478         3,556
                                       ------------  ------------  ------------
                                                          
NET INTANGIBLES                        $      1,950  $      2,011  $      4,235
                                       ============  ============  ============
</TABLE>


During the six months ended December 31, 1997 and the year ended June 30, 1997,
intangible assets with a net value of approximately $552 and $1,854,
respectively, were written off due to the determination that these intangible
assets no longer had value.


NOTE 6 - NOTE PAYABLE TO BANK

The Company has a revolving credit agreement which provides up to $9,000 in
revolving credit, limited to 85 percent of qualified accounts receivable and
40-60 percent of eligible inventory (up to a maximum borrowing of $5,000 for
inventory) and expires January 30, 1999.  The interest on the outstanding
borrowings is due on the first day of each month at 0.5 percent over the bank's
base rate (9.00 percent at December 31, 1997).  At December 31, 1997 and June
30, 1997 and 1996, the Company had $6,740, $1,666, and $1,005, respectively, of
its credit line in use.  The revolving credit agreement contains certain
restrictive covenants on the Company, including financial restrictions relating
to working capital, net worth, and earnings.  The restrictions also limit
capital expenditures, executive compensation, ownership changes, and prohibit
dividend payments and the creation of additional indebtedness.

Subsequent to December 31, 1997, the Company refinanced its revolving credit
agreement and entered into a new revolving credit facility with another
institution.  The new revolving credit facility provides up to $35,000 in
revolving credit and is a portion of a $50,000 total credit facility as
discussed at Note 7.



                                      F-11



<PAGE>   24


                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              DECEMBER 31, 1997 AND JUNE 30, 1997, 1996, AND 1995
                 (Dollars in Thousands, Except Per Share Data)


NOTE 7 - LONG-TERM DEBT

A summary of long-term debt follows:


<TABLE>
<CAPTION>
                                                        JUNE 30,
                                DECEMBER 31,   --------------------------
                                   1997            1997          1996
                                ------------   ------------  ------------
<S>                             <C>            <C>           <C>

$25,000 senior notes payable       
with interest at 11.5 percent;     
due in annual installments of      
various amounts beginning          
January 31, 1999 with the          
balance due January 31, 2005.   $     25,000   $     25,000  $     25,000
                                ============   ============  ============
</TABLE>

On January 25, 1995, the Company entered into a note and warrant purchase
agreement, pursuant to which the Company agreed to sell $25,000 of the
Company's 11.50 percent senior notes in consideration for a promise to repay
the principal, including interest, and the issuance of warrants to purchase
72,000 shares of the Company's common stock as discussed at Note 11.

The above-mentioned financing arrangement imposes certain restrictions on the
Company, including financial restrictions relating to working capital, lease
commitments, and indebtedness.  The restrictions also require the Company to
maintain key man life insurance on the Company's president.

The interest on the senior notes is payable semi-annually in arrears each
January and July.

The aggregate amounts of long-term debt maturities and principal payments for
each of the five years subsequent to December 31, 1997 and thereafter are as
follows:


<TABLE>
<S>                                           <C>
Fiscal year ending:                          
   1998                                       $      -
   1999                                          2,500
   2000                                          3,125
   2001                                          3,750
   2002                                          3,750
   Thereafter                                   11,875
                                              --------
                          
                                              $ 25,000
                                              ========
</TABLE>


As discussed at Note 6, subsequent to December 31, 1997, the Company entered
into a financing arrangement with another institution which provides total
financing of $50,000.  The arrangement contains a $35,000 revolving credit
portion and a $15,000 term loan portion.  If during any quarter, borrowings
under the revolving credit facility exceed $15,000, $10,000 of the revolving
credit facility will be converted into an additional term loan, and the
revolving credit facility will be reduced by $10,000.  The financing
arrangement bears interest at an adjustable rate based on LIBOR plus an
applicable margin which will vary depending on certain financial ratios
achieved by the Company.  The financing arrangement has a term of six years and
includes some mandatory prepayment terms and customary financial and other
covenants.  This financing arrangement requires quarterly principal payments of
various amounts of which $2,000 will be due in 1998.  This amount has been
reclassified as a current liability as of December 31, 1997.

                                      F-12



<PAGE>   25


                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              DECEMBER 31, 1997 AND JUNE 30, 1997, 1996, AND 1995
                 (Dollars in Thousands, Except Per Share Data)


NOTE 7 - LONG-TERM DEBT (CONTINUED)

In connection with the above arrangement, the Company recorded debt issue costs
of $676 and wrote-off approximately $552 of previous debt issue costs, net of
accumulated amortization, that related to the previous financing facility.  In
addition, the Company expensed $340 in termination fees to the previous
institution.


NOTE 8 - LEASES

The Company is obligated under various capital leases for certain machinery.
At December 31, 1997, the gross amount of equipment and related amortization
recorded under capital leases was as follows:


<TABLE>
<CAPTION>
                                                      1997
                                                     ------
                      
<S>                                                  <C>
Machinery                                            $  837
Less accumulated amortization                          (143)
                                                     ------
                      
                                                     $  694
                                                     ======
</TABLE>


Amortization of assets held under capital leases is included with depreciation
expense.

The present value of future minimum capital lease payments at December 31, 1997
was as follows:


<TABLE>
<S>                                                                 <C>  
Year ending December 31:                                               
   1998                                                             $  231 
   1999                                                                128 
   2000                                                                 83 
   2001                                                                 30 
                                                                    ------ 
             Total minimum lease payments                              472 
                                                                           
Less amount representing interest (from 9.2 to 10.4 percent)            56 
                                                                    ------ 
                                                                           
             Present value of net minimum capital lease payments       416 
                                                                           
Less current installments of obligations under capital leases          195 
                                                                    ------ 
                                                                           
OBLIGATIONS UNDER CAPITAL LEASES, EXCLUDING CURRENT INSTALLMENTS    $  221 
                                                                    ====== 
</TABLE>    
    

The Company also has operating leases for two of its plants, certain warehouse
space, and manufacturing and computer equipment.  Rental expense for operating
leases was $1,452, $2,061, $1,328, and $891 for the six months ended December
31, 1997 and years ended June 30, 1997, 1996, and 1995, respectively.


                                      F-13



<PAGE>   26



                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              DECEMBER 31, 1997 AND JUNE 30, 1997, 1996, AND 1995
                 (Dollars in Thousands, Except Per Share Data)


NOTE 8 - LEASES (CONTINUED)

Future minimum lease payments under noncancelable operating leases (with
initial or remaining lease terms in excess of one year) as of December 31, 1997
are:


<TABLE>
<S>                                                <C>
Year ending December 31:                     
   1998                                            $  3,298
   1999                                               3,207
   2000                                               2,955
   2001                                               2,610
   2002                                               2,434
   Thereafter                                         4,989
                                                   --------
                     
TOTAL MINIMUM LEASE PAYMENTS                       $ 19,493
                                                   ========
</TABLE>



NOTE 9 - COVENANTS PAYABLE

With the acquisition of the outstanding common stock of Morton Metalcraft Co.
in 1989, the Company entered into non-competition agreements which expire
August 31, 1999 with two of Morton Metalcraft Co.'s former shareholders and
officers in exchange for $3,050.  Monthly installments of $19 through August
15, 1999 will be paid to retire these obligations.  The remaining payments have
been recorded in the consolidated financial statements at their net present
value.


NOTE 10 - INCOME TAXES

Income tax expense (benefit) consists of the following:


<TABLE>
<CAPTION>
                                    CURRENT  DEFERRED   TOTAL
                                    -------  --------  --------
<S>                                 <C>      <C>       <C>
December 31, 1997:                
   Federal                          $  (812) $ (2,021) $ (2,833)
   State                                (28)     (509)     (537)
                                    -------  --------  --------
                
                                    $  (840) $ (2,530) $ (3,370)
                                    =======  ========  ========
                
June 30, 1997:                
   Federal                          $  (250) $    254  $      4
   State                                (57)       58         1
                                    -------  --------  --------
                
                                    $  (307) $    312  $      5
                                    =======  ========  ========
</TABLE>


                                      F-14



<PAGE>   27





                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              DECEMBER 31, 1997 AND JUNE 30, 1997, 1996, AND 1995
                 (Dollars in Thousands, Except Per Share Data)


NOTE 10 - INCOME TAXES (CONTINUED)


<TABLE>
<CAPTION>
                                   CURRENT   DEFERRED    TOTAL
                                  --------   --------  --------
<S>                               <C>        <C>        <C>
June 30, 1996:                     
   Federal                        $    224   $    147  $    371
   State                                20         33        53
                                  --------   --------  --------
                                   
                                  $    244   $    180  $    424
                                  ========   ========  ========
                                   
June 30, 1995:                     
   Federal                        $    520   $    (35) $    485
   State                                46         (8)       38
                                  --------   --------  --------
                                   
                                  $    566   $    (43) $    523
                                  ========   ========  ========
</TABLE>


Total income tax expense (benefit) differed from the amounts computed by
applying the U.S. federal corporate income tax rate of 34 percent for all
periods to earnings (loss) before income taxes as a result of the following:


<TABLE>
<CAPTION>
                                                                            JUNE 30,
                                        DECEMBER 31,    -----------------------------------------------
                                            1997             1997             1996             1995
                                        ------------    ------------     ------------      ------------  
<S>                                     <C>             <C>              <C>               <C>              
Computed "expected" tax expense                                                                             
   (benefit)                            $     (2,913)   $          4     $        327      $        369      
State income taxes (benefit), net of                                                                        
   federal income tax benefit                                                                               
   (expense)                                    (354)              1               35                25      
Surtax exemption                                   -              (2)               -                 -      
Amortization of goodwill                          10              20               20                20      
Officer's life insurance                           8              16               15                10      
Forgiveness of note receivable -                                                                            
   stockholder                                     -               -                -               110      
Other, net                                      (121)            (34)              27               (11)     
                                        ------------    ------------     ------------      ------------  
                                                                                                            
TOTAL INCOME TAX EXPENSE                $     (3,370)   $          5     $        424      $        523      
                                        ============    ============     ============      ============  
                                                                                                            
EFFECTIVE TAX RATE                             (39.3)%         39.2%             44.1%             48.2%     
                                        ============    ============     ============      ============  
</TABLE>


                                      F-15



<PAGE>   28





                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              DECEMBER 31, 1997 AND JUNE 30, 1997, 1996, AND 1995
                 (Dollars in Thousands, Except Per Share Data)


NOTE 10 - INCOME TAXES (CONTINUED)

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities at December 31, 1997
and June 30, 1997 and 1996 are presented below:


<TABLE>
<CAPTION>
                                                                            JUNE 30,           
                                                      DECEMBER 31,  ------------------------      
                                                          1997          1997         1996          
                                                      ------------  -----------  -----------        
<S>                                                   <C>           <C>          <C>                
Deferred tax assets:                                                                                
   Inventories, principally due to additional                                                       
      costs inventoried for tax purposes                                                            
      pursuant to the Tax Reform Act of 1986          $          -  $         6   $       80        
   Accrued vacation pay                                        136          125          112        
   Net operating loss carryforwards                          2,298            -            -        
   State tax credit carryforwards                               50            -            -        
   Compensation expense from issuance                                                               
      of stock options                                         289            -            -        
   Other                                                        39           16            -        
                                                      ------------  -----------  -----------        
            Total deferred tax assets                        2,812          147          192        
                                                      ------------  -----------  -----------        
                                                                                                    
Deferred tax liabilities:                                                                           
   Plant and equipment, principally due                                                             
      to differences in depreciation                        (2,389)      (2,211)      (1,876)        
   Recapture of inventory LIFO valuation                                                            
      for tax purposes                                        (155)        (194)        (255)        
   Excess of tax over book amortization of                                                          
      organization costs                                       (84)         (88)         (95)        
                                                      ------------  -----------  -----------        
            Total deferred tax liabilities                  (2,628)      (2,493)      (2,226)        
                                                      ------------  -----------  -----------        
                                                                                                    
NET DEFERRED TAX ASSET (LIABILITY)                    $        184  $    (2,346) $    (2,034)        
                                                      ============  ===========  ===========        
</TABLE>


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 $474 prior to the expiration of the net
operating loss carryforward in 2012.

The Company has a tax net operating loss carryforward of approximately $5,920
available at December 31, 1997 which expires in 2012.



                                      F-16



<PAGE>   29



                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              DECEMBER 31, 1997 AND JUNE 30, 1997, 1996, AND 1995
                 (Dollars in Thousands, Except Per Share Data)


NOTE 11 - EMPLOYEE STOCK OPTIONS AND WARRANTS

The Company has granted stock options to purchase the Company's Class A common
stock to certain officers and directors.  The options may be exercised at any
time prior to their expiration dates.  The 722,222 shares under option have
been reserved.  A summary of the stock options follows:


<TABLE>
<CAPTION>
 NUMBER                         EXERCISE                          EXPIRATION
OF SHARES                        PRICE                               DATE
---------                       --------                       -----------------
<S>                             <C>                            <C>
  444,443                           $.11                       September 1, 1999
   83,333                           $.11                       September 1, 2000
   83,333                           $.22                         July 13, 2002
   64,815                           $.11                       February 15, 2005
   46,298                           $.90                          May 8, 2005
</TABLE>


On October 8, 1997, the Company granted options to purchase 46,298 shares of
the Company's Class A common stock to an officer of the Company at an option
price of $.90 per share.  The Company has recognized compensation expense of
$745 in connection with this transaction.  In addition, 46,298 of previously
outstanding options to purchase the Company's Class A common stock were
canceled.

The Company has adopted the disclosure-only provisions of SFAS No. 123,
Accounting for Stock-Basis Compensation, but applies Accounting Principles
Board Opinion No. 25 and related interpretations in accounting for its option
plan.  If the Company had elected to recognize compensation cost for the plan
based on the fair value at the grant dates for awards under the plan consistent
with the method prescribed by SFAS No. 123, the effect on net income and
earnings per share would not have been significant.

On January 25, 1995, the Board of Directors authorized the issuance of 666,667
warrants, each representing the right to purchase one share of the Company's
common stock, as part of the consideration for the purchase of the $25,000
senior notes as discussed at Note 7.  The warrants may be exercised at any time
prior to their expiration date of January 31, 2005 for the exercise price of
$.002 per share.  There was no value assigned to the warrants upon issuance.
The 666,667 shares under the warrant agreement have been reserved.

NOTE 12 - CONCENTRATION OF SALES

Sales to customers in excess of 10 percent of total net sales for the six
months ended December 31, 1997 and each of the years ended June 30, 1997, 1996,
and 1995 are as follows:


<TABLE>
<CAPTION>
                                                         CUSTOMER A        CUSTOMER B
                                                         ----------        ----------
<S>                                                      <C>               <C>
Periods ended:                                                            
  December 31, 1997                                         34%               53%
  June 30, 1997                                             39%               46%
  June 30, 1996                                             53%               34%
  June 30, 1995                                             63%               20%
</TABLE>


                                      F-17



<PAGE>   30



                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              DECEMBER 31, 1997 AND JUNE 30, 1997, 1996, AND 1995
                 (Dollars in Thousands, Except Per Share Data)


NOTE 12 - CONCENTRATION OF SALES (CONTINUED)

Trade accounts receivable with these customers totaled $5,027, $6,502, and
$3,964 at December 31, 1997 and June 30, 1997 and 1996, respectively.


NOTE 13 - 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.  The expense charged to operations for
Company matching and discretionary contributions was $70, $116, $87, and $70
for the six months ended December 31, 1997 and the years ended June 30, 1997,
1996, and 1995, respectively.


NOTE 14 - LEASED PROPERTIES

The Company leases certain portions of its office, warehouse, and factory space
under operating leases to other companies.

Rental revenue earned under noncancelable operating leases amounted to $13,
$22, $55, and $74 for the six months ended December 31, 1997 and the years
ended June 30, 1997, 1996, and 1995, respectively.


NOTE 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:


<TABLE>
<CAPTION>
                                   SIX MONTHS ENDED DECEMBER 31, 1997
                                -----------------------------------------
                                   INCOME        SHARES       PER-SHARE
                                (NUMERATOR)   (DENOMINATOR)     AMOUNT
                                ------------  -------------  ------------
<S>                             <C>           <C>            <C>

Basic loss per share            $     (5,198)     1,944,444  $      (2.67)
                                                             ============
Effect of dilutive securities:
   Stock options                           -        714,948
   Warrants                                -        666,582
                                ------------  -------------

DILUTED LOSS PER SHARE          $     (5,198)     3,325,974  $      (1.56)
                                ============  =============  ============
</TABLE>



                                      F-18



<PAGE>   31





                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              DECEMBER 31, 1997 AND JUNE 30, 1997, 1996, AND 1995
                 (Dollars in Thousands, Except Per Share Data)


NOTE 15 - EARNINGS (LOSS) PER SHARE (CONTINUED)


<TABLE>
<CAPTION>
                                              YEAR ENDED JUNE 30, 1997        
                                      ------------------------------------------       
                                         INCOME          SHARES      PER-SHARE       
                                       (NUMERATOR)   (DENOMINATOR)      AMOUNT       
                                      ------------  --------------  ------------     
<S>                                   <C>           <C>             <C>                
                                                                                     
Basic earnings per share              $          7     1,944,444    $          -       
                                                                    ============       
Effect of dilutive securities:                                                       
   Stock options                                 -       716,226                     
   Warrants                                      -       666,571                     
                                      ------------  ------------                     
                                                                                     
DILUTED EARNINGS PER SHARE            $          7     3,327,241   $          -       
                                      ============  ============   ============       
</TABLE>                                                                 
                                                                         
                                                                         
                                                                         
<TABLE>                                                                  
<CAPTION>                                                                
                                               YEAR ENDED JUNE 30, 1996        
                                      -----------------------------------------       
                                         INCOME         SHARES      PER-SHARE         
                                       (NUMERATOR)  (DENOMINATOR)     AMOUNT          
                                      ------------  -------------  ------------       
<S>                                   <C>           <C>            <C>                
                                                                                     
Basic earnings per share              $        537      1,944,444  $        .28       
                                                                   ============       
Effect of dilutive securities:                                                       
   Stock options                                 -        699,086                     
   Warrants                                      -        666,297                     
                                      ------------   ------------                     
                                                                                     
DILUTED EARNINGS PER SHARE            $        537      3,309,827  $        .16       
                                      ============   ============  ============       
</TABLE>



<TABLE>
<CAPTION>
                                               YEAR ENDED JUNE 30, 1995
                                      -------------------------------------------
                                         INCOME          SHARES        PER-SHARE
                                       (NUMERATOR)   (DENOMINATOR)       AMOUNT
                                      ------------   -------------   ------------
<S>                                   <C>           <C>              <C>
      
Basic earnings per share              $        562       3,535,006   $        .16
                                                                     ============
Effect of dilutive securities:      
   Stock options                                 -               -
   Warrants                                      -          16,000
                                      ------------  --------------
      
DILUTED EARNINGS PER SHARE            $        562       3,551,006  $        .16
                                      ============  ==============  ============
</TABLE>      
      
      
Options to purchase 722,222 shares of Class A common stock at an average price
of $.12 per share were outstanding at June 30, 1995, but were not included in
the computation of diluted earnings per share because they were anti-dilutive.
      
      
      
                                     F-19
      
      
      
<PAGE>   32
      
      
      
                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              DECEMBER 31, 1997 AND JUNE 30, 1997, 1996, AND 1995
                 (Dollars in Thousands, Except Per Share Data)
      

NOTE 16 - COMMITMENTS AND CONTINGENCIES

SELF INSURANCE

The Company provides health benefits to its employees under the Morton
Metalcraft Co. Health Care Payment Plan (Plan).  The Plan is a partially
self-insured program funded by contributions from the Company and its
employees.  The Plan has purchased stop-loss insurance coverage for individual
claims in excess of $50.

PURCHASE COMMITMENTS

At December 31, 1997, the Company had outstanding purchase commitments for
certain manufacturing equipment totaling approximately $2,000.


NOTE 17 - SUBSEQUENT EVENT

On January 20, 1998, the Company merged (the "Merger") with MLX Corp. ("MLX")
with MLX being the surviving corporation.  As a result of the Merger, the
Company will cease 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 Merger, for financial accounting and reporting purposes, will be treated as
a purchase in accordance with generally accepted accounting principles.  The
Merger will be accounted for as though the Company purchased MLX because (i)
the Chairman and CEO of the Company will maintain voting control in the
surviving corporation, (ii) the Chairman of the Board of Directors, CEO, and
directors of the surviving corporation will consist of individuals appointed by
the Chairman and CEO of the Company, (iii) the revenues, net earnings, and
current market value of the Company exceed those of MLX, and (iv) the market
value of the consideration received by the former shareholders of the Company
and former holders of options and warrants for Company common stock, including
MLX common stock, MLX options, and cash exceeds the market value of the
securities to be retained by the shareholders of MLX common stock.

The historical financial statements of Morton Metalcraft Holding Co. will,
after the date of the merger, become the historical financial statements of
MLX, Inc. as the result of the reverse merger.

Immediately preceding the Merger, the Company recapitalized its existing common
stock, no par value, into Class A common stock, par value $.01, and Class B
common stock, par value $.01, and approved a 9.259 to 1.0 common stock split in
order to provide for the one-for-one stock exchange rate in the Merger.  Class
B common stock contains the identical rights and preferences as Class A common
stock but have limited voting rights.  Each share of Class B common stock is
convertible into one share of Class A common stock at the option of the
shareholder.  The capital structure and per share amounts in the accompanying
financial statements have been adjusted for the recapitalization and split.


                                      F-20



<PAGE>   33





                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              DECEMBER 31, 1997 AND JUNE 30, 1997, 1996, AND 1995
                 (Dollars in Thousands, Except Per Share Data)


NOTE 17 - SUBSEQUENT EVENT (CONTINUED)

In connection with the Merger, MLX purchased 612,121 shares of common stock and
721,211 options and warrants to acquire common stock from certain officers,
directors, and warrant holders of the Company for an aggregate purchase price
of $19,991 immediately prior to the consummation of the Merger.  These shares,
warrants, and options were canceled when the Merger was consummated.

Upon consummation of the Merger, each share of the Company's common stock was
exchanged for one share of the Surviving Corporation's common stock with
equivalent voting rights and all outstanding options to purchase the Company's
common stock were exchanged for options to purchase equivalent common stock of
the Surviving Corporation.

At December 31, 1997, the Company has recorded accrued bonuses in the amount of
$4,000 and various accrued consulting and legal expenses in the amount of
$1,000 in connection with the Merger.

The following unaudited pro forma summary presents the Company's consolidated
results of operations for the six months ended December 31, 1997, as if the
Merger had occurred on July 1, 1997.


<TABLE>
<S>                                                                <C>
Net sales                                                          $  46,598
                                                                   =========
                                                                   
Net loss                                                           $   5,466
                                                                   =========
                                                                   
Net loss per share - diluted                                       $    1.39
                                                                   =========
</TABLE>



           This information is an integral part of the accompanying
                      consolidated financial statements.

                                     F-21



<PAGE>   34





                         MORTON METALCRAFT HOLDING CO.

                SCHEDULE IX - VALUATION AND QUALIFYING ACCOUNTS



<TABLE>
<CAPTION>
         COLUMN A             COLUMN B         COLUMN C         COLUMN D   COLUMN E
---------------------------  ----------  --------------------  ----------  ---------
                                               ADDITIONS
                                         --------------------
                             BALANCE AT  CHARGED TO  CHARGED               BALANCE
                             BEGINNING   COSTS AND   TO OTHER              AT END OF
           DESCRIPTION       OF PERIOD   EXPENSES    ACCOUNTS  DEDUCTIONS  PERIOD
---------------------------  ----------  ----------  --------  ----------  ---------
<S>                          <C>         <C>         <C>       <C>         <C>

Allowance for doubtful
   accounts:
   Six months ended
      December 31, 1997      $       40  $       60  $      -  $        -  $     100
                             ==========  ==========  ========  ==========  =========

   Year ended June 30, 1997  $       10  $       42  $      -  $       12  $      40
                             ==========  ==========  ========  ==========  =========

   Year ended June 30, 1996  $       10  $        -  $      -  $        -  $      10
                             ==========  ==========  ========  ==========  =========
</TABLE>



                                      F-22



<PAGE>   35




                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1997 AND 1996
                   (Dollars In Thousands, Except Share Data)


<TABLE>
<CAPTION>
                                     ASSETS
                                                                             (UNAUDITED)     
                                                                 1997            1996        
                                                             ----------      -----------     
<S>                                                          <C>             <C>             
CURRENT ASSETS                                                                               
  Cash                                                       $      138      $        58     
                                                             ----------      -----------     
  Accounts and notes receivable:                                                               
    Trade                                                         7,678            5,120     
    Employees and other                                              90               16     
                                                             ----------      -----------     
                                                                  7,768            5,136     
    Less allowance for doubtful accounts                            100               10     
                                                             ----------      -----------     
         Net receivables                                          7,668            5,126     
                                                             ----------      -----------     
                                                                                             
  Inventories                                                     7,510            8,752     
  Prepaid expenses and other current assets                         815              840     
  Refundable income taxes                                         2,060               59     
  Deferred income taxes                                              70                -     
                                                             ----------      -----------     
         Total current assets                                    18,261           14,835     
                                                             ----------      -----------     
                                                                                             
                                                                                             
NOTE RECEIVABLE - STOCKHOLDER                                       250              260     
                                                             ----------      -----------     
                                                                                             
                                                                                             
DEFERRED INCOME TAXES                                               114                -     
                                                             ----------      -----------     
                                                                                             
                                                                                             
PROPERTY, PLANT, AND EQUIPMENT                                                               
  Cost                                                           28,078           18,319     
  Less accumulated depreciation                                   9,265            7,366     
                                                             ----------      -----------     
         Net property, plant, and equipment                      18,813           10,953     
                                                             ----------      -----------     
                                                                                             
                                                                                             
INTANGIBLE ASSETS, at cost, less accumulated                                                 
  amortization                                                    1,950            3,094     
                                                             ----------      -----------     
                                                                                             
                                                                                             
                                                                                             
                                                                                             
                                                                                             
                                                             $   39,388      $    29,142     
                                                             ==========      ===========     

</TABLE>


                                      F-23



<PAGE>   36




                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)


<TABLE>
<CAPTION>
                                                                        (UNAUDITED)      
                                                              1997          1996         
                                                           -----------  -----------      
<S>                                                        <C>          <C>              
CURRENT LIABILITIES                                                                      
   Note payable to bank                                    $     6,740  $     1,410      
   Current installments of long-term debt                        2,000            -      
   Current installments of obligations under                                             
    capital leases                                                 195          152      
   Current installments of covenants payable                       195          173      
   Accounts payable                                             11,892        7,192      
   Accrued salaries and wages                                    4,615          308      
   Accrued payroll taxes and withholding                           316          158      
   Accrued acquisition costs                                     1,826            -      
   Accrued interest payable                                      1,198        1,198      
   Deferred income taxes                                             -           63      
   Other                                                           599          312      
                                                           -----------  -----------      
              Total current liabilities                         29,576       10,966      
                                                           -----------  -----------      
LONG-TERM DEBT, excluding current installments                  23,000       25,000      
                                                           -----------  -----------      
OBLIGATIONS UNDER CAPITAL LEASES,                                                        
   excluding current installment                                   221          255      
                                                           -----------  -----------      
COVENANTS PAYABLE, excluding current installments                  143          338      
                                                           -----------  -----------      
DEFERRED INCOME TAXES                                                -        1,971      
                                                           -----------  -----------      
              Total liabilities                                 52,940       38,530      
                                                           -----------  -----------      
STOCKHOLDERS' EQUITY (DEFICIT)                                                           
   Class A common stock, $.01 par value.  Authorized                                     
       9,159,257 shares; issued 5,066,665 shares;                                        
       1,388,889 shares reserved                                    51           51      
   Class B common stock, convertible, $.01 par value.                                    
       Authorized 100,000 shares; issued 100,000 shares              1            1      
   Additional paid-in capital                                    1,203          458      
   Retained earnings (deficit)                                  (2,037)       2,872      
   Treasury stock, 3,222,221 shares, at cost                   (12,770)     (12,770)      
                                                           -----------  -----------      
              Total stockholders' equity (deficit)             (13,552)      (9,388)      
                                                           -----------  -----------      
                                                           $    39,388  $    29,142      
                                                           ===========  ===========      
</TABLE>



 These consolidated financial statements should be read only in connection with
          the accompanying notes to consolidated financial statements.

                                      F-24



<PAGE>   37


                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                  SIX MONTHS ENDED DECEMBER 31, 1997 AND 1996
                 (Dollars In Thousands, Except Per Share Data)


<TABLE>
<CAPTION>
                                                                (UNAUDITED)
                                                     1997          1996
                                                -------------  ------------
<S>                                             <C>            <C>
NET SALES                                       $      46,598  $     32,958


COST OF SALES                                          41,932        29,206
                                                -------------  ------------
      Gross profit                                      4,666         3,752
                                                -------------  ------------


OPERATING EXPENSES
  Selling expenses                                      1,202           803
  Administrative expenses                              10,350         1,775
                                                -------------  ------------
      Total operating expenses                         11,552         2,578
                                                -------------  ------------

      Operating income (loss)                          (6,886)        1,174
                                                -------------  ------------


OTHER INCOME (EXPENSE)
  Interest income                                           9             -
  Interest expense                                     (1,737)       (1,628)
  Miscellaneous                                            46            31
                                                -------------  ------------
      Total other income (expense)                     (1,682)       (1,597)
                                                -------------  ------------

      Loss before income taxes                         (8,568)         (423)


INCOME TAXES                                           (3,370)         (282)
                                                -------------  ------------


NET LOSS                                              ($5,198)        ($141)
                                                =============  ============


LOSS PER SHARE
  Basic                                         $       (2.67) $       (.07)
                                                =============  ============

  Diluted                                       $       (1.56) $       (.04)
                                                =============  ============

WEIGHTED AVERAGE NUMBER OF               
  COMMON SHARES OUTSTANDING             
  Basic                                             1,944,444     1,944,444
                                                =============  ============
             
  Diluted                                           3,325,974     3,323,925
                                                =============  ============
</TABLE>



 These consolidated financial statements should be read only in connection with
          the accompanying notes to consolidated financial statements.

                                      F-25



<PAGE>   38


                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                  SIX MONTHS ENDED DECEMBER 31, 1997 AND 1996
                             (Dollars In Thousands)


<TABLE>
<CAPTION>
                                                                           (UNAUDITED)
                                                               1997            1996
                                                           ------------    ------------
<S>                                                        <C>             <C> 
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                $     (5,198)    $      (282)


   Adjustments to reconcile net loss to net cash
       provided by operating activities:
       Depreciation and amortization of plant and
       equipment                                                  1,094             724
       Other amortization                                           185             481
       Write-off of intangible assets                               552             660
       Interest income capitalized as note receivable -
           stockholder                                                -              (7)
       Compensation expense from issuance of
           stock options                                            745               -
       Increase in allowance for doubtful accounts                   60               -
       Decrease in deferred taxes                                (2,530)              -
       Decrease (increase) in accounts and
           notes receivable                                          77            (198)
       Decrease in inventories                                      495             128
       Decrease in prepaid expenses and other
           current assets                                             6             135
       Increase in refundable income taxes                       (1,148)            (59)
       Increase (decrease) in accounts payable                    1,458             (75)
       Increase (decrease) in accrued expenses and
           other current liabilities                              5,481            (411)
                                                           ------------    ------------
              Net cash provided by operating activities           1,277           1,096
                                                           ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Capital expenditures                                          (5,571)         (1,599)
   Increase in intangible assets                                   (676)              -
   Repayment of note receivable - stockholder                        18               -
                                                           ------------    ------------
              Net cash used in investing activities              (6,229)         (1,599)
                                                           ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from issuance of note payable to bank                51,726          33,967
   Principal payments on note payable to bank                   (46,652)        (33,562)
   Principal payments under capital lease obligations               (98)            (69)
   Principal payments on covenants payable                          (90)            (79)
                                                           ------------    ------------
              Net cash provided by financing activities           4,886             257
                                                           ------------    ------------

NET DECREASE IN CASH                                                (66)           (246)

CASH AT BEGINNING OF PERIOD                                         204             304
                                                           ------------    ------------

CASH AT END OF PERIOD                                      $        138    $         58
                                                           ============    ============
</TABLE>


 These consolidated financial statements should be read only in connection with
          the accompanying notes to consolidated financial statements.

                                      F-26



<PAGE>   39





                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                  SIX MONTHS ENDED DECEMBER 31, 1997 AND 1996
                             (Dollars In Thousands)


<TABLE>
<CAPTION>
                                                                     (UNAUDITED) 
                                                         1997            1996    
                                                     ----------     ------------ 
<S>                                                  <C>            <C>          
SUPPLEMENTAL DISCLOSURES OF CASH                                                 
   FLOW INFORMATION                                                              
   Cash paid during the period for:                                              
      Interest                                       $    1,737     $      1,644 
                                                     ==========     ============ 
                                                                                 
      Income taxes                                   $      307     $          - 
                                                     ==========     ============ 
                                                                                 
                                                                                 
NONCASH FINANCING AND INVESTING ACTIVITIES                                       
   Capital lease obligations incurred for machinery                              
      and equipment                                  $         -    $         77 
                                                     ===========    ============ 
</TABLE>


 These consolidated financial statements should be read only in connection with
          the accompanying notes to consolidated financial statements.

                                      F-27



<PAGE>   40





                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1997 AND 1996

NOTE 1

The Company changed its fiscal year end to December 31 subsequent to June 30,
1997.

The Company's consolidated financial statements as of and for the six months
ended December 31, 1997 have been audited by the Company's independent auditor
and are presented in Exhibit 99.1.  The Company's consolidated financial
statements as of and for the six months ended December 31, 1996 have been
prepared without audit.

In the opinion of management, all adjustments, consisting only of normal
recurring adjustments necessary for a fair presentation of (a) the consolidated
balance sheet at December 31, 1996, (b) the consolidated statement of
operations for the six months ended December 31, 1996, and (c) the consolidated
statement of cash flows for the six months ended December 31, 1996 have been
made.


NOTE 2

The results for the six months ended December 31, 1997 and 1996 are not
necessarily indicative of the results for their entire respective calendar
years.


NOTE 3 - LOSS PER SHARE

Loss per share is computed under the provisions of Statement of Financial
Accounting Standards No. 128, Earnings Per Share, which was adopted
retroactively by the Company at December 31, 1997.  Amounts reported as loss
per share for the six months ended December 31, 1997 and 1996, reflect the loss
to stockholders for the period divided by the weighted average number of common
shares outstanding during the year.

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


<TABLE>
<CAPTION>
                                                SIX MONTHS ENDED DECEMBER 31, 1997
                                      ----------------------------------------------------
                                         INCOME              SHARES             PER-SHARE   
                                      (NUMERATOR)         (DENOMINATOR)           AMOUNT    
                                      ------------        -------------        ------------ 
<S>                                   <C>                 <C>                  <C>          
                                                                                            
Basic loss per share                  $    (5,198)            1,944,444        $      (2.67)
                                                                               ============ 
Effect of dilutive securities:                                                              
    Stock options                                -              714,948                     
    Warrants                                     -              666,582                     
                                      ------------        -------------                     
                                                                                            
DILUTED LOSS PER SHARE                $     (5,198)           3,325,974        $      (1.56) 
                                      ============        =============        ============ 
</TABLE>


                                      F-28



<PAGE>   41





                 MORTON METALCRAFT HOLDING CO. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1997 AND 1996


NOTE 3 - LOSS PER SHARE (CONTINUED)


<TABLE>
<CAPTION>
                                        SIX MONTHS ENDED DECEMBER 31, 1996       
                                     -----------------------------------------   
                                        INCOME        SHARES       PER-SHARE     
                                     (NUMERATOR)   (DENOMINATOR)     AMOUNT      
                                     ------------  -------------  ------------   
<S>                                  <C>           <C>            <C>            
                                                                                 
Basic loss per share                 $       (141)     1,944,444  $       (.07)   
                                                                  ============   
Effect of dilutive securities:                                                   
    Stock options                               -        712,962                 
    Warrants                                    -        666,519                 
                                     ------------  -------------                 
                                                                                 
DILUTED LOSS PER SHARE               $       (141)     3,323,925  $       (.04)   
                                     ============  =============  ============   
</TABLE>




                                      F-29