<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

[X]      ANNUAL REPORT PURSUANT TO

         SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1999
                                       or
[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT

        For the Transition period from             to

                         COMMISSION FILE NUMBER 0-20328

                                   AMTROL INC
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

       RHODE ISLAND                                              05-0246955
   (STATE OR OTHER JURISDICTION OF                            (I.R.S. EMPLOYER
   INCORPORATION OR ORGANIZATION)                           IDENTIFICATION NO.)

   1400 DIVISION ROAD, WEST WARWICK, RI                          02893
 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                     (ZIP CODE)

       Registrant's telephone number, including area code: (401) 884-6300
        Securities registered pursuant to Section 12(b) of the Act: NONE
        Securities registered pursuant to Section 12(g) of the Act: NONE

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

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

As of March 30, 2000, the aggregate market value of the Registrant's voting
stock held by non-affiliates was none.

As of March 30, 2000, 100 shares of Common Stock $0.01 par value, of the
Registrant were outstanding.

Documents Incorporated by Reference:  NONE

The Exhibit Index for this document appears on page 53 hereof.
<PAGE>   2
                                     PART I

ITEM 1.  BUSINESS

BACKGROUND

         AMTROL Inc., together with its subsidiaries ("AMTROL" or the
         "Company"), is a leading designer, manufacturer and marketer of
         expansion and pressure control products used in the water systems
         markets and selected sectors of the HVAC market. The Company's
         principal products include well water accumulators, hot water expansion
         controls, water treatment products, indirect-fired water heaters, and
         returnable and non-returnable pressure-rated cylinders used primarily
         to store, transport and dispense refrigerant, heating and cooking
         gases. Many of these products are based on a technology originated and
         developed by AMTROL, which is based on a pre-pressurized vessel with an
         internal diaphragm to handle fluids under pressure.

         The Company was incorporated in Rhode Island in 1973, and is the
         successor to all of the assets and liabilities of a predecessor Rhode
         Island corporation which was incorporated in 1946. On November 12,
         1996, as a result of a merger agreement with AMTROL Holdings Inc. and
         its wholly owned subsidiary AMTROL Acquisition Inc. (i.e., the
         "Merger"), AMTROL became a wholly-owned subsidiary of AMTROL Holdings
         Inc., a Delaware corporation controlled by The Cypress Group L.L.C.
         ("Cypress"). AMTROL's principal executive offices are located at 1400
         Division Road, West Warwick, Rhode Island 02893 (telephone number:
         (401) 884-6300).

OVERVIEW

         AMTROL is a leading North American manufacturer of its key product
         categories and a prominent participant in certain European, Middle
         Eastern and Asian cylinder markets. The Company's market prominence is
         attributable to the strength of AMTROL's brand names and the Company's
         product breadth, quality and innovation, as well as its marketing,
         distribution and manufacturing expertise. In addition, AMTROL's
         principal markets are highly replacement-oriented, with 60% to 70% of
         the Company's core business coming from replacement sales. These
         factors, combined with the Company's large installed base of products,
         have enabled AMTROL to demonstrate generally stable sales and earnings,
         even during periods of weak domestic economic activity. However, sales
         can be affected by extreme weather conditions, as well as significant
         changes in economic circumstances.

         AMTROL's brand names are among the most widely known in its markets.
         For example, the Company's EXTROL(R) is widely recognized by customers
         as the leading hot water expansion control tank. Other well-known brand
         names of the Company include Well-X-Trol(R), Therm-X-Trol(R), Hot Water
         Maker(R), CHAMPION(TM) and Water Worker(R). The Company also believes
         that it is a recognized technology leader in virtually all of its core
         product lines. In fact, many of the Company's major product lines,
         AMTROL's products are considered the industry standard, a key marketing
         advantage.


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         During its 50-year history, the Company has built a strong partnership
         with wholesalers, resulting in a broad distribution network serving
         approximately 2,000 customers throughout North America. The Company's
         strong reputation and brand recognition ensure that nearly every
         significant plumbing, pump specialty and HVAC wholesaler carries at
         least one line of AMTROL products. This facilitates new product
         introduction, effectively "pulling" the Company's new products through
         its distribution system. AMTROL also offers a broad range of products.
         This broad product offering allows AMTROL's customers to consolidate
         their suppliers and to purchase and manage inventory more efficiently.
         These factors and the Company's quality reputation have established the
         Company's products as a preferred brand and allow the Company to
         realize premium pricing on most of its premium branded products. In
         addition, the Company continues to increase its sales to the retail
         market, a rapidly growing channel of distribution, primarily through
         private label arrangements with Lowe's Companies, Menards, Tru*Serv
         Corporation and Ace Hardware.

         AMTROL-ALFA Metalomecanica S.A. ("ALFA"), located in Guimaraes,
         Portugal, is Europe's largest manufacturer of reusable steel gas
         cylinders and supplies Europe, the Middle East and Africa, as well as
         the Far East, with containers for storing cooking, heating and
         refrigerant gases. ALFA also produces non-returnable gas cylinders
         supplied to European and Asian customers. ALFA provides the Company
         with the potential for a low-cost international manufacturing base for
         all of AMTROL's products and is an important source of supply for the
         Company's international customers.

         AMTROL-NOVA (formally "NOVA Wassererwarmer GmbH", "NOVA") located in
         Donaueschingen, Germany, manufactures high-end residential and
         commercial water heaters which are marketed primarily in Germany,
         Switzerland and Austria. NOVA provides AMTROL with expanded
         manufacturing and distribution capabilities in central Europe, in
         addition to the opportunity to offer many of AMTROL's complementary
         hydronic heating and water systems products in the European market. It
         also provides the Company with greater product diversification and the
         ability to penetrate certain markets in the United States in which it
         currently has a limited presence.

         Including ALFA and NOVA, approximately 38.6% of the Company's net sales
         in 1999 were derived from international markets, compared to 36.2% in
         1998.


PRODUCTS AND MARKETS

         The EXTROL(R), the first product to utilize technology developed by
         AMTROL for handling fluid under pressure, redefined the standards for
         controlling the expansion of water in hydronic heating systems. Earlier
         systems consisted simply of a vessel containing air, resulting in
         excessive pressure and excessive corrosion. AMTROL developed a
         technology which uses a flexible diaphragm inside a pre-pressurized
         vessel to maintain the separation of air and water in the vessel, and
         has applied this technology in both HVAC products and water systems
         products.

         HVAC PRODUCTS

         AMTROL's sales to selected sectors of the HVAC market, which include
         sales of products such as expansion accumulators, water heaters and
         pressure-rated cylinders for

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         heating and refrigerant gases, accounted for approximately 62% of the
         Company's total sales in 1999. AMTROL's residential HVAC products
         include expansion vessels for heated water, potable water heaters and
         other accessories used in residential HVAC systems. AMTROL's commercial
         HVAC products are substantially identical in function to those used in
         residential applications, but may be modified as a result of design
         codes and the higher operating pressures of larger systems. AMTROL's
         pressure-rated cylinders for refrigerant gases are used mainly in the
         storage, transportation and dispensing of gases used principally in air
         conditioning and refrigeration systems. In addition, the AMTROL-ALFA
         facility produces returnable pressure-rated cylinders for storing gas
         used in residential and commercial heating and cooking applications.

         EXTROLS(R). EXTROL(R) expansion accumulators are used in conjunction
         with hydronic heating systems, which provide heat by circulating hot
         water through baseboard piping and radiators. The EXTROL(R) product
         controls pressure in the heating system and eliminates problems related
         to hot water expansion by allowing the volume of water to increase as
         the temperature of the water increases within a closed system,
         preventing operating problems.

         THERM-X-TROLS(R). Therm-X-Trols(R) accumulate expanded hot water
         escaping from potable water heaters that has been prevented from
         flowing back into the public water supply by backflow prevention
         devices. In response to the Clean Water Act of 1984, certain
         jurisdictions established local codes to require owners of commercial
         and residential buildings to install backflow prevention devices in
         order to prevent the contamination of the public water supply. Local
         codes adopted by organizations that set standards for most of the
         United States also require a separate device to handle the expanded
         water prevented from flowing back into the public water supply. The
         principal alternatives are relief valves, which permit water to drain
         inside the building, and thermal expansion accumulators, such as the
         Therm-X-Trol(R), which capture the water. Therm-X-Trol(R) satisfies
         these code requirements, as well as the codes of certain localities
         that specifically require a thermal expansion accumulator.
         Additionally, two of the largest domestic water heater manufacturers
         will void their warranties if thermal expansion accumulators are not
         used in conjunction with their products where backflow prevention
         devices are installed.

         INDIRECT-FIRED WATER HEATERS. In response to market demands for both an
         abundant supply of hot water and energy conservation, AMTROL has
         developed a line of indirect-fired residential and commercial water
         heaters, which it manufactures and distributes under the brand name Hot
         Water Maker(R). Used in conjunction with a new or existing boiler
         installed to heat living and work areas, these water heaters offer an
         alternative to conventional gas and electric potable water heaters and
         tankless coils. Hot water is generated through the use of heat
         exchangers and circulators which circulate heated water from the boiler
         through a coil in the core of the water heater's reservoir. The Hot
         Water Maker(R) is sold for use in both commercial and residential
         applications. The Company has recently introduced a new line of a large
         capacity stainless steel Hot Water Makers(R) designed for light
         commercial applications and residential customers who require large
         amounts of hot water and rapid recovery time. The acquisition of NOVA,
         which specializes in water heating products for a wide range of
         applications from very small residential units up to 10,000 liter
         commercial units, provides the Company with greater

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         product diversification and the ability to penetrate certain markets in
         which it currently has a limited presence.

         PRESSURE-RATED CYLINDERS. The Company's ALFA subsidiary, located in
         Portugal, produces and distributes reusable liquid propane gas ("LPG")
         cylinders and reusable and non-returnable refrigerant cylinders. It is
         the largest producers of reusable steel gas cylinders in Europe.
         Reusable LPG cylinders are typically purchased by major gas companies
         or their distributors who fill the cylinders for customers who use the
         gas for heating and cooking in residential and commercial applications.
         In 1998, the Company transferred to ALFA the non-returnable cylinder
         production line previously located in Singapore and began supplying its
         European and Asian non-returnable gas cylinder customers from ALFA.
         AMTROL, together with ALFA, is one of the world's two largest
         manufacturers of non-returnable pressure-rated cylinders used in the
         storage, transport and dispensing of refrigerant gases for air
         conditioning and refrigeration systems. In 1999, the Company
         established a new subsidiary in Poland which refurbishes returnable gas
         cylinders for the Polish market.

         WATER SYSTEMS PRODUCTS

         AMTROL's sales of its water systems products accounted for
         approximately 38% of the Company's total net sales in 1999. These
         products consist primarily of water accumulators for residential and
         commercial well water systems and products for residential water
         softening and purification.

         WELL WATER SYSTEMS. AMTROL produces and sells well water accumulators
         for both residential and commercial applications under the brand names
         Well-X-Trol(R) and CHAMPION(TM), as well as under several other brands
         and private label programs. Virtually all of the water accumulators
         sold by the Company incorporate an internally mounted rubber diaphragm
         that seals an air charge and allows pressure to increase as water fills
         the plastic lined vessel. This design serves to control pressure while
         maintaining the separation of air and water in the vessel, thereby
         eliminating water logging (absorption of air into water) as well as
         reducing wear on switches, pump motors and other system components
         caused by more frequent on/off cycling. A typical well water system
         consists of a submersible or jet pump located in the well that pumps
         water to an AMTROL pre-pressurized vessel.

         The pre-pressurized vessel is connected to the plumbing system in order
         to provide water on demand within a specific range of pressure as
         controlled by a pressure switch. As the water level and pressure in the
         vessel decreases, the diaphragm relaxes and the pressure switch causes
         the pump to cycle on until a certain pressure is achieved in the
         system.

         WATER TREATMENT/FILTRATION PRODUCTS. AMTROL offers a range of products
         to meet increasing global demand for improved water quality and water
         pressure. AMTROL manufactures and markets water softeners, reverse
         osmosis accumulators and other related systems that may be utilized to
         improve the quality of both municipal-supplied and well water. The
         Company also manufactures and markets products that address the need to
         boost water pressure where available pressure is not adequate.

DISTRIBUTION AND MARKETING


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         AMTROL's principal channel of distribution is plumbing, heating and
         pump specialty wholesalers. The Company maintains its presence in the
         United States and Canadian wholesale markets through a network of
         approximately 45 independent firms that represent multiple
         manufacturers, arranging sales on a commission basis, as well as
         approximately 10 salaried direct sales professionals. To service its
         customers with greater efficiency, the Company has streamlined its
         representative network and, through consolidation of multiple lines of
         business, has brought a broader range of products to its wholesalers.
         The Company also provides certain of its products to the rapidly
         growing retail market segment through a separate sales force. AMTROL's
         principal customers in this segment include Lowe's Companies, Menards,
         Tru*Serv Corporation and Ace Hardware.

         At its Education Center, which is an integral part of the Company's
         marketing organization, and at Company-sponsored seminars throughout
         the United States and selected international locations, AMTROL provides
         education and training to wholesalers, contractors and engineers,
         independent sales representatives and their employees to assist them in
         understanding the technical aspects of their respective customers'
         requirements and AMTROL's product lines. By educating customers about
         the benefits of AMTROL's products, the Company's products are
         effectively "pulled" through its distribution system.

         Non-returnable refrigerant pressure-rated cylinders are sold to major
         chemical companies, which produce and package refrigerant gases, and to
         independent contractors that purchase bulk refrigerants and fill the
         cylinders. AMTROL's major customers for reusable refrigerant gas
         cylinders are wholesale distributors who sell the products to service
         providers and refrigerant recovery equipment manufacturers. ALFA's
         major customers for reusable LPG cylinders are the major European gas
         companies or their distributors.

         With the exception of one cylinder customer to whom sales were
         approximately 6.9% of total sales, no individual customer represented
         more than 5% of the Company's net sales in 1999.

INTERNATIONAL SALES

         Sales in geographic regions outside of the United States and Canada,
         primarily Mexico, Asia and Western Europe, accounted for 22.3%, 36.2%
         and 38.6% of the Company's total net sales in fiscal years 1997, 1998
         and 1999 respectively. The significant increase in foreign sales was
         driven largely by the 1997 acquisition of ALFA and the 1998 acquisition
         of NOVA. In addition, over the last three years AMTROL has opened
         international sales offices in Asia and Europe and has built
         distribution networks in the Asia/Pacific region and Latin
         America/Mexico.

MANUFACTURING, RAW MATERIALS AND SUPPLIERS

         AMTROL manufactures its water system and HVAC products primarily at its
         own facilities. Many of its products depend on the Company's expertise
         in pressure vessel construction. AMTROL takes advantage of the material
         economies and precision inherent in deep-draw stamping technology to
         manufacture products of superior performance and life.


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<PAGE>   7
         The Company has significantly reduced its manufacturing cost base in
         recent years by closing less efficient plants or plants with redundant,
         excess capacity. Production at the closed facilities has been
         transferred to other existing production plants with the anticipated
         effect of lowering the Company's total cost structure and increasing
         the absorption of fixed manufacturing overhead through higher
         production volume at the remaining plants.

         AMTROL's production system is based on proven world class manufacturing
         practices, and all components of this platform receive continuous
         updating and review for effectiveness. Principal building blocks of the
         AMTROL production system include a visual factory philosophy, waste
         elimination through the Kaizen process improvement methodology, a
         formal corrective action response system, mistake-proofing and
         automatic source inspection, formal variation reduction processes,
         total preventive maintenance and the promotion of one-piece flow.
         Increasing proficiency in these manufacturing practices by the
         organization produced dramatic results in 1999. As a result, the
         Company is increasing its investment in personnel devoted to the
         development, implementation and mastery of quality lean manufacturing
         practices, in an effort to continue the rate of operational improvement
         observed in 1999.

         AMTROL's three principal North American manufacturing facilities and
         its Guimaraes, Portugal facility hold ISO 9001 Certification, the most
         complete certification in the ISO 9000 Series from the International
         Organization for Standardization ("ISO"). ISO certification requires
         periodic audits of AMTROL's systems for product design, development,
         production, installation and servicing, and has become the
         international standard of quality required for manufacturers serving
         the European Economic Community, Southeast Asia, the Middle East and
         Latin America.

         Raw material suppliers generally offer commodities used by the Company,
         such as steel, synthetic rubber, corrugated paper and plastic resins,
         to all manufacturers on substantially similar terms. Significant
         increases in raw material prices can adversely impact margins if the
         Company is unable to pass on such increases to its customers.
         Manufacturers of component parts also generally offer their products to
         others on substantially similar terms. Although certain components are
         only available from a limited number of manufacturers, the Company
         anticipates that it will be able to purchase all of the components it
         requires without disruption. The Company believes that its
         relationships with its suppliers are good.

SEASONALITY; BACKLOG

         Although AMTROL's sales fluctuate with general economic activity, the
         effect of significant economic volatility is mitigated by the fact that
         many of AMTROL's markets are highly replacement-oriented. While sales
         of certain of its products are seasonal in nature, AMTROL's overall
         business is not seasonal to any significant extent. Due to the
         generally short lead time in orders, the Company historically has not
         carried any material backlog.

PATENTS, TRADEMARKS AND LICENSES

         While the Company owns a number of patents, the Company believes that
         its position in its markets depends primarily on factors such as
         manufacturing expertise, technological

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         leadership, superior service and quality and strong brand name
         recognition, rather than on patent protection. The Company believes
         that foreign and domestic competitors have been unable to match the
         quality of AMTROL's branded products.

         The Company also has a number of registered and unregistered trademarks
         for its products. The Company believes the following registered
         trademarks, which appear on its products and are widely recognized in
         its markets, are important to its business: Well-X-Trol(R),
         Therm-X-Trol(R), EXTROL(R), Hot Water Maker(R), CHAMPION(TM) and Water
         Worker(R).

COMPETITION

         The Company is experiencing increasing competition from a number of
         competitors in each of its markets. The principal means of competition
         in the water systems products and HVAC markets are technology, quality,
         service and price. AMTROL brand name products generally compete on the
         basis of technology, quality, service and product line breadth and
         generally do not compete on the basis of price.

EMPLOYEES

         As of December 31, 1999, the Company had approximately 722 employees in
         the United States, none of whom were represented by collective
         bargaining units. There are 1,134 employees abroad, some of whom are
         represented by unions. AMTROL considers relations with its employees to
         be good.

ENVIRONMENTAL MATTERS

         Some of the Company's operations generate waste materials that may give
         rise to liability under environmental laws. Some risk of environmental
         and other damage is inherent in these operations, and in the past,
         certain of the Company's operations have been named a party in private
         actions associated with hazardous waste sites. Based upon the Company's
         experience in matters that have been resolved and the amount of
         hazardous waste shipped to off-site disposal facilities by the Company,
         the Company believes that any share of costs attributable to it will
         not be material. There can be no assurance that any liability arising
         from, for example, contamination at facilities the Company (or an
         entity or business the Company has acquired or disposed of) owns or
         operates or formerly owned or operated, or locations at which waste or
         contaminants generated by the Company (or an entity or business the
         Company has acquired or disposed of) have been disposed of, will not
         arise or be asserted against the Company or entities for which the
         Company may be responsible in a manner that could materially and
         adversely affect the Company.

         The Company monitors and reviews its procedures and policies for
         compliance with environmental laws. Based upon the Company's experience
         to date, the Company operates in substantial compliance with
         environmental laws, and the cost of compliance with existing
         regulations is not expected to have a material adverse effect on the
         Company's results of operations, financial condition or competitive
         position. However, future events, such as changes in existing laws and
         regulations or enforcement policies, may give rise to additional
         compliance costs which could have a material adverse effect on the
         Company's results of operations, financial condition or competitive
         position.


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ITEM 2.  PROPERTIES

The following table sets forth information regarding the Company's principal
properties each of which is owned by the Company unless otherwise indicated:
<TABLE>
<CAPTION>

LOCATION                       SQUARE FOOTAGE           PRINCIPAL USE
--------                       --------------           -------------
                               (approximate)
<S>                            <C>                   <C>
West Warwick, RI                     270,000         Corporate Headquarters, Manufacturing,
                                                          Education Center
Guimaraes, Portugal                  196,000         Manufacturing
North Kingstown, RI (a)              206,000         Distribution Center
Donaueschingen, Germany               70,000         Manufacturing and distribution
Paducah, KY                           46,300         Manufacturing
Mansfield, OH (a)                     45,000         Manufacturing and Distribution Center
Baltimore, MD                         37,000         Manufacturing
Swarzedz, Poland (a)                  29,000         Manufacturing
Kitchener, Ontario(a)                 18,400         Sales Office and Distribution
Singapore (a)                            600         Sales Office
England (a)                              400         Sales Office
                                    --------
        TOTAL                        918,700
</TABLE>

(a) Leased facilities

AMTROL believes that its properties and equipment generally are well maintained,
in good operating condition and adequate for its present needs. The Company
regularly evaluates its manufacturing requirements and believes that it has
sufficient capacity to meet its current and anticipated needs. The inability to
renew any short-term real property lease would not have a material adverse
effect on AMTROL's results of operations.

ITEM 3. LEGAL PROCEEDINGS

From time to time, the Company is named as a defendant in legal actions. These
include commercial disputes, agency proceedings and product liability and other
claims. Management believes that none of the pending legal actions will have a
material adverse effect on the Company's results of operations or its financial
condition.

ITEM 4. SUBMISSION OF MATTERS TO SECURITY HOLDERS

        Not applicable.



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                                     PART II


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

         All of the Common Stock of the Company is owned by Holdings; thus, no
         trading market exists for such stock. Similarly, all of the common
         stock of Holdings is held by affiliates of Cypress and certain officers
         of the Company, and no trading market exists for such stock. See Item
         12, "Security Ownership of Certain Beneficial Owners and Management".

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ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data presented below for and as of each of
the years and periods in the five-calendar-year period ended December 31, 1999
have been derived from the Consolidated Financial Statements of the Company,
including the related notes thereto, which have been audited by Arthur Andersen
LLP, independent certified public accountants. The selected consolidated balance
sheet data for November 12, 1996 have been derived from unaudited consolidated
financial statements of the Company which, in the opinion of management, include
all adjustments (consisting only of normal recurring items) necessary for a fair
and consistent presentation of such data. The information set forth below should
be read in conjunction with "Management's Discussion and Analysis of Results of
Operations and of Financial Condition" and with the Consolidated Financial
Statements of the Company, including the related notes thereto, appearing
elsewhere in this Annual Report.
<TABLE>
<CAPTION>

                                                  PREDECESSOR COMPANY              SUCCESSOR COMPANY
                                                 ------------------------   ----------------------------------------------------
                                                                                               YEAR ENDED DECEMBER 31,
                                                                                           -------------------------------------
                                                                 PERIOD       PERIOD
                                                 YEAR ENDED      ENDED        ENDED
                                                 DECEMBER 31,    NOVEMBER    DECEMBER
                                                    1995         12, 1996    31,1996(b)       1997          1998        1999
                                                -------------   ---------   ------------   ---------    ----------    ----------
                                                                             (In thousands)
<S>                                             <C>            <C>           <C>           <C>           <C>           <C>
Statement of Operations Data:
     Net sales                                  $ 172,454      $ 152,193     $  18,628     $ 176,432     $ 202,142     $ 212,177
     Cost of goods sold                           124,303        110,582        16,809       131,180       158,607       154,741
     Provision for abnormal warranty costs .         --             --            --            --           4,500          --
                                                ---------      ---------     ---------     ---------     ---------     ---------
     Total cost of goods sold                     124,303        110,582        16,809       131,180       163,107       154,741
         Gross profit                              48,151         41,611         1,819        45,252        39,035        57,436
     Selling, general and
          administrative expenses                  29,943         25,796         3,508        25,723        27,827        28,492
     Plant closing and reorganization costs         3,825           --            --           5,500         4,450          --
     Management restructuring                        --             --            --            --           3,693          --
     Amortization of goodwill                        --             --             313         3,995         4,446         4,463
     Other operating expenses                        --             --           1,000          --            --            --
                                                ---------      ---------     ---------     ---------     ---------     ---------
     Income (loss) from operations                 14,383         15,815        (3,002)       10,034        (1,381)       24,481
     Interest (expense) income, net                    60             53        (2,224)      (18,256)      (20,344)      (19,083)
     License and distributorship fees                 258            181            25           245           242           234
     Other income (expense), net                       65           (175)          (99)          299         1,384           353
                                                ---------      ---------     ---------     ---------     ---------     ---------
              Income (loss) before provision
              (benefit) for income taxes           14,766         15,874        (5,300)       (7,678)      (20,099)        5,985
     Provision (benefit) for income taxes ..        5,681          6,152        (1,956)          (30)       (6,728)        4,125
                                                ---------      ---------     ---------     ---------     ---------     ---------
     Net income (loss)                          $   9,085      $   9,722     $  (3,344)    $  (7,648)    $ (13,371)    $   1,860
                                                =========      =========     =========     =========     =========     =========

Other Data:
     Depreciation and amortization              $   4,673      $   4,586     $     598     $  11,541     $  13,147     $  14,003
     Capital expenditures                           5,492          9,260         1,662         8,489         9,858         5,798
     EBITDA (a)                                    23,139         20,582        (2,379)       26,887        12,454        38,346

Balance sheet data (at period end):
     Working capital                            $  43,303      $  41,778     $  33,346     $  22,675     $   6,642     $   5,885
     Total assets                                  93,909         96,280       253,828       291,945       300,667       281,745
     Long-term debt, less current maturities         --             --         159,175       184,164       173,023       163,385
     Shareholders' equity                          70,206         75,783        65,982        58,049        65,948        65,303
</TABLE>




(a)      EBITDA represents income (loss) from operations before plant closing
         charges, plus depreciation and amortization and license and
         distributorship fees. EBITDA is presented because it is a widely
         accepted indicator of a company's ability to incur and service
         indebtedness. EBITDA (subject to certain adjustments) will be used to
         determine compliance with certain covenants in the Indenture. EBITDA,
         however, should not be considered as an alternative to net income, as a
         measure of the Company's operating results, or as an alternative to
         cash flow as a measure of liquidity.

(b)      Adjusted to reflect a change in the method of determining inventory
         cost from the LIFO method to the FIFO method.



                                       11
<PAGE>   12
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
         FINANCIAL CONDITION

         The discussion in this section should be read in conjunction with the
         Consolidated Financial Statements of the Company included elsewhere
         herein.

         This Annual Report includes "forward-looking statements" within the
         meaning of the securities laws. All statements other than statements of
         historical facts included in this Annual Report regarding the Company's
         financial position and strategic plans are forward-looking statements.
         Although the Company believes that the expectations reflected in such
         forward-looking statements are reasonable, it can give no assurance
         that such expectations will prove to have been correct. Important
         factors that could cause actual results to differ materially from such
         expectations include, but are not limited to, the Company's ability to
         successfully implement its business strategy, the availability and cost
         of raw materials, changes in government regulation or enforcement
         policies, particularly related to refrigerant gases and building and
         energy efficiency requirements, development of competing technologies,
         acceptance of the Company's existing and planned new products in
         international markets, competition in the Company's markets, the rate
         of growth of developing economies and demand for the Company's
         products, the ability of the Company and its vendors to successfully
         implement their year 2000 compliance initiatives, the ultimate cost of
         future warranties claims, whether it succeeds in acquiring new
         businesses, and general economic, financial and business conditions,
         both domestically and internationally.



RESULTS OF OPERATIONS

         The following table sets forth, for the periods indicated, the
         percentage relationship to net sales of certain items included in the
         Company's statement of operations:
<TABLE>
<CAPTION>
                                                  YEAR ENDED DECEMBER 31,
                                                -------------------------------
                                                  1997        1998        1999
                                                ------      ------      ------
<S>                                             <C>         <C>         <C>
Net Sales                                        100.0 %     100.0 %     100.0 %
Cost of Goods Sold                                74.4        80.7        72.9
                                                ------      ------      ------
Gross Profit                                      25.6        19.3        27.1
Selling, General and Administrative Expenses      14.6        13.8        13.4
Plant Closing and Reorganization Costs             3.1         2.2        --
Management Restructuring                          --           1.8        --
Amortization of Goodwill                           2.3         2.2         2.1
                                                ------      ------      ------
Income (Loss) from Operations                      5.6        (0.7)       11.6
Interest Expense                                 (10.3)      (10.2)       (9.1)
Other Income, net                                  0.4         1.0         0.4
                                                ------      ------      ------
Income (Loss) before Provision (Benefit)
     for Income Taxes                             (4.3)       (9.9)        2.9
Provision (Benefit) for Income Taxes              --          (3.3)        1.9
                                                ------      ------      ------
Net Income (Loss)                                 (4.3)%      (6.6)%     1.0 %
                                                ======      ======      ======
</TABLE>


                                       12
<PAGE>   13
         The comparability of results for the above years is impacted by certain
         acquisitions and disposals, plant closings, restructuring and
         reorganization, and commencement of new operations. Where possible, the
         impact of these items on particular areas of operating results has been
         explained in the remainder of this section.

         The percentage of sales comprised by the Company's water systems and
         HVAC products for the periods indicated is listed below:
<TABLE>
<CAPTION>

                                     1997             1998           1999
                                     ----             ----           ----
<S>                                 <C>              <C>            <C>
          HVAC                       53.8%            60.5%          61.6%
          Water Systems              46.2%            39.5%          38.4%
                                    -----            -----          -----
               Gross Sales          100.0%           100.0%         100.0%
                                    =====            =====          =====
</TABLE>

         The increase in the HVAC percentage of total sales in 1998 is due to
         the inclusion of NOVA sales since June 8, 1998 and a full year of ALFA
         sales.

FISCAL YEAR ENDED DECEMBER 31, 1999 COMPARED TO FISCAL YEAR ENDED DECEMBER 31,
1998.

         NET SALES. Net sales in 1999 increased $10.0 million or 5.0% to $212.1
         million from $202.1 million in 1998. This increase was partly the
         result of the inclusion of Nova, acquired in June 1998, for a full year
         in 1999, and to the commencement of operations in Poland in the second
         quarter of 1999. Excluding NOVA and Poland, net sales in 1999 would
         have increased $3.2 million or 2.0%. North American sales increased
         3.0%, adjusted for certain markets transferred to ALFA in 1999. Sales
         of water systems increased 1.8% and HVAC sales increased 4.4%. ALFA
         sales in 1999, adjusted for transferred markets, were even with 1998.
         However, the weaker Escudo in 1999 as compared to 1998 deflated U.S.
         dollar reported ALFA sales by approximately $2.7 million. In local
         currency, ALFA's sales increased approximately 4.5%.

         GROSS PROFIT. Gross profit increased $18.4 million in 1999 to $57.4
         million from $39.0 million in 1998. As a percentage of sales, gross
         profit in 1999 increased to 27.1% from 19.3% in 1998. The comparison of
         gross profit from 1999 to 1998 is impacted by the acquisition of NOVA
         and the commencement of operations in Poland. Excluding Nova and
         Poland, gross profit would have increased $18.2 million and the gross
         margin would have increased 9 percentage points to 28.3%. Several
         factors contributed to the margin increase, including net higher
         selling prices, lower outgoing freight costs, lower scrap costs and
         significantly improved labor productivity. Scrap and productivity
         improvements were the result of the expansion of worldclass
         manufacturing practices and on-going capital investments in all of
         AMTROL's manufacturing locations. Lower materials costs, particularly
         lower steel costs in Europe, contributed to higher 1999 margins. Cost
         of sales in 1998 included an abnormal warranty charge of $4.5 million
         and incremental manufacturing inefficiencies associated with a plant
         relocation of $3.3 million.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
         administrative expenses increased $.6 million (or 2.2%) in 1999 to
         $28.4 million from $27.8 million in 1998. Without NOVA and Poland, SG&A
         would have been essentially the same in both years, although 1999
         administrative expenses included higher management incentive
         compensation of approximately $2.4 million. Incentive compensation in
         1999 was based entirely on earnings performance.


                                       13
<PAGE>   14
         Part of the Company's strategic focus has been to reduce operating
         costs. As a result, selling, general and administrative expenses as a
         percentage of sales have decreased from 17.8% in 1996 to 13.4% in 1999.
         A significant portion of the cost decrease has been achieved through
         personnel reductions associated with the elimination of redundant and
         unnecessary functions. Position eliminations at the Company's corporate
         headquarters have resulted in an approximate 25% headcount reduction
         since 1996. The Company will continue to rationalize operating costs to
         take advantage of improved information systems and technology.

         INCOME (LOSS) FROM OPERATIONS. Income from operations increased $25.9
         million to $24.5 million in 1999 from ($1.4 million) in 1998. Operating
         income in 1998 included certain non-recurring charges relating to plant
         closures, management reorganization and restructuring of approximately
         $17.4 million.

         EARNINGS BEFORE INTEREST EXPENSE, TAXES, DEPRECIATION AND AMORTIZATION
         (EBITDA). EBITDA in 1999 was $38.3 million compared to $12.5 million in
         1998, an increase of $25.8 million or 206%.

         INTEREST INCOME (EXPENSE), NET. Net interest expense decreased $1.3
         million in 1999 from 1998 due to lower debt levels resulting from
         improved cash collection efforts of customer accounts.

         INCOME TAXES. Income tax expense increased $10.8 million in 1999 as
         compared to 1998.

         NET INCOME (LOSS). The net income in 1999 of $1.9 million compares to a
         net loss in 1998 of $13.4 million, an absolute change of $15.3 million.

FISCAL YEAR ENDED DECEMBER 31, 1998 COMPARED TO FISCAL YEAR ENDED DECEMBER 31,
1997.

         NET SALES. Net sales increased $25.7 million or 14.6% in 1998 to $202.1
         million from $176.4 million in 1997. This increase is mainly
         attributable to the full year inclusion of ALFA and the addition of
         NOVA in June 1998, both of which are partially offset by the sale in
         1997 of American Granby. Net 1998 sales in North America, adjusted for
         certain markets transferred to ALFA in 1998 and the sale of American
         Granby in 1997, were essentially even with 1997. Water systems sales
         recovered in the last half of 1998 after being lower earlier in the
         year due to production disruptions caused by unanticipated delays in
         relocating water system production from Nashville to West Warwick,
         Rhode Island.

         GROSS PROFIT. Gross profit declined $6.2 million in 1998 to $39.0
         million from $45.2 million in 1997. As noted earlier in this section,
         the comparison of gross profit from 1998 to 1997 is impacted by the
         acquisitions of ALFA and NOVA and the 1997 disposition of American
         Granby. Excluding these acquisitions and disposition, gross profit
         would have decreased $9.9 million primarily due to: (i) special
         warranty charges recorded in 1998 and (ii) manufacturing inefficiencies
         associated with relocating production of large water systems. The
         Company recorded abnormal warranty costs of $4.5 million relating
         primarily to a product manufactured in 1995/1996. The

                                       14
<PAGE>   15
         circumstances creating the abnormal warranty costs have been corrected
         but the Company has experienced higher than normal warranty claims for
         these products sold in previous periods. Furthermore, the Company
         incurred increased production costs of approximately $3.3 million
         resulting from difficulties in achieving efficient production levels on
         the production lines relocated to West Warwick from Nashville.
         Increased production costs include higher labor, maintenance and scrap,
         as well as factory overhead. The Company believes that incremental
         manufacturing inefficiencies associated with the relocation of the
         Nashville production were essentially eliminated by the end of 1998.

         As a percentage of sales, gross profit in 1998 decreased to 19.3% from
         25.6% in 1997. Without the acquisitions and disposition, warranty
         charges and manufacturing inefficiencies, the 1998 gross profit
         percentage would have been approximately even with 1997.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
         administrative expenses increased $2.1 million or 8.2% in 1998 to $27.8
         million from $25.7 million in 1997. As a percentage of sales, SG&A
         expenses were 13.8% in 1998 compared to 14.6% in 1997. As noted earlier
         in this section, the comparison of 1998 to 1997 is impacted by the
         acquisitions of ALFA and NOVA and the 1997 disposition of American
         Granby. Also, SG&A includes $0.4 million of expenses incurred in 1998
         relating to an acquisition which was not completed and consulting costs
         of $0.9 million relating to outside consultants engaged to help
         facilitate and execute certain restructuring and reorganization
         activities. Without ALFA and NOVA, the cost of the failed acquisition
         and additional consulting charges, SG&A would have decreased $2.4
         million or 9.8%.

         PLANT CLOSING AND REORGANIZATION COSTS. The Company transferred certain
         production lines from its Nashville facility to its West Warwick, Rhode
         Island facility in December 1997. In connection with the relocation,
         the Company incurred incremental plant closing costs in 1998 of $4.5
         million resulting from unexpected retrofitting and reconditioning
         required for the relocated equipment, damage to equipment during
         shipment, and delays in preparing the Nashville building for sale. This
         amount has been reflected in the accompanying financial statements.

         MANAGEMENT RESTRUCTURING. The Company, in connection with certain
         restructuring and reorganization activities, discontinued certain
         product lines and took a number of actions to reduce the number of
         variations offered on many of its products, thereby reducing inventory
         levels. Certain members of senior management have left the Company in
         connection with these restructuring activities. The unrecoverable cost
         of discontinued inventory and the cost of programs to reduce the number
         of product offerings, combined with the cost of post employment
         benefits for departing executives, aggregates $3.7 million and has been
         reflected in the accompanying financial statements.

         INCOME (LOSS) FROM OPERATIONS. For the reasons set forth above,
         income/(loss) from operations decreased $11.4 million to ($1.4) million
         in 1998 from $10.0 million in 1997. As noted earlier in this section,
         the comparison of 1998 to 1997 is impacted by the recent acquisitions
         of ALFA and NOVA and the 1997 disposition of American Granby, as well
         as the plant closing and reorganization costs, management restructuring
         and abnormal warranty costs. Excluding the effects of these items,
         income from operations would have increased approximately $4.5 million.


                                       15
<PAGE>   16
         EARNINGS BEFORE INTEREST EXPENSE, TAXES, DEPRECIATION AND AMORTIZATION
         (EBITDA). EBITDA in 1998 approximated $12.5 million, a decrease of
         $14.4 million compared to 1997. Excluding the impact of plant closing
         and reorganization costs, management restructuring and abnormal
         warranty costs, EBITDA would have approximated $29.8 million in 1998.

         INTEREST INCOME (EXPENSE), NET. Net interest expense increased $2.1
         million in 1998 from 1997 due to higher debt levels earlier in 1998,
         the inclusion of a full year of ALFA in 1998 and the inclusion of NOVA
         for seven months in 1998.

         INCOME TAXES. Income tax benefit increased $6.7 million in 1998 as
         compared to 1997.

         NET INCOME. The net loss in 1998 of $13.4 million compares to a net
         loss of $7.6 million in 1997.


LIQUIDITY AND CAPITAL RESOURCES

         The Company's cash flows from operating activities were approximately
         $3.7 million, $1.5 million and $21.7 million for the years ended
         December 31, 1997, 1998 and 1999, respectively.

         The Company's cash balance decreased $0.4 million at December 31, 1999
         to $.7 million from $1.1 million in 1998. Although the Company has
         available up to $30 million from its revolving credit facility to meet
         short-term working capital needs, it uses its excess cash to keep
         borrowing under the revolver to a minimum. There were no borrowings
         against the revolver at December 31, 1999. However, amounts available
         under the revolver approximated $28.9 million due to outstanding
         letters of credit totaling $1.1 million at December 31, 1999.

         The Company's operating capital (defined as accounts receivable and
         inventory, less accounts payable) decreased approximately $2.0 from
         $32.1 million at December 31, 1998 to $30.1 million at December 31,
         1999.

         Accounts receivable increased $1.4 million at December 31, 1999 to
         $30.0 million from $28.9 million at December 31, 1998, or 4.8%. The
         increase in accounts receivable is consistent with increase in sales.
         Additionally, the Company did not experience any significant overall
         changes in credit terms, credit utilization or delinquency in accounts
         receivable in 1999.

         The Company's inventories decreased $2.0 million at December 31, 1999
         to $22.3 million from $24.3 million in 1998, or 8.1%. The decrease is
         consistent with the Company's efforts to eliminate redundant, low
         volume products and maintain optimum levels of high volume products.

         Capital expenditures were $8.5 million, $9.9 million and $5.8 million
         in the years ended December 31, 1997, 1998 and 1999, respectively.
         Approximately $3.4 million of the 1999 expenditures related primarily
         to ongoing maintenance and upgrading of the

                                       16
<PAGE>   17
         Company's manufacturing technology at its production facilities. In
         addition, approximately $2.2 million was expended in 1999 to enhance
         and complete the implementation of the Company's Enterprise Resource
         Planning System ("ERP") and an additional $.2 million was expended for
         other information technology investments. Total capital expenditures
         are expected to be approximately $7.5 million in 2000.

         The Company has obtained financing under a Bank Credit Facility (the
         "Facility") which, at December 31, 1999, consists of $51.0 million of
         senior term loans (the "Term Loans") and a $30.0 million revolving
         credit facility (the "Revolving Credit Facility"). A portion ($7.2
         million) of the Term Loans (the "Tranche A Term Loans") will mature on
         May 13, 2002, with quarterly amortization payments during the term of
         such loans. The remainder ($43.8 million) of the Term Loans (the
         "Tranche B Term Loans") will mature on May 13, 2004, with nominal
         quarterly amortization prior to the maturity of the Tranche A Term
         Loans and with the remaining amounts amortizing on a quarterly basis
         thereafter. The Revolving Credit Facility includes a sublimit providing
         for up to $20.0 million of availability on a revolving credit basis to
         finance permitted acquisitions. The commitments under the Revolving
         Credit Facility and the acquisition sublimit will each reduce by $5.0
         million on November 13, 2000 and $10.0 million on November 13, 2001.
         The Revolving Credit Facility will mature on May 13, 2002. The Bank
         Credit Facility is secured by substantially all assets of the Company
         and its domestic subsidiaries.

         In November 1996 AMTROL issued, under an Indenture, $115.0 million of
         Senior Subordinated Notes due 2006 (the "Notes"). The Notes are
         unsecured obligations of AMTROL. The Notes bear interest at a rate of
         10.625% per annum and are payable semi-annually on each June 30 and
         December 31 commencing on June 30, 1997. The Notes are redeemable at
         the option of AMTROL on or after December 31, 2001. From and after
         December 31, 2001, the Notes will be subject to redemption at the
         option of AMTROL, in whole or in part, at various redemption prices,
         declining from 105.313% of the principal amount to par on and after
         December 31, 2003. Upon a "Change of Control" (as defined in the
         Indenture), each Note holder has the right to require the Company to
         repurchase such holder's Notes at a purchase price of 101% of the
         principal amount plus accrued interest. The Indenture contains certain
         affirmative and negative covenants and restrictions. As of December 31,
         1999, AMTROL is in compliance with the various covenants of the
         Indenture.

         The significant increase in EBITDA and cash flow from operations in
         1999 enabled AMTROL to repay approximately $18.6 million in borrowings
         in 1999.

         The Company intends to fund its future working capital, capital
         expenditures and debt service requirements through cash flows generated
         from operations and borrowings under the Revolving Credit Facility
         (described above). Management believes that cash generated from
         operations, together with borrowings available under the Revolving
         Credit Facility, will be sufficient to meet the Company's working
         capital and capital expenditure needs in the foreseeable future. The
         Company may consider other options available to it in connection with
         funding future working capital and capital expenditure needs, including
         the issuance of additional debt and equity securities.

         AMTROL will continue to selectively pursue strategic acquisitions, such
         as the acquisitions of AMTROL ALFA and AMTROL NOVA. The Company
         believes that

                                       17
<PAGE>   18
         strategic acquisitions, both domestic and international, provide an
         effective means of increasing or establishing a market presence in
         targeted markets and an efficient method of identifying and introducing
         new products and technologies in markets where it already has a strong
         presence. The Company also believes that establishing local
         manufacturing and distribution facilities in international markets
         significantly enhances its ability to build strong customer
         relationships, understand local product preferences and to be price
         competitive.

INFLATION

         The Company believes that inflation does not have a material effect on
         its results of operations or financial condition. To insulate against
         fluctuating prices, the Company has negotiated annual contracts with
         suppliers of certain key raw materials (primarily steel) for a
         significant percentage of its expected usage through 2000.

RECENT ACCOUNTING PRONOUNCEMENTS

         There are no recent accounting pronouncements not yet implemented by
         the Company which will materially impact the Company's financial
         position or results of operations.

YEAR 2000 DISCLOSURE

         The year 2000 issue arose out of the fact that many computer programs
         were written using two digits to identify the applicable year rather
         than four digits. It was feared that computer programs with
         date-sensitive software or equipment with embedded date-sensitive
         technology might misinterpret a two-digit code; for example, "00,"
         entered in a date-field for the year "2000," might be wrongly
         interpreted as the year "1900." This error could result in system or
         equipment failures or miscalculations and disruptions of operations. As
         of March 30, 2000, the Company had not experienced any significant
         disruption as a result of the Year 2000 issue.

         The Company completed all Year 2000 remediation and readiness
         procedures in 1999, as part of the implementation process related to a
         new Enterprise Resource Planning System ("ERP"). The ERP provides the
         Company with a wide-range of operational and administrative
         efficiencies and supports a significant portion of the Company's North
         American operations. The cost to resolve the Year 2000 issue cannot be
         distinguished from the overall cost of the ERP which approximated $5.0
         million as of the end of 1999. Of this amount, approximately $2.1
         million was spent during 1999. Costs to remediate Year 2000 exposures
         other than costs incurred in connection with the ERP are not material.

         As part of the Company's remediation and readiness procedures mentioned
         above, the Company assessed the Year 2000 risks related to significant
         relationships with its critical third-party suppliers and customers.
         Despite these efforts, the Company can provide no assurance that all
         supplier and customer Year 2000 compliance plans were successfully
         completed in a timely manner, although it is not currently aware of any
         problems which would significantly impact its operations.


                                       18
<PAGE>   19
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         The Company is exposed to market risk related to foreign currency
         exchange rates and changes in interest rates, but the impact on 1999
         and the expected impact on 2000 operating results is not material. The
         Company currently does not use financial or other derivative
         instruments to hedge its foreign currency exposures, which relate
         primarily to its operations in Portugal and Germany. A significant
         portion of its Portuguese revenues are denominated in the Euro, and
         when translated into U.S. dollars, can result in higher or lower
         earnings due to currency fluctuations. Similarly, its German operations
         are primarily denominated in German Marks which, when translated into
         U.S. dollars, can cause an increase or decrease in earnings from
         currency fluctuations. For both operations, a 10% fluctuation in the
         exchange rate between these foreign currencies and the U.S. dollar
         would have less than a 2% impact on expected 2000 EBITDA, individually.
         The Company believes that its cash flow exposure resulting from its net
         foreign currency denominated asset positions in both Portugal and
         Germany is not material.

         The rate of interest on borrowings under the Company's Bank Credit
         Agreement is variable and ranges from: (i) a base rate which is equal
         to the higher of the federal funds rate plus .5% or the bank's prime
         lending rate plus an applicable spread of .75% to 2.0% to (ii) a
         Eurodollar rate plus an applicable spread of from 1.75% to 3.0% (in
         both cases based on the type of loan and the Company's leverage ratio
         at the time). The Company has the option of selecting the interest
         period (one, two, three, six, nine or twelve months) for Eurodollar
         based loans. The following table summarizes the interest rates in
         effect for the various facilities under the Company's Bank Credit
         Agreement as of December 31, 1999 (in thousands):
<TABLE>
<CAPTION>

                                      2000
                            ------------------------
                              1st Qtr       2nd Qtr.
<S>                         <C>            <C>
Tranche A                   $    6,762     $    6,344
Applicable interest rate          8.63%          8.63%

Tranche B                   $   43,663     $   43,245
Applicable interest rate          9.13%          9.13%
</TABLE>


         The interest rate has not been determined for any amounts due under the
         Bank Credit Agreement beyond the second quarter of 2000. The Company
         has entered into an interest rate swap agreement to limit a portion of
         its exposure to fluctuating interest rates. Under the agreement, the
         Company will pay or receive the difference between the floating three
         month LIBOR rate and a fixed LIBOR rate, applied to a notional amount
         of $15 million. The fixed LIBOR rate is 5.75% in 2000 and 5.85%
         thereafter until maturity of the agreement on June 30, 2004. The
         Company's $115 million of Senior Subordinated Debentures are not
         subject to interest rate risk since the rate of interest on these
         securities is fixed until maturity in 2006.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA


                                       19
<PAGE>   20
The index to financial statements is included on page 29 of this report.

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

        None.


                                       20
<PAGE>   21
                                    PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

The following table sets forth certain information regarding each of the
directors and executive officers of the Company:
<TABLE>
<CAPTION>

               NAME                         AGE             POSITION
               ----                         ---             --------
<S>                                        <C>              <C>
         John P. Cashman                     59             Chairman of the Board

         Albert D. Indelicato                49             President, Chief Executive Officer and Director

         Edward J. Cooney                    52             Executive Vice President Sales

         Thomas Sturiale                     63             President North America

         Larry T. Guillemette                44             Executive Vice President, Marketing and Business
                                                            Development

         Christopher A. Laus                 41             Vice President Operations

         Donald W. Reilly                    41             Vice President, Chief Financial Officer and Treasurer

         Phillip W. Colantonio               49             Vice President Human Resources and Administration

         Patricia Pickrel                    49             Secretary and General Counsel

         Andrew M. Massimilla                58             Director

         David P. Spalding                   45             Director

         James A. Stern                      49             Director

         Anthony D. Tutrone                  35             Director
</TABLE>


John P. ("Jack") Cashman became Chairman of the Board upon the Merger and served
also as Chief Executive Officer and President until Mr. Indelicato joined the
Company in July 1998. From 1989 until March 1996, Mr. Cashman served as Chairman
and Co-Chief Executive Officer of R. P. Scherer Corporation ("R. P. Scherer").
Mr. Cashman joined R. P. Scherer concurrent with that company's leveraged buyout
in 1989.

Albert D. Indelicato, President and Chief Executive Officer, joined the Company
in July 1998. From 1996 to 1998, he was President of Litorale Holdings, Inc., a
consulting firm specializing in acquisitions. From 1970 to 1996, Mr. Indelicato
served in various managerial capacities of

                                       21
<PAGE>   22
Power Control Technologies and its predecessor companies, including most
recently as Chief Executive Officer and Director.

Edward J. Cooney, Executive Vice President Sales, joined the Company in 1978.
Mr. Cooney served as Chief Financial Officer from 1991 to 1998 and as Treasurer
from 1982 to 1998, as Senior Vice President-Operations from 1988 to 1991, and as
Vice President from 1985 to 1988.

Thomas Sturiale, President North America, joined the Company in 1998. From
1992-1998, he was President of Neles-Jamesbury, Inc. From April 1998 to June
1999, he was the Executive Vice President-Operations and Technology.

Donald W. Reilly, Vice President, Chief Financial Officer, and Treasurer, joined
the Company in 1997 serving as Vice President-Finance from 1997 to 1998. From
May 1992 to October 1997, he was Director of Finance and Corporate Controller of
the A. T. Cross Company.

Phillip W. Colantonio, Vice President Human Resources and Administration,
joined the Company in January 1999. Previously, Mr. Colantonio was the sole
proprietor of a consulting services firm providing consulting services to
various businesses.

Patricia A. Pickrel, Secretary and General Counsel, joined the company as
counsel in 1998 and became secretary in 1999. Previously, Ms. Pickrel was
engaged in the private practice of law.

Larry T. Guillemette, Executive Vice President-Marketing and Business
Development, joined the Company in 1998. From 1991 to 1998, Mr. Guillemette was
President and Chief Executive Officer of Balcrank Products, Inc.

Andrew M. Massimilla became a director of the Company in June 1998. Mr.
Massimilla has been the sole proprietor of a consulting firm providing
management consulting services to various businesses since 1991.

David P. Spalding became a director of the Company upon the Merger. Mr. Spalding
has been Vice Chairman of Cypress since its formation in April 1994. Prior to
joining Cypress, he was Managing Director in the Merchant Banking Group of
Lehman Brothers Inc. since February 1991. Mr. Spalding is also a director of
Lear Corporation, William Scotsman, Inc., and Frank's Nursery & Craft, Inc.

James A. Stern became a director of the Company upon the Merger. Mr. Stern has
been Chairman of Cypress since its formation in April 1994. Prior to joining
Cypress, Mr. Stern spent his entire career with Lehman Brothers Inc., most
recently as head of the Merchant Banking Group. Mr. Stern is a director of Lear
Corporation, Cinemark USA, Inc, Wesco International Inc. and Frank's Nursery &
Craft, Inc.

Anthony D. Tutrone became a director of the Company upon the Merger. Mr. Tutrone
is a managing director of Cypress and has been a member of the firm since its
formation in April 1994. Prior to joining Cypress, he was a member of the
Merchant Banking Group of Lehman Brothers, Inc. Mr. Tutrone is also a director
of Wesco International Inc.


                                       22
<PAGE>   23
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934.

Not applicable

ITEM 11. EXECUTIVE COMPENSATION

The following table summarizes the compensation paid or accrued by the Company
to its Chief Executive Officer and the four other most highly compensated
executive officers who earned more than $100,000 in salary and bonus in 1999 in
each case for services rendered in all capacities to the Company during the
three year period ended December 31, 1999:


                                       23
<PAGE>   24
                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

                                                                                   LONG TERM
                                                                                  COMPENSATION
                                                                                  -------------
                                                                                    AWARDS
                                                             ANNUAL               -------------
                                                        COMPENSATION (a)           SECURITIES
                                                     -----------------------       UNDERLYING           ALL OTHER
     NAME AND PRINCIPAL POSITION          YEAR       SALARY (b)        BONUS       OPTIONS/SARS        COMPENSATION (c)
     ---------------------------          ----       ----------        -----      -------------       -----------------
<S>                                      <C>        <C>            <C>            <C>              <C>
Albert D. Indelicato (g)                    1999       $300,000       $300,000       30,500 (d)       $  1,698
President and Chief Executive Officer       1998        132,692        130,000             --            1,406
                                            1997           --             --               --             --


John P. Cashman                             1999        223,295        180,877             --           15,137
Chairman (d)                                1998        453,200           --               --           15,215
                                            1997        440,000         49,720       44,796 (e)         17,000

Edward J. Cooney                            1999        185,400        162,040             --            3,565
Executive Vice President-                   1998        185,400         10,000             --            3,940
Sales                                       1997        180,000         20,340        6,838 (f)          8,862


Thomas Sturiale (g)                         1999        175,385        152,950       11,000 (d)          4,835
President North America                     1998        113,336         25,000             --             --
                                            1997           --             --               --             --


Donald W. Reilly                            1999        147,500        126,730       11,000 (d)          2,550
Vice President                              1998        134,615         25,000                           1,483
Chief Financial Officer and Treasurer       1997         22,500         20,000                              47
</TABLE>


(a)      Any prequisites or other personal benefits received from the Company by
         any of the named executives were substantially less than the reporting
         thresholds established by the Securities and Exchange Commission (the
         lesser of $50,000 or 10% of the individual's cash compensation).

(b)      Includes portion of salary deferred under the Company's 401(k) Plan.

(c)      Amounts paid in 1999 include the Company's contributions under the
         Company's 401(k) Plan in the amount of $1,038, $15,137, $2,500, $2,157
         and $2,155 for Messrs. Indelicato, Cashman, Cooney, Sturiale and
         Reilly, respectively, and premiums paid by the Company with respect to
         term life insurance purchased for such executive officers in the amount
         of $660, $1,065, $2,678 and $395 for Messrs. Indelicato, Cooney,
         Sturiale and Reilly, respectively.


                                       24
<PAGE>   25
(d)      These are non-qualified options to purchase common stock of Holdings,
         the parent corporation of AMTROL. One half of such options are time
         based and vest immediately. The remaining half of such options are
         performance based and vest based upon annual and cumulative
         performance. Options vest upon a public offering or sale of Holdings,
         AMTROL or substantially all of the assets of AMTROL (a "Triggering
         Event").

(e)      These are non-qualified options to purchase common stock of Holdings,
         the parent corporation of AMTROL. These options are immediately
         exercisable. Shares purchased under the options are subject to
         repurchase by Holdings at the exercise price upon certain
         circumstances. Options for 22,398 shares are released from restrictions
         based upon continued employment, with 7,454 shares released immediately
         and 14,944 shares released in 32 equal monthly installments through
         August 2000. As of December 31, 1999, share options released from
         restrictions amounted to 18,662. As of December 31, 1999, vested
         incentive stock options amounted to 1,999. Options for 22,398 shares
         are released from restrictions based upon relative achievement of
         management's business plan for fiscal years 1997 through 2001. One-half
         of such performance-based options are released from restriction based
         upon annual performance and one-half based upon cumulative performance.
         Restrictions lapse upon a Triggering Event.

(f)      These represent options to purchase common stock of Holdings. One-half
         (3,419 shares) of these options are incentive stock options which vest
         1,000 shares in December 1997, 218 shares in January 1998 and the
         balance in 31 equal monthly installments of 71 shares through August
         2000. One-half (3,419 shares) of these options are non qualified stock
         options which are immediately exercisable, provided that purchased
         shares are subject to repurchase by Holdings at the exercise price
         until such shares vest based upon relative achievement of management's
         business plan for fiscal years 1997 through 2001. One-half of such
         performance based options vest based upon annual performance and
         one-half based upon cumulative performance. Options vest and
         restrictions lapse upon a Triggering Event.

(g)      Mr. Indelicato joined the Company in July 1998 and Mr. Sturiale in
         April 1998


                                       25
<PAGE>   26
OPTION PLANS

The following table sets forth certain information regarding currently
outstanding options held by the named executive officers as of December 31,
1999.

               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                         AND YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>

                                                                              NUMBER OF
                                                                             SECURITIES
                                                                             UNDERLYING
                                                                             UNEXERCISED
                                     NUMBER OF                             OPTION/SARS AT
                                     SECURITIES                            FISCAL YEAR END          VALUE OF
                                     UNDERLYING                               1999 (a)              UNEXERCISED
NAME                                OPTIONS/SARS           VALUE             EXERCISABLE/           IN-THE-MONEY
                                     EXERCISED           REALIZED($)        UNEXERCISABLE         OPTIONS/SAR($)(b)
                                     ---------           -----------        -------------         -----------------
<S>                                 <C>                 <C>                <C>                    <C>
John P. Cashman                          0                   0                44,796/0                  0/0
Phillip W. Colantonio                    0                   0                 0/5,000                  0/0
Edward J. Cooney                         0                   0             8,257/1,420            100,003/0
Albert D. Indelicato                     0                   0                0/30,500                  0/0
Christopher Laus                         0                   0                 0/5,000                  0/0
Larry T. Guillemette                     0                   0                0/11,000                  0/0
Andrew M. Massimilla                     0                   0                0/22,039                  0/0
Donald W. Reilly                         0                   0                0/11,000                  0/0
Thomas Sturiale                          0                   0                0/11,000                  0/0
</TABLE>

(a)      Immediately prior to the Merger, Mr. Cooney exchanged options
         exercisable for AMTROL common stock for options exercisable for
         Holdings common stock ("Amended Options") based on a conversion ratio
         of .2825 share of Holdings common stock for each share of AMTROL common
         stock subject to the option. Includes 2,839 shares of Holdings common
         stock subject to Amended Options received by Mr. Cooney in the
         exchange. The Amended Options are fully exercisable.

(b)      Based on the market value of $100 per share (determined by the Holdings
         Board of Directors to be the purchase price of Holdings common stock
         issued in connection with the Merger) less the exercise price of the
         options.

  SUPPLEMENTAL RETIREMENT PLANS

         The Company maintains two Supplemental Retirement Plans: Supplemental
         Retirement Plan I which covers a former officer and director and
         Supplemental Retirement Plan II which covers Mr. Cooney and two former
         officers. Under Supplemental Retirement Plan I, the former officer is
         entitled to receive an annual benefit of $150,000 per year for 15 years
         following his retirement. In January 1997, he began to receive the
         annual benefit in equal quarterly installments. Mr. Cooney is entitled
         to receive an annual benefit of $50,000 per year for a period of 15
         years upon retirement on or after age 62. The retirement benefit is
         forfeited in its entirety if he terminates employment or dies prior to
         age 62. The Company has purchased a split-dollar life insurance policy
         on Mr. Cooney to provide a death benefit not to exceed $300,000. If his
         employment is terminated prior to

                                       26
<PAGE>   27
         retirement he may purchase the policy from the Company. In the event a
         participant in either Supplemental Retirement Plan dies after
         retirement, his beneficiary will receive any remaining benefits which
         such participant was entitled to receive at the time of his death.

EMPLOYMENT AGREEMENTS AND OTHER TRANSACTIONS

         The Company, either directly or through its subsidiaries, has entered
         into employment agreements (each referred to individually as an
         "Agreement" and collectively as the "Agreements"), with Messrs. Cooney,
         Indelicato and Reilly to secure their continued employment with the
         Company. The Agreements provide for an annual base salary, subject to
         annual adjustments. In addition, the executives are entitled to
         participate in incentive compensation plans and all employee benefit
         arrangements generally appropriate to such executive's
         responsibilities. In the event the executive's employment is terminated
         without cause by the Company or, for Mr. Cooney, with Good Reason by
         the executive, such executive after termination is entitled to:
         continuation of monthly salary, including the pro rata portion of any
         bonus or other incentive compensation otherwise payable for the fiscal
         period in which such termination occurs, and maintenance of all life,
         disability, medical and health insurance benefits to which the
         executive was entitled immediately prior to termination. The duration
         of such benefits is 24 months, 18 months and 15 months for Messrs.
         Cooney, Indelicato and Reilly, respectively. In the case of Mr. Cooney,
         the Agreement also prohibits the executive, for a period of two years
         after the termination of his employment, from directly or indirectly,
         advising, assisting or being connected with any enterprise which
         competes with the Company.

         In addition, under separate Management Stockholder's Agreements between
         Holdings and Messrs. Cashman and Cooney if, prior to a public offering
         of the common stock of Holdings, the executive dies or becomes disabled
         while employed by the Company or following normal retirement or the
         executive's employment is terminated without Cause by the Company or
         with Good Reason by the executive (as such terms are defined in the
         agreements), the executive has the right to require Holdings to
         purchase all or any portion of Holdings common stock then held by the
         executive at the repurchase price specified in the agreement and to pay
         the executive the amount by which the repurchase price exceeds the
         exercise price of any options then held by the executive. If there
         exists and is continuing an event of default on the part of the Company
         under any loan guarantee or other agreement under which the Company has
         borrowed money or such repurchase would result in an event of default,
         the Company shall not be obligated to repurchase any of the common
         stock. The repurchase price is the market price of the Holdings common
         stock. If an executive's employment is terminated for Cause by the
         Company or with Good Reason by the executive, Holdings has the right to
         purchase all, but not less than all, Holdings common stock then held by
         the executive at a price equal to the lesser of $100 or the market
         price of the Holdings common stock, provided that if the executive's
         employment is terminated by the executive with Good Reason following a
         public offering, the repurchase price is the market price of the
         Holdings common stock. If Holdings exercises its repurchase right it
         must also pay the executive an amount equal to the excess of the
         repurchase price over the exercise price of any options held by the
         executive in cancellation of such options. Good Reason includes certain
         significant changes in the nature of the executive's employment
         including certain reductions in compensation and changes in
         responsibilities and powers.


                                       27
<PAGE>   28
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT

         The Company is a direct, wholly owned subsidiary of Holdings. The
         following table sets forth information with respect to the beneficial
         ownership of Holdings common stock or preferred stock as of March 15 by
         (i) each person known to the Company to beneficially own more than 5%
         of Holdings' outstanding common stock, (ii) each of the Company's
         directors and named executive officers and (iii) all directors and
         executive officers of the Company as a group. Each share of Holdings
         preferred stock is convertible at any time into one share of Holdings
         common stock. Unless otherwise indicated below, the persons and
         entities named in the table have sole voting and investment power with
         respect to all shares beneficially owned.
<TABLE>
<CAPTION>
                                                      COMMON STOCK             PREFERRED STOCK
                                                -----------------------     ------------------------
                                                NUMBER OF    PERCENTAGE     NUMBER OF     PERCENTAGE
      NAME AND ADDRESS OF BENEFICIAL OWNER        SHARES      OF TOTAL       SHARES       OF TOTAL
      ------------------------------------        -------     --------       ------       --------
<S>                                             <C>          <C>            <C>           <C>
Cypress Merchant Banking Partners L.P. (a)       733,033          91.6%        95,076          92.8%
c/o The Cypress Group L.L.C
65 East 55th Street, 28th Floor
New York, NY 10022

Cypress Offshore Partners L.P. (a)                37,967           4.8%        4, 924           4.8%
c/o The Cypress Group L.L.C
65 East 55th Street, 28th Floor
New York, NY 10022

John P. Cashman(c)                                62,032           7.3%         2,235           2.2%
Phillip W. Colantonio (d)                          5,500            .7%
Edward J. Cooney(b)(c)                             9,572           1.2%           250           0.2%
Larry Guillemette (d)                             12,000           1.5%          --            --
Albert D. Indelicato (d)                          33,750           4.1%          --            --
Christopher Laus(d)                                6,050            .8%          --            --
Andrew Massimilla (d)                             22,039           2.7%          --            --
Donald W. Reilly(d)                               11,600           1.4%          --            --
David P. Spalding(a)                                --            --             --            --
James A. Stern(a)                                   --            --             --            --
Thomas Sturiale (d)                               12,500           1.5%          --            --
Anthony D. Tutrone                                  --            --             --            --
All directors and executive officers as a        175,043          18.4%         4,924           4.8%
group (consisting of 12 persons)
</TABLE>

         (a)      Cypress Merchant Banking Partners L.P. and Cypress Offshore
                  Partners L.P. are affiliates of The Cypress Group L.L.C.
                  Messrs. Spalding and Stern are executives of The Cypress Group
                  L.L.C. and may be deemed to share beneficial ownership of the
                  shares shown as beneficially owned by such Cypress entities.
                  Each of such individuals disclaims beneficial ownership of
                  such shares. See Item 10, "Directors and Executive Officers of
                  the Company."

         (b)      Immediately prior to the Merger, Mr. Cooney exchanged options
                  exercisable for AMTROL Common Stock for options exercisable
                  for Holdings common stock. Includes 2,839 shares of common
                  stock issuable upon exercise of such options by Mr. Cooney.
                  See Item 11, "Executive Compensation".

         (c)      Includes 44,796 and 9,322 shares of Common Stock issuable upon
                  exercise of options granted to Messrs. Cashman and Cooney,
                  respectively, which will become exercisable within 60 days.
                  See Item 11, "Executive Compensation".


                                       28
<PAGE>   29
         (d)      Includes 11,000, 30,500, 21,039, and 11,000 shares of Common
                  Stock issuable upon exercise of options granted to Messrs.
                  Guillemette, Indelicato, Massimilla, and Sturiale,
                  respectively, which will become exercisable within 60 days.
                  See Item 11, "Executive Compensation".

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         A director of the Company, Mr. Massimilla, provides management
         consulting services to the Company for which he is paid by the Cypress
         Group L.L.C. The Company reimburses Cypress for its payments to Mr.
         Masimilla. During 1999, the amount of such payments was $183,000.


PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE & REPORTS ON FORM 8-K

(a) (1)  FINANCIAL STATEMENTS

         The following financial statements are included in a separate section
         of this Report commencing on the page numbers specified below:
<TABLE>
<CAPTION>

                                                                                PAGE
                                                                                ----
<S>                                                                            <C>
         Report of Independent Public Accountants                                 31

         Consolidated Balance Sheets as of December 31, 1998 and 1999             32

         Consolidated Statements of Operations and Comprehensive Loss
         for the years ended December 31, 1997, 1998 and 1999                     33

         Consolidated Statements of Shareholders' Equity for the years
         ended December 31, 1997, 1998 and 1999                                   34

         Consolidated Statements of Cash Flows for the years ended
         December 31, 1997, 1998 and 1999                                         35

         Notes to Consolidated Financial Statements                               36
</TABLE>


                                       29
<PAGE>   30
(a) (2)  FINANCIAL STATEMENT SCHEDULE
<TABLE>
<S>                                                                             <C>
         Schedule II - Valuation and Qualifying Accounts and Reserves for the
         years ended December 31, 1997, 1998 and 1999                             51
</TABLE>

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

(a) (3) EXHIBITS

        See List of Exhibits

(b) REPORTS FILED ON FORM 8-K

         None



                                       30
<PAGE>   31
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



TO AMTROL INC.:

We have audited the accompanying consolidated balance sheets of AMTROL Inc. and
subsidiaries as of December 31, 1999 and 1998, and the related consolidated
statements of operations, comprehensive loss, shareholders' equity and cash
flows for the years ended December 31, 1999, 1998 and 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

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

Our audit was made for the purpose of forming an opinion on the basic
consolidated financials statements taken as a whole. The financial statement
schedule listed in item 14(a)(2) is the responsibility of the Company's
management and is presented for purposes of complying with the Securities and
Exchange Commission's rules and is not part of the basic financial statements.
This schedule has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, fairly states in all
material respects, the financial data required to be set forth therein in
relation to the basic consolidated financial statements taken as a whole.


                                                 /s/ Arthur Andersen LLP



Boston, Massachusetts
February 23, 2000


                                       31
<PAGE>   32
                          AMTROL INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
                                     ASSETS
<TABLE>
<CAPTION>

                                                                                      DECEMBER 31,
                                                                                 1998              1999
                                                                              ---------          ---------
Current Assets:
<S>                                                                           <C>                <C>
         Cash and cash equivalents                                            $   1,088          $     674
         Accounts receivable, less allowance for doubtful accounts of
              $1,594 and $1,188 in 1998 and 1999, respectively                   28,938             30,340
         Inventories                                                             24,319             22,346
         Tax refund receivable                                                      930                788
         Prepaid income taxes                                                     2,271              1,390
         Prepaid expenses and other                                               2,311                887
         Assets held for sale                                                       572               --
                                                                              ---------          ---------
              Total current assets                                               60,429             56,425
                                                                              ---------          ---------
Property, Plant and Equipment, at cost
         Land                                                                     6,186              5,765
         Buildings and improvements                                              13,530             12,718
         Machinery and equipment                                                 40,537             42,708
         Furniture and fixtures                                                   1,098              1,175
         Construction-in-progress and other                                       6,567              6,903
                                                                              ---------          ---------
                                                                                 67,918             69,269
         Less: accumulated depreciation and amortization                         14,590             22,169
                                                                              ---------          ---------
                                                                                 53,328             47,100
                                                                              ---------          ---------
Other Assets:
         Goodwill                                                               171,166            166,520
         Deferred financing costs                                                 6,770              5,704
         Deferred income taxes                                                    8,205              5,092
         Other                                                                      769                904
                                                                              ---------          ---------
                                                                                186,910            178,220
                                                                              ---------          ---------
                                                                              $ 300,667          $ 281,745
                                                                              =========          =========

                  LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
         Current maturities of long-term debt                                 $   4,043          $   4,935
         Notes payable to banks                                                  10,660                790
         Accounts payable                                                        21,193             22,535
         Accrued expenses                                                        14,242             15,804
         Accrued interest                                                           777                789
         Accrued income taxes                                                     2,872              2,571
                                                                              ---------          ---------
              Total current liabilities                                          53,787             47,424
                                                                              ---------          ---------

Other Noncurrent Liabilities                                                      7,909              5,633
Long-Term Debt, less current maturities                                         173,023            163,385

Commitments and Contingencies                                                      --                 --

Shareholders' Equity
         Capital stock $.01 par value - authorized 1,000 shares,
              100 shares issued                                                    --                 --
         Additional paid-in capital                                              89,823             90,156
         Retained deficit                                                       (24,363)           (22,503)
         Accumulated other comprehensive income (loss)                              488             (2,350)
                                                                              ---------          ---------
              Total shareholders' equity                                         65,948             65,303
                                                                              ---------          ---------
                                                                              $ 300,667          $ 281,745
                                                                              =========          =========
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       32
<PAGE>   33
                          AMTROL INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                   YEAR ENDED DECEMBER 31
                                                      -----------------------------------------------
                                                         1997               1998               1999
                                                      ---------          ---------          ---------
<S>                                                   <C>                <C>                <C>
Net Sales                                             $ 176,432          $ 202,142          $ 212,177

Cost of goods sold                                      131,180            158,607            154,741
Provision for abnormal warranty costs                      --                4,500               --
                                                      ---------          ---------          ---------
Total Cost of Goods Sold                                131,180            163,107            154,741

       Gross Profit                                      45,252             39,035             57,436

Operating Expenses:
       Selling                                           13,175             11,951             11,130
       General and administrative                        12,548             15,876             17,362
       Plant closing and reorganization costs             5,500              4,450               --
       Management restructuring                            --                3,693               --
       Amortization of goodwill                           3,995              4,446              4,463
                                                      ---------          ---------          ---------
       Income (loss) from operations                     10,034             (1,381)            24,481

Other Income (Expense):
       Interest expense                                 (18,684)           (20,554)           (19,224)
       Interest income                                      428                210                141
       License and distributorship fees                     245                242                234
       Other, net                                           299              1,384                353
                                                      ---------          ---------          ---------
            (Loss) income before (benefit)
            provision for income taxes                   (7,678)           (20,099)             5,985

(Benefit) Provision for Income Taxes                        (30)            (6,728)             4,125
                                                      ---------          ---------          ---------
Net (Loss) Income                                     $  (7,648)         $ (13,371)         $   1,860
                                                      =========          =========          =========
</TABLE>


                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
                                 (In thousands)
<TABLE>
<CAPTION>

                                                            YEAR ENDED DECEMBER 31
                                                 --------------------------------------------
                                                     1997              1998              1999
                                                 --------          --------          --------
<S>                                              <C>               <C>               <C>
Net (Loss) Income                                $ (7,648)         $(13,371)         $  1,860
Foreign currency translation adjustments             (285)              773            (2,838)
                                                 --------          --------          --------
Comprehensive Loss                               $ (7,933)         $(12,598)         $   (978)
                                                 ========          ========          ========
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       33
<PAGE>   34
                          AMTROL INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                 (In thousands)


<TABLE>
<CAPTION>


                                                                                              ACCUMULATED
                                                          ADDITIONAL                             OTHER
                                              CAPITAL      PAID-IN          RETAINED          COMPREHENSIVE
                                               STOCK       CAPITAL          DEFICIT           (LOSS) INCOME
                                              -------      --------         ---------         -------------

<S>                                           <C>         <C>              <C>               <C>
Balance, December 31, 1996                     $--         $ 69,326         $ (3,344)         $   --

       Net loss                                 --             --             (7,648)             --
       Currency translation adjustment          --             --               --                (285)

                                               ---         --------         --------          --------
Balance, December 31, 1997                      --           69,326          (10,992)             (285)

       Capital contribution                     --           20,497             --                --
       Net loss                                 --             --            (13,371)             --
       Currency translation adjustment          --             --               --                 773

                                               ---         --------         --------          --------
Balance, December 31, 1998                      --           89,823          (24,363)              488

       Capital contribution                     --              333             --                --
       Net income                               --             --              1,860              --
       Currency translation adjustment          --             --               --              (2,838)
                                               ---         --------         --------          --------
Balance, December 31, 1999                     $--         $ 90,156         $(22,503)         $ (2,350)
                                               ===         ========         ========          ========
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.



                                       34
<PAGE>   35
                          AMTROL INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                                YEAR ENDED DECEMBER 31
                                                                                      --------------------------------------------
                                                                                        1997              1998              1999
                                                                                      --------          --------          --------
<S>                                                                                   <C>               <C>               <C>
Cash Flows Provided by Operating Activities:
            Net (loss) income                                                         $ (7,648)         $(13,371)         $  1,860
            Adjustments to reconcile net (loss) income to net cash
                 provided by operating activities -
                     Depreciation                                                        6,384             7,554             8,369
                     Amortization                                                        5,157             5,593             5,634
                     Provision for losses on accounts receivable                           370               526              --
                     Loss on sale of fixed assets                                            2              --                 107
                     Non-cash charges                                                     --              10,077              --
            Changes in operating assets and liabilities:
                     Accounts receivable, net                                           (2,376)            2,753            (3,213)
                     Tax refund receivable                                               2,581              (566)               14
                     Inventory                                                          (1,474)            4,696               492
                     Prepaid income taxes                                                 (761)              224               881
                     Prepaid expenses and other current assets                            (331)             (135)            1,400
                     Other assets                                                         (838)           (3,963)             (567)
                     Accounts payable                                                    4,547             3,661             3,009
                     Accrued expenses and other current liabilities                     (1,152)           (5,838)            2,263
                     Other noncurrent liabilities                                          (71)           (2,575)           (1,643)
                     Deferred income taxes                                                (641)           (7,140)            3,113
                                                                                      --------          --------          --------
                          Net cash provided by operating activities                      3,749             1,496            21,719
                                                                                      --------          --------          --------
Cash Flows Used in Investing Activities:
            Acquisition of Alfa                                                        (25,500)             --                --
            Acquisition of NOVA, net of cash acquired                                     --              (5,855)             --
            Proceeds from sale of property, plant and equipment                            681             2,025               895
            Capital expenditures                                                        (8,489)           (9,858)           (5,798)
                                                                                      --------          --------          --------
                          Net cash used in investing activities                        (33,308)          (13,688)           (4,903)
                                                                                      --------          --------          --------
Cash Flows Provided by (Used in) Financing Activities:
            Repayment of long term debt                                                 (5,367)          (52,872)          (25,074)
            Issuance of long term debt                                                  29,150            40,600            16,800
            Repayment of short term debt                                                  --             (16,476)          (17,988)
            Issuance of short term debt                                                   --              20,959             8,790
            Capital contribution                                                          --              20,497               333
                                                                                      --------          --------          --------
                          Net cash provided by (used in) financing activities           23,783            12,708           (17,139)
                                                                                      --------          --------          --------
Net (Decrease) Increase in Cash and Cash Equivalents                                    (5,776)              516              (323)

Effect of exchange rate changes on cash and cash equivalents                               (63)               28               (91)

Cash and Cash Equivalents, beginning of period                                           6,383               544             1,088

                                                                                      --------          --------          --------
Cash and Cash Equivalents, end of period                                              $    544          $  1,088          $    674
                                                                                      ========          ========          ========
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       35
<PAGE>   36
(1)    BASIS OF PRESENTATION

       AMTROL Inc., a Rhode Island corporation, and its wholly-owned
       subsidiaries (collectively referred to herein as "the Company"), designs,
       manufactures and markets products used principally in flow control,
       storage, heating and other treatment of fluids in the water systems
       market and selected sectors of the heating, ventilating and air
       conditioning ("HVAC") market. The Company offers a broad product line of
       quality fluid handling products and services marketed under widely
       recognized brand names.

       The Company is a wholly-owned subsidiary of AMTROL Holdings, Inc.
       ("Holdings"), a Delaware corporation formed by The Cypress Group L.L.C.
       in 1996 to effect the acquisition of all of the outstanding common stock
       of the Company. Holdings has no other material assets, liabilities or
       operations other than those that result from its ownership of the common
       stock of the Company.

(2)    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       PRINCIPLES OF CONSOLIDATION

       The accompanying consolidated financial statements include the accounts
       of AMTROL Inc. and its wholly owned subsidiaries. All material
       intercompany balances and transactions have been eliminated in
       consolidation.

       USE OF ESTIMATES

       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
       financial statements and the reported amounts of revenues and expenses
       during the reporting period. Actual results could differ from those
       estimates.

       FISCAL YEAR

       The Company uses a calendar fiscal year and four quarterly interim
       periods ending on Saturday of the thirteenth week of the quarter.

       REVENUE RECOGNITION

       The Company generally recognizes revenue upon shipment of its products to
       customers.

       CASH AND CASH EQUIVALENTS

       Cash and cash equivalents include cash on hand and short-term investments
       that are readily convertible into cash with an original maturity to the
       Company of three months or less.

                                       36
<PAGE>   37
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

       DEPRECIABLE PROPERTY AND EQUIPMENT

       Property, plant, and equipment are stated on the basis of cost. The
       Company provides for depreciation by charges to income (computed on the
       straight-line method) in amounts estimated to depreciate the cost of
       properties over their estimated useful lives which generally fall within
       the following ranges:
<TABLE>
<S>                                                          <C>
       Building and improvements                             10-40 years
       Machinery and equipment                                3-12 years
       Furniture and fixtures                                 5-20 years
       Other                                                  3-10 years
</TABLE>

       Leasehold improvements are amortized over the life of the lease or the
       estimated useful life of the improvement, whichever is shorter.

       Interest costs, during the construction period, on borrowings used to
       finance construction of buildings and related property are included in
       the cost of the constructed property.

       INVENTORIES

       The Company's inventories are stated at the lower of cost or market
       including material, labor and manufacturing overhead (see Note 6).

       GOODWILL

       The excess of purchase price over the fair value of net assets acquired
       is allocated to goodwill and is included in other assets. Goodwill is
       being amortized over 40 years. The Company accounts for long-lived and
       intangible assets in accordance with SFAS No. 121, Accounting for the
       Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
       Of. The Company continually reviews its intangible assets for events or
       changes in circumstances which might indicate the carrying amount of the
       assets may not be recoverable. The Company assesses the recoverability of
       the assets by determining whether the amortization of such intangibles
       over their remaining lives can be recovered through projected
       undiscounted future cash flows. The amount of impairment, if any, is
       measured based on the fair value of the impaired asset. At December 31,
       1999, no such impairment of assets was indicated.



                                       37
<PAGE>   38
(2)    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

       FAIR VALUE OF FINANCIAL INSTRUMENTS

       In accordance with the requirements of Statement of Financial Accounting
       Standards (SFAS) No. 107, Disclosures About Fair Value of Financial
       Instruments, the Company has determined the estimated fair value of its
       financial instruments using appropriate market information and valuation
       methodologies. Considerable judgment is required to develop the estimates
       of fair value; thus, the estimates are not necessarily indicative of the
       amounts that could be realized in a current market exchange. The
       Company's financial instruments consist of cash, accounts receivable,
       accounts payable, senior subordinated notes and bank debt. The carrying
       value of these assets and liabilities is a reasonable estimate of their
       fair market value at December 31, 1999.

       RESEARCH AND DEVELOPMENT EXPENSES

       All costs for research and development, which amounted to approximately
       $1.3 million, $0.9 million, and $1.1 million for the years ended December
       31, 1997, 1998 and 1999, respectively, are charged to general and
       administrative expenses as incurred.

       INTEREST RATE SWAP AGREEMENTS

       The Company uses interest rate swap agreements to manage interest rate
       cost and the risks associated with changing interest rates. The
       differential to be paid or received is accrued as interest rates change
       and is recognized in interest expense over the life of the contract. The
       counter-party to the interest rate swap agreements is a major financial
       institution. Credit loss from counter-party non-performance is not
       anticipated.

       DEFERRED FINANCING COSTS

       Deferred financing costs are stated at cost as a component of other
       assets and amortized over the life of the related debt using the
       effective interest method. Amortization of deferred financing costs is
       included in interest expense.

       ACCRUED EXPENSES

       Certain customers are allowed a rebate if agreed upon sales targets are
       achieved for a given year. At December 31, 1998 and 1999, the Company has
       accrued $3.2 million and $3.8 million, respectively, for such volume
       allowances. These amounts are included in accrued expenses in the
       accompanying consolidated balance sheets.

       FOREIGN CURRENCY TRANSLATION

       Assets and liabilities of non-U.S. operations have been translated into
       United States Dollars at the year-end rate of exchange, shareholders'
       equity at historical rates, and revenues and expenses at the average
       exchange rates prevailing during the year. The cumulative effect of the
       resulting translation is reflected as a separate component of
       shareholders' equity.


                                       38
<PAGE>   39
(2)    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

       STOCK OPTIONS

       The Company accounts for employee stock options in accordance with SFAS
       No. 123, Accounting for Stock Based Compensation. As permitted under SFAS
       No. 123, the Company applies Accounting Principles Board Opinion No. 25,
       Accounting for Stock Issued to Employees to account for its stock option
       plans.

       RECLASSIFICATIONS

       Certain prior year balances have been reclassified to conform with the
       current year presentation.

       ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

       SFAS No. 133, as amended by SFAS No. 137, Accounting for Derivative
       Instruments and Hedging Activities- Deferral of the Effective Date of
       SFAS No. 133- an Amendment of SFAS No. 133 issued in June 1999, is
       effective for fiscal quarters of all fiscal years beginning after June
       15, 2000. A company may implement SFAS No. 133 as of the beginning of any
       fiscal quarter after issuance (that is, fiscal quarters beginning June
       16, 1998 and thereafter). SFAS No. 133 cannot be applied retroactively.
       SFAS No. 133, as amended by SFAS No. 137, must be applied to (a)
       derivative instruments and (b) certain derivative instruments embedded in
       hybrid contracts that were issued, acquired or substantially modified
       after either January 1, 1998 or January 1, 1999, as selected by the
       Company.

       SFAS No. 133 establishes accounting and reporting standards requiring
       that every derivative instrument (including certain derivative
       instruments embedded in other contracts) be recorded in the balance sheet
       as either an asset or a liability measured at its fair value. SFAS No.
       133 requires that changes in the derivative's fair value be recognized
       currently in earnings unless specific hedge accounting criteria are met.
       Special accounting for qualifying hedges allows a derivative's gains and
       losses to offset related results on the hedged item in the income
       statement, and requires that a company must formally document, designate
       and assess the effectiveness of transactions that receive hedge
       accounting.

       The Company has not yet quantified the impact of adopting SFAS No. 133 on
       the consolidated financial statements and has not determined the timing
       of or method of the adoption of SFAS No. 133. However, SFAS No. 133 could
       increase volatility in earnings and other comprehensive income.


                                       39
<PAGE>   40
 (3)   ACQUISITIONS

       On June 30, 1997, the Company entered into a Promissory Agreement and a
       Complementary Document to the Promissory Agreement (collectively, the
       "Purchase Agreements") to acquire all the outstanding capital shares of
       Petroleo Mecanica ALFA, S.A., a corporation organized under the laws of
       Portugal ("ALFA"), for $25.5 million (United States Dollars) plus assumed
       debt of $8.7 million. The Company assumed immediate management control of
       ALFA and, accordingly, the operating results and financial position of
       ALFA are included in the Company's consolidated results of operations and
       consolidated balance sheets from July 1, 1997. The Company paid $20
       million of the purchase price on June 30, 1997 from borrowings available
       under its revolving credit facility and paid the remaining $5.5 million
       upon final closure of the transaction in December 1997. The Company's
       1997 income from operations includes $1.9 million relating to the
       operations of ALFA subsequent to July 1, 1997. The following represents
       pro forma net sales and net loss as though the acquisition of ALFA
       occurred as of January 1, 1997 (in thousands): Net sales $192,068, net
       loss $8,600. ALFA's name was changed to AMTROL-ALFA, Metalomecanica S.A.
       following the acquisition.

       On June 9, 1998, the Company acquired NOVA Wassererwarmer GmbH ("NOVA")
       located in Donaueschingen, Germany for approximately $6.0 million (United
       States Dollars) plus assumed debt of $2.0 million. NOVA manufactures
       high-end residential and commercial water heaters that are marketed
       primarily in Germany, Switzerland and Austria. This acquisition provides
       AMTROL with expanded manufacturing and distribution capabilities in
       central Europe, in addition to the opportunity to offer many of AMTROL's
       complementary hydronic heating and water systems products in the European
       market. AMTROL assumed immediate management control of NOVA and,
       accordingly, the operating results and financial position of NOVA are
       included in the consolidated results of operations and consolidated
       balance sheets of AMTROL from the acquisition date. The Company's 1998
       income from operations include approximately $0.4 million relating to the
       operations of NOVA. The following represents pro forma net sales and net
       income as though the acquisition of NOVA occurred as of January 1, 1998
       (in thousands): Net sales $207,861, net loss $13,277.

(4)    DIVESTITURES

       In May 1997, the Company sold all of the assets, subject to substantially
       all liabilities, of its American Granby Inc. subsidiary. Accordingly, the
       results of American Granby included in the accompanying consolidated
       statements of operations are as follows (in thousands):

<TABLE>
<CAPTION>

                           YEAR ENDED DECEMBER 31,
                         -------------------------------
                           1997          1998       1999
                         ----------   ----------   ------
<S>                      <C>            <C>         <C>
Net Sales                $7,576         $--         $--
Operating Income         $   23         $--         $--
</TABLE>


       Also in May 1997, the Company sold its Peru, Indiana production facility
       and the related pump business. AMTROL transferred certain production
       activities performed in Peru to the Company's West Warwick, Rhode Island
       facility.


                                       40
<PAGE>   41
       The Company utilized the net proceeds of the sales of approximately $6.0
       million to fund seasonal working capital demands as well as the
       acquisition of ALFA (see Note 3).

(5)    PLANT CLOSINGS, REORGANIZATION AND RESTRUCTURING CHARGES

       In September 1997, the Company ceased operations of its Singapore
       production facility and transferred production of its non-returnable
       chemical containers to its ALFA facility in Guimaraes, Portugal. The
       Company closed its Nashville, Tennessee production facility in December
       1997 and transferred certain production lines to its West Warwick, Rhode
       Island facility. The Company's 1997 results include a pretax charge to
       operating expense of $5.5 million in connection with these plant
       closures. Costs involved in closing the Nashville facility and starting
       production in West Warwick were higher than anticipated due to unexpected
       retrofitting and reconditioning required for the relocated equipment,
       damage to equipment during shipment, and delays in preparing the
       Nashville building for sale. The Company recorded charges in 1998
       relating to the incremental costs associated with the Nashville closure
       and production relocation approximating $7.8 million (including $3.3
       million of production inefficiencies included in cost of goods sold). In
       addition, the Company recorded management restructuring charges of $3.7
       million in connection with the discontinuation and reduction of certain
       product lines and a reorganization of its management group.

       The Company experienced an unusually high level of warranty claims for a
       particular product manufactured in 1995-1996, the cause of which has
       since been corrected. Actions taken by the Company to mitigate the level
       of returns for products manufactured during that time period did not
       reduce the return rate to the extent expected. Accordingly, the Company
       recorded an additional loss provision in the second quarter of 1998 of
       $4.5 million for abnormal warranty costs relating to this product.

(6)    INVENTORIES

       Inventories are stated at the lower of cost (first-in, first-out method)
       or market and consists of the following at December 31 (in thousands):

<TABLE>
<CAPTION>

                                           1998            1999
                                          -------         -------
<S>                                       <C>             <C>
Raw materials and work in process         $14,346         $11,689
Finished goods                              9,973          10,657
                                          -------         -------
                                          $24,319         $22,346
                                          =======         =======
</TABLE>

                                       41
<PAGE>   42
(7)    LONG-TERM DEBT AND NOTES PAYABLE TO BANKS

       Long-term debt consisted of the following at December 31 (in thousands):

<TABLE>
<CAPTION>

                                                       1998             1999
                                                     --------         --------
<S>                                                  <C>              <C>
Revolving credit facility                            $  3,000         $   --
Tranche A Term Loan                                    10,200            7,180
Tranche B Term Loan                                    44,237           43,777
Senior subordinated notes, due 2006, 10.625%          115,000          115,000
Other                                                   4,629            2,363
                                                     --------         --------
                                                      177,066          168,320
Less: Current maturities of long-term debt              4,043            4,935
                                                     --------         --------
                                                     $173,023         $163,385
                                                     ========         ========
</TABLE>


       Long-term debt repayable in each of the next five years is as follows (in
       thousands):

<TABLE>

<S>                         <C>
             2000            $   4,935
             2001                3,597
             2002               11,136
             2003               20,800
             2004               12,602
       Thereafter              115,250
                             ----------
                             $ 168,320
                             ==========
</TABLE>

       REVOLVING CREDIT AND TERM LOANS

       The Company is party to a Bank Credit Agreement (the "Agreement"), which
       provides for secured borrowings from a syndicate of lenders. The
       Agreement was amended on July 31, 1998 to allow for the early repayment
       of a portion of the principal outstanding and to modify certain covenants
       to be more in line with the Company's business plans. The Agreement, as
       amended, provides for senior term loans (the "Term Loans") and a
       Revolving Credit Facility. In connection with the amendment to the
       Agreement, the Company repaid $20.5 million on August 3, 1998. A portion
       ($7.2 million) of the Term Loans (the "Tranche A Term Loans") will mature
       on May 13, 2002, with quarterly amortization payments during the term of
       such loans. As a result of the August 3, 1998 repayment, no further
       amortization payments on Tranche A term loans were required in 1998. The
       remainder ($43.8 million) of the Term Loans (the "Tranche B Term Loans")
       will mature on May 13, 2004, with nominal quarterly amortization prior to
       the maturity of the Tranche A Term Loans and with the remaining amounts
       amortizing on a quarterly basis thereafter. The Revolving Credit Facility
       of $30.0 million includes a sublimit providing for up to $20.0 million of
       availability on a revolving credit basis to finance permitted
       acquisitions. The highest amount outstanding during 1999 was $9.2
       million. The commitments under the Revolving Credit Facility and the
       acquisition sublimit will reduce by $5.0 million on November 13, 2000 and
       $10.0 million on November 13, 2001. The

                                       42
<PAGE>   43
       Revolving Credit Facility will mature on May 13, 2002. The Agreement
       is secured by substantially all of the assets of the Company and its
       domestic subsidiaries.

       The loans under the Agreement bear interest, at the Company's option, at
       either (A) a "base rate" equal to the higher of (i) the federal funds
       rate plus 0.5% or (ii) the bank's prime lending rate plus (x) in the case
       of Tranche A Term Loans and loans under the Revolving Credit Facility, an
       applicable spread ranging from 0.75% to 1.50% (determined based on the
       Company's leverage ratio) or (y) in the case of Tranche B Term Loans,
       2.00%; or (B) a 'Eurodollar rate" plus (x) in the case of Tranche A Term
       Loans and loans under the Revolving Credit Facility, an applicable spread
       ranging from 1.75% to 2.50% (determined based on the Company's leverage
       ratio), or (y) in the case of Tranche B Term Loans, 3.00%. Swingline
       Loans may only be "base rate" loans.

       The Revolving Credit Facility also requires the Company to pay a
       commitment fee on the average daily aggregate unutilized portion of the
       Revolving Credit Facility at a rate of 0.5% per annum, payable quarterly
       in arrears, as well as a commission on trade and standby letters of
       credit of 1.25% per annum of the amount to be drawn under the Agreement.
       Amounts outstanding under the Revolving Credit Facility are due on May
       13, 2002.

       The Agreement contains a number of covenants that, among other things,
       restrict the ability of the Company and its subsidiaries to dispose of
       assets, incur additional indebtedness, incur guaranty obligations, repay
       other indebtedness or amend other debt instruments, pay dividends, create
       liens on assets, enter into leases, make investments, make acquisitions,
       engage in mergers or consolidations, make capital expenditures, engage in
       certain transactions with subsidiaries and affiliates and otherwise
       restrict corporate activities. In addition, the Agreement requires
       compliance with certain financial covenants, including requiring the
       Company to maintain a minimum level of earnings before income taxes,
       depreciation and amortization (i.e., "EBITDA"), a minimum ratio of EBITDA
       to interest expense and a maximum ratio of Indebtedness to EBITDA, in
       each case tested at the end of each fiscal quarter of the Company.

       The Company's obligations under the Agreement are guaranteed by Holdings
       and each direct and indirect domestic subsidiary of the Company. The
       Company's obligations under the Agreement are secured by substantially
       all assets of the Company and its subsidiaries.

       The company has entered into interest rate swap agreements which have
       effectively converted $15.0 million of floating rate borrowings to fixed
       borrowings through June 2004. The agreements are contracts to
       periodically exchange floating interest rate payments for fixed rate
       payments over the life of the agreements and are used to manage the
       Company's interest rate exposure.

       SENIOR SUBORDINATED NOTES

       The Company issued $115.0 million of Senior Subordinated Notes due 2006
       (the "Notes"). The Notes are unsecured obligations of AMTROL. The Notes
       bear interest at a rate of 10.625% per annum which is payable
       semi-annually on each June 30 and December 31 commencing on June 30,
       1997.


                                       43
<PAGE>   44
       The Notes are redeemable at the option of the Company on or after
       December 31, 2001. The Notes will be subject to redemption, in whole or
       in part, at various redemption prices, declining from 105.313% of the
       principal amount to par on and after December 31, 2003. In addition, on
       or prior to December 31, 1999, the Company had the option to use the net
       cash proceeds of one or more equity offerings to redeem up to 35% of the
       aggregate principal amount of the Notes originally issued at a redemption
       price of 110.625% of the principal amount thereof plus accrued interest
       to the date of redemption. Upon a "Change of Control" (as defined in the
       Indenture), each Note holder has the right to require the Company to
       repurchase such holder's Notes at a purchase price of 101% of the
       principal amount plus accrued interest. The fair value of these Notes at
       December 31, 1999 approximated their face value.

       The Note Indenture contains certain affirmative and negative covenants
       and restrictions.

       As of December 31, 1999, the Company was in compliance with the various
       covenants of the Agreement and the Notes.

       OTHER LONG-TERM DEBT AND NOTES PAYABLE TO BANKS

       Other long-term debt represents borrowings assumed by the Company in
       connection with the 1997 acquisition of ALFA and 1998 acquisition of
       NOVA. The ALFA debt is denominated in Escudos and includes the equivalent
       of approximately $1.7 million of loans payable to the Industrial
       Development Fund of Portugal as well as several local Portuguese banks.
       The loans amortize in roughly equal installments through 2000 and accrue
       interest at LIBOR plus a premium ranging from 1.25% to 1.5%, adjusted
       quarterly or semi-annually. The loans are secured by substantially all
       property and equipment owned by ALFA. ALFA also has available revolving
       credit facilities with local banks providing for short-term working
       capital loans of up to the equivalent of approximately $7.5 million.
       Borrowings under these agreements accrue interest at LIBOR plus a premium
       ranging from 0.375% to 1.375%. The balance outstanding at December 31,
       1999 was approximately $0.01 million. The highest amount outstanding
       under these facilities in 1999 was approximately $7.0 million. In
       Escudos, the total outstanding long term debt and notes payable to banks
       amounted to 335,156,000 at December 31, 1999. The NOVA long-term debt is
       denominated in Deutsche Marks and includes the equivalent of
       approximately $1.3 million of loans payable to two local German banks.
       These loans amortize in roughly equal installments through 2002 and
       accrue interest at rates ranging from 6.0% to 6.5%. The loans are secured
       by substantially all real property and certain equipment owned by NOVA.
       NOVA also has available revolving credit facilities with a local bank
       providing for short-term working capital loans of up to the equivalent of
       approximately $1.9 million. Borrowings under the agreement accrue
       interest at prevailing market rates which averaged approximately 6.25%
       during the period ended December 31, 1999. The balance outstanding at
       December 31, 1999 was approximately $0.8 million. The highest amount
       outstanding under the facility in 1999 was approximately $1.3 million. In
       Deutsche Marks, the amount of long term debt outstanding amounted to
       1,347,240 at December 31, 1999.

       Cash paid for interest amounted to approximately $19.2 million, $19.0
       million, and $18.1 million for the years ended December 31, 1997, 1998
       and 1999, respectively.


                                       44
<PAGE>   45
(8)    INCOME TAXES

       The components of the provision (benefit) for income taxes are as follows
       (in thousands):

<TABLE>
<CAPTION>
                                             YEAR ENDED DECEMBER 31,
                                           ----------------------------
                                           1997       1998       1999
                                           ----       ----       ----
<S>                                    <C>        <C>        <C>
Current:
  Federal                                $   --    $    --     $   60
  State                                      --         --         --
  Foreign                                   714        188      1,000
                                         ------     ------     ------
                                            714        188      1,060
Deferred:
  Federal                                  (625)    (5,854)     2,581
  State                                    (119)    (1,062)       484
                                         ------     ------     ------
                                           (744)    (6,916)     3,065
                                         ------     ------     ------
                                         $  (30)   $(6,728)    $4,125
                                         ======     ======     ======
</TABLE>


       The deferred income tax provision resulted primarily from temporary
       differences due to the use of accelerated depreciation for income tax
       purposes and straight-line depreciation for financial statement purposes,
       temporary differences related to deferred compensation and the reversal
       of temporary differences related to safe-harbor lease transactions that
       had previously transferred tax benefits to the Company.

       The difference between a provision computed using the respective
       statutory U.S. federal income tax rate and the provision for income taxes
       in the accompanying consolidated financial statements is primarily the
       result of state taxes, net of federal benefit.


                                       45
<PAGE>   46
       Significant items giving rise to deferred tax assets and deferred tax
       liabilities at December 31, 1998 and 1999 are as follows (in thousands):
<TABLE>
<CAPTION>

                                               1998            1999
                                              -------         -------
<S>                                           <C>             <C>
Prepaid Income Taxes:
     Warranty reserves - current              $    96         $    92
     Allowance for doubtful accounts              411             324
     Plant closing reserve                        302             (62)
     Accrued vacation                             122              99
     UNICAP adjustment                           285             227
     Accrued management restructuring             405             710
     Other                                        650            --
                                              -------         -------
                                              $ 2,271         $ 1,390
                                              =======         =======
</TABLE>

<TABLE>
<CAPTION>

                                                              1998             1999
                                                             -------          -------
<S>                                                         <C>              <C>
Deferred Income Taxes:
     Net operating loss carryforward                         $ 7,533          $ 5,640
     Accelerated depreciation                                 (2,847)          (2,718)
     Safe harbor leases                                          (65)            --
     Warranty reserves - long-term                             1,683            1,148
     Deferred compensation and restricted stock plan             700              643
     LIFO revaluation                                            646              250
     Other                                                       555              129
                                                             -------          -------
                                                             $ 8,205          $ 5,092
                                                             =======          =======
</TABLE>


       The difference between the Company's effective income tax rate and the
       federal statutory income tax rate primarily results from state income
       tax, net of federal tax benefit, and non-deductible goodwill
       amortization.

       Cash paid for income taxes amounted to $0, $0, and $0.3 million for the
       years ended December 31, 1997, 1998 and 1999, respectively. At December
       31, 1999, the company had net operating loss carryforwards of
       approximately $15.0 million expiring in 2011 through 2018.

(9)    PENSION AND PROFIT SHARING PLANS

       The Company has a defined contribution 401(k) plan covering substantially
       all of its domestic employees. Under the Plan, eligible employees are
       permitted to contribute up to 15% of gross pay, not to exceed the maximum
       allowed under the Internal Revenue Code. The Company matches each
       employee contribution up to 6% of gross pay at a rate of $0.25 per $1 of
       employee contribution. The Company also contributes 3% of each employee's
       gross pay up to the Social Security taxable wage base and 4% of amounts
       in excess of that level up to approximately $0.2 million of wages.
       Company contributions to the 401(k) plan

                                       46
<PAGE>   47
       totaled approximately $1.1 million, $1.0 million and $0.8 million for the
       years ended December 31, 1997, 1998 and 1999, respectively.

(10)   LEASE COMMITMENTS

       The Company leases certain plant facilities and equipment. Total rental
       expenses charged to operations approximated $1.5 million, $1.9 million
       and $1.4 million for the years ended December 31, 1997, 1998 and 1999,
       respectively. Minimum rental commitments under all non-cancelable
       operating leases are as follows (in thousands):
<TABLE>

<S>                               <C>
                     2000         $1,052
                     2001            765
                     2002            494
                     2003             44
                     2004             25
                                  ------
                                  $2,380
                                  ======
</TABLE>


       Certain of the leases provide for renewal options.


(11)   COMMITMENTS AND CONTINGENCIES

       At December 31, 1999, the Revolving Credit Facility contains a sublimit
       to support the issuance of letters of credit in the amount of $5.0
       million. At December 31, 1999, letters of credit outstanding amounted to
       $1.1 million.

       The Company is involved in various legal proceedings which, in the
       opinion of management, will not result in a material adverse effect on
       its financial condition or results of operations.

 (12)  STOCK PLANS

       Certain key employees and directors have been granted options to purchase
       common shares of the Company's parent, AMTROL Holdings Inc, under the
       AMTROL Holdings 1997 Incentive Stock Plan. As of December 31, 1999,
       options to purchase 168,173 shares under the 1997 Plan were outstanding.
       The outstanding options include 25,817 non-qualified options which are
       exercisable immediately provided that purchased shares are subject to
       repurchase by Holdings at the exercise price until such shares vest based
       on relative achievement of management's business plan for fiscal years
       1997 through 2001. An additional 22,398 non-qualified options are also
       immediately exercisable but are subject to repurchase by Holdings, in
       monthly diminishing amounts, if the holder terminates employment before
       August 2000. Options amounting for 3,419 shares are incentive stock
       options of which 2,851 are vested at December 31, 1999 and the remainder
       are released from restrictions ratably through August 2000. The remaining
       116,539 options are non-qualified options issued in 1999 none of which
       are exercisable.


                                       47
<PAGE>   48
       The Company applies APB opinion No. 25 to account for its stock option
       plans. Accordingly, pursuant to the terms of the 1997 Holdings Incentive
       Stock Plan, no compensation cost related to the issuance of stock options
       has been recognized in the Company's financial statements. However, if
       the Company had determined compensation cost for options under the
       provisions of SFAS No. 123, the Company's net loss in 1997 would have
       increased by approximately $0.6 million. In 1998, adjustments to
       compensation expense associated with the options issued in 1997 would
       have approximated $.1 million as a result of forfeitures by certain
       individuals who left the Company. In 1999, the company's net income would
       have decreased approximately $1.0 million. The fair value of the options
       granted in 1997 and 1999 were estimated using the Black-Scholes option
       pricing model. The following key assumptions were used to value the
       options granted: volatility, 0; weighted average risk free rate, 5.00%;
       average expected life, 3 years. The weighted average fair value per share
       of the stock options granted in 1997 and 1999 amounted to $13.92. It
       should be noted that the option pricing model used was designed to value
       readily tradeable stock options with relatively short lives. The options
       granted are not tradeable. However, management believes that the
       assumptions used and the model applied to value the awards yield a
       reasonable estimate of the fair value of the options grants under the
       circumstances.

       In connection with the merger of AMTROL Acquisition Inc. into AMTROL
       Holdings Inc., through which AMTROL Inc. became a wholly owned subsidiary
       of AMTROL Holdings, certain holders of options to purchase shares of the
       common stock of AMTROL Inc. exchanged such options for Amended Options to
       purchase an aggregate of 17,041 shares of Holdings common stock with
       weighted average exercise price of $57.38 per share. All such options are
       immediately exercisable. No options from any source were exercised in
       1997, 1998 or 1999.

(13)   BUSINESS SEGMENT INFORMATION

       The Company adopted SFAS No. 131, Disclosure about Segments of an
       Enterprise and Related Information, in 1998. AMTROL's reportable segments
       are delineated geographically. The segments are managed separately
       because of their different product offerings, markets served,
       manufacturing processes and cost structures. As the Company rationalizes
       its manufacturing capacity and manages its markets, the frequency of
       overlap of products and markets between segments has increased.

       The Company's North American segment operates manufacturing facilities in
       Rhode Island, Kentucky, Maryland and Ohio, and operates a distribution
       facility in Ontario, Canada. This segment manufactures and markets
       products used principally in flow control, storage, heating, and other
       treatment of fluids in the water system and HVAC markets. These products
       are marketed throughout the world but primarily in North America, Western
       Europe, Asia and Mexico.

       The Company's European segment includes the Company's facilities in
       Guimaraes, Portugal, Donaueschingen, Germany and Swarzedz, Poland. The
       Guimaraes facility manufactures returnable and non-returnable steel gas
       cylinders for storing cooking, heating and refrigerant gases which are
       marketed throughout Europe, the Middle East and Africa, as well as the
       Far East, with sales of approximately $17.8 million, $49.6 million, and
       $54.1 million for the periods ended December 31, 1997, 1998, and 1999,
       respectively. The

                                       48
<PAGE>   49
       Donaueschingen facility manufactures and distributes residential and
       commercial water heaters which are marketed primarily in Switzerland,
       Austria and Germany with sales of approximately $8.7 million and $12.1
       million for the periods ended December 31, 1998 and 1999, respectively.
       The facility in Swarzedz refurbishes gas cylinders with sales of
       approximately $3.4 million for the period ended December 31, 1999.

       The primary criteria by which financial performance is evaluated and
       resources are allocated include revenues and operating income. The
       following is a summary of key financial data by segment:

<TABLE>
<CAPTION>

                                         1997              1998               1999
                                      ---------         ---------          ---------
<S>                                   <C>               <C>                <C>
Sales to external customers
   North America                      $ 158,627         $ 143,817          $ 142,622
   Europe                                17,805            58,325             69,555
                                      ---------         ---------          ---------
   Consolidated                       $ 176,432         $ 202,142          $ 212,177
                                      =========         =========          =========

INCOME FROM OPERATIONS
   North America                      $   8,127         $  (4,801)         $  17,665
   Europe                                 1,907             3,420              6,816
                                      ---------         ---------          ---------
   Consolidated                       $  10,034         $  (1,381)         $  24,481
                                      =========         =========          =========

DEPRECIATION AND AMORTIZATION
   North America                      $  10,396         $  10,143          $  10,315
   Europe                                 1,145             3,004              3,688
                                      ---------         ---------          ---------
   Consolidated                       $  11,541         $  13,147          $  14,003
                                      =========         =========          =========

EBITDA
   North America                      $  23,639         $   4,889          $  29,130
   Europe                                 3,248             7,565              9,216
                                      ---------         ---------          ---------
   Consolidated                       $  26,887         $  12,454          $  38,346
                                      =========         =========          =========

CAPITAL EXPENDITURES
   North America                      $   6,437         $   7,807          $   4,571
   Europe                                 2,052             2,051              1,227
                                      ---------         ---------          ---------
   Consolidated                       $   8,489         $   9,858          $   5,798
                                      =========         =========          =========

IDENTIFIABLE ASSETS
   North America                      $ 178,926         $ 173,590          $ 170,979
   Europe                                36,545            49,359             42,641
                                      ---------         ---------          ---------
   Consolidated                       $ 215,471         $ 222,949          $ 213,620
                                      =========         =========          =========
</TABLE>


                                       49
<PAGE>   50
       "EBITDA" is earnings (net income/loss) before interest, taxes,
       depreciation and amortization, which amounts are as disclosed in the
       statement of operations. Operating income for the North America business
       segment above is reduced by goodwill amortization for each year
       presented. The following table summarizes sales by product
       classification:
<TABLE>
<CAPTION>

                       1997            1998            1999
                      ------          ------          ------
<S>                   <C>             <C>             <C>
HVAC                    53.8%           60.5%           61.6%
Water Systems           46.2%           39.5%           38.4%
                      ------          ------          ------
Consolidated           100.0%          100.0%          100.0%
                      ======          ======          ======
</TABLE>


       The percentages above exclude sales by the American Granby subsidiary
       which was sold by the Company in 1997.



                                       50
<PAGE>   51
ITEM 14(a)(2)  SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES


                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                           BALANCE AT
                                          BEGINNING OF                                   ADJUSTMENTS/    BALANCE AT END
            CONSOLIDATED                     PERIOD        PROVISION      RECOVERIES     WRITE-OFFS        OF PERIOD
------------------------------------      ------------     ---------      ----------     ------------    --------------
<S>                                       <C>              <C>            <C>            <C>             <C>
Year ended December 31, 1997
     Allowance for doubtful accounts          1,055            370              3           (340)           1,088

Year ended December 31, 1998
     Allowance for doubtful accounts          1,088            526             42            (62)           1,594

Year ended December 31, 1999
     Allowance for doubtful accounts          1,594           --             --             (406)           1,188
</TABLE>


* Includes $135 related to the disposition of the Company's American Granby
subsidiary in May 1997.


                                       51
<PAGE>   52
                                   SIGNATURES

Pursuant to the requirements of Section 13 or 5(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in West Warwick, Rhode
Island, on the 30th day of March 2000.

                                             AMTROL Inc.

                                             By:      /s/ Donald W. Reilly
                                                  -----------------------------
                                                         Donald W. Reilly
                                                      Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1934, this registration
statement has been signed by the following persons in the capacities and on the
date indicated.
<TABLE>
<CAPTION>

       Signature                                    Title                                           Date
       ---------                                    -----                                           ----
<S>                                         <C>                                              <C>
   /s/  John P. Cashman                     Chairman of the Board                            March 30, 2000
----------------------------------------
       John P. Cashman

   /s/  Albert D. Indelicato                President, Chief Executive Officer               March 30, 2000
----------------------------------------    and Director
       Albert D. Indelicato

   /s/ Donald W. Reilly                     Vice President, Chief Financial Officer,         March 30, 2000
----------------------------------------    and Treasurer (principal
       Donald W. Reilly                     financial officer)


   /s/ Andrew M. Massimilla                 Director                                         March 30, 2000
----------------------------------------
       Andrew M. Massimilla

   /s/  David P. Spalding                   Director                                         March 30, 2000
----------------------------------------
       David P. Spalding

   /s/  James A. Stern                      Director                                         March 30, 2000
----------------------------------------
       James A. Stern

   /s/  Anthony D. Tutrone                  Director                                         March 30, 2000
----------------------------------------
       Anthony D. Tutrone
</TABLE>


                                       52
<PAGE>   53
<TABLE>
<CAPTION>
EXHIBIT #                                   DOCUMENT DESCRIPTION
<S>            <C>
3.1            Restated Articles of Incorporation of AMTROL Inc. (incorporated
               by reference from the Company's Registration Statement on Form
               S-4, Registration No. 333-18075, declared effective by the
               Securities and Exchange Commission on January 2, 1997).

3.2            Bylaws of AMTROL Inc. (incorporated by reference from the
               Company's Registration Statement on Form S-4, Registration No.
               333-18075, declared effective by the Securities and Exchange
               Commission on January 2, 1997).

4.1            Indenture, dated as of November 1, 1996 between AMTROL
               Acquisition, Inc. and The Bank of New York (incorporated by
               reference from the Company's Registration Statement on Form S-4,
               Registration No. 333-18075, declared effective by the Securities
               and Exchange Commission on January 2, 1997).

4.2            Form of 10-5/8% Senior Subordinated Notes due 2006 (included in
               Exhibit 4.1) (incorporated by reference from the Company's
               Registration Statement on Form S-4, Registration No. 333-18075,
               declared effective by the Securities and Exchange Commission on
               January 2, 1997).

4.3            First Supplemental Indenture, dated as of November 13, 1996,
               between AMTROL Inc. and The Bank of New York (incorporated by
               reference from the Company's Registration Statement on Form S-4,
               Registration No. 333-18075, declared effective by the Securities
               and Exchange Commission on January 2, 1997).

10.1           Credit Agreement, dated as of November 13, 1996, among AMTROL
               Acquisition, Inc. and AMTROL Holdings, Inc., various lending
               institutions party thereto, Morgan Stanley Senior Funding, Inc.
               as documentation agent, and Bankers Trust Company, as
               administrative agent (incorporated by reference from the
               Company's Registration Statement on Form S-4, Registration No.
               333-18075, declared effective by the Securities and Exchange
               Commission on January 2, 1997).

10.1.1         First Amendment to Credit Agreement, dated as of June 24, 1997
               (incorporated by reference to the Company's Quarterly Report on
               Form 10-Q for the quarter ended July 5, 1997).

10.1.2         Second Amendment to Credit Agreement, dated as of December 12,
               1997 (incorporated by reference to Exhibit 7(c) in the Company's
               Current Report on Form 8-K dated December 22, 1997).

10.1.3         Third amendment to the Credit Agreement dated as of June 24, 1998
               (incorporated by reference to the Company's Quarterly report on
               Form 10-Q for the quarter ended July 4, 1998).

10.1.4         Fourth amendment to the Credit Agreement dated as of July 13,
               1998 (incorporated by reference to the Company's Quarterly report
               on Form 10-Q for the third quarter ended October 3, 1998).

10.2           AMTROL Inc. Pension Plan and Trust (incorporated by reference
               from the Company's Registration Statement on Form S-1,
               Registration No. 33-48413, declared effective by the Commission
               on March 18, 1993).*

10.3           Amendments to AMTROL Inc. Pension Plan and Trust (incorporated by
               reference from the Company's Registration Statement on Form S-1,
               Registration No. 33-48413, declared effective by the Securities
               and Exchange Commission on March 18, 1993).*

10.4           AMTROL Inc. Executive Cash Bonus Plan (incorporated by reference
               from the Company's Annual Report on Form 10-K for the fiscal year
               ended December 31, 1994).*
</TABLE>

                                       53
<PAGE>   54
<TABLE>
<CAPTION>
<S>            <C>
10.5           AMTROL Inc. Supplemental Retirement Plan II (incorporated by
               reference from the Company's Registration Statement on Form S-1,
               Registration No. 33-48413, declared effective by the Commission
               on March 18, 1993).*

10.6           First Amendment to AMTROL Inc. Supplemental Retirement Plan II
               (incorporated by reference from the Company's Annual Report on
               Form 10-K for the fiscal year ended December 31, 1995).*

10.8           Employment Agreement dated June 22, 1998 by and between AMTROL
               Inc. and Donald W. Reilly. (incorporated by reference from the
               Company's Annual Report on Form 10-K for the fiscal year ended
               December 31, 1998).*

10.9           Employment Agreement dated January 19, 1997 by and between AMTROL
               Inc. and Edward J. Cooney. (incorporated by reference to the
               Company's Annual Report on Form 10-K for the period ended
               December 31, 1996).*

10.10          Employment Agreement dated June 24, 1998 by and between AMTROL
               Inc. and Albert D. Indelicato (incorporated by reference from the
               Company's Annual Report on Form 10-K for the fiscal year ended
               December 31, 1998).*

10.11          AMTROL Holdings Inc. 1997 Incentive Stock Plan dated December 16,
               1997.* (incorporated by reference to the Company's Annual Report
               on Form 10-K for the year ended December 31, 1997).

18             Preferability letter regarding change in accounting policy from
               LIFO to FIFO (incorporated by reference from the Company's Annual
               Report on Form 10-K for the fiscal year ended December 31,
               1998).*

21             Subsidiaries of AMTROL Inc.

27             Financial Data Schedule
</TABLE>

* Management contract or compensatory plan arrangement.


                                       54