SECURITIES EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                      10-K


                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended December 31, 1999           Commission File No. 1-7215


                              PEERLESS TUBE COMPANY


New Jersey (State of Jurisdiction)                             22-1191280

                               58-76 LOCUST AVENUE
                          BLOOMFIELD, NEW JERSEY 07003
                             TELEPHONE: 973-743-5100

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


        Title of Class                                         Exchange
        --------------                                         --------

Common stock $1.33-1/3 par value                         Over the counter (PLSU)


Indicate  by a check  mark  whether  the  registrant  (1) has filed all  reports
required to be filed under Section 13 or 15 (d) of the  Securities  Exchange Act
of 1934 during the  preceding  12 months (or for such  shorter  periods that the
registrant  was required to file such report),  and (2) has been subject to such
filing requirements for the past 90 days.

Yes  [X] No [ ]

On March 1, 2000,  the  aggregate  market  value of the voting stock held by non
affiliates of the Registrant  was  approximately  $923,615.  The market value is
based on the bid price of $ .3750 as of March 1,  2000.  Over the last 52 weeks,
actual trades of relatively  small amounts of the Company's shares of stock have
ranged in transaction price from $ .1250 - $ .3750.

Common Stock, Par Value                            $1.33-1/3
Outstanding at March 1, 2000.               2,462,973 shares


Documents incorporated by reference:

Part I and II: Annual  Report to  Shareholders  for the Year Ended  December 31,
1999.



PEERLESS TUBE COMPANY 1999 ANNUAL REPORT FORM 10-K                             1

<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                Item                                                                                           Page
<S>             <C>                                                                                               <C>
Part I.         1        Business                                                                                 3
                2        Properties                                                                               6
                3        Legal Proceedings                                                                        6
                4        Submission of Matters to a Vote of Security Holders                                      6

Part II.        5        Market for the Registrant's Common Stock and Related Stockholder Matters.                8
                6        Selected Financial Data                                                                  8
                7        Management's Discussion and Analysis of Financial Condition and Results of Operations    8
                8        Financial Statements and Supplementary Data                                              8
                9        Changes in and Disagreements with Accountants on Accounting and Financial Disclosure     8
Part III.       10       Directors and Executive Officers of the Registrant                                       9
                11       Executive Compensation                                                                   9
                12       Security Ownership of Certain Beneficial Owners and Management                           9
                13       Certain Relationships and Related Transactions                                           9

Part IV.        14       Exhibits, Financial Statement Schedules and Reports on Form 8-K                         10

                         Signatures
</TABLE>


PEERLESS TUBE COMPANY 1999 ANNUAL REPORT FORM 10-K                             2

<PAGE>

                                     PART I


ITEM 1: BUSINESS

The Company's  primary product shipped in the United States is aluminum  aerosol
pressurized  cans.  The market size is an  estimated  3.0 billion  units.  Major
product groups include personal  products,  household  products,  automotive and
industrials,  paints and finishes,  insect sprays,  and food products.  Aluminum
containers  historically  comprise  10%  of the  aerosol  market  with  personal
products and hair sprays comprising the largest segments.

The tube industry is comprised of plastic,  laminate,  and metal  products.  The
major markets are pharmaceutical,  dentifrice,  cosmetic, and personal care. The
estimated annual tube volume is 2.95 billion units. The metal tube market, which
represents the Company's  segment of the market,  has become a small part of the
Company's overall sales mix.

The  Company  does not fill any  containers  that it  manufacturers.  The  other
product lines mentioned previously are of relatively minor importance,  are in a
highly  competitive  market,  and  are  sold  to a  small  number  of  specialty
customers.

The industry in which the Company competes is extremely price  competitive.  The
Company  continues  to  offer a high  quality  product,  meet  customer  product
demands, and at the same time remain price competitive.


                                 SALES 1997-1999

<TABLE>
<CAPTION>


Description                           1999                    1998                     1997
<S>                                   <C>                     <C>                     <C>
Seamless aerosol cans             $12,280,000             $14,300,000             $15,152,000
Collapsible metal tubes             1,279,000                 782,000                 844,000
Miscellaneous                         822,000                 475,000                 292,000
                                  -----------             -----------             -----------
Total                             $14,381,000             $15,557,000             $16,288,000
                                  ===========             ===========             ===========
</TABLE>

The Company supplies approximately 100 customers including 15-20 major accounts.
In 1999, two customers  accounted for 45% (32% and 13%) of the Company's  sales.
In 1998, two customers  accounted for 60% (48% and 12%) of the Company's  sales.
In 1997, sales to two customers accounted for 61% (27% and 34%) of the Company's
sales.

Excess  capacity  in the  industry  has had an  adverse  effect on the  Company.
However,  steps are currently being taken to implement  operational  changes and
reduce costs in order to offset the loss in volume.

The current sales backlog of production orders and inventory on hand is slightly
less than last year.  This position can change rapidly as customers  release new
orders or adjust desired  quantities.  The Company's  production is against firm
orders and subject to firm and final pricing.


PEERLESS TUBE COMPANY 1999 ANNUAL REPORT FORM 10-K                             3
<PAGE>

THE MANUFACTURING PROCESS

While  production  lines for  aluminum  aerosols  and  tubes can be  dissimilar,
automatic production machinery and equipment perform each of the following steps
in a continuous process:

Extruding the can or tube:

   1.    Trimming the can or tube to its proper length.

   2.    Heating and cleaning the can or tube shell.

   3.    Coating or lining the interior and/or exterior of the shell.

   4.    Decorating and over lacquering the container.

   5.    Necking or forming the orifice or shoulders of the can or tube.

   6.    Packaging the product.

Solid  aluminum  slugs are first fed through a hopper  into an impact  extrusion
press  250-400  tons  pressure  at  impact  point.  Then  the  containers,   now
recognizable  as such, are fed by conveyors,  during which time a micrometer and
other tests are made  periodically  to check wall and bottom  thickness,  into a
trimmer that shears the side wall to correct length.  After the container shells
have been trimmed,  the  containers  are conveyed  through one or more ovens and
washing tanks. Then they are fed back onto a production line where they are spun
on spindles or other  transfer  devices,  and sprayed  with coats of the desired
internal  resin  liner.  To set these resins for maximum  resistance  to certain
product  corrosivity,  the containers are preheated and baked in an oven at very
high  temperatures  (over 500(Degree) F). A vinyl or epoxy-type base coat of the
desired  color is then  sprayed on the  outside of the  container.  After  going
through  another drying oven, the containers are positioned for  lithography (of
up to six colors) on an offset press and then dried. If specifications  call for
a high degree of protection of the container  finish against possible marring by
product spray or drip,  the containers are then given a coating with an external
clear  lacquer,  usually of the epoxy  type.  After  final  drying,  a "rolling"
machine turns the neck inward or outward,  so that the lip touches the inside of
the neck to form a continuous  interior  circumferential  bead leaving the mouth
circular.  In addition to product  compatibility  discussed below,  this necking
process,  plus the seamless  construction  and the  exceptionally  high bursting
strength,   gives  the  aerosol  its  chief  selling  appeal  from  a  technical
standpoint;   while  the  seamless   construction  combined  with  the  printing
capability  provides  the  aesthetic  appeal  and  marketability.  The  finished
products,  at a rate of up to 150 per  minute,  are packed for  shipment  to the
customer.

Though each  container  has the same physical  characteristics,  they may differ
widely as to special features.  Selection of internal liners, lithographic print
inks,  base coat  formulation  and external  lacquers are all conditioned by the
chemical  characteristics of product and propellant and how each reacts with the
other. Also acting to differentiate the containers of one customer from those of
another are the form of product dispersal, the type of metal or plastic overcap,
and possible corrosive  characteristics  of the valve components  intended for a
particular product.  The Company obtains samples of all the components after the
custom filler or marketer has achieved product and propellant compatibility, and
parallel  tests are  conducted to evolve the right liners and coatings to use so
that they fit the  particular  product.  Frequently,  the  customer  changes his
source of supply,  and seemingly minor changes may throw out all the formulation
specifications.

PEERLESS TUBE COMPANY 1999 ANNUAL REPORT FORM 10-K                             4

<PAGE>

Some of the external  coating  problems are  ameliorated by the use of aluminum,
which has surface  especially suited to receive  coatings.  Aerosol cans contain
99.4% aluminum (or slightly less than metal tubes to impart  greater  rigidity),
and under a  microscope,  the aluminum  surface looks like a series of raw teeth
which  readily  pick up high  quality  coating and inks with good hard  adhesive
qualities.

SEGMENT DATA

The Company has one segment of business which is the  manufacture of containers,
either  aluminum  cans or tubes.  All of its major product lines are sold to the
same marketer and/or  manufacturing  industries for highly similar end uses. All
products  are  fabricated  by the  extrusion  method of  forming  metal and many
customers are buying all product lines for sale to essentially the same markets.
The products are manufactured  under the same roof with overlapping labor forces
and overhead, and on similar machinery.


RAW MATERIALS

The basic raw  materials  essential to the operation of the Company are aluminum
ingot, paint, ink and paper products for packaging and shipping containers.  All
necessary supplies are readily available. The Company has a supply agreement for
aluminum  slugs that expires in the year 2000.  The Company may  terminate  this
supply  agreement  upon thirty days  written  notice to the buyer  provided  the
buyer's  selling  price to the Company is not  competitive  with  market  quotes
obtained from at least three other vendors for aluminum.


ENVIRONMENT

The Company is subject to federal,  state, and local requirements regulating the
discharge  of  materials  into the  environment  or  otherwise  relating  to the
protection of the  environment.  It is the Company's policy to comply with these
requirements,  and the Company  believes that as a general  matter its policies,
practices and procedures are properly  designed to prevent  unreasonable risk of
environmental  damage, and of resulting financial liability,  in connection with
its  business.  Some risk of  environmental  damage  is,  however,  inherent  in
particular  operations  and products of the  Company,  as is the case with other
companies engaged in similar businesses.

The Company is and has been engaged in handling, manufacture, use or disposal of
several  substances,  which are  classified as hazardous or toxic by one or more
regulatory agencies.  The Company believes that its handling,  manufacture,  use
and disposal of such substances have generally been in accord with environmental
law and  regulations.  It is possible,  however,  that future knowledge or other
developments,  such as  improved  capability  to detect such  substances  in the
environment,   increasingly   strict   environmental   laws  and  standards  and
enforcement  policies  thereunder,  could  bring  into  question  the  Company's
handling, manufacture, use, or disposal of such substances.

EMPLOYEES

The Company  presently  employs  approximately  130-150  persons at its facility
located in Bloomfield,  New Jersey. The Company is a non-union  organization and
management's relationship with its employees is considered excellent.


PEERLESS TUBE COMPANY 1999 ANNUAL REPORT FORM 10-K                             5
<PAGE>

ITEM 2: PROPERTIES

The Company's facility is located in Bloomfield, New Jersey.

The land,  building,  and equipment are pledged as collateral under various loan
agreements  with the  Company's  secured  working  capital  lender,  which has a
security interest in substantially all the Company's assets.

The executive, administrative,  marketing and engineering offices along with the
manufacturing and warehouse  facilities are contained in three (3) buildings,  a
total of 261,000  square feet.  There is adequate space to expand the operations
if required.

ITEM 3: LEGAL PROCEEDINGS

In January  1998, a jury  verdict was rendered  against the Company in a lawsuit
filed by a former employee alleging age  discrimination  and breach of contract.
The amount of damages and attorney's  fees awarded to the employee  approximated
$638,000.  On June 5, 1998, a settlement  agreement with the former employee was
reached  whereby  the  Company  would pay,  over a two year  period,  a total of
$700,000 including interest, of which $60,000 was paid in 1998. In June 1999, as
part of a further  agreement,  $600,000 was paid as full and final settlement of
the suit.

There are several  other suits  arising in the normal  course of  business.  The
Company  believes these suits are without merit and is vigorously  defending its
position in each suit. Counsel for the Company cannot offer an opinion as to the
probable outcome of such cases.

ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Shareholders at the annual meeting,  expected to be held in September,  will
be asked to elect the Board of Directors  and ratify the  Company's  independent
auditors.

PEERLESS TUBE COMPANY 1999 ANNUAL REPORT FORM 10-K                             6


<PAGE>

<TABLE>
<CAPTION>

                                           EXECUTIVE OFFICERS OF THE REGISTRANT

Name, position                              Officer    Age                                   Business Background
                                             since
------------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>        <C>                                                <C>
Frederic Remington, Chairman of the          1965       70            Elected to the Board of Directors in 1965. Joined the Company
Board, Chief Executive Officer                                        in 1950  after  attending  Temple  University  and New Jersey
                                                                      Institute  of   Technology,   formerly   Newark   College  of
                                                                      Engineering.   Vice  President,   Operations  in  1968,  Vice
                                                                      President,   Engineering  in  1977,  Senior  Vice  President,
                                                                      Engineering  in 1986 and  Chairman  of the  Board  and  Chief
                                                                      Executive Officer in 1989.
Richard W. Potts, President and              1970       63            Elected  to the  Board  of  Directors  in 1970.  Bachelor  of
Director                                                              Science  degree from  Rensselaer  Polytechnic Institute and a
                                                                      Masters  Degree from Newark College of Engineering   (NJIT).
                                                                      Joined the  Company  in 1963.  Vice  President,  Manufacturing
                                                                      since  1968.  Senior  Vice  President,   Production  in  1986.
                                                                      President and Chief Operating  Officer in 1989.  Member of the
                                                                      Executive Committee of the Board. Ann Gaccione, Secretary 1992
                                                                      62 Joined the Company in 1978. Secretary, 1978-1988; assistant
                                                                      corporate  secretary,  1989-1991;  and executive secretary and
                                                                      administrative assistant to the Chairman of the Board, 1989 to
                                                                      present.

</TABLE>


PEERLESS TUBE COMPANY 1999 ANNUAL REPORT FORM 10-K                            7


<PAGE>

                                     PART II


ITEM 5: MARKET FOR THE  REGISTRANT'S  COMMON STOCK AND RELATED  SECURITY  HOLDER
        MATTERS

The Peerless Tube Company  Corporation Common Stock is traded  over-the-counter.
The Company is traded under the symbol PLSU.  There has been a relatively  small
number of trades during 1999.

The range of the high and low common stock sale's prices as reported by the NASD
bulletin  board over the  counter for each of the  quarters  for the years ended
December 31, 1999, 1998, and 1997 are listed as follows:

     QUARTER              1999             1998              1997
------------------- ----------------- ---------------- -----------------
        1               $0.4400           $0.3125          $0.6250
                        $0.3750           $0.2600          $0.4375
        2               $0.4400           $0.4375          $0.3750
                        $0.4400           $0.2800          $0.3125
        3               $0.6250           $0.2800          $0.5000
                        $0.5000           $0.1250          $0.3125
        4               $0.6600           $0.2500          $0.3750
                        $0.3750           $0.0625          $0.3000
------------------- ----------------- ---------------- -----------------

There were no stock or cash  dividends  declared or paid since  1989.  Under the
Company's  loan  agreement,  the  Company  is  restricted  from the  payment  of
dividends.

The  approximate  number of record  holders of the Company's  Common  Stock,  at
December 31, 1999, was 1,100.

ITEM 6: SELECTED FINANCIAL DATA

The information  included under the caption  Selected  Financial Data Five Years
Ended  December  31,  1999 at page 17 of the  Company's  1999  Annual  Report to
shareholders is incorporated herein by reference.

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

"Management's  Discussion and Analysis" at pages 13-16,  management  section, of
the  Company's  1999 Annual Report to  Shareholders  is  incorporated  herein by
reference.

ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The  Company's  consolidated  financial  statements,  together  with the reports
therein of Goldstein Golub Kessler LLP dated March 1, 2000 appear on pages 1-12,
auditor's section, of the Company's 1999 annual report to shareholders.

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

There were no disagreements on any auditing , accounting or financial disclosure
in 1999.

PEERLESS TUBE COMPANY 1999 ANNUAL REPORT FORM 10-K                             8
<PAGE>

                                    PART III


ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information, relating to the directors of the Registrant, as well as information
relating to compliance with section 16(a) of the Securities Exchange Act of 1934
is contained in a definitive  Proxy statement  primarily  involving  election of
directors  and  appointment  of  independent  accountants.   The  Registrant  is
simultaneously  filing this document with the Securities and Exchange Commission
pursuant to Regulation  14a, and such  information is incorporated by reference.
Certain other information  relating to the Executive  Officers of the Registrant
appears at page 7 of this Form 10-K Annual Report.

ITEM 11: EXECUTIVE COMPENSATION

Information  relating to executive  compensation  is also contained in the Proxy
statement  referred to above in Item 10: Directors and Executive Officers of the
Registrant, and such information is incorporated by reference.

ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information  relating to security  ownership  of certain  beneficial  owners and
management is also  contained in the Proxy  statement  referred to above in Item
10: Directors and Executive Officers of the Registrant,  and such information is
incorporated by reference.

ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information  relating to certain  relationships and related  transactions can be
found  in  Note  11 to the  consolidated  financial  statements  and on  page 7,
management  section,  of the Company's  1999 annual report to  stockholders  and
incorporated herein by reference.

PEERLESS TUBE COMPANY 1999 ANNUAL REPORT FORM 10-K                             9


<PAGE>


ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

The following documents are filed as part of this report:

<TABLE>
<CAPTION>
                                                                                                  Annual Report to
                                                                                                    Shareholders
                                                                                                         Page
         Description

<S>      <C>                                                                                           <C>
(1)      Consolidated Financial Statements*:
         Independent Auditors Report                                                                     1
         Consolidated Balance Sheets as of December 31, 1999 and 1998                                    2
         Consolidated Statements of Operations and Accumulated Deficit For the Years Ended
          December 31, 1999, 1998, and 1997                                                              3
         Consolidated Statements of Cash Flows for the Years Ended December 31, 1999, 1998 and 1997
         Notes to the Consolidated Financial Statements                                                 5-12
(2)      Consolidated Financial Statement Schedules:
             None Required
             No reports on Form 8-K were filed during the last  quarter  covered by this report.
             All  other  documents  have  been  filed  and are  incorporated  by reference.
</TABLE>

* The consolidated  financial  statement schedules should be read in conjunction
with the Consolidated  Financial Statements  incorporated by reference in Item 8
of the Form 10-K Annual  Report.  Schedules  other than those  listed above have
been  omitted  because of the  absence of the  conditions  under  which they are
required or because information required is shown in the consolidated  financial
statements or the notes thereto.

PEERLESS TUBE COMPANY 1999 ANNUAL REPORT FORM 10-K                            10

<PAGE>


SIGNATURES

Pursuant  to the  requirements  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.


                              PEERLESS TUBE COMPANY

                              Registrant

                              By:


                              ---------------------------------------
                              Frederic Remington, Jr.
                              Chairman of the Board and Chief Executive Officer


                              By:


                              ---------------------------------------
                              Richard W. Potts
                              President and Director


PEERLESS TUBE COMPANY 1999 ANNUAL REPORT FORM 10-K                            11
<PAGE>

OUR  VISION                             We  will  be one of the  leaders  in the
                                        packaging   industry,    successful   in
                                        everything we do.
--------------------------------------------------------------------------------
OUR                                     We will achieve  our vision  by  being a
COMMITMENT                              Total  Quality   Company,   continuously
                                        improving  our  processes to satisfy our
                                        internal and external customers.
--------------------------------------------------------------------------------
OUR  VALUES                             CUSTOMERS  - Our  first  priority  is to
                                        satisfy our customers.

                                        PEOPLE - We help our  employees  improve
                                        their  skills,  encourage  them  to take
                                        risks,  treat them fairly, and recognize
                                        their  accomplishments,  asking  them to
                                        approach  their  jobs with  passion  and
                                        commitment.

                                        TEAMWORK - We build  trust and  teamwork
                                        with  open,  candid  communications.  We
                                        work together and share technologies and
                                        best  practices  with our  suppliers and
                                        customers.

                                        INNOVATION  - We  accept  change  as the
                                        rule, not the exception, and drive it by
                                        encouraging creativity.

                                        PERFORMANCE  - We encourage  the highest
                                        expectations,  set ambitious  goals, and
                                        quite simply strive to be the best.


PEERLESS TUBE COMPANY 1999 ANNUAL REPORT FORM 10-K                            12
<PAGE>


SALES AND RESULTS OF OPERATIONS 1999 COMPARED TO 1998


SALES

Net sales for the year ended  December 31, 1999  decreased  $1,176,000  or 8% on
sales of  $14,381,000  when compared to 1998 net sales of  $15,557,000.  Aerosol
volume for 1999 was  $12,280,000  as compared with sales for 1998 of $14,300,000
or a decrease of 14%.  Aluminum tube sales for 1999 were  $1,279,000 as compared
with 1998 tube sales of $782,000 or an increase of 64%.  Miscellaneous sales for
1999 totaled $822,000 as compared to $475,000 in 1998. The decrease in sales was
a result of a slight decrease in sales to a major customer.

In 1999, the Company's sales to two customers accounted for 45% (32% and 13%) of
the Company's  total sales.  In 1998,  two customers  accounted for 60% (48% and
12%) of the Company's sales.

GROSS MARGIN TRENDS AND DISCUSSION

The gross profit for the years ended December 31, 1999 and December 31, 1998 was
$1,242,000  or 8.6% of sales and $303,000 or 2.0% of sales,  respectively.  This
was primarily the result of lower aluminum costs and reduced factory personnel.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling,  general and  administrative  expenses for the year ended  December 31,
1999 were  $1,518,000  or 11% of sales as compared to $1,874,000 or 12% of sales
for the year ended December 1998.

INTEREST EXPENSE, AND OTHER INCOME, NET

Interest  expense for the year ended  December 31, 1999 was $335,000 as compared
to $270,000 in 1998.

Other  income for the year ended  December  31, 1999 was $336,000 as compared to
$1,000 for the year ended  December  31,  1998.  In February  1999,  the Company
received  a payment  of  $321,000  as the  result of the final  closing of their
pension plan.

LIQUIDITY AND CAPITAL RESOURCES

The Company had a negative  working  capital of $421,000 at December  31,  1999.
This was a $1,314,000  increase from the negative  working capital of $1,735,000
at December 31, 1998.

Cash at December 31, 1999 was $50,000 or an increase of $35,000 when compared to
the same  date in 1998.  In order to meet cash  requirements  during  1999,  the
Company  went  through a  refinancing,  decreasing  its current  liabilities  by
$1,427,000 and increasing long term debt by $1,064,000.

The  Company  has a working  capital  loan  secured  by the  Company's  accounts
receivables and inventories.

Management   must  monitor  its  cash   resources   very  closely.   Operational
improvements,  aggressive  marketing,  and  favorable  aluminum  pricing will be
required in order to improve cash availability.

PEERLESS TUBE COMPANY 1999 ANNUAL REPORT FORM 10-K                            13
<PAGE>


SALES AND RESULTS OF OPERATIONS 1998 COMPARED TO 1997


SALES

Net sales for the year ended December 31, 1998 decreased $731,000 or 4% on sales
of $15,557,000  when compared to 1997 net sales of  $16,288,000.  Aerosol volume
for 1998 was  $14,300,000  as compared with sales for 1997 of  $15,152,000  or a
decrease of 6%. Aluminum tube sales for 1998 were $782,000 as compared with 1997
tube sales of $844,000 or a decrease of 7%. Miscellaneous sales for 1998 totaled
$475,000 as compared to $292,000 in 1997.  The decrease in sales was a result of
a slight decrease in sales to a major customer.

In 1998, the Company's sales to two customers accounted for 60% (48% and 12%) of
the Company's  total sales.  In 1997,  two customers  accounted for 61% (34% and
27%) of the Company's sales.

GROSS MARGIN TRENDS AND DISCUSSION

The gross profit for the years ended December 31, 1998 and December 31, 1997 was
$303,000 or 2.0% of sales and $228,000 or 1.0% of sales respectively.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling,  general and  administrative  expenses for the year ended  December 31,
1998 were  $1,874,000  or 12% of sales as compared to  $2,778,000 or 17% for the
year ended December 1997.

INTEREST EXPENSE, AND OTHER INCOME, NET

Interest  expense for the year ended  December 31, 1998 was $270,000 as compared
to $278,000 in 1997.

Other  income for the year ended  December  31,  1998 was $1,000 as  compared to
$89,000 for the year ended  December 31, 1997.  Most of the other income in 1997
related to the surrender of life insurance policies.

LIQUIDITY AND CAPITAL RESOURCES

The Company had a negative working capital of ($1,735,000) at December 31, 1998.
This was a  $1,582,000  decrease  from the  working  capital  of  ($153,000)  at
December 31, 1997.

Cash at December 31, 1998 was $15,000 or a decrease of $153,000 when compared to
the same  date in 1997.  In order to meet cash  requirements  during  1998,  the
Company was  required to  increase  its line of credit in order to minimize  the
drain in working  capital and help in the net repayment of debt. The increase to
the line of credit was $271,000.

The  Company  has a working  capital  loan  secured  by the  Company's  accounts
receivables and inventories.

Management   must  monitor  its  cash   resources   very  closely.   Operational
improvements,  aggressive  marketing,  and  favorable  aluminum  pricing will be
required in order to improve cash availability.

PEERLESS TUBE COMPANY 1999 ANNUAL REPORT FORM 10-K                            14
<PAGE>

SALES AND RESULTS OF OPERATIONS 1997 COMPARED TO 1996


SALES

Net sales for the year ended  December 31, 1997  decreased  $7,328,000 or 31% on
sales of  $16,288,000  when compared to 1996 net sales of  $23,616,000.  Aerosol
volume for 1997 was  $15,152,000  as compared with sales for 1996 of $17,921,000
or a decrease of 15%. Aluminum tube sales for 1997 was $844,000 as compared with
1996 Tube sales of $5,175,000 or a decrease of 84%. Miscellaneous sales for 1997
totaled  $292,000 as compared to $520,000.  The decrease in 1997 vs. 1996 in the
aerosol and tube lines was a result of excess  capacity  in the aerosol  markets
and the closing of the Puerto Rico facility.

In 1997, the Company's sales to two customers accounted for 61% (27% and 34%) of
the Company's total sales.  In 1996 three customers  accounted for 55% (22%, 21%
and 12%) of the Company's sales.

The Company's sales of aluminum aerosols are approximately 93% of the 1997 sales
as  compared  to 76% in 1996.  The mix change is a result of the  closing of the
Puerto Rico facility in 1996. The Puerto Rico facility  produced solely aluminum
tube product.

GROSS MARGIN TRENDS AND DISCUSSION

The gross profit for the year ended  December 31, 1997 and December 31, 1996 was
$228,000  or 1.0% of sales and  $2,115,000  or 9.0% of sales  respectively.  The
decrease in gross margin is primarily due to current  excess  capacity which the
Company has  available.  A large part of the Company's  costs are "fixed" rather
than  variable  and the  decreased  demand for product in 1997 had a  sufficient
impact on the Company's ability to absorb the high amount of fixed costs.  While
the Company has been  successful in reducing costs, it must increase its machine
hour leverage and "value added" hours,  in order to be  profitable.  The Company
must increase its sales level in order to accomplish the above.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling,  general and  administrative  expenses for the year ended  December 31,
1997 were  $2,778,000  or 17% of sales as compared to  $2,528,000 or 11% for the
year ended  December 1996.  The increase in SG&A is due to  non-recurring  legal
expenses.

INTEREST EXPENSE, AND OTHER INCOME, NET

Interest  expense for the year ended  December 31, 1997 was $278,000 as compared
to $607,000 in 1996. The decrease of $329,000 was a result of the termination of
the sales/leaseback agreement with the Block Drug Company.

Other  income for the year ended  December  31,  1997 was $89,000 as compared to
$1,786,000  for the year  ended  December  31,  1996.  The  decrease  is largely
attributed  to the  Sale/Leaseback  of Puerto Rico being  terminated in November
1996. (See note 10, of notes to the Financial Statements).

PEERLESS TUBE COMPANY 1999 ANNUAL REPORT FORM 10-K                            15

<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

The Company had a negative  working  capital of ($153,000) at December 31, 1997.
This was  approximately a $72,000  increase from the negative working capital of
($225,000) at December 31, 1996.

Net cash at  December  31,  1997 was  $190,000  or a decrease  of  $37,000  when
compared to the same period in 1996. In order to meet cash  requirements  during
1997,  the Company  was  required to  increase  its  equipment  loan in order to
minimize the drain in working capital and help in the net repayment of debt. The
increase to the equipment loan was $552,000.

The  debt-equity-ratio  at  December  31,  1997 was 4:1 as  compared to 1.5:1 at
December 31, 1996.

The  Company  has a working  capital  loan  secured  by the  Company's  accounts
receivables and inventories.

Management   must  monitor  its  cash   resources   very  closely.   Operational
improvements,  aggressive  marketing,  and  favorable  aluminum  pricing will be
required in order to improve cash availability and management.


PEERLESS TUBE COMPANY 1999 ANNUAL REPORT FORM 10-K                            16
<PAGE>


<TABLE>
<CAPTION>

Peerless Tube Company Selected Financial
Data Five Years Ended December 31,                1999             1998             1997            1996            1995
                                                  ----             ----             ----            ----            ----

<S>                                              <C>            <C>              <C>                <C>          <C>
                                    Net sales   $14,381,000      $15,557,000      $16,288,000     $23,616,000     $29,793,000
                            Net income (loss)     ($275,000)     ($1,840,000)     ($2,739,000)       $766,000     ($1,775,000)
Weighted average number of shares outstanding     2,462,973        2,462,973        2,462,973       2,462,973       2,462,973
                  Net income (loss) per share        ($0.11)          ($0.75)          ($1.11)          $0.31          ($0.72)
                      Cash dividends declared            $0               $0               $0              $0              $0
                    Working capital (deficit)     ($421,000)     ($1,735,000)       ($153,000)      ($225,000)        $31,000
                                Current ratio           .85              .59
      Property, plant and equipment - at cost   $19,700,000      $19,700,000      $19,700,000     $19,638,000     $24,490,000
                     Accumulated depreciation   $18,282,000      $17,562,000      $16,714,000     $15,514,000     $16,407,000
          Property, plant and equipment - net    $1,418,000       $2,138,000       $2,986,000      $4,124,000      $8,083,000
                                 Total assets    $3,988,000       $4,656,000       $6,429,000     $10,030,000     $15,443,000
                               Long-term debt    $1,715,000         $651,000         $891,000        $484,000      $4,009,000
                            Total liabilities    $4,814,000       $5,207,000       $5,140,000      $6,002,000     $12,181,000
                Stockholders equity (deficit)     ($826,000)       ($551,000)      $1,289,000      $4,028,000      $3,262,000
                         Debt to equity ratio           N/A              N/A              4.1             1.5             3.7
</TABLE>


*For the year ended December 31, 1996, the net income included a recognized gain
of  $1,555,000,  net of Puerto Rico capital  gains tax, in  connection  with the
termination of the sale leaseback of the Puerto Rico facility.

PEERLESS TUBE COMPANY 1999 ANNUAL REPORT FORM 10-K                            17

<PAGE>


PEERLESS TUBE COMPANY

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1999


<PAGE>


                                                           PEERLESS TUBE COMPANY

                                                                        CONTENTS
                                                               DECEMBER 31, 1999
--------------------------------------------------------------------------------

INDEPENDENT AUDITOR'S REPORT                                                1


CONSOLIDATED FINANCIAL STATEMENTS:

   Balance Sheet                                                            2
   Statement of Operations and Accumulated Deficit                          3
   Statement of Cash Flows                                                  4
   Notes to Consolidated Financial Statements                             5 - 12


<PAGE>


INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders
Peerless Tube Company

We have audited the  accompanying  consolidated  balance sheets of Peerless Tube
Company  as of  December  31,  1999  and  1998,  and  the  related  consolidated
statements of operations and accumulated deficit, and cash flows for each of the
three years in the period ended December 31, 1999.  These  financial  statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audits.

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

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

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As described in Note 2 of the
notes to consolidated  financial statements,  the Company has suffered recurring
losses  from  operations  and  negative  cash  flows  and  has  a  stockholders'
deficiency.  These  conditions  raise  substantial  doubt  about its  ability to
continue as a going concern.  Management's  plans in regard to these matters are
also described in Note 2. The consolidated  financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.

GOLDSTEIN GOLUB KESSLER LLP
New York, New York

March 1, 2000

<PAGE>


<TABLE>
<CAPTION>


                                                                                                               PEERLESS TUBE COMPANY


                                                                                                          CONSOLIDATED BALANCE SHEET

------------------------------------------------------------------------------------------------------------------------------------
DECEMBER 31,                                                                                     1999                        1998
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    (rounded to nearest thousand)
<S>                                                                                          <C>                       <C>

ASSETS

Current Assets:
  Cash                                                                                       $     50,000              $     15,000
  Accounts receivable, less allowance for doubtful
   accounts of $100,000                                                                         1,373,000                 1,184,000
  Inventories                                                                                     919,000                 1,233,000
  Prepaid expenses and other current assets                                                        63,000                    86,000

-----------------------------------------------------------------------------------------------------------------------------------
      TOTAL CURRENT ASSETS                                                                      2,405,000                 2,518,000

Property, Plant and Equipment, net                                                              1,418,000                 2,138,000

Deferred Financing Costs                                                                          165,000

Deferred Tax Assets, net of valuation allowance of
$5,701,000 and $5,862,000, respectively

-----------------------------------------------------------------------------------------------------------------------------------
      TOTAL ASSETS                                                                           $  3,988,000              $  4,656,000
===================================================================================================================================

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current Liabilities:
  Accounts payable                                                                           $    740,000              $  2,004,000
  Accrued liabilities                                                                             595,000                 1,145,000
  Revolving credit line                                                                         1,184,000                   868,000
  Current portion of long-term debt                                                               307,000                   236,000
-----------------------------------------------------------------------------------------------------------------------------------
      TOTAL CURRENT LIABILITIES                                                                 2,826,000                 4,253,000

Long-term Debt                                                                                  1,715,000                   651,000

Other Liabilities                                                                                 273,000                   303,000
-----------------------------------------------------------------------------------------------------------------------------------
      TOTAL LIABILITIES                                                                         4,814,000                 5,207,000
-----------------------------------------------------------------------------------------------------------------------------------

Commitments and Contingencies

Stockholders' Deficiency:
  Common stock - $1.33-1/3 par value; authorized
   5,000,000 shares; issued 2,536,935 shares                                                    3,382,000                 3,382,000
  Additional paid-in capital                                                                   14,439,000                14,439,000
  Accumulated deficit                                                                         (18,303,000)              (18,028,000)
  Less 73,962 shares of stock in treasury, at cost                                               (344,000)                 (344,000)
-----------------------------------------------------------------------------------------------------------------------------------
      STOCKHOLDERS' DEFICIENCY                                                                   (826,000)                 (551,000)
-----------------------------------------------------------------------------------------------------------------------------------
      TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                         $  3,988,000              $  4,656,000
===================================================================================================================================

                                                               The  accompanying  notes  and  independent  auditor's  report  should
                                                                   be read in conjunction with the consolidated financial statements


                                                                                                                                   2

</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                                                                                               PEERLESS TUBE COMPANY
                                                                        CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT

------------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,                                                      1999                   1998                     1997
------------------------------------------------------------------------------------------------------------------------------------
                                                                          (rounded to nearest thousand except per share amounts)
<S>                                                                      <C>                    <C>                    <C>

Net sales                                                                $ 14,381,000           $ 15,557,000           $ 16,288,000

Cost of sales                                                              13,139,000             15,254,000             16,060,000
-----------------------------------------------------------------------------------------------------------------------------------

Gross profit                                                                1,242,000                303,000                228,000

Selling, general and administrative expenses                                1,518,000              1,874,000              2,778,000
-----------------------------------------------------------------------------------------------------------------------------------
Loss from operations                                                         (276,000)            (1,571,000)            (2,550,000)
-----------------------------------------------------------------------------------------------------------------------------------

Other income (expense):
  Interest expense                                                           (335,000)              (270,000)              (278,000)
  Other income, net                                                           336,000                  1,000                 89,000
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                1,000               (269,000)              (189,000)
-----------------------------------------------------------------------------------------------------------------------------------

Net loss                                                                     (275,000)            (1,840,000)            (2,739,000)

Accumulated deficit at beginning of year                                  (18,028,000)           (16,188,000)           (13,449,000)
-----------------------------------------------------------------------------------------------------------------------------------
Accumulated deficit at end of year                                       $(18,303,000)          $(18,028,000)          $(16,188,000)
===================================================================================================================================

Basic loss per share                                                     $       (.11)          $       (.75)          $      (1.11)
===================================================================================================================================

Weighted-average shares outstanding                                         2,462,973              2,462,973              2,462,973
===================================================================================================================================

                                                                          The accompany notes and independent auditor's report shall
                                                                   be read in conjunction with the consolidated financial statements

                                                                                                                                   3


<PAGE>

                                                                                                               PPERLESS TUBE COMPANY
                                                                                                CONSOLIDATED STATEMENT OF CASH FLOWS

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

YEAR ENDED DECEMBER 31,                                                               1999                1998              1997
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                (rounded to nearest thousand)
<S>                                                                                 <C>               <C>               <C>

Cash flows from operating activities:
  Net loss                                                                          $  (275,000)      $(1,840,000)      $(2,739,000)
  Adjustments to reconcile net loss to net cash
   provided by (used in) operating activities:
    Depreciation and amortization                                                       735,000           848,000         1,200,000
    Pension costs                                                                                                           625,000
    Provision for bad debts                                                                              (110,000)          (25,000)
    (Increase) decrease in operating assets:
      Accounts receivable                                                              (189,000)          (91,000)        1,237,000
      Inventories                                                                       314,000           981,000           446,000
      Prepaid expenses and other current assets                                          23,000           (40,000)           95,000
      Other assets                                                                                         10,000            48,000
    Increase (decrease) in operating liabilities:

      Accounts payable                                                               (1,264,000)           14,000          (583,000)
      Accrued liabilities                                                              (550,000)          378,000          (722,000)
      Other liabilities                                                                 (30,000)         (360,000)          593,000
-----------------------------------------------------------------------------------------------------------------------------------
         NET CASH PROVIDED BY (USED IN) OPERATING
         ACTIVITIES                                                                  (1,236,000)         (210,000)          175,000
-----------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
  Net borrowings (repayments) under credit line                                         316,000           271,000          (522,000)
  Proceeds from (reduction of) long-term debt and
   current maturities                                                                 1,135,000          (236,000)         (242,000)
  Proceeds from long-term debt                                                                                              552,000
  Payment of deferred financing costs                                                  (180,000)
-----------------------------------------------------------------------------------------------------------------------------------
         NET CASH PROVIDED BY (USED IN) FINANCING
         ACTIVITIES                                                                   1,271,000            35,000          (212,000)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash                                                          35,000          (175,000)          (37,000)
Cash at beginning of year                                                                15,000           190,000           227,000
-----------------------------------------------------------------------------------------------------------------------------------
Cash at end of year                                                                 $    50,000       $    15,000       $   190,000
===================================================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during the year for interest                                            $   335,000       $   270,000       $   278,000
===================================================================================================================================
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING AND INVESTING ACTIVITIES:
  Capital lease obligations incurred for acquisition
   of property and equipment                                                                                            $    62,000
===================================================================================================================================

                                                                      The accompanying notes and independent auditor's report should
                                                                   be read in conjunction with the consolidated financial statements

                                                                                                                                   4

</TABLE>

<PAGE>

                                                           PEERLESS TUBE COMPANY

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                               DECEMBER 31, 1999
--------------------------------------------------------------------------------
1.  BUSINESS         Peerless Tube Company (the "Company") supplies  collapsible
    ORGANIZATION     metal tubes and seamless  aluminum  aerosol  containers  to
    AND SIGNIFICANT  national  marketers  primarily  in   the    pharmaceutical,
    ACCOUNTING       cosmetic and toiletry industries.  Manufacturing facilities
    POLICIES:        are located in Bloomfield, NJ.

                     The  consolidated   financial  statements  of  the  Company
                     include  the  accounts  of  Peerless  and its wholly  owned
                     inactive subsidiary,  Peerless Tube Company of Puerto Rico,
                     Inc. All significant intercompany accounts and transactions
                     have been eliminated.

                     Inventories  are  stated  at the  lower of cost  (first-in,
                     first-out method) or market.

                     Depreciation  of property,  plant and equipment is provided
                     for by the straight-line and the declining-balance  methods
                     over the estimated useful lives of the related assets.

                     Property,  plant  and  equipment  is stated at the lower of
                     cost,  less  accumulated  depreciation,  or net  realizable
                     value.

                     Revenue from sales of products is recognized at the date of
                     shipment to customers.

                     The Company  maintains its cash in bank accounts  which, at
                     times, may exceed federally insured limits. The Company has
                     not experienced any losses on these accounts.

                     Basic  earnings  per  share  ("EPS")  is  computed  as  net
                     earnings divided by the  weighted-average  number of common
                     shares outstanding for the period. Diluted EPS reflects the
                     potential  dilution  that could  occur from  common  shares
                     issuable through stock-based  compensation  including stock
                     options,  restricted stock awards and warrants. Diluted EPS
                     is not presented since the effect would be antidilutive.

                     The preparation of financial  statements in conformity with
                     generally   accepted    accounting    principles   requires
                     management to make  estimates and  assumptions  that affect
                     certain  reported  amounts  and  disclosures.  Accordingly,
                     actual results could differ from those estimates.

                     The  Company  reviews  long-lived  assets and  identifiable
                     intangibles  for impairment  whenever  events or changes in
                     circumstance  indicate that the carrying  value of an asset
                     may  not  be  fully   recoverable.   The  Company  performs
                     nondiscounted   cash  flow  analyses  to  determine  if  an
                     impairment exists.

                     Impairment  losses on assets  are  determined  based on the
                     present  value of cash flows  using  discount  rates  which
                     reflect  the  inherent  risk  of the  underlying  business.
                     Impairment  losses on assets to be disposed of are based on
                     the  estimated  proceeds  to  be  received  less  costs  of
                     disposal.

                     Statement of Financial  Accounting  Standards  ("SFAS") No.
                     107, Disclosures About Fair Value of Financial Instruments,
                     requires management to disclose the estimated fair value of
                     certain assets and  liabilities  defined by SFAS No. 107 as
                     financial instruments.  Financial instruments are generally
                     defined  by SFAS No.

                                                                               5

<PAGE>

                                                           PEERLESS TUBE COMPANY

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                               DECEMBER 31, 1999
--------------------------------------------------------------------------------

                     107 as cash, evidence of ownership interest in equity, or a
                     contractual  obligation  that both  conveys to one entity a
                     right to receive cash or other financial  instruments  from
                     another   entity  and  imposes  on  the  other  entity  the
                     obligation to deliver cash or other  financial  instruments
                     to the  first  entity.  At  December  31,  1999  and  1998,
                     management   believes  that  the  carrying  amount  of  the
                     revolving  credit line  approximates  fair value because of
                     the  short  maturity  of  this  financial  instrument.  The
                     carrying   value  of  the  Company's   long-term   debt  is
                     considered  to  approximate  fair value based upon  current
                     borrowing rates offered to the Company.

                     Costs  incurred  in 1999  in the  amount  of  approximately
                     $180,000  in  connection   with  obtaining  the  borrowings
                     described  in  Note 8 have  been  deferred  and  are  being
                     amortized   over  the  terms  of  the   borrowing   by  the
                     straight-line method.  Accumulated amortization at December
                     31, 1999 is approximately $15,000.

                     Advertising  costs are expensed as incurred.  For the years
                     ended December 31, 1999 and 1998,  advertising  expense was
                     $29,000 and $73,000, respectively.

2.  BUSINESS AND     The  accompanying  consolidated  financial  statements have
    DEBT             been  prepared  in  conformity  with   generally   accepted
    RESTRUCTURING:   accounting principles,  which  contemplate  continuation of
                     the Company as a going concern.  Since 1988,  however,  the
                     Company has suffered  recurring  losses from operations and
                     negative  cash  flows  and  currently  has a  stockholders'
                     deficiency.  These conditions raise substantial doubt about
                     its ability to continue as a going concern.

                     The  Company's  management  has  continually  evaluated and
                     reshaped its business to improve the operational results of
                     the Company and respond to the changes in the  economic and
                     competitive  market in which the  Company  operates.  Major
                     cost  and  head   count   reduction   programs   previously
                     implemented  focused on  reduction  of pension and employee
                     benefits,  particularly  changes  to  healthcare  benefits.
                     Except  for  periodic  additions  to meet  peaks  in  sales
                     demand,  the  Company  has  reduced  its  workforce,   both
                     salaried and hourly.  Management introduced and implemented
                     new   programs   to  improve  its   production,   inventory
                     management and management cost accounting systems.

                     With the anticipated  cooperation of its secured lender and
                     the additional  consolidation  of plant assets,  management
                     believes that actions  presently being taken to improve the
                     Company's  operating  performance  including  reductions of
                     staffing  levels and  stabilization  of raw material prices
                     will provide adequate  working  capital,  help minimize the
                     financial  losses,  and  create  the  opportunity  for  the
                     Company to continue as a going concern.

                                                                               6

<PAGE>

<TABLE>
<CAPTION>

                                                                                                               PEERLESS TUBE COMPANY

                                                                                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                                                                   DECEMBER 31, 1999
------------------------------------------------------------------------------------------------------------------------------------
<S>                 <C>                                                                                <C>               <C>
3. ALLOWANCE        Information relating to the allowance for doubtful  accounts is as follows:

                    Balance at beginning of year                                                        $100,000          $ 210,000
                    Deductions or write-off of uncollectible
                    accounts receivable                                                                                    (110,000)
                    ----------------------------------------------------------------------------------------------------------------
                         BALANCE AT END OF YEAR                                                         $100,000          $ 100,000
                    ================================================================================================================
4.  INVENTORIES:    Inventories are comprised of the following:

                    December 31,                                                                          1999              1998
                    ----------------------------------------------------------------------------------------------------------------

                    Raw materials                                                                       $510,000          $ 648,000
                    Work-in-process                                                                                          27,000
                    Finished goods                                                                       409,000            558,000
                    ----------------------------------------------------------------------------------------------------------------
                                                                                                        $919,000         $1,233,000
                    ================================================================================================================

5.  PROPERTY,       Property, plant and equipment is comprised of the following:
    PLANT AND
    EQUIPMENT:                                                                                                          Estimated
                    December 31,                                                       1999              1998          Useful Life
                    ----------------------------------------------------------------------------------------------------------------
                    Land                                                          $   462,000      $   462,000
                    Buildings and improvements                                      4,348,000        4,348,000        10 to 45 years
                    Machinery and equipment                                        13,276,000       13,276,000         7 to 13 years
                    Furniture, fixtures and office
                     equipment                                                      1,614,000        1,614,000         5 to 10 years
                    ----------------------------------------------------------------------------------------------------------------
                                                                                   19,700,000       19,700,000
                    Less accumulated depreciation
                     and amortization                                             (18,282,000)     (17,562,000)
                    ----------------------------------------------------------------------------------------------------------------
                                                                                $   1,418,000      $ 2,138,000
                    ================================================================================================================

                    Substantially  all  of  the  Company's   equipment serves as  collateral  for  short-  and long-term  borrowings
                    (see Notes 8 and 9).

                                                                                                                                   7

</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                                                                                                               PEERLESS TUBE COMPANY

                                                                                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                                                                   DECEMBER 31, 1999
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                    <C>                     <C>

6. ACCRUED          Accrued liabilities are comprised of the following:
   LIABILITIES:
                    December 31,                                                           1999                1998
                    ----------------------------------------------------------------------------------------------------------------

                    Payroll, payroll taxes and payroll-related costs                    $168,000         $   208,000
                    Professional fees                                                    145,000             110,000
                    Deferred revenue                                                     105,000             105,000
                    Environmental                                                        100,000             100,000
                    Legal settlement                                                                         360,000
                    All other                                                             77,000             262,000
                    ----------------------------------------------------------------------------------------------------------------
                                                                                        $595,000         $ 1,145,000
                    ================================================================================================================

7.  INCOME TAXES:   The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of temporary
                    differences between the carrying amounts and the tax bases of assets and liabilities.

                    Temporary differences and carryforwards which give rise to deferred tax assets and liabilities are as follows:

                    December 31,                                                         1999               1998
                    ----------------------------------------------------------------------------------------------------------------

                    Deferred tax assets:
                    Postretirement benefits other than pensions                       $   12,000         $     8,000
                    Accrual differences                                                  123,000             385,000
                    Accounts receivable and inventory valuation
                    allowances                                                           123,000             123,000
                    Net operating loss carryforward                                    5,097,000           5,000,000
                    Investment tax credit carryforward                                   346,000             346,000
                    ----------------------------------------------------------------------------------------------------------------
                                                                                       5,701,000           5,862,000
                    Valuation allowance                                               (5,701,000)         (5,862,000)
                    ----------------------------------------------------------------------------------------------------------------
                                                                                      $  - 0 -           $   - 0 -
                    ================================================================================================================

                    At December 31, 1999, the Company had cumulative net operating loss  carryforwards of approximately  $14,500,000
                    available to offset future taxable income. These carryforwards will expire in various years through 2014.

                    At December 31, 1999 and 1998, the Company had investment tax credit  carryforwards  of  approximately  $346,000
                    available to be carried  forward to offset future taxes payable.  A substantial  portion of these  carryforwards
                    will expire in the year 2001.

8.  REVOLVING       During 1999, the Company  terminated its revolving  credit facility with an asset-based working  capital  lender
    CREDIT          and entered into a refinancing agreement with a major national asset-based  lender covering both a new revolving
    FACILITY:       credit facility and a new term loan. This  credit   facility   expires  in  July  2006. Borrowings  are

                                                                                                                                   8

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<CAPTION>

                                                                                                               PEERLESS TUBE COMPANY

                                                                                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                                                                   DECEMBER 31, 1999
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                    <C>                     <C>


                    based on specified  levels of accounts  receivable and inventories of the Company and bear interest at the prime
                    rate (8.5% at December 31, 1999) plus 3% on the outstanding balance. The maximum amount available under the line
                    of credit is $5,000,000 less the principal  balance of the equipment term loan ($2,022,000 at December 31, 1999)
                    (see Note 9).

                    Certain of the terms of the revolving credit agreement, as amended,  require the pledge of substantially all the
                    Company's assets as collateral.

                    Proceeds  from  these  borrowings  were used to 1) repay the  existing  asset-based  lender in full;  2) pay the
                    $600,000 ($640,000 less $40,000 settlement) remaining due from the lawsuit verdict in favor of a former employee
                    (pursuant to the terms of the settlement  agreement,  the Company paid  $700,000,  including  interest,  to this
                    former employee over a two-year  period.  The settlement award was charged to operations in 1998); and 3) to pay
                    all real estate and other taxes as well as other past due accounts payable.

9.    LONG-TERM     Long-term debt is comprised of the following:
      DEBT:

                    December 31,                                                        1999          19985
                    ---------------------------------------------------------------------------------------

                    Equipment  term loan  payable in  monthly
                    installments  of $25,600  plus interest through
                    July 1,  2006.  The  loan  bears  interest at the prime
                    rate  (8.5% at December 31, 1999) plus 3%.                      $2,022,000     $ 822,000

                    Various purchase money capital leases for
                    manufacturing  and office equipment,  with interest
                    rates  ranging from 11% to 18%.  Final payment
                    made in 1999.                                                                     65,000
                    ----------------------------------------------------------------------------------------
                                                                                     2,022,000       887,000
                    Less current portion                                              (307,000)     (236,000)
                    ----------------------------------------------------------------------------------------
                       LONG-TERM DEBT                                               $1,715,000     $ 651,000
                    ========================================================================================

                    Maturities of long-term debt are as follows:

                    Year ending December 31,
                            2000                                                                   $ 307,000
                            2001                                                                     307,000
                            2002                                                                     307,000
                            2003                                                                     307,000
                            2004                                                                     307,000
                         Thereafter                                                                  487,000
                    ----------------------------------------------------------------------------------------
                                                                                                  $2,022,000
                    ========================================================================================

                                                                                                                                   9

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<CAPTION>

                                                                                                               PEERLESS TUBE COMPANY

                                                                                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                                                                   DECEMBER 31, 1999
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<S>                                                                                    <C>                     <C>


10. RETIREMENT      The Company  maintained a  noncontributory  defined  benefit plan  covering most of its domestic employees.  The
    PLANS:          plan was formally  terminated  effective August 1, 1997. On or about October 15, 1998,  lump-sum  payments  were
                    made to the remaining  participants in complete settlement of all benefit obligations under the plan. There were
                    residual  assets  remaining in the plan  subsequent to these  lump-sum  payments.  The overfunded  amount,  less
                    termination  charges,  taxes and other required costs,  was not expected to be material and was to revert to the
                    Company.  Therefore,  the prepaid cost of $625,000 at the  termination  date was charged to  operations in 1998.
                    During February 1999, the Company received a final payment of $306,000 for the overfunded  amount which has been
                    reflected in other income at December 31, 1999.

                    Commencing in 1995, the Company offered a 401(k) retirement savings plan to all nonunion full-time employees who
                    have completed one year of employment.  Employees may contribute a percentage of their gross salaries as defined
                    in the plan,  subject to limits prescribed by the Internal Revenue Service.  The Company's  contributions are at
                    the discretion of the board of directors.  Participants are fully vested upon entering the plan. Officers of the
                    Company serve as trustees of the plan. There were no Company  contributions for 1999 and  approximately  $13,000
                    for 1998.

11. STOCK OPTION    In 1992, the Company  adopted a stock option plan under which incentive stock options may be granted to officers
    PLAN:           and key  employees  to  purchase  up to a maximum of 250,000  shares of common  stock.  The  options  granted to
                    employees  under the plan are to vest and become  exercisable at the rate of 25% per year following the grant of
                    such options provided that certain conditions are satisfied. The stock options are exercisable at a price of not
                    less than 100%, or 110% in the case of a 10% or greater  stockholder,  of the market value at date of grant. The
                    exercise price of options issued is $.52 per share.  All options are exercisable  over a 10-year period,  except
                    for 10% or greater stockholders, in which case the period is 5 years. Activity in stock options during the years
                    was as follows:

                                                                                                                  Weighted-
                                                                                                                   Average
                                                                                                                Exercise Price
                    Year ended December 31,                       1999           1998        1997         1999      1998     1997
                    ----------------------------------------------------------------------------------------------------------------

                    Outstanding at beginning of year                            109,800     124,200                $2.08   $2.50
                    Granted during the year                     150,000                                  $.52
                    Expired during the year                                    (109,800)    (14,400)                2.50    5.75
                    ----------------------------------------------------------------------------------------------------------------
                        OUTSTANDING AT END OF YEAR              150,000          - 0 -      109,800      $.52              $2.08
                    ================================================================================================================

                    Options exercisable at year-end              37,500                      84,800
                    ================================================================================================================

                    SFAS No. 123,  Accounting for  Stock-based  Compensation,  encourages  but does not require  companies to record
                    compensation  cost for employee stock option grants.  The Company has chosen to continue to account for employee
                    option

                                                                                                                                  10

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<CAPTION>

                                                                                                               PEERLESS TUBE COMPANY

                                                                                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                                                                   DECEMBER 31, 1999
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                    <C>                     <C>

                    grants  using  Accounting  Principles  Board  Opinion  No. 25.  Accordingly,  no  compensation  expense has been
                    recognized for employee stock option grants and the Company has elected to adopt the disclosure  provisions only
                    of SFAS No. 123.

                    If the Company had elected to recognize  compensation cost based on the fair value of the options granted at the
                    grant date as  prescribed  by SFAS No. 123, the  Company's  net loss for the year ended  December 31, 1999 would
                    approximate the pro forma amount  indicated  below:

                    Net loss - as reported                                                                                $(275,000)
                    Net loss - pro forma                                                                                  $(353,000)
                    Basic loss per share - as reported                                                                    $    (.11)
                    Basic loss per share - pro forma                                                                      $    (.14)
                    ----------------------------------------------------------------------------------------------------------------

                    The fair value of each option  grant is estimated  on the date of grant using the  Black-Scholes  option-pricing
                    model with the  following  weighted-average  assumptions  used for the year ended  December 31,  1999:  expected
                    volatility of 184%, risk-free interest rate of 4.8%, no dividend yield and all options have expected lives of 10
                    years.

                    No stock options were granted by the Company during the years ended December 31, 1998 and 1997. Accordingly,  no
                    pro forma disclosures are presented.

12. OTHER POST-     The Company  provides  healthcare  and life  insurance  benefits to certain  active and retired  employees.  The
    RETIREMENT      Company adopted SFAS No. 106, Employer's Accounting for Post-retirement  Beenfits Other Than Pensions.  SFAS No.
    BENEFITS:       106 requires the Company to accrue the estimated cost of retiree benefit  payments  during an employee's  active
                    service life. The retiree medical and life insurance programs are not funded.  Claims and expenses are paid from
                    the general assets of the Company.  The balance of this accrual is adjusted based on actuarial  adjustments  and
                    employment activity during the periods involved. The activity of this liability is as follows:

                    December 31,                                                           1999            1998            1997
                    ----------------------------------------------------------------------------------------------------------------

                    Beginning of year                                                    $23,000         $23,000         $ 70,000
                    Adjustment to recognize the cost
                     of benefits, net                                                     13,000                          (47,000)
                    ----------------------------------------------------------------------------------------------------------------
                        END OF YEAR                                                      $36,000         $23,000         $ 23,000
                    ================================================================================================================

13. MAJOR CUS-      In 1999,  two  customers accounted for 45% (32% and 13%) of the Company's sales. In 1998, sales to two customers
    TOMERS AND      accounted for 60% (48% and 12%) of the Company's  sales. In 1997, two customers  accounted for 61% (34% and 27%)
    CONCENTRA-      of the Company's sales.
    TION OF CREDIT
    RISK:
                    Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of


                                                                                                                                  11

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<CAPTION>


                                                                                                               PEERLESS TUBE COMPANY

                                                                                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                                                                   DECEMBER 31, 1999
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                    <C>                     <C>


                   accounts  receivable.  At  December 31, 1999, in management's  opinion,  there is no significant  risk of loss on
                   these  instruments  and management  believes its allowance for losses are adequate.  Two customers  accounted for
                   approximately 47% of net accounts receivable at December 31, 1999.

14. COMMITMENTS    At December 31, 1999, the Company had purchase commitments outstanding of approximately $785,700 for raw aluminum
                   through June 2000. These are substantially offset by firm purchase orders on contracts from customers.

                   In the ordinary  course of business,  the Company is a party to various  lawsuits,  the outcome of which,  in the
                   opinion of management, will not have a material adverse effect on the consolidated financial position, results of
                   operations or cash flows of the Company.

                   The Company is subject to federal,  state and local  requirements  regulating the discharge of materials into the
                   environment or otherwise relating to the protection of the environment. It is the Company's policy to comply with
                   these requirements,  and the Company believes that as a general matter its policies, practices and procedures are
                   properly designed to prevent unreasonable risk of environmental damage, and of resulting financial liability,  in
                   connection with its business.  Some risk of environmental damage is, however,  inherent in particular  operations
                   and products of the Company, as is the case with other companies engaged in similar businesses.

                   The Company is and has been engaged in the handling, manufacture, use or disposal of several substances which are
                   classified  as hazardous or toxic by one or more  regulatory  agencies.  The Company  believes that its handling,
                   manufacture,  use and disposal of such  substances  have  generally  been in accord with  environmental  laws and
                   regulations. It is possible, however, that future knowledge or other developments, such as improved capability to
                   detect such substances in the environment,  increasingly strict  environmental laws and standards and enforcement
                   policies  thereunder,  could bring into question the  Company's  handling,  manufacture,  use or disposal of such
                   substances.

                   The Company has and will continue to incur operating costs for environmental  compliance.  In connection with the
                   removal of several  underground  storage  tanks,  the Company is monitoring  several wells to ensure  appropriate
                   action is taken with respect to any ground water  contamination.  Future  modifications  and capital additions to
                   existing equipment may also be required as regulations are enacted. At the present time,  management is unable to
                   fully estimate the amount of potential expenditures in these areas for future years, but believes the Company has
                   acted prudently in its environmental practices and responsibilities.

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