# SECURITIES AND
EXCHANGE COMMISSION FORM 10-K Washington, D.C. 20549

|(MARK ONE)
|----------
|(X)       
|OR        
|(   )     

Commission File No:   0-7475

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PHOTO CONTROL CORPORATION
(Exact name of Registrant as specified in its charter)

|Minnesota                       |  | 41-0831186          | 
|------------------------------- |  | ------------------- | 
|(State or other jurisdiction of |  | (I.R.S. Employer    | 
|incorporation or organization)  |  | Identification No.) | 

4800 Quebec Avenue
North Minneapolis, Minnesota 55428
(Address of principal executive offices)

(763) 537-3601
(Registrants telephone number, including area code)

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

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.08

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

Check if there is no
disclosure of delinquent filers in response to Item 405 of Regulation S-K
contained in this form, and no disclosure will be contained, to the best of
registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.   (X)

Indicate by check mark
whether the registrant is an accelerated filer (as defined in Exchange Act
Rule 12b-2).   Yes  No X

The aggregate market value
of the voting stock held by non-affiliates of the Registrant as of June 30,
2003 was approximately $2,043,000 based on the closing sale price of the
Registrants Common Stock on such date.

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Number of shares of
$0.08 par value Common Stock outstanding at June 30, 2003:   1,604,163

1.    This
annual report on form 10-K consisting of 44 pages including exhibits. The
exhibit index is on page 32.

1

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Index

Photo Control
Corporation

|Part I.           |                                                                                                |   
|----------------- | ---------------------------------------------------------------------------------------------- | --
|Item 1            | Business                                                                                       | 3 
|Item 2            | Properties                                                                                     | 5 
|Item 3            | Legal Proceedings                                                                              | 5 
|Item 4            | Submission of Matters to a vote of Security Holders                                            | 5 
|                  | Executive Officers of Registrant                                                               | 6 
|Part II.         
|Item 5            | Market for Registrants Common Equity and Related Shareholder Matters                          | 7 
|Item 6            | Selected Financial Data                                                                        | 7 
|Item 7            | Managements Discussion and Analysis of Financial Condition and Results of Operations          | 8 
|Item 7A           | Quantitative and Qualitative Disclosure About Market Risk                                      | 11
|Item 8            | Financial Statements and Supplementary Data                                                    | 12
|Item 9            | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure           | 22
|Item 9A           | Control and Procedures                                                                         | 22
|Part III.        
|Item 10           | Directors and Executive Officers of the Registrant                                             | 22
|Item 11           | Executive Compensation                                                                         | 24
|Item 12           | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 26
|Item 13           | Certain Relationships and Related Transactions                                                 | 27
|Item 14           | Principal Accountant Fees and Services                                                         | 27
|Part IV.         
|Item 15           | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                               | 28
|                  | Signatures                                                                                     | 31
|Index to Exhibits |                                                                                                | 32

2

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# PART I

Item 1.   Business

(a)   General
Development of Business.

Photo Control Corporation (the
Registrant or the Company) was organized as a Minnesota
corporation in 1959. The Registrant acquired all of the outstanding stock of Norman
Enterprises, Inc. (Norman), a California corporation, in 1973. In June 1983,
the Registrant acquired all of the outstanding stock of Nord Photo Engineering, Inc.
(Nord), a Minnesota corporation. In October 1997, Normans manufacturing
operations were moved to Minnesota and the land and building in California was sold. In
October 1998 the remaining sales and service facility was closed and moved to Minneapolis.
Effective January 1, 1998 the Registrant liquidated both subsidiaries and transferred the
assets to Photo Control Corporation, the parent company.

The Company designs, manufactures,
and markets professional Camerz film and digital cameras, photographic accessories, Norman
electronic flash equipment and Lindahl photographic accessories. In October 2000, the
Company acquired a non-photographic line, the Bookendz docking station for Apple
PowerBook, IBook and IPod. In January 2004, the Company purchased the Vaddio product line
which is specialized video camera equipment and controls used in the video conferencing
and presentation market. No new Nord photographic package printers have been sold in the
last four years. However, to the extent available, service parts and replacement lenses
are sold.

(b)   Financial Information About Segments.

The Registrant is engaged in two
industries. It designs, manufactures, and markets professional photographic
equipment and the Bookendz docking station for the Apple PowerBook, IBook and
IPod. See Footnote 11 to Financial Statements for information about
industry segments for the years ended December 31, 2003 and 2002.

(c)   Narrative Description of Business.

(c)(l)(i)   Principal
Products, Services and Markets. The Registrant designs, manufactures and
markets professional Camerz film and digital cameras, photographic accessories,
Norman electronic flash equipment, and the Lindahl product line which consists
of lens shades, light filters and flash brackets. All products are manufactured
in our existing facility and distributed by use of our employee salesmen and
five independent representatives for the Lindahl dealers. In October 2000 the
Company purchased the Bookendz docking station for Apple PowerBook, IBook and
IPod. The Bookendz product line is manufactured in our existing facility and
distributed by use of our employee salesmen to end users and resellers of Apple
products.

The principal market for
the Registrants Camerz film and digital camera equipment is the
sub-segment of the professional photography market requiring high-volume
equipment, such as elementary and secondary school photographers. The market
with respect to the Norman electronic flash equipment and Lindahl lens shades is
broader, extending to all professional photographers and to experienced amateur
photographers. The market for the Bookendz docking station is the owner of the
Apple PowerBook, IBook and IPod. The geographic market in which the Registrant
competes with respect to film and digital camera equipment, flash equipment and
lens shades consists of the entire United States and, to a lesser extent, some
foreign countries. The Bookendz docking station is sold internationally,
although substantially all sales are in the United States.

The Registrant markets most
of its Camerz cameras, Norman electronic flash and lighting equipment, Lindahl
lens shades and photographic accessories through its four employee salesmen and
through the part-time use of service employees. In addition, five independent
representatives are used to sell the Lindahl product line. These products are
marketed primarily under the tradenames, Camerz, Norman
and Lindahl. Bookendz products are marketed by use of the same
employees that are used for the photographic products. It is expected that the
sales force will remain at the current level during 2004.

3

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(c)(1)(ii)   New
Products and Services. In 2003 the Company introduced a five and a fourteen
mega pixel digital camera. A fourteen mega pixel camera back which fits onto the
Camerz ZII and ZIII film cameras was also introduced. The five mega
pixel camera uses a Sony sensor and the fourteen mega pixel camera uses a Kodak
sensor. In the Norman product line the D12 and D24 series 900 power supplies
were introduced which are used with standard AC power. Two new series of
softboxes were introduced, the Norman battery portable and the Norman umbrella
type softboxes. In the Lindahl product line the GoPod, a body mounted camera
holder, aimed at the sport photographer was introduced. A dock for the Apple
twelve inch Powerbook was introduced in May 2003. In 2004 a dock for the fifteen
inch Powerbook will be introduced.

(c)(1)(iii)   Sources
and Availability of Raw Materials. Materials required for the
Registrants photographic equipment consist primarily of fabricated parts,
lenses, electronic components, and lights, most of which are readily available
from numerous sources. Material for the Bookendz product consists primarily of
electronic components and fabricated parts, which are readily available.

(c)(1)(iv)   Patents,
Trademarks, Licenses, Franchises and Concessions. When the Company acquired
the Bookendz product line in 2000, it also acquired the exclusive license right
to patent number 5,186,646. The patent provides for multiple ports or
connections which allows for easy and quick connection between two devices. Also
in 2000, utility patent number 6,024,461 and design patent number 428,661 were
issued for a lamphead having a multi-positional base and removable mountable
reflector flashtube assembly. The patented lamphead is used in the Norman flash
equipment product line and allows for interchange of the flashtube assembly on
the lamphead. The Registrant received U.S. Patents Nos. 5,294,950 on March 15,
1994 and 5,812,895 on September 22, 1998 for an identification system for
automated film and order processing including machine and human readable code.

The Registrant is the owner
of the registered trademarks Camerz, Norman,
Lindahl and Bookendz and the logo-type designs used in
connection with the sale of photographic equipment under those names.

Although the
Registrants patents and trademarks are valuable, they are not considered
to be essential to the Companys success. Innovative application of
existing technology along with providing efficient and quality products are of
primary importance.

The Registrant has entered
into agreements with employees which agreements grant the Registrant an
exclusive right to use make and sell inventions conceived by employees during
their employment with the Registrant. The Registrant believes that the right to
use, make and sell such inventions adequately protects the Registrant against
any employee who might claim an exclusive proprietary right in an invention
developed while the employee was employed by the Registrant.

(c)(1)(v)   Seasonal
Fluctuations. The photographic equipment business is somewhat seasonal, with
a larger volume of sales from March through October. Historically, the Bookendz
product has less sales volume in the summer months.

(c)(1)(vi)   Working
Capital Practices. The Registrant believes that its working capital needs
are typical to the industry. The nature of the Registrants business does
not require that it provide extended payment terms to customers. The Registrant
maintains an inventory of raw material and finished products and permits
customers to return only defective merchandise.

(c)(1)(vii)   Single
Customer. During the years ended December 31, 2003, 2002 and 2001, the
Company derived 16.3%, 17.2% and 27.5%, respectively, of its sales from an
unaffiliated customer, Lifetouch Inc. and its affiliates. During the years ended
December 31, 2003, 2002 and 2001, 6.5%, 6.2% and 15.5%, respectively, of the
Companys sales were from another unaffiliated customer, CPI Corp. During
the years ended December 31, 2003, 2002, and 2001, 12.1%, 14.0% and 2.8%,
respectively, of it sales were from a third unaffiliated customer, PCA National,
Inc.

(c)(1)(viii)   Backlog.
The dollar amount of backlog believed by the Registrant to be firm at December
31, 2003, 2002 and 2001, is $1,470,000, $360,000 and $965,000, respectively. The
Registrant anticipates that it will be able to fill all current backlog orders
during the fiscal year ending December 31, 2004.

(c)(1)(ix)   Government
Contracts. No material portion of the Registrants business is subject
to renegotiation of profits or termination of any contract or subcontract at the
election of the Government.

4

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(c)(1)(x)   Competition.
Primary methods of competition for the Companys products are product
performance, reliability, service, and delivery. Because of varying product
lines, the Registrant is unable to state accurately its competitive position in
relation to such competitors. The Camerz film cameras have no known competitor,
however, the digital cameras compete with the digital professional cameras sold
by Kodak, Fuji and Nikon. In the somewhat broader market in which the Norman
professional studio electronic flash equipment competes, there are approximately
ten significant competitors, several of which are well established. The
Registrant is unable to state accurately Normans overall competitive
position in relation to such competitors. Normans dominant competitors are
Broncolor, Dynalite, White Lighting, Photogenic, ProFoto and Speed-O-Tron. The
Lindahl line has one known competitor, Jones Brackets, Inc. Bookendz docking
stations have no known competitors.

(c)(1)(xi)   Research
and Development. For the years ended December 31, 2003, 2002 and 2001, the
Registrant spent $861,000, $601,000 and $713,000, respectively, on research
activities relating to the development of new products, services, and production
engineering. The Company intends to maintain its 2003 level of spending on
research and development in 2004. It is anticipated that the life cycle of
digital products will be shorter than the film based products of the past and a
higher level of spending will be required.

(c)(1)(xii)   Environmental
Regulation. Federal, state and local laws and regulations with respect to
the environment have had no material effect on the Registrants capital
expenditures, earnings, or respective competitive positions.

(c)(1)(xiii)   Employees.
As of December 31, 2003, the Registrant had 46 full time employees and 4 part
time employees. The Registrant utilizes subcontract personnel on a temporary
basis to supplement its regular work force, which totaled 2 people as of
December 31, 2003.

(d)   Financial
Information About Foreign and Domestic Operations and Export Sales. The
Registrant has no operations based outside of the United States. During each of
the last three years ended December 31, 2003, slightly less than 5% of the
Registrants sales were derived from export sales.

# Item 2.   Properties

The Registrants principal
property is located at 4800 Quebec Avenue North, Minneapolis, Minnesota. The building at
that location consists of 55,000 square feet and is located on 3 1/2 acres of land. The
building was constructed in 1971 and was purchased in 1980. Extensive remodeling has been
done to meet the specific needs of the Company. The Registrant first occupied the building
during the fall of 1980, and uses the building for the manufacturing of all its products
and as corporate offices.

The Registrant believes its present
facilities are adequate for its current level of operation and provide for a reasonable
increase in production activities.

# Item 3.   Legal Proceedings

The Registrant is not a party to, and
none of its property is the subject of, any material pending legal proceedings.

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

No matter was submitted to a vote of
the Registrants shareholders during the Registrants quarter ending December 31, 2003.

5

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# Executive Officers of the Registrant

|Name, Age andPresent Position of Officer                                        | Business Experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|John R. Helmen, 63 Chairman                                                     | Mr. Helmen was appointed Chairman of the Registrant in June 2001 when he resigned from his positions of President and CEO. He was the President of the Registrant since April 1997. In August 1997, the Board of Directors appointed him CEO and a director of the Registrant. Mr. Helmen was employed by Supra Color Labs, Inc. as Vice President, Director of Sales and Marketing from 1977 through 1979, President from 1979 through 1993, and General Manager after the sale of Supra Color to Burrel Professional Labs from 1993 to 1996.
|Curtis R. Jackels, 57 Chief Executive Officer President, Secretary and Director | Mr. Jackels was appointed CEO and President of the Registrant in June 2001. He had been Vice President-Finance of the Registrant since August 1985 and Treasurer since November 1980. He has been a director since May 2001. Mr. Jackels was controller from June 1978 to November 1980. Prior to June, 1978, Mr. Jackels was employed by two public accounting firms.                                                                                                                                                                        
|Robert A. Leidlein, 54 Vice President-Marketing                                 | Mr. Leidlein joined the Registrant in August 2001. From May 1995 to July 2001, Mr. Leidlein was the Group Executive International Operations of Photo Marketing Association International, a photographic trade association. From August 1985 to April 1995, Mr. Leidlein had been President of Photoquip.                                                                                                                                                                                                                                    
|Christopher S. Lausen, 42 Treasurer                                             | Mr. Lausen has served as the Registrants Controller and Personnel Director since April 2000, and as Treasurer since May 2003. Prior to April 2000, Mr. Lausen had been the Accounting Manager for GAF Materials Corporation, a manufacturer of building materials, from April 1998 to April 1999 and the Accounting Manager at Command Tooling Systems Incorporated, a manufacturer of toolholding systems for the steel milling industry, from October 1987 to April 1998.                                                                  

The term of office for each executive
officer is from one annual meeting of directors until the next annual meeting or until a
successor is elected. There are no arrangements or understandings between any of the
executive officers and any other person (other than arrangements or understandings with
directors or officers acting as such) pursuant to which any of the executive officers were
selected as an officer of the Registrant. There are no family relationships between any of
the Registrants directors or executive officers.

6

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PART II

Item 5:   Market for
Registrants Common Equity and Related Shareholder Matter

Selected Common Stock Data

The Companys Common
Stock is listed on the National Association of Securities Dealers Automated
Quotation System (NASDAQ). The Company has never paid any cash dividends. It
intends to retain earnings to finance the development of its business.
Stockholders of record on December 31, 2003 numbered 284. The Company
estimates that an additional 400 stockholders own stock held for their
account at brokerage firms and financial institutions. The following table sets
forth the high and low sales prices for the periods set forth below. The source
of the prices is the NASDAQ Historical Trade Tables.

|             | 2003 | 2002
|------------ | ---- | ----
|
|March 31     | 1.80 | 1.50
|June 30      | 1.80 | 1.51
|September 30 | 2.23 | 1.50
|December 31  | 2.49 | 1.90

Item 6:   Selected
Financial Data

|                                  | Year Ended December 31
|--------------------------------- | ----------------------
|
|Net Sales                         |                       
|Net Income (Loss)                 |                       
|Net Income (Loss) Per Share       |                       
|Return on Sales                   |                       
|Return on Beginning Net Worth     |                       
|Return on Beginning Assets        |                       
|Working Capital                   |                       
|Plant and Equipment               |                       
|Total Assets                      |                       
|Long-Term Debt                    |                       
|Other Accrued Expenses-Retirement |                       
|Benefit                           |                       
|Stockholders Equity              |                       
|Book Value Per Share              |                       
|Shares Outstanding                |                       

7

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Item 7:   Managements
Discussion and Analysis of Financial Condition and Results of Operations

GeneralPhoto Control Corporation is a
manufacturer of professional photographic equipment and the Bookendz docking stations.
There are three photographic product lines: long-roll film and digital cameras, electronic
flash equipment and lens shades. All three product lines are used primarily for high
volume portrait, commercial and school photography. The Company continues to offer service
parts and support on a fourth line of photographic package printers. However, because this
product is technologically obsolete, no new printers have been sold in the last four
years. The Bookendz products are docking stations for the Apple Powerbook, Ibook and Ipod.

In recent years there has been a
consolidation in the markets served by our photographic equipment, resulting in excess
capacity and sales to fewer customers. Sales are highly concentrated to several high
volume studio and school photographers. For the years ended December 31, 2003, 2002 and
2001, three customers comprised 34.9%, 37.4% and 45.8%, respectively of the Companys
sales.

Sales by other companies of consumer
digital cameras and products have increased significantly over the last several years.
However, the professional photographic markets have experienced a slow gradual increase
for digital products with the lower volume individual wedding and studio photographers
purchasing high-end professional cameras from such companies as Kodak, Fuji and Nikon.
This trend has yet to emerge in the high volume professional photographers, which is the
market the Company primarily serves. Beginning in 1998, sales of the Companys new
film cameras decreased significantly because professional photographers would either make
new investments in digital products or buy used film equipment. As a result, the
Companys camera sales have declined in recent years. The Company offers several
digital camera products and in 2003 introduced three new camera products, a five mega
pixel camera, a fourteen mega pixel camera and a fourteen mega pixel camera back, however,
shipments of production units did not begin until 2004. Management believes that newer
digital products will offset the decline in sales of film cameras and increase sales in
future years.

The Companys electronic flash
equipment is of high quality, premium priced, and targeted at high volume photographers.
Lighting considerations are similar for both digital and film photography. During 2002 the
Company began to distribute a low priced line of lights imported from China. Also, at the
end of 2002, a new high quality, lower priced monolight was brought to market. During 2003
a new lower priced line of digital floor power supplies was introduced with shipments of
production units beginning in 2004. The Company expects its new products coupled with its
older products will satisfy a broader spectrum of the lighting market.

The lens shade product line also
includes light filters and brackets that are used to attach the special effect shades and
filters to professional medium format cameras. Both the lens shade line and photographic
printer service parts account for less than eight percent of sales in 2003 and 2002.

The Bookendz docking stations allow
owners of Apple Powerbooks, Ibooks and Ipods to remove the device from the dock for travel
and upon return, dock the device without having to make a connection for each individual
peripheral device. Apple constantly changes the configuration of their equipment and the
docks are frequently redesigned and retooled to accommodate theses changes.

The Company has developed new digital
products in an effort to offset the decline in sales of film based products. However, it
is unknown the effect to which this strategy will be successful. In addition the Company
has attempted to diversify outside the photographic market by purchasing the Bookendz
docking product line in 2000 and the Vaddio product line in January 2004. The Vaddio
product line is specialized cameras and controls used in the video conferencing and
presentation markets. The products are sold through a dealer network that resells and
installs the equipment. The end users are a variety of businesses and various
organizations that wish to utilize video conferencing. Schools and churches are a
significant share of the presentation market.

8

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Critical Accounting PoliciesThe preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect reported amounts. The
more significant estimates include reserves for obsolete inventory, reserves for
warranty and the carrying value of intangible assets.

In assessing the ultimate realization
of inventories, we are required to make judgments as to future demand requirements and
compare them with the inventory levels. Reserve requirements increase as projected demand
decreases due to market conditions, technological and product life cycle changes. We have
experienced significant changes in reserves in recent periods due to photography switching
from film to digital capture and consolidation of our customers resulting in excess
capacity and declining requirements for equipment. Such estimates are difficult to make
under current volatile economic conditions and it is possible significant changes in
required inventory reserves may continue to occur in the future.

Warranty reserves are determined by
applying historical claim rate experience to the current installed base of equipment.
Historical claim rates are developed using four years of actual warranty expense to
establish the reserve requirement for any given accounting period.

Currently the only intangible asset
is the patent for the Bookendz docking station. This asset is being amortized over the
legal life of the patent, however, if significant changes would occur to the estimated
future cash flow of the product sales under the patent right, an additional write down
would be determined based on the reduction of such cash flows.

Off Balance Sheet
Financing ArrangementsAs of December 31, 2003 there are no off-balance sheet
arrangements, unconsolidated subsidiaries and commitments or guarantees of other
parties.

Results of OperationsThe following table presents selected
items from the Companys Statements of Operations expressed as percentages of sales
for the year indicated:

|                                    | YEAR ENDED DECEMBER 31
|----------------------------------- | ----------------------
|
|Sales                               |                       
|Gross Margin                        |                       
|Marketing & Administrative          |                       
|Research, Development & Engineering |                       
|Gain on Sale of Land and Building   |                       
|Income(Loss) Before Taxes           |                       
|Net Income(Loss)                    |                       

SalesTotal sales in 2003 decreased
$1,824,000 compared to 2002. Camera sales decreased by $1,049,000 in 2003, primarily due
to a decrease in sales to the three major customers discussed in footnote 10, whose
purchases from us declined by a total of $758,000 in 2003 compared to 2002. In addition to
the continuing downward sales trend of film cameras in 2003, our supplier of digital
camera sensors discontinued that segment of their business which caused a decrease in
camera sales in 2003 compared to 2002. Although the three new digital camera products were
introduced in 2003, production units were not available until 2004. Sales of the Bookendz
product line decreased $541,000. In January 2003, Apple introduced two new Powerbooks, a
twelve and a seventeen inch model. The Company did not have twelve inch docks available
for shipment until May and is evaluating the market for seventeen inch docks. In July
2003, Apple introduced a new fifteen inch Powerbook and the Company began shipping docks
for this model in February 2004. Lighting sales decreased by $61,000. The two other
products, Lindahl shades and Nord printer parts which account for 7.4% of sales, decreased
by $173,000 in 2003 as compared to 2002.

Total sales in 2002 decreased
$3,070,000 or 28.4% as compared to 2001. Camera sales decreased by $2,334,000 primarily
due to the completion of a $6,600,000 contract in 2001, of which $1,706,000 was shipped in
2001. Also, sales of film cameras decreased by 52.0% in 2002 from 2001. Sales of flash
equipment decreased $875,000 due to one large OEM customer who did not order in 2002 at
the same level as 2001. Sales of the Bookendz product line increased $360,000 in 2002 as
compared to 2001. Two new products, a dock for the Ipod and the Ibook were added to the
line in 2002. The two other products, Lindahl shades and Nord printer parts which
accounted for 7.9% of sales, decreased by $221,000 in 2002 as compared to 2001.

9

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Gross MarginsThe gross margins were 19.6%, 23.5%
and 32.2% for the years ended December 31, 2003, 2002 and 2001, respectively. Because of
low sales volume in 2003 there was an under absorption of manufacturing overhead of
$759,000 compared to an under absorption of $662,000 in 2002 and $234,000 in 2001. If the
Company successfully increases its sales in 2004, the gross margins will increase due to
the elimination of excess plant capacity and under absorbed overhead. The gross margin on
the Norman product line accounted for approximately one half of the gross margin change
from 2003 to 2002 because of the sales of lower priced and margin products in 2003
compared to 2002. However, gross margins are expected to fluctuate on a quarterly basis
because of product mix changes and the seasonality of sales.

# 

Marketing and
AdministrativeMarketing and administrative expenses were $1,358,843,
$1,330,639 and $1,687,717 for the years ended December 31, 2003, 2002 and 2001,
respectively. As a percentage of sales, marketing and administrative expenses
have increased to 23.0% in 2003 from 17.2% in 2002 and from 15.6% in 2001.
Marketing and administrative expense increased as a percentage of sales from
2003 to 2002 and 2002 to 2001 because the expenses did not decrease
proportionally with the sales decreases. The increase in dollar amounts in 2003
compared to 2002 reflect increased marketing expenses of $106,343 which was
offset by lower administrative costs for a net increase of $28,204. In an
attempt to increase sales, higher advertising, trade show and direct calling
promotion expenses were incurred. The decrease in dollar amounts reflects
decreased staff in 2002 and 2001.

# 

Research, Development
and EngineeringResearch, development and engineering expenses were
$861,589, $601,360 and $713,112 for the years ended December 31, 2003, 2002 and
2001, respectively. In 2002, the Company reduced the engineering staff compared
to 2001. In 2003 the Company spending increased $260,229 compared to 2002. This
increase was to develop three new digital camera products. In 2004, the Company
will continue to spend at approximately the 2003 level.

Quarterly ResultsThe three years ended December 31,
2003 reflect the seasonal demand for the Companys products resulting in relatively
higher sales in the second and third quarters.

Income TaxesAt December 31, 2003, the
Companys deferred tax asset of $855,000 is fully reserved. In 2003, the Company used
all of its tax loss carry back, which resulted in a benefit of $96,000 for income taxes.
In 2002, the Company carried its tax loss back and received an income tax benefit of
$190,000.

Liquidity and Capital
ResourcesCash decreased by $10,692 to $3,509,930 at December 31, 2003
from $3,520,622 at December 31, 2002. Net loss from operations was $964,471
which was offset by non cash charges for depreciation, amortization and reserve
for obsolescence of $501,490, decrease in inventory of $469,471, decrease in
refundable income taxes of $112,536 and other changes in working capital netting
to $88,881 for net cash provided by operating activity of $207,907. Working
capital decreased to $5,834,428 at December 31, 2003 from $6,526,574 at December
31, 2002 primarily as a result of decreased inventory.

Capital expenditures were $28,966 in
2003, $20,231 in 2002 and $215,354 in 2001. The Company estimates that additional capital
investments for property and equipment will be approximately $100,000 in 2004.

The Company has an unsecured line of
credit for $1,000,000 at the prime rate of interest. At December 31, 2003, there were no
borrowings under the line.

The Company believes that its current
cash position, its cash flow from operations and amounts available from bank borrowing
should be adequate to meet its anticipated cash needs for working capital, capital
expenditures and the Vaddio product line during 2004. However, if losses continue into the
future, there is no assurance that additional cash and borrowings will be available to the
Company.

Effects of InflationThe Company believes that the effect of inflation has not been material
during each of the years ended December 31, 2003, 2002 and 2001.

10

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Gain on Sale of Land and
BuildingIn 2002, the Company sold its 5,000
square foot building and related land in Hinckley Minnesota that had been under a lease
for the last four years which resulted in a gain of $90,055.

Disclosures about
Contractual Obligations and Commercial CommitmentsThe following summarizes our
contractual obligations at December 31, 2003, and the effects these contractual
obligations are expected to have on our liquidity and cash flows in future periods.

|                                      | Payment Due by Period
|------------------------------------- | ---------------------
|
|Accrued expense - Retirement Benefits |                      
|Line of Credit Borrowings             |                      
|                                      |                      
|Total                                 |                      
|                                      |                      

Cautionary StatementStatements included in this
managements discussion and analysis of financial condition and results of
operations, in the letter to stockholders, elsewhere in the Companys Form 10-K and
in future filings by the company with the Securities and Exchange Commission which are not
historical in nature are identified as forward looking statements for the
purposes of the safe harbor provided by Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company
cautions readers that forward looking statements, including without limitations, those
relating to the Companys future business prospects, revenues, gross profit margins,
working capital, liquidity, capital needs, interest costs, and income, are subject to
certain risks and uncertainties that could cause actual results to differ materially from
those indicated in the forward looking statements. The risks and uncertainties include,
but are not limited to, economic conditions, product demand and industry capacity,
competitive products and pricing, manufacturing efficiencies, new product development and
market acceptance, the regulatory and trade environment, and any other risks indicated.

Item 7A:   Quantitative
and Qualitative Disclosures About Market Risk

The Companys line of credit
described in Footnote 5 to the Financial Statements carries interest rate risk. Amounts
borrowed under this agreement are subject to interest charges at a rate tied to the
lending base rate which is generally prime rate. There were no borrowings under the line
in 2003 or 2002. The Companys cash and cash equivalents consist of cash and money
market funds. All amounts are placed with creditworthy financial institutions, however the
rate of return will fluctuate with the change in market interest rates.

11

---

Item 8:   Financial
Statements and Supplementary Data

Report of Independent Auditors

Audit Committee, Board of Directors
and Stockholders Photo Control Corporation

We
have audited the accompanying balance sheets of Photo Control Corporation as of December
31, 2003 and 2002, and the related statements of changes in stockholders equity,
operations and cash flows for each of the three years in the period ended December 31,
2003. 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 auditing standards generally accepted in the
United States of America. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material
respects, the financial position of Photo Control Corporation as of December 31, 2003 and
2002 and the results of its operations and cash flows for each of the three years in the
period ended December 31, 2003, in conformity with accounting principles generally
accepted in the United States of America.

Virchow, Krause & Company, LLP

Minneapolis, Minnesota January 29,
2004

12

---

Statements of Operations

|                                          | Year Ended December 31
|----------------------------------------- | ----------------------
|
|Net Sales                                 |                       
|Cost of Sales                             |                       
|Gross Profit                              |                       
|Expenses                                  |                       
|Marketing and Administrative              |                       
|Research, Development and Engineering     |                       
|Gain on Sale of Land and Building         |                       
|                                          |                       
|                                          |                       
|Income(Loss) Before Income Taxes          |                       
|Income Tax Provision(Benefit)             |                       
|                                          |                       
|Net Income(Loss)                          |                       
|                                          |                       
|Net Income(Loss) Per Common Share-Basic   |                       
|                                          |                       
|Net Income(Loss) Per Common Share-Diluted |                       
|                                          |                       

See accompanying Notes
to Financial Statements

Statements of Changes in Stockholders Equity

|                             | Common Stock |  |  |          
|---------------------------- | ------------ |  |  | ---------
|
|Balance at December 31, 2000 |              |  |  | 1,604,163
|Net Income                   |              |  |  |          
|                             |              |  |  |          
|Balance at December 31, 2001 |              |  |  | 1,604,163
|Net Income                   |              |  |  |          
|                             |              |  |  |          
|Balance at December 31, 2002 |              |  |  | 1,604,163
|Net Loss                     |              |  |  |          
|                             |              |  |  |          
|Balance at December 31, 2003 |              |  |  | 1,604,163
|                             |              |  |  |          

See accompanying Notes
to Financial Statements

13

---

Balance Sheets

|                                               | December 31
|---------------------------------------------- | -----------
|
|Current Assets                                 |            
|Cash and Cash Equivalents                      |            
|Accounts Receivable, Less Allowance of $40,000 |            
|Inventories                                    |            
|Prepaid Expenses                               |            
|Refundable Income Taxes                        |            
|                                               |            
|Total Current Assets                           |            
|                                               |            
|Other Assets                                   |            
|Patent, Net of Amortization                    |            
|Cash Value of Life Insurance                   |            
|                                               |            
|Total Other Assets                             |            
|                                               |            
|Plant and Equipment                            |            
|Land and Building                              |            
|Machinery and Equipment                        |            
|Accumulated Depreciation                       |            
|                                               |            
|Total Plant and Equipment                      |            
|                                               |            
|                                               |            
|                                               |            

|Liabilities and Stockholders Equity       |  | 
|------------------------------------------ |  | 
|Current Liabilities                        |  | 
|Current Portion of Purchase Contract       |  | 
|Accounts Payable                           |  | 
|Accrued Payroll and Employee Benefits      |  | 
|Accrued Expenses                           |  | 
|                                           |  | 
|Total Current Liabilities                  |  | 
|                                           |  | 
|Other Accrued Expense - Retirement Benefit |  | 
|                                           |  | 
|Stockholders Equity                       |  | 
|Common Stock                               |  | 
|Par Value $.08 Authorized 5,000,000        |  | 
|Shares Issued 1,604,163                    |  | 
|Additional Paid-In Capital                 |  | 
|Retained Earnings                          |  | 
|                                           |  | 
|Total Stockholders Equity                 |  | 
|                                           |  | 
|                                           |  | 
|                                           |  | 

See accompanying Notes to Financial Statements

14

---

Statements of Cash Flows

|                                                   | Year Ended December 31
|-------------------------------------------------- | ----------------------
|
|Cash flows from operating activities:              |                       
|Net income from operations                         |                       
|Items not affecting cash-                          |                       
|Depreciation                                       |                       
|Amortization                                       |                       
|Deferred retirement benefit                        |                       
|(Gain)Loss on sale of land, building and equipment |                       
|Provision for inventory obsolescence               |                       
|Deferred income taxes                              |                       
|Payment of retirement benefit                      |                       
|Change in operating assets and liabilities:        |                       
|Accounts Receivable                                |                       
|Inventories                                        |                       
|Prepaid expenses                                   |                       
|Accounts payable                                   |                       
|Accrued expenses                                   |                       
|Accrued and refundable income taxes                |                       
|                                                   |                       
|Net cash provided  by                              |                       
|operating activities                               |                       
|                                                   |                       
|Cash flows from investing activities:              |                       
|Proceeds from sale of land, building and equipment |                       
|Additions to plant and equipment                   |                       
|Proceeds from life insurance                       |                       
|Additions to cash value of life insurance          |                       
|                                                   |                       
|Net cash provided (used)                           |                       
|in investing activities                            |                       
|                                                   |                       
|Cash flows from financing activities:              |                       
|Payment on purchase contract                       |                       
|                                                   |                       
|Change in cash and cash equivalents                |                       
|Cash and cash equivalents at beginning of year     |                       
|                                                   |                       
|Cash and cash equivalents at end of year           |                       
|                                                   |                       
|Supplemental disclosure information:               |                       
|Income tax payments                                |                       
|                                                   |                       
|Income tax refunds                                 |                       
|                                                   |                       

See accompanying Notes to Financial Statements

15

---

Notes to Financial Statements

Note 1.   Business
Description Photo Control Corporation (the Company) designs, manufactures and
markets professional cameras, electronic flash equipment, lens shades and
related photographic accessories. A second line of business consists of the
Bookendz docking stations for the Apple PowerBook, IBook and IPod.

The principal market for
the Companys long-roll film and digital camera equipment is the
sub-segment of the professional photography market requiring high-volume
equipment, such as elementary and secondary school photographers. The market
with respect to electronic flash equipment and the Lindahl products is broader,
extending to all professional and commercial photographers and to experienced
amateur photographers. The market for Bookendz is all owners of the Apple
PowerBooks, IBooks and IPods. The geographic market in which the Company
competes consists of the entire United States and, to a lesser extent, some
foreign countries.

In 2003, sales of flash
equipment was the highest followed by camera equipment, Bookendz and lens shade
sales. In 2002, sales of camera equipment and flash equipment were approximately
equal followed by Bookendz and lens shades. There has been a consolidation of
school photography and studio portrait photography in recent years, which has
concentrated the Companys sales to fewer customers. It is expected that
this trend will continue. In 2003, three customers accounted for 34.9% of the
Companys sales, in 2002 37.4% and in 2001 45.8%. Due to the rapidly
changing technology related to many areas of image processing, the Company has
discontinued manufacturing many products and is replacing them with newer,
updated equipment.

Note 2.   Significant Accounting PoliciesUse of Estimates
 Management uses estimates and assumptions in preparing financial
statements in accordance with accounting principles generally accepted in the
United States of America. Those estimates and assumptions affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities, and the reported revenues and expenses. Actual results could vary
from the estimates that were assumed in preparing the financial statements.

Revenue Recognition 
Sales are recorded when the product is shipped and returns are permitted only
for defective equipment. Costs incurred related to shipping and handling are
billed to customers, and the costs and billings are offset against each other in
cost of sales. Billings for the years ended December 31, 2003, 2002 and 2001
were $132,239, $127,667 and $137,240, respectively.

Accounts Receivable  The
Company reviews customers credit history before extending unsecured credit and
establishes an allowance for doubtful accounts based upon factors surrounding the credit
risk of specific customers and other information. The Company does not accrue interest on
past due accounts receivable. Unless specific arrangements have been made, accounts
receivable over 30 days are considered past due. The Company writes off accounts
receivable when they are deemed uncollectible. The Company believes all accounts in excess
of the allowance for doubtful accounts to be fully collectible. If accounts receivable in
excess of the provided allowance are determined uncollectible, they are charged to expense
in the year that determination is made.

Inventories  Inventories
of raw materials, work in process and finished goods are valued at the lower of cost
(first-in, first-out) or market. Market represents estimated realizable value in the case
of finished goods and replacement or reproduction cost in the case of other inventories.
Because of changing technology and market demand, inventory is subject to obsolescence. An
annual review is made of all inventory to determine if any obsolete, discontinued or slow
moving items are in inventory. Based on this review, inventory is disposed of or an
allowance for obsolescence established to cover any future disposals.

Plant and Equipment 
Plant and equipment are stated at cost. Depreciation is computed primarily on the
straight-line method over the estimated useful lives of 35 years for the building and 3 to
7 years for machinery and equipment. Ordinary maintenance and repairs are charged to
operations, and expenditures which extend the physical or economic life of property and
equipment are capitalized. Gains and losses on disposition of property and equipment are
recognized in operations and the related asset and accumulated depreciation accounts are
adjusted accordingly. The Company assesses long-lived assets for impairment under FASB
Statement of Financial Accounting Standards (SFAS) No. 144 using estimates of undiscounted
future cash flows. Under those rules, long-lived assets are included in impairment
evaluations when events or circumstances exist that indicate the carrying amount of those
assets may not be recoverable. To date, there have been no such losses.

16

---

Fair Value of Financial
Instruments  The carrying amounts for cash and cash equivalents, receivables,
accounts payable, accrued liabilities and purchase contract approximate fair value because
of the short maturity of these instruments. The Company does not have any derivative
financial instruments.

Amortization of Patent 
Patent cost of $1,655,000 is being amortized over nine years, which is based on the
life of the patent. As of December 31, 2003 and 2002 the unamortized balance is $1,093,474
and $1,270,798. Amortization of the patent was $177,324 for each of the years ended
December 31 2003 and 2002. The estimated amortization for each of the next five years is
$177,324.

Research and Development
 Expenditures for research and development are charged against operations as
incurred.

Income Taxes  Deferred
income taxes are provided for expenses recognized in different time periods for financial
reporting and income tax purposes. These differences consist primarily of deferred
retirement benefit that is not deductible for taxes and inventory which has a higher tax
basis than for financial reporting purposes. Deferred taxes are reduced by a valuation
allowance to the extent that realization of the related deferred tax asset is not assured.

Advertising  Advertising
costs are included in Marketing and Administrative Expenses and are expensed as incurred.
Advertising expense was $125,000, $96,000 and $89,000 for the years ended December 31,
2003, 2002 and 2001 respectively.

Cash Equivalents  The
Company considers all highly liquid debt instruments purchased with a maturity of three
months or less to be a cash equivalent. Cash and cash equivalents consist of short-term
securities and bank balances. The Company at December 31, 2003 and periodically throughout
the year has maintained balances in various operating and money market accounts in excess
of federally insured limits.

Net Income(Loss) Per Common
Share  Net income(loss) per common share was based on the weighted average
number of common shares outstanding during the period when computing the basic net
income(loss) per share. When dilutive, stock options are included as equivalents using the
treasury stock market method when computing the diluted net income per share. The weighted
average number of common shares outstanding for the three years ended December 2003 was
1,604,163. The basic net income(loss) per share was $(.60), $.11 and $.45 for the years
ended December 31, 2003, 2002 and 2001, respectively. The dilutive net income(loss) per
share was $(.60) and $.10 and $.43 for the years ended December 31, 2003, 2002 and 2001,
respectively, which was computed using an additional 0, 43,000 and 63,000 shares for the
dilutive effect of stock options. Dilutive options excluded from the net income(loss) per
share was 269,000, 235,000, and 263,000 for the years ended December 31, 2003, 2002 and
2001, respectively.

Stock-Based Compensation
 In accordance with Accounting Principles Board (APB) Opinion No. 25 and related
interpretations, the Company uses the intrinsic value-based method for measuring
stock-based compensation cost which measures compensation cost as the excess, if any, of
quoted market price of the Companys common stock at the grant date over the amount
the employee must pay for the stock. The Companys general policy is to grant stock
options at fair market value at the date of grant. Options and warrants issued to
non-employees are recorded at fair value, as required by Statement of Financial Accounting
Standards (SFAS) No. 123, as amended by SFAS No. 148, Accounting for Stock-Based
Compensation, using the Black-Scholes pricing method.

Had compensation cost been recognized
based on the fair values of options at the grant dates consistent with the provisions of
SFAS No. 123, the Companys net income(loss) and basic and diluted net income(loss)
per common share would have been changed to the following pro forma amounts:

17

---

|                                          | Fiscal Year ended
December 31,
|----------------------------------------- | ------------------------------
|
|Net Income (loss):                        |                               
|As reported                               | ($964,471)                    
|Pro forma                                 | ($1,018,077)                  
|Basic net income (loss) per common share:
|As reported                               | ($0.60)                       
|Pro forma                                 | ($0.63)                       
|Diluted net income per common share:     
|As reported                               | ($0.60)                       
|Pro forma                                 | ($0.63)                       
|Stock based compensation:                
|As reported                               | $0                            
|Pro forma                                 | $53,606                       

In determining the compensation cost
of options granted during fiscal year 2003, 2002 and 2001, as specified by SFAS No. 123,
the fair value of each option grant has been estimated on the date of grant using the
Black-Scholes option pricing model and the weighted average assumptions used in these
calculations are summarized as follows:

|                                 | Fiscal Year ended
December 31,
|-------------------------------- | ------------------------------
|
|Risk-free interest rate          | 6.5%                          
|Expected life of options granted | 5 years                       
|Expected volatility              | 50%                           
|Expected dividend yield          | 0%                            

Note 3.   Inventories
The following inventories were on hand at December 31:

|                | 2003       |  | 2002      
|--------------- | ---------- |  | ----------
|Raw Materials   | $1,214,579 |  | $1,504,392
|Work in Process | 54,777     |  | 103,993   
|Finished Goods  | 1,249,359  |  | 1,536,381 
|                |            |  |           
|                | $2,518,715 |  | $3,144,766
|                |            |  |           

18

---

Note 4.   Accrued Expenses and
Warranty CostsAccrued expenses at December 31 are as follows:

|                         | 2003 |  | 2002
|------------------------ | ---- |  | ----
|Product Warranty Reserve |      |  | $   
|Real Estate Taxes        |      |  |     
|Other                    |      |  |     
|                         |      |  |     
|                         |      |  | $   
|                         |      |  |     

The Company warrants its products
for one or two years. The reserve for warranty is computed by averaging the last four
years warranty costs incurred and multiplying by two which provides a full two year
warranty on all products. The Company has reserved an additional $50,000 to cover any
unanticipated or unusual product warranty problems. The following summarizes the warranty
transactions:

|                             | 2003 |  | 2002 |         | 2001
|---------------------------- | ---- |  | ---- | ------- | ----
|Balance at Beginning of Year |      |  | $    | 200,000 |     
|Claims Paid                  |      |  |      | (47,680 | )   
|Expense Provision            |      |  |      | 47,680  |     
|                             |      |  |      |         |     
|Balance at End of Year       |      |  | $    | 200,000 |     
|                             |      |  |      |         |     

Note 5.   Short-Term Line of Credit
The Company has a $1,000,000 unsecured line of credit agreement at the prime
rate of interest. There were no borrowings under the line of credit during the
years ended December 31, 2003 and 2002.

Note 6.   Commitments
The Company has retirement benefit agreements with key management personnel,
which are funded by life insurance. Under the agreements, covered individuals
become vested immediately upon death or if employed at age 65. Benefit costs are
recognized over the period of service and recorded as accrued retirement
benefit.

Note 7.   Income Taxes
The income tax provision(benefit) shown in the statements of operations is
detailed below for each year ended December 31:

|         | 2003 |  | 2002 |         | 2001
|-------- | ---- |  | ---- | ------- | ----
|Current  |      |  |      |         |     
|Federal  |      |  | $    | (98,000 | )   
|State    |      |  |      | 2,000   |     
|Deferred |      |  |      |         |     
|         |      |  |      |         |     
|         |      |  | $    | (96,000 | )   
|         |      |  |      |         |     

The income tax provision (benefit)
varied from the federal statutory tax rate as follows for each year ended December 31:

|                                                      | 2003 |  | 2002 |       | 2001
|----------------------------------------------------- | ---- |  | ---- | ----- | ----
|U.S. Statutory Rate                                   |      |  |      | (34.0 | %)  
|State Income Taxes, Net of Federal Income Tax Benefit |      |  |      | .2    |     
|Inventory Disposal                                    |      |  |      |       |     
|Valuation Allowance                                   |      |  |      | 23.4  |     
|Other, net                                            |      |  |      | 1.3   |     
|                                                      |      |  |      |       |     
|                                                      |      |  |      | (9.1  | %)  
|                                                      |      |  |      |       |     

19

---

The following summarizes the tax
effects of the significant temporary differences which comprise the deferred tax asset at
year ended December 31:

|                                        | 2003 |  | 2002
|--------------------------------------- | ---- |  | ----
|Inventory Costs                         |      |  | $   
|Deferred Retirement Benefit             |      |  |     
|Bad Debt Reserves                       |      |  |     
|Accrued Benefits                        |      |  |     
|Accrued Costs                           |      |  |     
|Financial Amortization in Excess of Tax |      |  |     
|Loss Carryforwards                      |      |  |     
|                                        |      |  |     
|Net Deferred Tax Asset                  |      |  |     
|Valuation Allowance                     |      |  |     
|                                        |      |  |     
|Net Deferred Income Tax                 |      | 
|                                        |      |  |     

At December 31, 2003, the Company has
available for U.S. federal and state income tax purposes net operating loss carryforwards
of approximately $500,000 and $580,000, respectively. These carryforwards expire in the
year 2023 for federal purposes and the years 2017 and 2018 for state purposes. The
ultimate utilization of the net operating loss carryforwards may be limited and are fully
reserved in the valuation allowance.

Note 8.   Profit Sharing Plan
The Company has a 401K plan, which covers qualified full-time employees. The
Company matches the employees contributions to 8% of the employees salary at a
rate of 25%. An additional 10% match is contributed if certain profit goals are
achieved. The Company contributed $37,647, $56,159 and $59,979 for the years
ended December 31, 2003, 2002 and 2001, respectively.

Note 9.   Stock Options
Non-qualified stock options to purchase shares of the Companys common
stock have been granted to certain officers, directors, and key employees.
Option prices of all the grants were not less than the fair market value of the
Companys common stock at dates of grants. At December 31, 2003, there were
111,573 shares of common stock available under the plan for future grants.

The Company has elected to account
for non-qualified stock options under Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees, and related interpretations.
Accordingly, no compensation expense has been recognized for stock options.

The following summarizes the changes
in the options for the years ended December 31:

|                             | 2003 |  | 2002 |         | 2001 |  
|---------------------------- | ---- |  | ---- | ------- | ---- | -
|
|Balance at Beginning of Year |      |  |      | 331,000 |      | $
|Granted                      |      |  |      |         |      |  
|Expired                      |      |  |      | (62,000 | )    | $
|                             |      |  |      |         |      |  
|Balance at End of Year       |      |  |      | 269,000 |      | $
|                             |      |  |      |         |      |  

The following summarizes the
outstanding and exercisable options as of December 31, 2003 and the potential realizable
value assuming annual rates of stock price appreciation for the option term:

|Options Outstanding |  | Exercisable Options
|------------------- |  | -------------------
|
|$1.19               |  |                    
|$3.19               |  |                    
|$2.20 to 3.44       |  |                    
|                    |  |                    
|                    |  |                    
|                    |  |                    

20

---

Note 10.   Major Customers
During the years ended December 31, 2003, 2002, and 2001, three unaffiliated
customers accounted for the following percentages of sales:

|Customer |  | 2003 |   | 2002 |   | 2001 |  
|-------- |  | ---- | - | ---- | - | ---- | -
|A        |  | 16.3 | % | 17.2 | % | 27.5 | %
|B        |  | 12.1 |   | 14.0 |   | 2.8  |  
|C        |  | 6.5  |   | 6.2  |   | 15.5 |  
|         |  |      |   |      |   |     
|         |  | 34.9 | % | 37.4 | % | 45.8 | %
|         |  |      |   |      |   |     

Note 11.   Segment Reporting
The Bookendz product line are docking stations for the Apple PowerBook,
IBook and IPod. All of its operations (sales and marketing, engineering,
manufacturing and administration) are merged into Photo Controls
structure. Accordingly, the only activity for Bookendz that is separately
maintained is sales, cost of sales and the cost of its related assets. The
following summarizes the Bookendz operation:

|                   | Assets
|------------------ | ------
|
|Bookendz           |       
|Unamortized Patent |       
|Inventory          |       
|Tooling            |       
|                   |       
|Total Bookendz     |       
|                   |       
|Total Company      |       
|                   |       
|                  
|
|
|Bookendz           |       
|                   |       
|Total Company      |       
|                   |       

Note 12.   Quarterly Information (unaudited)
The following is a summary of the unaudited quarterly financial information
for the years ended December 31, 2003, 2002 and 2001:

|Year ended December 31, 2003 |  |  | 1st Qtr. |           | 2nd Qtr. |   | 3rd Qtr.  |   | 4th Qtr. |           | Total |  
|---------------------------- |  |  | -------- | --------- | -------- | - | --------- | - | -------- | --------- | ----- | -
|Sales                        |  |  | $        | 1,471,200 |          | $ | 1,700,519 |   | $        | 1,851,939 |       | $
|Gross Profit                 |  |  |          | 242,471   |          |   | 281,585   |   |          | 506,729   |       |  
|Net Income(Loss)             |  |  |          | (316,573  | )        |   | (190,490  | ) |          | 29,305    |       |  
|Net Income(Loss) Per Share   |  |  |          | (.20      | )        |   | (.12      | ) |          | .02       |       |  
|                            
|
|Sales                        |  |  | $        | 1,703,475 |          | $ | 2,027,180 |   | $        | 2,497,561 |       | $
|Gross Profit                 |  |  |          | 371,667   |          |   | 509,333   |   |          | 573,964   |       |  
|Net Income(Loss)             |  |  |          | (123,242  | )        |   | 24,976    |   |          | 119,503   |       |  
|Net Income(Loss) Per Share   |  |  |          | (.08      | )        |   | .02       |   |          | .07       |       |  
|                            
|
|Sales                        |  |  | $        | 3,093,996 |          | $ | 3,159,355 |   | $        | 2,953,330 |       | $
|Gross Profit                 |  |  |          | 1,142,860 |          |   | 944,532   |   |          | 893,883   |       |  
|Net Income                   |  |  |          | 271,641   |          |   | 183,322   |   |          | 194,564   |       |  
|Net Income Per Share         |  |  |          | .16       |          |   | .11       |   |          | .12       |       |  

21

---

# Note 13.   Subsequent Events (unaudited)

On January 5, 2004 the
Company purchased all the assets and rights for the Vaddio product line used in
the video conferencing and presentation industry from Vaddio LLC and Rob
Sheeley. The purchase price for these assets was $450,000 of cash, 50,000 shares
of Photo Control common stock, the assumption of approximately $80,000 of
liabilities and payment of certain legal fees and commissions. Effective January
5, 2004, Rob Sheeley and the six Vaddio employees became employees of Photo
Control.

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

None

# Item 9A:   Controls and Procedures

The Companys Chief Executive
Officer, Curtis R. Jackels, and principal financial and accounting officer,
Christopher S. Lausen, have reviewed the Companys disclosure controls
and procedures as of the end of the period covered by this report. Based upon
this review, these officers believe that the Companys disclosure controls
and procedures are effective in ensuring that material information related to
the Company is made known to them by others within the Company.

There have been no
significant changes in internal control over financial reporting that occurred
during the fiscal period covered by this report that have materially affected,
or are reasonably likely to materially affect, the registrants internal
control over financial reporting.

# PART III

# Item 10.   Directors and Executive officers of the Registrant

Directors of the Registrant

Biographical information, including
principal occupation and business experience during the last five years, of each director
is set forth below.

| | Curtis
R. Jackels, 57, Class I Director, CEO, President and Secretary. He was appointed CEO and
President of the Company in June 2001. He had been Vice President-Finance of the Company
since August 1985 and Treasurer since November 1980. Mr. Jackels was controller of the
Company from June 1978 to November 1980. Prior to June 1978, Mr. Jackels was employed by
two public accounting firms. Director since May 2001.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Richard
P. Kiphart, 62, Class I Director. Mr. Kiphart has been a principal in the firm of William
Blair and Company, L.L.C., a broker dealer and investment advisor, since 1972. He joined
William Blair in 1965. He has been the principal in charge of William Blairs
corporate finance department since 1995. Director since November 2001.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Scott
S. Meyers, 50, Class II Director. He is the former President and Board of Director member
of Alliant Techsystems (ATK), an aerospace and defense company with leading positions in
solid rocket propulsion, composite structures, and munitions. Mr. Meyers continues to
provide advisory services to ATK. Mr. Meyers joined ATK in March 1996 and served as Chief
Financial Officer until October 2000 when he became President. Mr. Meyers previously
served as Executive Vice President and Chief Financial Officer and a Director of Magnavox
Electronic Systems Company in Ft. Wayne, Indiana, a manufacturer of defense electronics
products. Director since April 2000.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

22

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| | John
McMillan, 61, Class II Director. He is the retired President and Chief Executive Officer
of Scotia Technology, LLC. Scotia is located in Minneapolis, Minnesota and is a
manufacturer of products for digital imaging equipment, medical devices and life support
equipment for fire, rescue and recreational vehicles. Mr. McMillan became the President
and CEO of Scotia in December 2001 having retired in 1998 as Chairman and Chief Executive
Officer of Merit Corp., the predecessor to Scotia, a position he held since 1987.
Director since September 2001.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | James
R. Loomis, 78, Class III Director. He retired in February, 1992 as Chairman and Chief
Executive Officer of Magnavox Electronic Systems Co., a position he held since May, 1990.
Magnavox Electronic Systems Co. has its headquarters in Fort Wayne, Indiana and is a
manufacturer of electronic equipment. From 1980 to 1990, Mr. Loomis had been President
and Chief Operating Officer of that company. Director since May 1986.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | John
R. Helmen, 63, Class III Director. He was appointed Chairman of the Company in June 2001.
He had been President of the Company since April 1997. In August 1997, the Board of
Directors appointed him CEO and a director of the Company. Mr. Helmen was employed by
Supra Color Labs, Inc. as Vice President, Director of Sales and Marketing from 1977
through 1979, President from 1979 through 1993, and General Manager after the sale of
Supra Color to Burrel Professional Labs in 1993. Director since August 1997.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The term of office for each director
is for three years or until a successor is elected. There are no arrangements or
understandings between any of the directors and any other person (other than arrangements
or understandings with directors or officers acting as such) pursuant to which any of the
directors were selected as a director of the Registrant. There are no family relationships
between any of the Registrants directors or executive officers.

Mr. Meyers is a member
of the Audit Committee and is an audit committee financial expert
and independent as defined under applicable Securities and Exchange
Commission rules.

Executive officers of the Registrant.

Information concerning Executive Officers of the Company is included in this
Annual Report on Form 10-K in Part I, Item 4 under the caption
Executive Officers of the Registrant.

Compliance with 16(a) of the Securities Exchange Act of 1934.

Section 16(a) of the Securities Exchange Act of 1934 requires the
Companys directors and officers, as well as beneficial owners of ten
percent or more of the Companys common stock, to report their holdings and
transactions in the Companys securities. To the Companys knowledge,
based on information furnished to it and contained in reports provided pursuant
to Section 16(a), as well as written representations that no other reports were
required for 2003, it appears that all persons described above have complied
with Section 16(a).

Code of Ethics.

We have adopted a Code of Business Conduct and Ethics that applies to all of
our officers, directors and employees, including, without limitation, our
principal executive officer, principal financial and accounting officer and all
other senior financial officers.  A copy of our Code of Business Conduct
and Ethics can be found on our website at http://www.photocontrol.com. We
intend to disclose future amendments to our Code of Business Conduct and Ethics,
as well as any waivers thereof for our principal executive officer, principal
financial and accounting officer and persons performing similar functions, on
our website to the extent permissible under the Securities Act of 1934 and the
NASDAQ Listing Standards.

23

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# Item 11.   Executive Compensation

# Summary Compensation Table

The following table sets forth the
cash and non-cash compensation for each of the last three years awarded to or earned by
the CEO and the other executive officers of the Company who earned in excess of $100,000.

|                         | ANNUAL COMPENSATION
|------------------------ | -------------------
|
|JOHN R. HELMEN           |                    
|Chairman                 |                    
|                         |                    
|CURTIS R. JACKELS        |                    
|President and Chief      |                    
|Executive Officer        |                    
|ROBERT A. LEIDLEIN       |                    
|Vice PresidentMarketing |                    

(1)    
The aggregate amount allocated for bonuses for a particular year is established
by the Board of Directors and normally is equal to a percentage of the
Companys corporate pretax profits for the year. Generally, an officer will
receive a bonus if the individual meets the performance criteria determined by
the President of the Company.

(2)    
All optionees, upon exercise of their non-qualified stock option, receive a cash
bonus of 5% of the exercise price if exercised in the third year of the option;
10% if exercised in the fourth year and 40% if exercised in the fifth year.

# Option Grants In 2003

There were no options
granted in 2003 to the officers named in the Summary Compensation Table.

# Aggregated
Option Exercises In 2003 and December 31, 2003 Option Values

There were no options
exercised by officers in 2003.

|              | NUMBER OF UNEXERCISED OPTIONS AT DECEMBER 31, 2003 |        | VALUE OF UNEXERCISED IN THE MONEY OPTIONS AT DECEMBER 31, 2003($)(1)
|------------- | -------------------------------------------------- | ------ | --------------------------------------------------------------------
|
|J.R. HELMEN   |                                                    | 36,667 |                                                                     
|C.R. JACKELS  |                                                    | 30,000 |                                                                     
|R.A. LEIDLEIN |                                                    | 3,333  |                                                                     

(1)    Value
calculated based on December 31, 2003 market value of $2.36 per share less the
exercise price per share multiplied by the number of option shares.

24

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# Compensation of Directors

Each
director who is not a full time employee of the Company (outside director)
receives an annual retainer of $12,000. Also, a fee of $500 is paid to each outside
director for each board or committee meeting attended. Those directors who are employees
of the Company are not specifically compensated for their duties as directors. The total
amount paid to all full time outside directors for services as directors during fiscal
year 2003 was $60,000. The outside directors are granted stock options from time to time.
Also, under the Companys stock option plan, each participant is eligible to receive
a cash bonus upon certain option exercises.

# Executive Retirement Plan

In
1985, the Board of Directors adopted an Executive Retirement Benefit Plan to provide
retirement benefits to selected executives of the Company. Pursuant to the Plan the Board
of Directors determines which key executive employees may participate in the Plan. Each
participant who is vested or dies while employed by the Company, shall be entitled to
receive retirement benefits payable monthly for not less than 15 years. In the event of
the death of a participant, payments will be made to the participants beneficiary.
If a participant dies before reaching age 67, retirement benefits will be paid to the
beneficiary of the participant for 15 years or until the participant would have reached
the age 67, whichever is longer. The amount of the retirement benefits to be paid each
year is 20% of the projected annual salary of the participant at age 67. The projected
annual salary is equal to the salary the participant would receive at age 67 if his salary
on August 9, 1985, (the date of adoption of the Plan) was increased by 5% each year until
the participant reached age 67. The Company maintains a life insurance policy for the
individuals covered under the Plan, the proceeds of which are intended to reimburse the
Company for payment of retirement benefits. Currently there are three retired participants
who receive or whose heirs receive a total of $73,301 annually.

In
March 2004, the Plan was amended to provide that except in the event of a change in
control, upon termination for any reason, Mr. Jackels will immediately begin receiving the
payments he would have otherwise been entitled to receive under the Plan if he had worked
until age 65. The annual amount of these payments is $48,534. Upon a change in control
after termination, the remaining payments due under the Plan will increase by an aggregate
of 3% each year over the prior years payments beginning with the payments due the
year after the change in control. Upon a change in control prior to termination, Mr.
Jackels will begin receiving payments due under the Plan beginning on the 31st
month after a change in control. Payments made in each year after the first year will
increase by an aggregate of 3% each year over the prior years payments. These
payments will be made whether or not employee terminates employment before or after the
31st month after a change in control. On a change in control, the Company will
establish a trust for the benefit of Mr. Jackels and fund such trust with an annuity
purchased from a financially sound insurance company sufficient to make the remaining
payments due under the Plan.

# Change in Control Arrangements

The
Company has entered into a Retention Agreement with Curtis R. Jackels providing for
certain payments upon termination of his employment after a change in control if he agrees
to remain with the Company for at least six months after a change in control. The
agreement provides for the payment of insurance benefits for 18 months, continuation of
his salary for 24 months and the transfer to Mr. Jackels of his then-company vehicle.
Also, upon a change in control Mr. Jackels is entitled to certain additional benefits
under the Executive Retirement Plan as described above.

25

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# Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Principal Shareholders

The only persons known to the Company to be beneficial owners of more than
five percent of the Companys Common Stock, $.08 par value, as of
December 31, 2003, are set forth in the table below. Unless otherwise
indicated the shareholders listed in the table have sole voting and investment
powers with respect to the shares indicated.

|Name and Addressof Beneficial Owner    |  | Amount BeneficiallyOwned(1) |     | Percent ofClass
|-------------------------------------- |  | --------------------------- | --- | ---------------
|Mr. Patrick J. Bruggeman               |  | 107,000                     |     | 6.67           
|131 W. Columbia St                     | 
|Fort Wayne, Indiana                    | 
|Richard P. Kiphart                     |  | 191,893                     | (2) | 11.85          
|222 West Adams Street                  | 
|Chicago, Illinois                      | 
|Diocese of Fort Wayne/South Bend, Inc. |  | 190,256                     |     | 11.86          
|1103 South Calhoun                     | 
|Fort Wayne, Indiana                    | 

(1)    Shares
not outstanding but deemed beneficially owned by virtue of the right of a person
to acquire them as of December 31, 2003, or within 60 days of such
date are treated as also outstanding when determining the percent owned by such
person and when determining the percent owned by a group of which such a person
is a member.

(2)    Includes
5,000 shares not outstanding but obtainable upon exercise of presently
exercisable options. Mr. Kiphart has sole power to vote and direct the
disposition of the 186,893 shares which are beneficially owned by him and
presently outstanding.

# Shareholdings of Officers and Directors

The beneficial ownership of
the Companys Common Stock, $.08 par value, by directors and nominees for
directors and by all of the Companys present executive officers and
directors as a group, as of December 31, 2003, is set forth in the table below.
Unless otherwise indicated the shareholders listed in the table have sole voting
and investment powers with respect to the shares indicated.

|Name of Individual orIdentity of Group |  | Number of SharesBeneficially Owned(1) |  | Percent ofClass
|-------------------------------------- |  | ------------------------------------- |  | ---------------
|John R. Helmen                         |  | 54,567                                |  | 3.26           
|James R. Loomis                        |  | 36,562                                |  | 2.24           
|Curtis R. Jackels                      |  | 60,155                                |  | 3.64           
|Richard P. Kiphart                     |  | 191,893                               |  | 11.85          
|All Executive Officers and             | 
|Directors as a Group (8 persons)       |  | 367,177                               |  | 21.35          

(1)   Includes

the following shares which may be acquired within 60 days through exercise
of options: Mr. Helmen  36,667; Mr. Loomis 
20,000; Mr. Jackels  30,000; Mr. Kiphart  5,000;
and all executive officers  115,667.

26

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# Equity Compensation Plans

The
following table sets forth certain information about the Common Stock that may be issued
upon the exercise of options as of December 31, 2003 under the Companys 1983 Stock
Option Plan, which is the Companys only equity compensation plan. The Board of
Directors grants non-qualified stock options to purchase shares of the Companys
common stock to all eligible participants, which includes officers, directors, and all
employees. Option prices of all the grants are not less than fair market value of the
Companys common stock at dates of grant. The options expire at the end of five years
from the date of grant and become exercisable over the last three years of the option at a
rate of 33 1/3 percent each year.

# EQUITY COMPENSATION PLAN INFORMATION

|PLAN CATAGORY            |  | NUMBER OF SHARESTO BE ISSUED UPONEXERCISE OFOUTSTANDINGOPTIONS, WARRANTSAND RIGHTS |  | WEIGHTED-AVERAGEEXERCISE PRICE OFOUTSTANDINGOPTIONS, WARRANTSAND RIGHTS |  | NUMBER OF SHARES REMAININGAVAILABLE FOR FUTURE ISSUANCEUNDER EQUITY COMPENSATION PLANS(EXCLUDING SHARES REFLECTEDIN THE FIRST COLUMN) | 
|------------------------ |  | ---------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------- | 
|Equity Plan Compensation |  | N/A                                                                                |  | N/A                                                                     |  | N/A                                                                                                                                   | 
|Plans Approved By        | 
|Stockholders             | 
|Equity Plan Compensation |  | 269,000                                                                            |  | $2.62                                                                   |  | 111,573                                                                                                                               | 
|Plans Not Approved By    | 
|Stockholders             | 
|Total                    |  | 269,000                                                                            |  | $2.62                                                                   |  | 111,573                                                                                                                               | 

# Item 13.   Certain Relationships and related transactions

None

# Item 14.   Principal Accountant Fees and Services

# Audit Fees

Fees for audit services
totaled approximately $25,200 in 2003 and $22,700 in 2002, including fees
associated with the audit of the financial statements, review our quarterly
reports on Form 10-Q and review of our annual report on Form 10-K.

# Tax Fees

Fees for tax services,
including tax compliance, tax advice and tax planning, totaled approximately
$5,500 in 2003 and $7,000 in 2002.

# All Other Fees

The Company incurred no
other fees with its Auditor than as described above in 2003 and 2002.

# Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

The audit committee meets
prior to filing any Form 10-Q or 10-K to approve those filings. In
addition, the committee meets to discuss audit plans and anticipated fees for
audit and tax work prior to the commencement of that work. All fees paid to our
independent auditors are pre-approved by the audit committee. These services may
include audit services, audit-related services, tax services and other services.
The Audit Committee has adopted a policy for the pre-approval of services
provided by the independent auditors, which is attached as Exhibit 99.1.

27

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# PART IV

# Item 15.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)   Financial
Statements. The following documents are filed as part of this report under
Item 8:

Report of Independent Auditors

Statements of Operations for the years ended December 31, 2003, 2002 and 2001

Statements of Changes in Stockholders Equity for the years ended December 31, 2003, 2002 and 2001

Balance Sheets at December 31, 2003 and 2002

Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001

Notes to Financial Statements

(a)(1)   Financial Statement Schedule.

Auditors Consent and
Report on Schedules  filed as part of this report on page 29

Schedule IX   Valuation and
Qualifying Accounts for the years ended December 31, 2003, 2002 and 2001 
filed as part of this report on page 30

All other schedules have been omitted
because they are not applicable or are not required, or because the required information
has been given in the Consolidated Financial Statements or notes thereto.

(a)(3)   Exhibits.
See Exhibit Index on page 32 following signatures.

(b)   Reports
on Form 8-K. A Form 8-K was filed on October 31, 2003 to
report the Registrants third quarter 2003 earnings.

(c)   Exhibits.
Reference made to item 14 (A)(3)

(d)   Schedules. Reference made to item 14 (A)(2)

28

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# AUDITORS CONSENT AND REPORT ON SCHEDULES

Audit Committee, Board of Directors and
Stockholders
Photo Control Corporation

We hereby consent to the
incorporation by reference in this Annual Report on Form 10-K of Photo Control Corporation
for the year ended December 31, 2003 of our report, dated January 29, 2004, appearing in
the Companys 2003 Annual Report to Shareholders. We also consent to the
incorporation by reference of such report in the registration statements on Form S-8 for
the Photo Control Stock Option Plan.

In the course of our audit of the
financial statements referred to in our report, dated January 29, 2004, included in the
Companys 2003 Annual Report to Shareholders, we also audited the supporting schedule
listed in Item 14(a)(2) of this Annual Report on Form 10-K. In our opinion, the schedule,
when considered in relation to the basic financial statements taken as a whole, presents
fairly in all material respects the information set forth therein.

Virchow, Krause & Company, LLP

Minneapolis, Minnesota
January 29, 2004

29

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# Schedule IX  Valuation and Qualifying Accounts and Reserves

|Column A                     |  | Column B |   | Column C |  | Column D |        | Column E |  
|---------------------------- |  | -------- | - | -------- |  | -------- | ------ | -------- | -
|
|Year Ended December 31, 2003 |  |          |   |          |  |          |        |          |  
|Allowance for Doubtful       |  |         
|Accounts                     |  |          | $ | 40,000   |  | $        | 23,143 |          | $
|                             |  |          |   |          |  |          |        |          |  
|Allowance for Warranty       |  |          | $ | 200,000  |  | $        | 47,680 |          |  
|                             |  |          |   |          |  |          |        |          |  
|Year Ended December 31, 2002 |  |         
|Allowance for Doubtful       |  |         
|Accounts                     |  |          | $ | 40,000   |  | $        | (4,408 | )        | $
|                             |  |          |   |          |  |          |        |          |  
|Allowance for Warranty       |  |          | $ | 200,000  |  | $        | 61,840 |          |  
|                             |  |          |   |          |  |          |        |          |  
|Year Ended December 31, 2001 |  |         
|Allowance for Doubtful       |  |         
|Accounts                     |  |          | $ | 40,000   |  | $        | (3,937 | )        | $
|                             |  |          |   |          |  |          |        |          |  
|Allowance for Warranty       |  |          | $ | 200,000  |  | $        | 79,900 |          |  
|                             |  |          |   |          |  |          |        |          |  

(a)    Recoveries
of amounts written off in prior years.

(b)    Uncollectible
accounts written off. In 2002 and 2001 write off of credits exceeded write off
of uncollectible accounts.

(c)    Claims Paid

30

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# Signatures

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

|                     |  | Photo Control Corporation         | 
|-------------------- |  | --------------------------------- | 
|                    
|Date: March 19, 2004 |  | By  /s/   Curtis R. Jackels       | 
|                     |  | Curtis R. Jackels                 | 
|                     |  | Chief Executive Officer,          | 
|                     |  | President, Secretary and Director | 

Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.

|Date: March 19, 2004 |  | /s/   Curtis R. Jackels                                | 
|-------------------- |  | ------------------------------------------------------ | 
|                     |  | Curtis R. Jackels, Chief Executive Officer, President, | 
|                     |  | Secretary and Director                                 | 
|                     |  | (principal executive officer)                          | 
|                    
|Date: March 19, 2004 |  | /s/   Christopher S. Lausen                            | 
|                     |  | Christopher S. Lausen, Treasurer                       | 
|                     |  | (principal financial and accounting officer)           | 
|                    
|Date: March 19, 2004 |  | /s/   John R. Helmen                                   | 
|                     |  | John R. Helmen, Chairman                               | 
|                    
|Date: March 19, 2004 |  | /s/   James R. Loomis                                  | 
|                     |  | James R. Loomis, Director                              | 
|                    
|Date: March 19, 2004 |  | /s/   Richard P. Kiphart                               | 
|                     |  | Richard P. Kiphart, Director                           | 
|                    
|Date: March 19, 2004 |  | /s/   Scott S. Meyers                                  | 
|                     |  | Scott S. Meyers, Director                              | 
|                    
|Date: March 19, 2004 |  | /s/   John McMillan                                    | 
|                     |  | John McMillan, Director                                | 

31

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# Photo Control
Corporation

# Exhibit Index

|Exhibit |  | Page Number inSequentialNumberingof allForm 10-K andExhibit Pages                                                                                                                                            
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1     |  | Registrants Restated Articles of Incorporation, as amended  incorporated by reference to Exhibit 3.1 to the Registrants Annual Report on Form 10-K for the fiscal year ended June 30, 1988                
|       
|3.2     |  | Registrants bylaws as amended  incorporated by reference to Exhibit 3.2 to the Registrants Annual Report on Form 10-K for the fiscal year ended June 30, 1989                                             
|       
|10.1    |  | Executive Salary Continuation Plan adopted August 9, 1985 together with Exhibits  incorporated by reference to Exhibit 10.4  to the Registrants Annual Report on Form 10-K for the year ended June 30, 1986
|       
|10.2    |  | The Registrants 1983 Stock Option Plan  incorporated by reference to Exhibit 10.4 to the Registrants Annual Report on Form 10-K for the fiscal year ended June 30, 1989                                   
|       
|10.3    |  | Form of Stock Option Agreement under the Registrants 1983 Stock Option Plan  incorporated by reference to Exhibit 5 to the Registrants Registration Statement on Form S-8, Reg.  No. 2-85849              
|       
|10.4    |  | Cash bonus plan for officers and key employees incorporated by reference to the Registrants Annual Report on Form 10-K for the fiscal year ended December 31, 1999                                          
|       
|10.5    |  | Amendment to Stock Option Plan August 29, 1994  incorporated by reference to Exhibit 10.5 to the Registrants Annual Report on Form 10-K for the fiscal year ended December 31, 1994                        
|       
|10.6    |  | Amendment to Stock Option Plan, February 23, 1996  incorporated by reference to Exhibit 10.6 to the Registrants annual report on form 10-K for the fiscal year ended December 31, 1995                     
|       

32

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|Exhibit |  | Page Number inSequentialNumberingof allForm 10-K andExhibit Pages                                                                                                                      
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.7    |  | Amendment to Stock Option Plan, November 7, 1997  incorporated by reference to Exhibit 10.7 to the Registrants annual report on form 10-K for the fiscal year ended December 31, 1997
|       
|10.8    |  | Purchase and license agreement of Bookendz product line  incorporated by reference to Exhibit 10.1 to the Registrants report on form 8-K dated October 19, 2000                       
|       
|10.9    |  | Retention Agreement with Curtis R. Jackels, dated March 12, 2004                                                                                                                       
|       
|11      |  | Statement of computation of per share earnings                                                                                                                                         
|       
|23      |  | Consent of Independent Auditors                                                                                                                                                        
|       
|25      |  | Power of Attorney from Messrs. Helmen, Jackels, Loomis,  McMillan,  Kiphart and Meyers                                                                                                 
|31.1    |  | Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act and Rules 13a-14 and 15d-14 of the Exchange Act                                                                 
|       
|31.2    |  | Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act and Rules 13a-14 and 15d-14 of the Exchange Act                          
|       
|32      |  | Certification pursuant to 18 U.S.C.ss.135 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002                                                                         
|       
|99.1    |  | Audit Committee guidelines for pre-approval of Independent Auditor services                                                                                                            

*Incorporated by reference
**Indicates management contracts or compensation plans or arrangements required to be filed as exhibits.

33

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