SECURITIES EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                      10-K


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


For the fiscal year ended December 31, 2000          Commission File No. 1-7215


                              PEERLESS TUBE COMPANY


New Jersey (State of Jurisdiction)                  22-1191280 (E.I.N.)

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

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


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


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

Yes[x]   No[ ]



Common Stock, Par Value                        $1.33-1/3
Outstanding at December 30, 2000.       2,462,973 shares






PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            1
<PAGE>

<TABLE>
<CAPTION>


                                                 Table of Contents

<S>             <C>      <C>                                                                                   <C>


                Item                                                                                           Page

Part I.         1        Business                                                                                 3
                2        Properties                                                                               6
                3        Legal Proceedings                                                                        6
                4        Submission of Matters to a Vote of Security Holders                                      6

Part II.        5        Market for the Registrant's Common Stock and Related Stockholder Matters.                8
                6        Selected Financial Data                                                                  8
                7        Management's Discussion and Analysis of Financial Condition and Results of               8
                         Operations
                8        Financial Statements and Supplementary Data                                              8

                9        Changes in and Disagreements with Accountants on Accounting and Financial                9
                         Disclosure

Part III.       10       Directors and Executive Officers of the Registrant                                     10*
                11       Executive Compensation                                                                 10*
                12       Security Ownership of Certain Beneficial Owners and Management                         10*
                13       Certain Relationships and Related Transactions                                         10*

Part IV.        14       Exhibits, Financial Statement Schedules and Reports on Form 8-K                        11

                         Signatures


</TABLE>


*These items are omitted since the Registrant has simultaneously filed with the
Securities and Exchange  Commission a definitive Proxy Statement pursuant to
Regulation 14A involving the election of directors. Certain information relating
to the  Executive  Officers of the  Registrant  appears on page 7 and 10 of this
report.



PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            2

<PAGE>





--------------------------------------------------------------------------------
                                     Part I.
--------------------------------------------------------------------------------

ITEM 1: BUSINESS

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

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

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

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

<TABLE>
<CAPTION>


---------------------------------------------------------------------------------------------------------
                                            Sales 1998-2000
---------------------------------------------------------------------------------------------------------

<S>                                         <C>                       <C>                    <C>


Description                                     2000                     1999                     1998

Seamless aerosol cans                       $10,639,000               $12,280,000            $14,300,000
Collapsible metal tubes                       1,429,000                 1,279,000                782,000
Miscellaneous                                   655,000                   822,000                475,000
                                            -----------               -----------            -----------
Total                                       $12,723,000               $14,381,000            $15,557,000
                                            ===========               ===========            ===========

</TABLE>


The Company supplies approximately 100 customers including 15-20 major accounts.
In 2000, three customers accounted for 43% (17%, 16% and 10%) of the Company's
sales. In 1999, two customers accounted for 45% (32% and 13%) of the Company's
sales. In 1998, two customers accounted for 60% (48% and 12%) of the Company's
sales.

Excess capacity in the industry has had an adverse effect on the Company.
However, steps are currently being taken to implement operational changes and
reduce costs in order to offset the loss in volume. The change in sales mix from
1998 to 2000 is a result of increased demand in collapsible metal tubes and
increased price pressure brought on by a stronger U.S. dollar. The current sales
backlog of production orders and inventory on hand is slightly less than last
year. This position can change rapidly as customers


PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            3
<PAGE>

release new orders or adjust desired quantities. The Company's production is
against firm orders and subject to firm and final pricing.

THE MANUFACTURING PROCESS

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

Extruding the can or tube:

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

2.       Heating and cleaning the can or tube shell.

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

4.       Decorating and over lacquering the container.

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

6.       Packaging the product.

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

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


PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            4
<PAGE>

Frequently, the customer changes his source of supply, and seemingly minor
changes may throw out all the formulation specifications.

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

SEGMENT DATA

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


RAW MATERIALS

The basic raw materials essential to the operation of the Company are aluminum
ingot, paint, ink and paper products for packaging and shipping containers. All
necessary supplies are readily available. The Company has a supply agreement for
aluminum slugs that expires in the year 2005. The Company has the right to
purchase from a third party supplier if the supplier is unable to ship slugs
when needed.


ENVIRONMENT

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

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

EMPLOYEES

The Company  presently  employs  approximately  110-120  persons at its facility
located in Bloomfield,  New Jersey. The Company is a non-union  organization and
management's  relationship with its employees is considered  excellent.


PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            5
<PAGE>

ITEM 2: PROPERTIES

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

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

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

ITEM 3: LEGAL PROCEEDINGS

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

Under the terms of the agreement, the former employee was granted a lien
subordinated in priority to the Company's asset based lender on substantially
all of the Company's assets.

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


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

The Shareholders at the annual meeting, expected to be held on or before
December 2001, will be asked to elect the Board of Directors and ratify the
Company's independent auditors.

PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            6

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<TABLE>
<CAPTION>


                                           Executive Officers of the Registrant
---------------------------------------------------------------------------------------------------------------------------
Name, position                              Officer    Age                        Business Background
                                             since
---------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>        <C>   <C>

Frederic Remington, Chairman of the          1965       72    Elected  to the  Board  of  Directors  in 1965.  Joined  the
Board, Chief Executive Officer                                Company in 1950 after  attending  Temple  University and New
                                                              Jersey Institute of Technology, formerly Newark College of
                                                              Engineering. Vice President, Operations in 1968, Vice
                                                              President, Engineering in 1977, Senior Vice President,
                                                              Engineering in 1986 and Chairman of the Board and Chief
                                                              Executive Officer in 1989.
---------------------------------------------------------------------------------------------------------------------------
Richard W. Potts, President and Director     1970       65    Elected  to the  Board of  Directors  in 1970.  Bachelor  of
                                                              Science degree from Rensselaer  Polytechnic  Institute and a
                                                              Master's  Degree from Newark College of Engineering  (NJIT).
                                                              Joined the Company in 1963.  Vice  President,  Manufacturing
                                                              since  1968.  Senior  Vice  President,  Production  in 1986.
                                                              President  and Chief  Operating  Officer in 1989.  Member of
                                                              the Executive Committee of the Board.
---------------------------------------------------------------------------------------------------------------------------
Ann Gaccione, Corporate Secretary            1992       64    Joined   the   Company   in  1978.   Secretary,   1978-1988;
                                                              assistant  corporate  secretary,  1989-1991;  and  executive
                                                              secretary  and  administrative  assistant to the Chairman of
                                                              the Board, 1989 to present.
------------------------------------------ ---------- ------- -------------------------------------------------------------
</TABLE>

PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            7
<PAGE>




--------------------------------------------------------------------------------
                                     Part II
--------------------------------------------------------------------------------


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

The Peerless Tube Company Corporation Common Stock is traded over-the-counter.
The Company is traded under the symbol PLSU. There has been a relatively small
number of trades during 1997.

The range of the high and low common stock sale's prices as reported by the NASD
bulletin board over the counter for each of the quarters for the years ended
December 31, 2000, 1999, and 1998 are listed as follows:

------------------------------------------------------------------------
     Quarter                 2000             1999              1998
------------------------------------------------------------------------
        1                    $0.3500          $0.4400           $0.3125
                             $0.2000          $0.3750           $0.2600
        2                    $0.4600          $0.4400           $0.4375
                             $0.2000          $0.4400           $0.2800
        3                    $0.2800          $0.6250           $0.2800
                             $0.1000          $0.5000           $0.1250
        4                    $0.2400          $0.6600           $0.2500
                             $0.0400          $0.3750           $0.0625
------------------------------------------------------------------------

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

The approximate number of record holders of the Company's Common Stock, at
December 31, 2000, was 1,100.

ITEM 6: SELECTED FINANCIAL DATA

Selected financial data for the five years ended December 31, 2000 is presented
on page 20 of this report.

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

Management's Discussion and Analysis is presented on pages 4 to 11 of this
report.


ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Company's consolidated financial statements, together with the reports
therein of Goldstein Golub Kessler LLP dated April 19, 2001 appear on pages
22-34, of this report.


PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            8

<PAGE>


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

There were no disagreements on any auditing, accounting or financial disclosure
in 2000.


PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            9
<PAGE>



--------------------------------------------------------------------------------
                                    Part III.
--------------------------------------------------------------------------------

ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

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

ITEM 11: EXECUTIVE COMPENSATION

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

ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

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

ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information relating to certain relationships and related transactions can be
found on page 13, management section, of the Company's 1998 annual report to
stockholders and incorporated herein by reference.



PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            10

<PAGE>



--------------------------------------------------------------------------------
                                    Part IV.
--------------------------------------------------------------------------------


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

The following documents are filed as part of this report:

<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------------------
                                                                                            Form 10-K Annual Report
                                                                                                      Page
                 Description

<S>       <C>    <C>                                                                                   <C>
          (1)    Consolidated Financial Statements*:
a.)              Report of Independent Auditors                                                        22
                 Consolidated Balance Sheets as of December 31, 2000                                   23
                        and 1999
                 Consolidated Statements of Operations and Accumulated                                 25
                       Deficit For the Years Ended December 31, 2000,
                       1999, and 1998
                 Consolidated Statements of Cash Flows for the Years Ended                           26-34
                       December 31, 2000, 1999 and 1998.
                 Notes to the Consolidated Financial Statements
          (2)    Consolidated Financial Statement Schedules:
                       None Required
b.)                    No reports on Form 8-K were filed during the last
                       quarter covered by this report.
c.)                    All other documents have been filed and are
                       incorporated by reference.
---------------------------------------------------------------------------------------------------------------------
</TABLE>

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


PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            11

<PAGE>



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                               PEERLESS TUBE COMPANY

                               Registrant
                               By:


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


                               By:


                               ___________________________________
                               Richard W. Potts
                               President and Director




PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            12

<PAGE>


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

OUR VISION                      We will be one of the leaders in the packaging
                                industry, successful in everything we do.

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

OUR                             We will achieve our Vision by being a Total
COMMITMENT                      Quality Company, continuously improving our
                                processes to satisfy our internal and external
                                customers.

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

OUR VALUES                      CUSTOMERS - Our first priority is to satisfy our
                                customers.

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

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

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


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


PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            13

<PAGE>


--------------------------------------------------------------------------------
SALES AND RESULTS OF OPERATIONS 2000 COMPARED TO 1999
--------------------------------------------------------------------------------

SALES

Net sales for the year ended December 31, 2000 decreased $1,658,000 or 13% on
sales of $12,723,000 when compared to 1999 net sales of $14,381,000. Aerosol
sales volume for 2000 was $10,639,000 as compared with sales for 1999 of
$12,280,000 or a decrease of 15%. Aluminum tube sales for 2000 were $1,429,000
as compared with 1999 tube sales of $1,279,000 or an increase of 11%.
Miscellaneous sales for 2000 totaled $655,000 as compared to $822,000 in 1999.
The decrease in sales was a result of increasing price pressure brought on by a
strong U.S. Dollar.

In 2000, the Company's sales to three customers accounted for 43% (17%, 16% and
10%) of the Company's total sales. In 1999, two customers accounted for 45% (32%
and 13%) of the Company's sales.

GROSS MARGIN TRENDS AND DISCUSSION

The gross profit for the years ended December 31, 2000 and December 31, 1999 was
$654,000 or 5.1% of sales and $1,242,000 or 8.6% of sales respectively.


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses for the year ended December 31,
2000 were $1,709,000 or 13% of sales as compared to $1,578,000 or 11% for the
year ended December 1999.

INTEREST EXPENSE, AND OTHER INCOME, NET

Interest expense for the year ended December 31, 2000 was $443,000 as compared
to $335,000 in 1999.

Other income for the year ended December 31, 2000 was $221,000 as compared to
$336,000 for the year ended December 31, 1999.

LIQUIDITY AND CAPITAL RESOURCES

The Company had a negative working capital of $1,585,000 at December 31, 2000.
This was a $1,164,000 decrease from the negative working capital of $421,000 at
December 31, 1999.

Cash at December 31, 2000 was $18,000 or a decrease of $32,000 when compared to
the same date in 1999. The Company has a working capital loan secured by the
Company's accounts receivables and inventories and a term loan secured by
property, plant and equipment. Management must monitor its cash resources very
closely. Operational improvements, aggressive marketing, and favorable aluminum
pricing will be required in order to improve cash availability.


PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            14

<PAGE>

--------------------------------------------------------------------------------
SALES AND RESULTS OF OPERATIONS 1999 COMPARED TO 1998
--------------------------------------------------------------------------------

SALES

Net sales for the year ended December 31, 1999 decreased $1,176,000 or 8% on
sales of $14,381,000 when compared to 1998 net sales of $15,557,000. Aerosol
volume for 1999 was $12,280,000 as compared with sales for 1998 of $14,300,000
or a decrease of 14%. Aluminum tube sales for 1999 were $1,279,000 as compared
with 1998 tube sales of $782,000 or an increase of 63%. Miscellaneous sales for
1999 totaled $822,000 as compared to $475,000 in 1998. The decrease in sales was
a result of a slight decrease in sales to a major customer.

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

GROSS MARGIN TRENDS AND DISCUSSION

The gross profit for the years ended December 31, 1999 and December 31, 1998 was
$1,242,000 or 8.6% of sales and $303,000 or 2.0% of sales respectively.


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses for the year ended December 31,
1999 were $1,578,000 or 11% of sales as compared to $1,878,000 or 12% for the
year ended December 1998.

INTEREST EXPENSE, AND OTHER INCOME, NET

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

Other income for the year ended December 31, 1999 was $221,000 as compared to
$1,000 for the year ended December 31, 1998.

LIQUIDITY AND CAPITAL RESOURCES

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

Cash at December 31, 1999 was $50,000 or an increase of $35,000 when compared to
the same date in 1998. In order to meet cash requirements during 1999 and fund
certain obligations, the Company refinanced its secured credit facility with a
major lender. The Company was able to increase its line of credit and minimize
the drain in working capital.

The Company has a working capital loan secured by the Company's accounts
receivables and inventories and a term loan secured by property, plant and
equipment.

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


PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            15

<PAGE>


--------------------------------------------------------------------------------
SALES AND RESULTS OF OPERATIONS 1998 COMPARED TO 1997
--------------------------------------------------------------------------------

SALES

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

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

GROSS MARGIN TRENDS AND DISCUSSION

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


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses for the year ended December 31,
1998 were $1,878,000 or 12% of sales as compared to $2,778,000 or 17% for the
year ended December 1997.

INTEREST EXPENSE, AND OTHER INCOME, NET

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

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

LIQUIDITY AND CAPITAL RESOURCES

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

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

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

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


PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            16

<PAGE>


--------------------------------------------------------------------------------
SALES AND RESULTS OF OPERATIONS 1997 COMPARED TO 1996
--------------------------------------------------------------------------------

SALES

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

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

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

GROSS MARGIN TRENDS AND DISCUSSION

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


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

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

INTEREST EXPENSE, AND OTHER INCOME, NET

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

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

LIQUIDITY AND CAPITAL RESOURCES

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


PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            17

<PAGE>


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

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

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

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



















PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            18

<PAGE>



--------------------------------------------------------------------------------
SALES AND RESULTS OF OPERATIONS 1996 COMPARED TO 1995
--------------------------------------------------------------------------------

SALES

Net sales for the year ended December 31, 1996 decreased $6,177,000 or 21% on
sales of $ 23,616,000 when compared to 1995 net sales of 29,793,000. Aerosol
volume for 1996 was $17,921,000 as compared with sales for 1995 of $19,627,000
or a decrease of 9%. Aluminum Tube sales for 1996 was $5,175,000 as compared
with 1995 tube sales of $9,739,000 or a decrease of 47%. Miscellaneous sales for
1996 totaled $520,000 as compared to 1995 of $427,000. The decrease in 1996 vs.
1995 for both aerosols and tube sales was due almost entirely to the loss of a
major account in March 1996 and the closing of the tube facility in Puerto Rico.

In 1996, the Company's sales to 3 customers accounted for 55% (22%, 21%, and
12%) of the Company's total sales. In 1995, four customers accounted for 68%
(24%, 16%, 15% and 13%) of the Company's sales. (See note 14, of notes to the
Financial Statements).

The overall aerosol market continues to make packaging decisions for new product
introduction between those that favor aluminum containers as to compatibility
with environmentally acceptable formulations, and alternatives that are less
expensive. Aggressive marketing of the products that are "alcohol free" also
helps counter some consumer perception that aerosols are harmful to the ozone
layer. The Company hopes to attract new sales as it works with industry and
public relation groups to dispel this perception. While the industry forecasts
growth, excess industry capacity may slow this growth, and will be slow in
coming.

The Company's sales of aluminum aerosols are approximately 76% of the 1996 sales
as compared to 69% in 1995. This mix change is a result of the loss of a major
customer in 1996, the closing of the Puerto Rico facility in 1996 and most
importantly the increased consumer demand for plastic tubes opposed to aluminum
tubes.

GROSS MARGIN TRENDS AND DISCUSSION

The gross profit for the year ended December 31, 1996 and December 31, 1995 was
$2,115,000 or 9% of sales and $1,462,000 or 5% of sales respectively. The
increase in gross margin is primarily do to the decrease in aluminum prices
during 1996. In general, a large part of the Company's costs are "fixed" rather
than variable. While the Company has been successful in reducing costs, with the
forecasted reduction in sales in 1997, it must continue to successfully leverage
its machine hours in order to be profitable. However, an increase level of sales
is also required.

Management believes it can continue to improve its gross margins in 1997 beyond
what was achieved in 1996. However, the overall improvement in gross margin and
operating results is expected to be gradual. The Company's management continues
to make gains operationally because of the favorable price of aluminum, labor
reductions and operational improvements.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses for the year ended December 31,
1996 were $2,528,000 or 11% of sales as compared to December 1995 SG&A of
$2,825,000 or 9.5%. Selling, general and administrative expense increased in
1996 in relation to sales because of the loss of a major account in 1996 and the
closing of the Puerto Rico facility November 1996.



PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            19

<PAGE>



INTEREST EXPENSE, AND OTHER INCOME, NET

Interest expense for the year ended December 31, 1996 was approximately $607,000
as compared to $816,000 in 1995. In 1996 interest decreased approximately
$209,000, as compared to 1995, because of the decrease in the prime rate and
lower average borrowing.

Other income for the year ended December 31, 1996 was $1,786,000 as compared to
$754,000 for the year ended December 31, 1995. The increase was attributable to
the gain on the termination of the Sale Lease Back agreement of $1,555,000.(see
note 10, of notes to the Financial Statements). Other income for 1996 and 1995
was also realized from the sale of substantially depreciated production lines
not needed for current operations.

At present, the Company's results have been favorably impacted by the market
price of aluminum. Also, as discussed earlier, the Company has covered its
aluminum requirements at a price that will protect sales at the gross margin
level. Other operating cost have not been significantly impacted by inflation,
however, very competitive pricing in the industry will continue to be a problem.

LIQUIDITY AND CAPITAL RESOURCE

The Company had a negative working capital of ($225,000) at December 31, 1996.
This was approximately a $256,000 decrease from the working capital of $31,000
at December 31, 1995. While many factors effect the components of working
capital, the primary reason for the decrease in working capital relates to the
Company's continuing losses.

Net cash at December 31, 1996 was $227,000 or a decrease of $433,000 when
compared to the same time period in 1995. The decrease in cash in 1996 was
primarily related to Company losses. However , the Company was provided with
cash of $70,000 from the sale of certain obsolete production equipment an
additional proceeds of $329,000 was realized form the termination of the
sale/leaseback.

The debt -equity- ratio at December 31, 1996 was 1.5:1 compared to 3.7:1 at
December 31, 1994. The change in this financial ration was adversely impacted by
the Company's operating loss in 1996.

The Company has a working capital loan of up $4,000,000 secured by the Company's
account receivable and inventories. As of December 31, 1996 the Company had cash
and cash equivalents of approximately $227,000 and an availability under the
line of credit of approximately another $600,000.

Management must continue to monitor its cash resources very closely. Operational
improvements, favorable aluminum pricing in the market, and an aggressive
marketing approach will be required in 1997 in-order to improve cash management.



PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            20

<PAGE>

<TABLE>
<CAPTION>


PEERLESS TUBE COMPANY                            2000           1999            1998           1997            1996
SELECTED FINANCIAL DATA FIVE                     ----           ----            ----           ----            ----
YEARS ENDED DECEMBER 31,
<S>                                           <C>             <C>            <C>             <C>            <C>

                                 Net sales    $12,723,000     $14,381,000    $15,557,000     $16,288,000    $23,616,000

                         Net income (loss)   ($1,277,000)      ($275,000)   ($1,840,000)    ($2,739,000)       $766,000

      Average number of shares outstanding     $2,462,973      $2,462,973     $2,462,973      $2,462,973     $2,462,973

               Net income (loss) per share        ($0.52)         ($0.11)        ($0.75)         ($1.11)          $0.31

                   Cash dividends declared             $0              $0             $0              $0             $0

                 Working capital (deficit)   ($1,585,000)      ($421,000)   ($1,735,000)      ($153,000)     ($225,000)

                             Current ratio           $0.6            $0.9           $0.6            $1.0           $1.0

   Property, plant and equipment - at cost    $19,700,000     $19,700,000    $19,700,000     $19,700,000    $19,638,000

                  Accumulated depreciation    $18,672,000     $18,282,000    $17,562,000     $16,714,000    $15,514,000

       Property, plant and equipment - net     $1,028,000      $1,418,000     $2,138,000      $2,986,000     $4,124,000

                              Total assets     $3,435,000      $3,988,000     $4,656,000      $6,429,000    $10,030,000

                            Long-term debt     $1,408,000      $1,715,000       $651,000        $891,000       $484,000

                         Total liabilities     $5,538,000      $4,814,000     $5,207,000      $5,140,000     $6,002,000

             Stockholders equity (deficit)   ($2,103,000)      ($826,000)     ($551,000)      $1,289,000     $4,028,000

                      Debt to equity ratio            N/A             N/A            N/A             4.1            1.5



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

</TABLE>


PEERLESS TUBE COMPANY 2000 ANNUAL REPORT FORM 10-K                            21
<PAGE>

                                            PEERLESS TUBE COMPANY AND SUBSIDIARY
                                                      CONSOLIDATED BALANCE SHEET
================================================================================

DECEMBER 31,                                                2000            1999
--------------------------------------------------------------------------------
                                                   (rounded to nearest thousand)

ASSETS

Current:

 Cash                                                $    18,000     $    50,000
 Accounts receivable, net of allowance for doubtful
  accounts of $100,000                                 1,323,000       1,373,000
  Inventories                                            808,000         919,000
  Prepaid expenses and other current assets              123,000          63,000
--------------------------------------------------------------------------------
     TOTAL CURRENT ASSETS                              2,272,000       2,405,000

Property, Plant and Equipment, net                     1,028,000       1,418,000

Deferred Financing Costs                                 135,000         165,000

Deferred Tax Assets, net of valuation allowance of
 $6,204,000 and $5,701,000, respectively
--------------------------------------------------------------------------------
     TOTAL ASSETS                                    $ 3,435,000     $ 3,988,000
================================================================================
LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current Liabilities:
 Accounts payable                                    $ 1,509,000     $   740,000
 Accrued liabilities                                     715,000         595,000
 Revolving credit line                                 1,515,000       1,184,000
 Current portion of long-term debt                       307,000         307,000
--------------------------------------------------------------------------------
     TOTAL CURRENT LIABILITIES                         4,047,000       2,826,000

Long-term Debt                                         1,408,000       1,715,000

Other Liabilities                                        273,000         273,000
--------------------------------------------------------------------------------
     TOTAL LIABILITIES                                 5,728,000       4,814,000
--------------------------------------------------------------------------------

COMMITMENTS AND CONTINGENCIES

Stockholders' Deficiency:
 Common stock - $1.333 par value; authorized
    5,000,000 shares, issued 2,536,935 shares          3,382,000      3,382,000
 Additional paid-in capital                           14,439,000     14,439,000
 Accumulated deficit                                 (19,770,000)   (18,303,000)
 Less 73.962 shares of treasury stock, at cost          (344,000)      (344,000)
--------------------------------------------------------------------------------
     STOCKHOLDERS' DEFICIENCY                         (2,293,000)      (826,000)
--------------------------------------------------------------------------------
     TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY  $ 3,435,000    $ 3,988,000
================================================================================

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

                                       23
<PAGE>

                                            PEERLESS TUBE COMPANY AND SUBSIDIARY
                     CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
================================================================================

YEARS ENDED DECEMBER 31, 1998, 1999 and 2000

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------

                                                        ADDITIONAL   RETAINED EARNINGS                             TOTAL
                                COMMON                   PAID-IN      (ACCUMULATED       TREASURY STOCK,   STOCKHOLDERS' EQUITY
                                SHARES      AMOUNT       CAPITAL         DEFICIT)            AT COST           (DEFICIENCY)
--------------------------------------------------------------------------------------------------------------------------------
<S>                            <C>         <C>           <C>          <C>                   <C>                 <C>
Balance at January 1, 1998     2,536,935   $3,382,000    $14,439,000   $(16,188,000)         $(344,000)          $ 1,289,000

Net loss                                                                 (1,840,000)                              (1,840,000)
--------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998   2,536,935    3,382,000     14,439,000    (18,028,000)          (344,000)             (551,000)

Net loss                                                                   (275,000)                                (275,000)
---------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1999   2,536,935    3,382,000     14,439,000    (18,303,000)          (344,000)             (826,000)

Net loss                                                                 (1,467,000)                              (1,467,000)
---------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2000   2,536,935   $3,382,000    $14,439,000   $(19,770,000)         $(344,000)           (2,293,000)
=================================================================================================================================


                                                                   The accompanying notes and independent auditor's report should
                                                                be read in conjunction with the consolidated financial statements.
</TABLE>

                                       24
<PAGE>

                                            PEERLESS TUBE COMPANY AND SUBSIDIARY
                                            CONSOLIDATED STATEMENT OF OPERATIONS
================================================================================

YEAR ENDED DECEMBER 31,                      2000          1999         1998
--------------------------------------------------------------------------------
                         (rounded to nearest thousand, except per share amounts)

Net sales                              $12,723,000   $14,381,000   $15,557,000

Cost of sales                           12,069,000    13,139,000    15,254,000
--------------------------------------------------------------------------------

Gross profit                               654,000     1,242,000       303,000

Selling, general and administrative
 expenses                                1,709,000     1,518,000     1,874,000
--------------------------------------------------------------------------------
Loss from operations                    (1,055,000)     (276,000)   (1,571,000)
--------------------------------------------------------------------------------

Other income (expense)
 Interest expense                         (443,000)     (335,000)     (270,000)
 Other income, net                          31,000       336,000         1,000
--------------------------------------------------------------------------------
                                          (412,000)        1,000      (269,000)
--------------------------------------------------------------------------------
Net loss                               $(1,467,000)  $  (275,000)  $(1,840,000)
================================================================================
Basic and diluted loss per share       $      (.60)  $      (.11)  $       (75)
================================================================================

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


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

                                       25
<PAGE>

                                            PEERLESS TUBE COMPANY AND SUBSIDIARY
                                            CONSOLIDATED STATEMENT OF CASH FLOWS
================================================================================

YEAR ENDED DECEMBER 31,                          2000         1999         1998
--------------------------------------------------------------------------------
                                              (rounded to nearest thousand)

Cash flows from operating activities:
 Net loss                                 $(1,467,000)  $ (275,000) $(1,840,000)
 Adjustments to reconcile net loss
  to net cash used in operating activities:
   Depreciation and amortization              420,000      735,000      848,000
   Provision for bad debts                                             (110,000)
   (Increase) decrease in operating assets:
     Accounts receivable                       50,000     (189,000)     (91,000)
     Inventories                              111,000      314,000      981,000
     Prepaid expenses and other current
      assets                                  (60,000)      23,000      (40,000)
     Other assets                                                        10,000
    Increase (decrease) in operating
     liabilities:
     Accounts payable                         769,000   (1,264,000)      14,000
     Accrued liabilities                      121,000     (550,000)     378,000
     Other liabilities                                     (30,000)    (360,000)
--------------------------------------------------------------------------------
       NET CASH USED IN OPERATING ACTIVITIES  (56,000)  (1,236,000)    (210,000)
--------------------------------------------------------------------------------

Cash flows from financing activities:
 Net borrowings under credit line             331,000      316,000      271,000
 Net (reduction of) proceeds from long-term
  debt and current maturities                (307,000)   1,135,000     (236,000)
 Payment of deferred financing costs                      (180,000)
--------------------------------------------------------------------------------
       NET CASH PROVIDED BY FINANCING
        ACTIVITIES                             24,000    1,271,000       35,000
--------------------------------------------------------------------------------
Net increase (decrease) in cash               (32,000)      35,000     (175,000)

Cash at beginning of year                      50,000       15,000      190,000
--------------------------------------------------------------------------------
Cash at end of year                       $    18,000   $   50,000  $    15,000
================================================================================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION:

Cash paid during the year for interest    $   443,000   $  335,000  $   270,000
================================================================================

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

                                       26


<PAGE>

                                            PEERLESS TUBE COMPANY AND SUBSIDIARY

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                               DECEMBER 31, 2000
================================================================================

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

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

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

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

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

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

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

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

                    The 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 certain reported amounts and
                    disclosures. Accordingly, actual results could differ from
                    those estimates.

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

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

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

                                       27

<PAGE>
                                            PEERLESS TUBE COMPANY AND SUBSIDIARY

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                               DECEMBER 31, 2000
================================================================================


                    as cash, evidence of ownership interest in equity, or a
                    contracutal obligation that both conveys to one entity a
                    right to receive cash or other financial instruments from
                    another entity and imposes on the other entity the
                    obligation to deliver cash or other financial instruments to
                    the first entity. At December 31, 2000 and 1999, management
                    believes that the carrying amount of the revolving credit
                    line approximates fair value because of the short maturity
                    of this financial instrument. The carrying value of the
                    Company's long-term debt is considered to approximate fair
                    value based upon current borrowing rates offered to the
                    Company.

                    Costs incurred in 1999 in the amount of approximately
                    $180,000 in connection with obtaining the borrowings
                    described in Note 8 have been deferred and are being
                    amortized over the terms of the borrowing by the
                    straight-line method. Accumulated amortization at December
                    31, 2000 is approximately $45,000.

                    Advertising costs are expensed as incurred. For the years
                    ended December 31, 2000 and 1999, advertising expense was
                    $39,000 and $29,000, respectively.

                    The Company does not believe that any recently issued, but
                    not yet effective, accounting standards, if currently
                    adopted, will have a material effect on the Company's
                    consolidated financial position, results of operations or
                    cash flows.

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

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

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

                                       28

<PAGE>

                                            PEERLESS TUBE COMPANY AND SUBSIDIARY

                                      NOTES TO CONSOLIDATED FINANCING STATEMENTS
                                                               DECEMBER 31, 2000
================================================================================

3. INVENTORIES:     Inventories are comprises of the following:

                    December 31,                            2000         1999
                    ------------------- --------------------------------------
                    Raw materials                        $570,000     $510,000
                    Finished goods                        238,000      409,000
                    ------------------- ---------------------------------------
                                                         $808,000     $919,000
                    ============================================================

4. PROPERTY,        Property, plant and equipment is comprised of the following:
   PLANT AND
   EQUIPMENT:                                                          Estimated
                     December 31,              2000         1999    Useful Life
                    -----------------------------------------------------------

                      Land              $   462,000  $   462,000
                      Buildings and
                       improvements       4,348,000    4,348,000  10 to 45 years
                      Machinery and
                       equipment         13,276,000   13,276,000   7 to 13 years
                      Furniture,
                       fixtures
                       and office
                       equipment          1,614,000    1,614,000   5 to 10 years
                    -----------------------------------------------------------
                                         19,700,000   19,700,000
                     Less accumulated
                      depreciation and
                      amortization      (18,672,000) (18,282,000)
                    -----------------------------------------------------------
                                        $ 1,028,000  $ 1,418,000
                    ===========================================================

                    Substantially all of the Company's equipment serves as
                    collateral for short- and long-term borrowings (see Notes 7
                    and 8).

5. ACCRUED          Accrued liabilities are comprised of the following:
   LIABILITIES:
                    December 31,                             2000          1999
                    ------------------------------------------------------------

                    Payroll, payroll taxes and payroll-
                     related costs                       $181,000      $168,000
                    Professional fees                     163,000       145,000
                    Deferred revenue                       38,000       105,000
                    Environmental                         290,000       100,000
                    All other                              44,000        77,000
                    ------------------------------------------------------------

                                                         $716,000      $595,000
                    ============================================================

                                       29

<PAGE>

                                            PEERLESS TUBE COMPANY AND SUBSIDIARY

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                               DECEMBER 31, 2000
================================================================================

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

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


<TABLE>

                    December 31,                                       2000           1999
                    -----------------------------------------------------------------------
                    <S>                                            <C>          <C>

                    Deferred tax assets:
                     Postretirement benefits other than pensions                $    12,000
                     Accrual differences                           $   123,000      123,000
                     Accounts receivable and inventory valuation
                      allowances                                       123,000      123,000
                     Net operating loss carryforward                 5,612,000    5,097,000
                     Investment tax credit carryforward                346,000      346,000
                    -----------------------------------------------------------------------
                                                                     6,204,000    5,701,000
                    Valuation allowance                             (6,204,000)  (5,701,000)
                    -----------------------------------------------------------------------
                                                                   $   -0-      $    -0-
                    =======================================================================

</TABLE>

                    The provision (benefit) for income taxes differs from the
                    amount computed using the federal statutory rate of 34% as a
                    result of the following:

<TABLE>


                    Year ended December 31,                2000           1999         1998
                    -----------------------------------------------------------------------
                    <S>                                    <C>            <C>           <C>

                    Federal statutory rate                 (34)%          (34)%         (34)%
                    Increase in valuation allowance         34             34            34
                    -----------------------------------------------------------------------
                                                            -0-%           -0-%          -0-%
                    =======================================================================

</TABLE>

                    At December 31, 2000, the Company had cumulative net
                    operating loss carryforwards of approximately $16,000,000
                    available to offset future taxable income. These
                    carryforwards will expire in various years through 2020.

                    At December 31, 2000 and 1999, the Company had investment
                    tax credit carryforwards of approximately $346,000 available
                    to be carried forward to offset future taxes payable. A
                    substantial portion of these carryforwards will expire in
                    the year 2001.

7. REVOLVING        During 1999, the Company terminated its revolving credit
   CREDIT           facility with an asset-based working capital lender and
   FACILITY:        entered into a refinancing agreement with a major national
                    asset-based lender covering both a new revolving credit
                    facility and a new term loan. This credit facility
                    expires in July 2006. Borrowings are based on specified
                    levels of accounts receivable and inventories of the
                    Company and bear interest at the prime rate (9.5% at
                    December 31, 2000) plus 3% on the outstanding balance. The
                    maximum amount available under the line of credit is


                                       30

<PAGE>

                                            PEERLESS TUBE COMPANY AND SUBSIDIARY

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                               DECEMBER 31, 2000
================================================================================


                    $5,000,000 less the principal balance of the equipment term
                    loan ($1,715,000 at December 31, 2000) (see Note 8).

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

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

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

<TABLE>

                    December 31,                                             2000          1999
                    -------------------------------------------------------------------------------
                    <S>                                                    <C>          <C>

                    Equipment term loan payable in monthly
                    installments of $25,600 plus interest through
                    July 1, 2006. The loan bears interest at the prime
                    rate (9.5% at December 31, 2000) plus 3%               $1,715,000    $2,022,000

                    Less current portion                                     (307,000)     (307,000)
                    -------------------------------------------------------------------------------
                      LONG-TERM DEBT                                        1,408,000    $1,715,000
                    ===============================================================================

</TABLE>

                    Maturities of long-term debt are as follows:

<TABLE>
                    Year ended December 31,
                          <S>                                                            <C>

                            2001                                                         $  307,000
                            2002                                                            307,000
                            2003                                                            307,000
                            2004                                                            307,000
                            2005                                                            307,000
                          Thereafter                                                        180,000
                    -------------------------------------------------------------------------------
                                                                                         $1,715,000
                    ===============================================================================

</TABLE>


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

                                       31

<PAGE>

                                            PEERLESS TUBE COMPANY AND SUBSIDIARY

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                               DECEMBER 31, 2000
================================================================================

                    final payment of $306,000 for the overfunded amount which
                    has been reflected in other income at December 31, 1999.

                    Commencing in 1995, the Company offered a 401(k) retirement
                    savings plan to all nonunion full-time employees who have
                    completed one year of employment. Employees may contribute
                    a percentage of their gross salaries as defined in the
                    plan, subject to limits prescribed by the Internal Revenue
                    Service. The Company's contributions are at the discretion
                    of the board of directors. Participants are fully vested
                    upon entering the plan. Officers of the Company serve as
                    trustees of the plan. Company contributions were
                    approximately $14,000 in 2000 and approximately $13,000 or
                    1998. There were no Company contributions for 1999.

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

<TABLE>

                                                                                               Weighted-
                                                                                                Average
                                                                                            Exercise Price
                    Year ended December 31,                2000        1999        1998      2000     1999     1998
                    -----------------------------------------------------------------------------------------------
                    <S>                                   <C>         <C>        <C>         <C>      <C>
                    Outstanding at beginning of year      150,000                 109,800    $.52             $2.08
                    Granted during the year                           150,000                         $.52
                    Expired during the year                                      (109,800)                     2.50
                    -----------------------------------------------------------------------------------------------
                       OUTSTANDING AT END OF YEAR         150,000     150,000       -0-      $.52     $.52
                    ===============================================================================================
                    Options exercisable at year-end        75,000      37,500
                    ===============================================================================================

</TABLE>

                    SFAS No. 123, Accounting for Stock-based Compensation,
                    encourages but does not require companies to record
                    compensation cost for employee stock option grants. The
                    Company has chosen to continue to account for employee
                    option grants using Accounting Principles Board Opinion No.
                    25. Accordingly, no compensation expense has been recognized
                    for employee stock option grants and the Company has elected
                    to adopt the disclosure provisions only of SFAS No. 123.

                                       32

<PAGE>

                                            PEERLESS TUBE COMPANY AND SUBSIDIARY

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                               DECEMBER 31, 2000
================================================================================

                    If the Company had elected to recognize compensation cost
                    based on the fair value of the options granted at the grant
                    date as prescribed by SFAS No. 123, the Company's net loss
                    for the years ended December 31, 2000 and 1999 would
                    approximate the pro forma amounts indicated below:

                    Year ended December 31,                 2000         1999
                    -----------------------------------------------------------
                    Net loss - as reported              $(1,467,000)  $(275,000)
                    Net loss - pro forma                $(1,486,000)  $(295,000)
                    Basic loss per share - as reported  $      (.60)  $    (.11)
                    Basic loss per share - pro forma    $      (.60)  $    (.12)
                    -----------------------------------------------------------

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

                    No stock options were granted by the Company during the
                    years ended December 31, 2000 and 1998. Accordingly, no pro
                    forma disclosures are presented.

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

                    Year ended December 31,             2000      1999     1998
                    ------------------------------------------------------------
                    Beginning of year                 $36,000  $23,000  $23,000
                    Adjustment to recognize the cost
                    of benefits, net                    6,000   13,000
                    ------------------------------------------------------------
                      END OF YEAR                     $42,000  $36,000  $23,000
                    ============================================================

12. MAJOR CUS-      In 2000, three customers accounted for 43% (17%, 16% and
    TOMERS AND      10%) of the Company's sales. In 1999, two customers
    CONCENTRA-      accounted for 45% (32% and 13%) of the Company's sales. In
    TION OF CREDIT  1998, sales to two customers accounted for 60% (48% and
    RISK:           12%) of the Company's sales.



                                       33
<PAGE>

                                            PEERLESS TUBE COMPANY AND SUBSIDIARY
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                               DECEMBER 31, 2000
================================================================================

                           Financial instruments that potentially subject the
                           Company to concentrations of credit risk consist
                           primarily of accounts receivable. At December 31,
                           2000, in management's opinion, there is no
                           significant risk of loss on these instruments and
                           management believes its allowance for losses is
                           adequate. Three customers accounted for approximately
                           49% of net accounts receivable at December 31, 2000.
13.    COMMITMENTS
       AND
       CONTINGENCIES:
                           In the ordinary course of business, the Company is a
                           party to various lawsuits, the outcomes of which, in
                           the opinion of management, will not have a material
                           adverse effect on the consolidated financial
                           position, results of operations or cash flows of the
                           Company.

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

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

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

                           On July 24, 2001, the Company received notice from
                           the State of New Jersey Department of Environmental
                           Protection that the Company was not in compliance
                           with certain regulations, and penalties are being
                           imposed. The Company has an accrual on its books
                           which it believes will cover costs related to this
                           matter. The Company counsel intends to fight this
                           matter vigorously.

                                       34