<PAGE>
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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                                   FORM 10-K
 
<TABLE>
<S>        <C>
  X                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
-------               OF THE SECURITIES EXCHANGE ACT OF 1934
                    FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
                                        OR
 
                 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
-------               OF THE SECURITIES EXCHANGE ACT OF 1934
                       FOR THE TRANSITION PERIOD FROM     TO
                           COMMISSION FILE NUMBER 1-5530
</TABLE>
 
                          ALLIED PRODUCTS CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                             <C>
                   DELAWARE                                       38-0292230
                  ---------                                      -----------
       (State or other jurisdiction of                         (I.R.S. Employer
        Incorporation or Organization)                       Identification No.)
 10 SOUTH RIVERSIDE PLAZA, CHICAGO, ILLINOIS                        60606
 --------------------------------------------                       -----
   (Address of principal executive offices)                       (Zip Code)
</TABLE>
 
       Registrant's telephone number, including area code (312) 454-1020
 
          Securities registered pursuant to Section 12(b) of the Act:
 
<TABLE>
<S>                                             <C>
             Title of Each Class                  Name of Each Exchange on Which Registered
            ---------------------                 ------------------------------------------
         COMMON STOCK--$.01 PAR VALUE                        NEW YORK AND PACIFIC
</TABLE>
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
                                      _X_
 
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
                             Yes _X_        No ___
 
As of February 28, 1997, 8,145,272 shares of common stock were outstanding, and
the aggregate market value of the shares of common stock (based upon the closing
price on the New York Stock Exchange) held by nonaffiliates of the Company was
approximately $201,589,000. Determination of common stock ownership by
affiliates was made solely for the purpose of responding to this requirement,
and the Registrant is not bound by this determination for any other purpose.
 
The Company's definitive Proxy Statement (which will be filed at a later date)
for the Annual Meeting of Stockholders scheduled to be held May 28, 1997 and
Annual Report to security holders for the year ended December 31, 1996 are
incorporated by reference in Part III and Part IV herein.
 
The Exhibit Index is located on page 40.
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
                                     PART I
 
ITEM 1.  BUSINESS
 
    Allied Products Corporation (Company) was organized under Delaware law in
1967 as the successor to a Michigan corporation which was formed in 1928. Its
principal executive offices are at 10 South Riverside Plaza, Chicago, Illinois
60606 and its telephone number is (312) 454-1020.
 
    The Company's operations involve a single industry segment, the
manufacturing and sale of agricultural and industrial machinery and other
products.
 
    The operations of the Company were realigned into one business segment in
1993 reflecting the sale or closure of several operating divisions. This
restructuring of the Company, which began in 1991, was completed in 1994 with
the sale of the Cooper division. Reference is made to Note 3 of Notes to
Consolidated Financial Statements for a more complete description of these
closures and dispositions.
 
    Approximately 16%, 11% and 2% of the Company's net sales from continuing
operations in 1996, 1995 and 1994, respectively, were exported principally to
Canada and Mexico.
 
PRODUCT LINES
IMPLEMENTS AND MACHINERY
 
    PRODUCTS.  The Bush Hog division offers a comprehensive line of implements
and machinery used by farmers, ranchers, large estate owners, commercial turf
mowing and landscape contractors, golf courses and municipalities. Implements
and machinery sold by Bush Hog include rotary cutters, tractor mounted loaders,
hay mowers, tillers, cultivators, back hoes, Zero Turn mowers, landscape tools,
and turf and golf course mowing equipment.
 
    Bush Hog-Registered Trademark- rotary cutters are used to shred stalks after
the crop has been harvested, to mow pasture, for land maintenance and for
governmental right-of-way mowing. The use season for rotary cutters extends from
early spring to late fall, and even longer in warmer climates. Bush Hog has a
major market share (approximately 38%) of rotary cutters sold in North America.
 
    Front end loaders are used by farmers and ranchers for material handling,
and cultivators are used for weed control after crops have been planted.
 
    Implements tend to have a shorter life than tractors and other
self-propelled machines, and purchases of implements are less likely to be
deferred in times of economic uncertainty, somewhat dampening cyclical swings in
demand. Sales of replacement parts accounted for almost one sixth of Bush Hog's
total revenue in 1996.
 
    In order to maintain and expand its market position, Bush Hog continually
updates and improves its product offerings. This is done through a combination
of internal development and external acquisition of technology.
 
    MARKETING.  Bush Hog markets its products, except for commercial turf and
golf course mowing equipment, through 58 commissioned manufacturer's
representatives operating as independent contractors within defined territories.
The manufacturer's representatives call on dealers located within their
territories which have been approved to carry the Bush Hog-Registered Trademark-
line. In all, there are approximately 2,650 Bush Hog-Registered Trademark-
dealers. In general, the dealers are independent, local businessmen who have an
established local clientele developed over the years and represent more than 35%
of the total farm equipment dealerships in the United States and Canada. Bush
Hog is in the process of contracting with independent distributors to market
commercial turf and golf course mowing equipment within defined territories. The
Bush Hog-Registered Trademark- brand name is particularly strong in the
southeastern and southwestern states.
 
    To even out the seasonal variations in its production cycles, Bush Hog
provides incentives for off-season purchases, including extended payment terms
to dealers in the form of floor plan financing. Bush Hog retains a security
interest in this floor plan equipment. Under certain state and provincial
statutes, a dealer may return floor plan equipment to a manufacturer upon
termination of the dealership.
 
    Bush Hog services its network of dealers through two manufacturing
facilities and eight service parts distribution centers strategically located in
the United States and Canada.
 
    COMPETITION.  Competition for the type of equipment sold by Bush Hog
includes the major line manufacturers of tractors and landscape equipment, along
with several hundred companies producing one or more models of shortline farm or
landscape implements and machinery. Price, quality, service and availability are
all factors in brand selection. Bush Hog's objective is to be a low cost
producer of high quality products. To do this it continues to modernize its
facilities to improve efficiency.
 
2
<PAGE>
    INDUSTRY.  The agricultural equipment industry in North America is a mature
industry engaged in producing replacement equipment for a declining number of
farmers. It is dominated by a small number of major line manufacturers, which
market a full range of farm machinery, including tractors, grain combines and
various implements through their own dealer organizations and account for
approximately 60% of the dollar volume of industry shipments. The remaining 40%
of the market is shared by approximately 700 companies that generally
concentrate their production on shortline implements such as plows, harrows,
cultivators, livestock equipment, grain handling equipment or hay equipment.
 
    During the 1980's, the farm economy was in decline and this led to a
deterioration in farmers' financial condition. Capital expenditures by farmers
reached a low in 1986. Since then, commodity exports have improved due to
changes in governmental programs and foreign exchange rates. Individual farmers
have reduced their debt load and are much less leveraged after several years of
good earnings.
 
    Economic conditions in the U.S. farm sector improved substantially in 1996.
Net farm income rose to a new record of $51.7 billion due to near record crop
yields in the Midwest, stronger exports, higher commodity prices, and large
"transitional" payments under the 1996 Farm Bill.
 
    While the overall farm sector situation has improved, the cattle sector has
suffered. In the cattle sector, severe drought in the plains area, compounded by
high cattle inventories and record feed prices have forced the cattle sector to
enter a major liquidation phase, depressing prices during 1996. Feed lot
operators should return to profitability in 1997 and the industry should see
improving conditions for the cow/calf operator as well.
 
    The U.S. grain and commodity situation continues to be favorable with
pricing levels substantially higher than in recent years. This trend is expected
to continue through 2001 with normal adjustments resulting from weather and
other factors.
 
    It is anticipated that corn, soybean, and wheat prices for the next five
years will average significantly higher than average prices for the previous ten
years. Average cotton prices in the next five years should also average above
the previous ten years, although not as significantly.
 
    On balance, it appears that the long term prospects for strong economic and
financial conditions in U.S. agriculture are encouraging, especially once the
livestock market recovers from the current liquidation mode.
 
    Demand for certain Bush Hog-Registered Trademark- rotary cutters parallels
the cyclical cattle segment of the agricultural equipment market. To offset this
demand cycle, Bush Hog has in recent years sought to develop and market products
for the landscape, commercial turf and golf course mowing equipment markets.
Products for these markets fit especially well into the Bush
Hog-Registered Trademark- line because of similarities to other Bush
Hog-Registered Trademark- products. Also, certain of the new products can be
sold through established Bush Hog-Registered Trademark- dealers.
 
    In 1995, Bush Hog introduced a line of Zero Turn mowers for landscape and
commercial turf mowing contractors and large estate owners. The success of this
effort has resulted in the development of additional products for the commercial
turf, landscape and golf course mowing equipment markets. Bush Hog's newest
product is a revolutionary new mulching mower designed specifically for golf
course rough maintenance. Bush Hog introduced this new mower to the golf course
industry at the annual Golf Course Superintendent Association Show in February
1997. Bush Hog will commerce shipment of the new mower this spring.
 
METAL FORMING PRESSES
 
    PRODUCTS.  The Verson division manufactures a broad line of both medium and
large technologically advanced mechanical and hydraulic metal forming presses.
These products are used in the manufacture of components for the automotive,
appliance, office equipment, farm equipment, ordnance, aerospace and general
metal working industries. A transfer press is a specialized mechanical press
that combines a series of operations by transferring a work piece from one
station to another inside of a single press. Each station in the press has a
separate die that is individually adjustable. This process allows all
operations, from blank to finished product, to take place in one press,
resulting in increased output and reduced labor expense. Prices vary by type and
size. Size categories for transfer presses range from "A" (largest) to "D"
(smallest). An "A" transfer press is generally 13 to 15 feet wide, 80 to 90 feet
long and stands four stories tall. By comparison, a "B" transfer press is
approximately 10 feet wide, 60 feet long and four stories tall. The difference
between these machines is the component part size they can stamp. An "A"
transfer press may sell for in excess of $25 million.
 
    Approximately 11% of Verson's revenue is generated by customer special
services. Items included in the special services area are: repair parts,
complete remanufacturing capability for used presses, and contract machining and
manufacturing. In addition to the
 
                                                                               3
<PAGE>
fabrication and machining of components, Verson provides complete tooling and
engineering services necessary for turnkey systems. Verson also designs and
supplies tools for metal forming, including metal stamping and cold extrusion.
 
    MARKETING.  Verson's Marketing Group is headed by a Director of Marketing
and Sales, with responsibility for all Verson products and services. Verson
sells and promotes its products by using a direct sales force that concentrates
in strategically significant markets and contract representatives which focus on
lower volume potential markets.
 
    Verson's major customers are the U.S. automobile manufacturers (both U.S.
and foreign owned) and first and second tier automotive parts producing
companies, which, on average, account for the largest part of Verson's annual
revenue. Verson's other major market served is the appliance industry and
customers include all major brand names.
 
    Verson is the technology leader, having designed the world's first transfer
press in 1939, the world's first electronic feed in 1981, a cross bar feed in
1992 which significantly improves production, and most recently, a Dynamic
Orientation-TM- system which further improves production and saves space.
 
    COMPETITION.  There are only a few companies world-wide that supply large
transfer press systems similar to those provided by Verson. Verson is now the
only American owned company competing in this upper end segment. Principal
competition comes from German and Japanese manufacturers. Press manufacturers
compete on the basis of technology, capability, reliability and price. The
barriers to entry for new competitors are high due to the large capital
expenditures required.
 
    INDUSTRY.  Domestic automobile manufacturers are seeking to become more
cost-effective by requiring quality parts, implementing Just-In-Time concepts,
obtaining price reductions from suppliers, as well as redesigning cost out of
automobiles, and restructuring and automating their manufacturing processes.
 
    Demand from the appliance industry remains strong as the major manufacturers
seek to increase capacity, reduce costs and gear up to produce water conserving
clothes washers.
 
    The Verson division is in a strong position to capitalize on major retooling
and modernization programs as they come on stream. The second wave of this
demand is being felt now with major suppliers to the automakers converting to
new technology. In response to these market factors and an unprecedented
incoming order rate in 1994, the Verson division completed a 40,000 square foot
expansion of its assembly facilities in 1995. This addition has significantly
expanded the division's capacity for manufacturing large transfer presses.
 
THERMOPLASTIC RESINS
 
    PRODUCTS AND SERVICES.  The Coz division provides a complete line of
thermoplastic resins and related services to the plastic molding and extrusion
industry. Coz offers a full line of materials supply, including specialty
thermoplastic compounds and compounding services, color and additive
concentrates, the reprocessing of scrap thermoplastic resins, and the brokering
of prime and secondary materials.
 
    Coz purchases thermoplastic resins from major resin suppliers and compounds
these resins with various additives to achieve certain desired properties such
as color, heat resistance, fire retardancy, etc.
 
    Coz's brokerage operation provides its customers with prime and wide
specification materials at competitive prices in large or small quantities, as
required. On-site inventories facilitate short delivery cycles. As an additional
service to its customers, Coz also reprocesses scrap generated in molding or
extrusion activities, thereby economically turning scrap into useful materials.
 
    MARKETING.  Coz's marketing group is headed by a Vice President of Marketing
and Sales. This group is strongly supported by technical personnel, both in
product development and in customer start-ups, applications, or training.
Customer plant visits and technical conferences are commonplace. The vast
majority of Coz's sales activity is in the northeastern United States.
 
    COMPETITION.  Coz's competition comes from several different levels in the
plastics industry, including basic resin producers, plastic distributors,
brokers, concentrate suppliers and independent thermoplastic compounders.
 
    Coz differentiates itself from its competition by covering all aspects of
plastics material supply, including compounding, color and additives,
concentrates, toll processing customers' materials, reprocessing scrap
materials, and brokering both prime and off-spec materials.
 
    Over its 36-year history, Coz has developed significant technical
capabilities supported by excellent laboratory and production equipment. As a
result, Coz is positioned as a high-end co-developer for special customer
applications.
 
    INDUSTRY.  The thermoplastic compounding industry sales approximate $5
billion and are experiencing
 
4
<PAGE>
real growth at a rate of about 4 percent annually. Independent compounders such
as Coz are numerous and generally focus on a relatively small geographic area.
Industry consolidation is occurring as some larger companies have been attracted
to the growth opportunities in thermoplastic compounding.
 
SALES BACKLOG
 
    Sales backlog as of December 31, 1996 was $142,304,000 compared to
$173,361,000 at December 31, 1995. Over 90% of the backlog orders will be filled
prior to the end of 1997.
 
EMPLOYEES
 
    Allied Products currently employs approximately 1,500 individuals.
Approximately 31% of Allied Products' employees are represented by unions.
 
RAW MATERIALS AND SOURCES OF SUPPLY
 
    The principal raw material used by the implement and metal forming press
operations include steel and other metals and purchased components. The
thermoplastic division uses thermoplastics resins and other chemicals. During
1996, the materials needed by Allied Products generally were available from a
variety of sources in adequate quantities and at prevailing market prices. No
one supplier is responsible for supplying more than 10% of the principal raw
materials used by Allied Products.
 
PATENTS, TRADEMARKS AND LICENSES
 
    Allied Products owns the federally registered trademarks "Bush Hog" used on
its agricultural, landscape, and turf and golf course mowing equipment products
and "Verson" on its metal forming presses, each of which it considers material
to its business. While Allied Products believes that the other trademarks used
by each of its operations are important, none of the patents, licenses,
franchises or such other trademarks are considered material to the operation of
its business.
 
MAJOR CUSTOMERS
 
    Net sales from continuing operations to the three major U.S. automobile
manufacturers accounted for approximately 39% of total consolidated sales from
continuing operations in 1996. Approximately 29% and 14% of Allied Products'
consolidated net sales from continuing operations in 1995 and 1994,
respectively, were derived from sales to the major U.S. automobile
manufacturers. With the exception of the three major automobile manufacturers,
no material part of Allied Products' business is dependent upon a single
customer.
 
SEASONALITY
 
    Retail sales of and cash collected for farm equipment tend to occur during
or just preceding the use seasons previously described. Sales and cash receipts
for the other divisions are not affected by seasonality.
 
ENVIRONMENTAL FACTORS
 
    Reference is made to Note 10 of Notes to Consolidated Financial Statements
regarding environmental factors and matters.
 
                                                                               5
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
 
    The following table sets forth the names and ages of the Company's Executive
Officers, together with all positions and offices held with the Company by such
officers as of February 28, 1997.
 
<TABLE>
<CAPTION>
                    NAME                                         POSITION WITH ALLIED PRODUCTS                    AGE
---------------------------------------------  -----------------------------------------------------------------  ---
<S>                                            <C>                                                                <C>
Richard A. Drexler...........................  Chairman, President and Chief Executive Officer                    49
Kenneth B. Light.............................  Executive Vice President, Chief Financial and
                                                 Administrative Officer                                           64
Martin A. German.............................  Senior Vice President                                              60
Bobby M. Middlebrooks........................  Senior Vice President                                              61
David B. Corwine.............................  Vice President, General Counsel and Secretary                      59
Robert J. Fleck..............................  Vice President-Accounting and Chief Accounting Officer             49
Patrick J. Riley.............................  Vice President and Treasurer                                       61
</TABLE>
 
    No family relationships exist among the executive officers.
 
    Each executive officer has been employed by Allied Products for over 10
years. Pursuant to Allied Products' By-laws, each officer is elected annually by
the Board of Directors.
 
    Mr. Drexler, who became Chairman in 1993, has been President and a Director
of Allied Products since 1982 and has been Chief Executive Officer since 1986.
Mr. Drexler served as Acting Chief Financial Officer from 1991 to 1992, Chief
Financial Officer from 1989 to 1990 and Chief Operating Officer from 1981 to
1986. He was also Chief Financial Officer from 1977 to 1987. Prior to becoming
President, Mr. Drexler served as Executive Vice President, Senior Vice President
of Administration, Vice President of Administration, Staff Vice
President-Development, and Director of Planning.
 
    Mr. Light, who became Chief Financial Officer in 1995, has been Executive
Vice President and Chief Administrative Officer since 1982 and has also served
as Secretary from 1972 to 1995. From 1980 to 1982, he was Senior Vice
President-Administration, from 1976 to 1980 he was Vice President-General
Counsel and prior to that he was General Counsel and Director of the Corporate
Law Department. He became a Director of Allied Products in 1993.
 
    Mr. German was elected Senior Vice President in 1991 and was Vice President
from 1989 to 1991. Since joining Allied Products in 1986 through 1996, he had
served as President of the Verson Allsteel Press division. Prior to joining
Allied Products, he was Vice President and General Manager of the Turning
Division of Warner & Swasey Company.
 
    Mr. Middlebrooks has been Senior Vice President since 1985 and was Vice
President of Allied Products from 1984 to 1985 in charge of the former
Agricultural Equipment Group. Prior to that, he was President-Bush Hog
Implements Division. He joined Bush Hog in 1955.
 
    Mr. Corwine was elected Vice President, General Counsel and Secretary in
1995. From 1980 to 1995, he was General Counsel and Assistant Secretary, and
prior to that he was Director of the Corporate Law Department and Assistant
Secretary. Prior to joining Allied Products in 1979, he was General Attorney for
Santa Fe Industries, Inc.
 
    Mr. Fleck has been Vice President-Accounting since 1985 and Chief Accounting
Officer since 1986. From 1983 to 1985 he was Staff Vice President-Accounting and
prior to that he served as Corporate Controller and in various other accounting
positions for Allied Products. Prior to joining Allied Products in 1974, he was
an internal auditor with Marquette Cement Company, a national cement
manufacturing company.
 
    Mr. Riley has been Vice President & Treasurer since 1993. Prior to that he
has been Treasurer of Allied Products since 1976. Prior to that he was Assistant
Treasurer and Director of Cash Management of Allied Products since 1969.
 
6
<PAGE>
ITEM 2.  PROPERTIES
 
    Allied Products owns or leases four manufacturing facilities in three states
for the production of its various products and maintains warehouse facilities in
various locations throughout the United States and Canada.
 
    Management is of the opinion that all facilities are of sound construction,
in good operating condition and are adequately equipped for carrying on the
business of the Company.
 
    Operations at the Bush Hog division are conducted in Selma, Alabama in two
owned facilities containing approximately 700,000 square feet in total. The
division also maintains several leased facilities in various states and Canada
which are used as warehouses and parts depots. Operations at the Verson division
are conducted in Chicago, Illinois in an owned facility containing approximately
400,000 square feet. Operations at the Coz division are conducted in
Northbridge, Massachusetts in a leased facility containing approximately 263,000
square feet. The lease expires December 31, 2000.
 
ITEM 3.  LEGAL PROCEEDINGS
 
    Reference is made to Note 10 of Notes to Consolidated Financial Statements
with respect to the Company's involvement in legal proceedings as a defending
party.
 
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
    None.
 
                                                                               7
<PAGE>
                                    PART II
 
ITEM 5.  MARKET PRICE OF THE COMPANY'S COMMON STOCK AND RELATED SECURITY HOLDER
        MATTERS
 
The Company's common stock is listed on the New York and Pacific Stock
Exchanges. The price range of the common stock on the New York Stock Exchange is
as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
                                BEGINNING  END OF
            1996                OF YEAR     YEAR      1996 QTR    HIGH        LOW        DIVIDEND
-----------------------------------------------------------------------------------------------------
<S>                             <C>        <C>        <C>        <C>        <C>       <C>
Common                          $24        $29 3/4       1       $24 1/4    $20 5/8        $.05
-----------------------------------------------------------------------------------------------------
                                                         2        31 1/8     22 3/16        .05
-----------------------------------------------------------------------------------------------------
                                                         3        28 3/8     24 1/4         .05
-----------------------------------------------------------------------------------------------------
                                                         4        30 3/8     23 3/4         .05
-----------------------------------------------------------------------------------------------------
 
<CAPTION>
-----------------------------------------------------------------------------------------------------
                                BEGINNING  END OF
            1995                OF YEAR     YEAR      1995 QTR    HIGH        LOW        DIVIDEND
-----------------------------------------------------------------------------------------------------
<S>                             <C>        <C>        <C>        <C>        <C>       <C>
Common                          $14 3/8    $24           1       $17 1/8    $13 3/8         $--
-----------------------------------------------------------------------------------------------------
                                                         2        19 7/8     16 3/4        .025
-----------------------------------------------------------------------------------------------------
                                                         3        23 1/4     18 3/4        .025
-----------------------------------------------------------------------------------------------------
                                                         4        24 1/8     20 1/8        .025
-----------------------------------------------------------------------------------------------------
</TABLE>
 
    As of February 28, 1997, the approximate number of holders of record of the
Company's common stock ($.01 par value) was 2,200.
 
    The Company paid no dividends from 1982 until 1995. Restrictions from paying
dividends were removed in 1995. Subsequent to the end of 1995, the Company
increased its quarterly dividend from $.025 per share to $.05 per share.
 
ITEM 6.  SELECTED FINANCIAL DATA
 
<TABLE>
<CAPTION>
                                                        1996          1995          1994          1993            1992
                                                    ------------  ------------  ------------  ------------  ----------------
<S>                                                 <C>           <C>           <C>           <C>           <C>
Net sales from continuing operations (A)..........  $274,414,000  $260,861,000  $215,529,000  $217,988,000  $195,341,000
Income from continuing operations (A).............  $ 19,004,000  $ 33,989,000  $ 19,687,000  $  5,951,000  $  1,774,000(B)
Earnings (loss) per common share from continuing
  operations (A)..................................     $2.11         $3.48         $1.96          $.43            $(.08)(B)
Total assets......................................  $171,949,000  $166,743,000  $150,555,000  $192,040,000  $284,612,000
Long-term debt (including capitalized leases and
  redeemable preferred stock).....................  $    489,000  $    315,000  $ 12,130,000  $ 23,522,000  $117,833,000
Cash dividend declared per common share...........      $.20         $.075          $--           $--           $--
</TABLE>
 
------------------------
(A) Restated prior to 1993 to reflect the effects of discontinued operations.
 
(B) Excludes a charge of $1,739,000 ($.21 per common share) relating to the
    transition effect of adopting SFAS No. 106 -- Employers' Accounting for
    Postretirement Benefits Other Than Pensions on an immediate recognition
    basis.
 
          The accompanying Notes to Consolidated Financial Statements
                     are an integral part of this summary.
 
8
<PAGE>
ITEM 7.  MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
OPERATING RESULTS
    Reference is made to Note 3 of Notes to Consolidated Financial Statements
regarding the sale/shutdown and restructuring of operations prior to the end of
1994.
 
1996 COMPARED TO 1995
 
    Net sales in 1996 were $274,414,000 compared to net sales of $260,861,000
for 1995. Income before taxes in 1996 was $29,708,000 compared to income before
taxes of $18,330,000 for the prior year. Net income in 1996 was $19,004,000
compared to net income of $33,989,000 reported in 1995. During 1995, the Company
evaluated its net operating loss carryforwards and other deferred tax assets in
relation to its earnings history over the prior few years and the projected
future earnings over the next few years. As a result of this review, the Company
recorded a deferred tax asset ($27,361,000) which represents a reversal of the
valuation allowance associated with the net deferred tax asset. The credit to
income taxes was reduced by $10,713,000 representing the elimination of goodwill
associated with certain acquisitions which included net operating loss
carryforwards. The net effect of these two items resulted in a credit to income
taxes of $16,648,000 in 1995.
 
    Net sales at the Bush Hog division decreased by less than 2% in 1996
compared to 1995. On an overall basis, no single product line was responsible
for any significant increase or decrease in sales comparing 1996 to 1995.
Decreases were primarily related to disc mowers and loaders. These products, as
well as certain models of rotary cutters, were adversely impacted by the
continued effects of the widespread liquidation of cattle herds resulting in
lower cattle prices. Cattle ranchers use the cutters and loaders for grazing
pasture and feed lot maintenance, respectively. Peanut combine sales also
decreased in 1996. Subsequent to the end of 1996, the division announced that it
would no longer manufacture peanut combines. These decreases were partially
offset by the effect of increased overall rotary cutter sales and the full year
impact of new products introduced in the last half of 1995. New products are
primarily related to the turf and landscaping market for utilization by
commercial turf (sod) growers and for golf course maintenance. Gross profits and
gross profit margins improved in 1996 compared to 1995. The majority of these
increases were related to improved direct labor efficiencies and management of
overhead costs. A program was initiated in the last half of 1995 and completed
at the end of the first half of 1996 to help recognize areas and means of
improvement in the manufacturing process. Management believes that further
implementation of these changes should result in additional savings in the
future.
 
    At the Verson division, net sales increased by over 12% in 1996 compared to
the prior year. The entire increase was related to press production. Revenue and
profits are recognized on a percentage of completion basis for press production
at this division. During the last half of 1995, production began on an order for
three "A" size transfer presses from Chrysler. During 1996, production (and
shipment) was completed on two of these presses with significant production
completed on the third. Shipment of the last press is expected to occur in the
first half of 1997. During 1995, the press assembly area was expanded to
accommodate the continuing increase in press orders and production. Product
sales other than presses decreased slightly in 1996. Gross profits increased in
1996 compared to 1995. The increase was principally associated with increased
sales (production) volume as noted above. Gross profit margins decreased
slightly in 1996 due to the effects of increased employment levels (direct and
indirect) in order to meet production and delivery schedules. Absorption of
engineering costs decreased in 1996. Absorption in 1995 was related primarily to
the order for the three "A" presses discussed above. Two of these presses were
shipped in 1996 with the third in production. Engineering activities are
expected to increase in 1997 as the division has received an order to design and
build two large transfer presses for Ford.
 
    At the Coz division, net sales in 1996 decreased by 2% over net sales of the
prior year. Sales by product line indicated no significant changes between the
two years. Gross profits and gross profit margins decreased in 1996. The
decrease reflects the effects of increased material costs which were not being
passed on to customers in order to remain competitive with other manufacturers.
The division has also been selling older inventory stock, which was no longer in
demand, at prices that generated less than normal margins. The majority of this
inventory has now been sold.
 
    Selling and administrative expenses were $33,400,000 (12.2% of net sales) in
1996 compared to $34,452,000 (13.2% of net sales) in 1995. The majority of the
increase in selling expenses was associated with the Bush Hog division.
Commissions (which are based on cash collections) increased in 1996 due to
strong retail activity in the last quarter of the year. Additional costs were
also incurred at this division related to the introduction of new products at
turf and lawn shows during
 
                                                                               9
<PAGE>
1996. Administrative expenses decreased in 1996 compared to 1995. The majority
of the decrease was associated with costs of $1,543,000 incurred in 1995 for the
termination/retirement of certain individuals.
 
    The increase in interest expense ($1,557,000 in 1996 compared to $1,052,000
in 1995) was directly associated with increased average borrowing levels
($17,201,000 in 1996 compared to $7,998,000 in 1995) under credit agreements in
effect. The effect of increased borrowing levels was partially offset by lower
average borrowing rates in 1996 (7.16%) compared to 1995 (8.88%). The majority
of the increased borrowings was associated with the Company's common stock
purchase program described below. Reference is made to Note 5 of Notes to
Consolidated Financial Statements for a description of borrowing arrangements in
effect during 1996 and 1995.
 
    Other expense was $631,000 in 1996 compared to $7,483,000 in 1995. Reference
is made to Note 12 of Notes to Consolidated Financial Statements for an analysis
of other (income) expense in 1996 and 1995.
 
    Reference is made to Note 4 of Notes to Consolidated Financial Statements
for an analysis and explanation of the current and deferred provision (credit)
for income taxes in 1996 and 1995.
 
1995 COMPARED TO 1994
 
    Net sales from continuing operations in 1995 increased 21% to $260,861,000
compared to net sales from continuing operations of $215,529,000 in 1994. Income
before taxes from continuing operations was $18,330,000 in 1995 compared to
$20,564,000 in 1994. Excluding the effects of a $7,699,000 reserve for a long-
term receivable in 1995 (see Note 10 of Notes to Consolidated Financial
Statements), income before taxes from continuing operations would have been
$26,029,000, an increase of over 26% from the prior year. Net income in 1995 was
$33,989,000 compared to net income of $14,333,000 reported in 1994.
 
    Net sales at the Bush Hog division decreased by approximately 2% in 1995
compared to 1994. The majority of the decrease was associated with the disc
mower and peanut combine product lines. During 1995, portions of the Midwest
were affected by spring floods, resulting in lower crop plantings. In the
southern portion of the country, extreme drought and insect infestation affected
the cotton, corn and peanut crops. Cattle prices dropped during 1995 affecting
the sales of larger cutters at the Bush Hog division. Cattle ranchers use these
large cutters for grazing pasture maintenance. Decreases in sales noted above
were partially offset by the effects of new products introduced in the current
year. Gross profits and gross profit margins decreased in 1995 compared to 1994.
The decreases were primarily related to the effects of decreased labor
efficiencies and the mix of products sold. New product sales in the current year
were generally not manufactured by the Bush Hog division but were purchased from
outside sources under OEM (original equipment manufacturing) agreements,
resulting in lower gross profit margins. Lower sales volume noted above also
resulted in lower gross profits.
 
    At the Verson division, net sales increased by almost 60% in 1995 compared
to the net sales level of 1994. During 1995, production began on an order for
three "A" size transfer presses. The total value of the order was in excess of
$85,000,000. Production and shipment of these presses will be completed in 1997.
Revenues and profits are recognized on a percentage of completion basis for
press production at the Verson division. Production on other press orders as
well as parts sales also increased in 1995. Although profit margins decreased in
1995, gross profits increased, principally the result of increased production
(sales) volume noted above. Gross profit margins decreased slightly in relation
to press sales due to a mix of presses manufactured in 1995 compared to 1994.
Margins on parts sales also decreased in 1995. Some parts business was
subcontracted out in 1995 due to manufacturing requirements associated with the
"A" presses. Warranty provisions increased in 1995 due to the increase in sales
volume. Provisions for warranty in 1994 included the reversal of excess
provisions in the prior year.
 
    Net sales at the Coz division increased 11% in 1995 compared to net sales of
the prior year. The majority of the increase was associated with increased sale
prices in the current year. During 1994 and the first half of 1995, the price of
basic raw materials increased significantly. Sales prices were adjusted to
partially offset the effect of these cost increases. In the last half of 1995,
raw material prices decreased. Gross profits increased slightly in 1995 compared
to 1994, principally from the effects of increased sales as noted above. Gross
profit margins decreased slightly in the current year due to the mix of products
sold and the difficulty in passing on material cost increases to customers.
Manufacturing costs increased in 1995 due to a slight increase in employment
levels and normal cost increases in labor, rent and supplies.
 
    Selling and administrative expenses were $34,452,000 (13.2% of net sales
from continuing operations) in 1995 compared to $31,072,000 (14.4% of net sales
from continuing operations) in 1994. In terms of actual dollars, selling
expenses increased slightly in 1995. Increased costs at the Verson division
associated with increased sales efforts were partially offset by decreased costs
at the Bush Hog division related to
 
10
<PAGE>
changes within the commission structure at this operation. The increases in
administrative expenses relate primarily to provisions ($932,000) for the new
Target Benefit pension plan (effective January 1, 1995) and expenses totaling
approximately $1,500,000 related to the termination/retirement of certain
individuals. Normal cost increases (salaries, rent, utilities, insurance, etc.)
also impacted both selling and administrative costs in 1995.
 
    The decrease in interest expense ($1,052,000 in 1995 compared to $1,859,000
in 1994) was directly related to reduced borrowing levels in the current year.
In March 1994, the Company terminated certain financing arrangements and
replaced them with a Revolving Credit Agreement. This agreement was amended in
the first quarter of 1995 providing for reduced interest rates. Borrowing levels
have been reduced due to the improved internal cash flow of the Company from its
continuing operations.
 
    Other expense was $7,483,000 in 1995 compared to other expense of $1,198,000
in 1994. Reference is made to Note 12 of Notes to Consolidated Financial
Statements for an analysis of other (income) expense in 1995 and 1994.
 
    Reference is made to Note 4 of Notes to Consolidated Financial Statements
for an explanation of the current and deferred provision (credit) for income
taxes in 1995 and 1994.
 
FINANCIAL CONDITION
 
1996
 
    Working capital at December 31, 1996 was $50,800,000 and the current ratio
was 1.68 to 1.0. Net accounts receivables increased by $8,621,000 in 1996. The
entire increase was associated with the Verson division, of which $6,000,000 was
in transit at the end of 1996. The remaining portion of the increase was related
to two "A" presses which were shipped to Chrysler facilities for installation.
Under the terms of the agreement with Chrysler, a portion of the amounts due are
held back until installation and die tryout of each press is complete.
Receivables at the Bush Hog division decreased in 1996. Strong retail activity
and cash collections occurred in the last quarter of 1996 resulting in this
decrease in receivables. Additional decreases were associated with the
collection of amounts due on the sale of an idle facility at the end of 1995.
Inventory levels increased by $4,384,000 at the end of 1996 compared to the end
of the prior year. This increase was also related to the Verson division. While
the level of accumulated costs of presses in process has decreased at the end of
1996 (primarily due to the shipment of two "A" presses noted above), the level
of customer deposits and progress payments has decreased by a greater amount at
the end of 1996, resulting in a net increase in the work in process inventory
level. Inventory levels at the Bush Hog division decreased due primarily to
improved inventory management in 1996. Coz division inventory levels also
decreased in 1996. The division successfully increased its efforts to eliminate
excess raw material levels and better manage production quantities.
 
    Fixed asset additions were primarily associated with equipment necessary to
improve productivity and quality at all manufacturing divisions. Funds to
finance these additions include current operating cash flow and borrowings under
loan agreements in effect. There were no major fixed asset dispositions in 1996.
 
    The changes in the deferred tax assets (classified as both current and other
assets) were associated with changes in timing differences between book and tax
income and the utilization of net operating loss carryforwards recognized in
1995. The continued earnings history of the Company and prospects for future
earnings makes it more likely than not that the Company will utilize the
benefits arising from the deferred tax assets noted above. See Note 4 of Notes
to Consolidated Financial Statements.
 
    During the first quarter of 1996, the Company increased the quarterly
dividend from $.025 per share to $.05 per share effective with the first quarter
dividend of 1996 paid at the end of that quarter. Quarterly dividend rates have
remained at this level for the remainder of 1996.
 
    During 1996, the Company issued 211,500 new common shares to certain
officers of the Company upon exercise of stock options. The Company repurchased
these shares from the officers for treasury stock purposes. The Company's Board
of Directors authorized the purchase of up to 1,500,000 shares of the Company's
common stock from time to time on the open market, subject to prevailing market
conditions. Of this amount, approximately 800,000 shares have been purchased
through the end of 1996. Funds to finance these treasury share purchases include
current operating cash flow and borrowings under loan agreements in effect. Some
treasury shares purchased have been reissued upon the exercise of stock options.
 
1995
 
    Working capital at December 31, 1995 was $54,947,000 and the current ratio
was 1.84 to 1.0. Net accounts receivable decreased by approximately $2,000,000
in 1995. The majority of the decrease was related to the Verson division.
Receivables at this division are a function of shipments (revenues recognized
 
                                                                              11
<PAGE>
on a percentage of completion basis are accumulated in inventory). Press
shipments in the last few months of 1995 decreased compared to the end of the
prior year. This decrease was partially offset by the effects of increased
receivables at the Bush Hog division. The increase reflects decreased retail
sales of large cutters and peanut combines due to market conditions described
earlier. On a consolidated basis, inventory levels increased by approximately
$4,000,000 in 1995. The entire increase was related to the Verson division where
production continues on an order for three "A" size transfer presses discussed
earlier. A portion of the increase in accumulated costs of presses in progress
has been offset by increased customer deposits and progress payments related to
the contracts in process. Inventories at the Bush Hog and Coz divisions
decreased in 1995.
 
    Major fixed asset additions in 1995 include building additions at the Verson
division (primarily to expand the press assembly area) and a new paint system at
the Bush Hog division. Other fixed asset additions at all divisions were for
equipment to improve productivity and quality in the products manufactured.
Funds to finance these additions include current operating cash flow and
borrowings (subsequently repaid) under the Revolving Credit Agreement. During
1995, the Company sold for cash certain idle facilities and other operating and
nonoperating assets which resulted in gains of approximately $2,000,000.
 
    The decrease in notes receivable due after one year was related to a reserve
of $7,699,000 established in 1995 for the remaining unreserved amount due the
Company from the sale of an operation in 1991. See Note 10 of Notes to
Consolidated Financial Statements.
 
    The deferred tax asset results from the reversal of the valuation allowance
associated with certain net operating loss carryforwards, tax credits and timing
differences in 1995. The recent earnings history of the Company and prospects
for the future makes it more likely than not that the Company will utilize the
benefits arising from the items noted above. See Note 4 of Notes to Consolidated
Financial Statements.
 
    Borrowings under the Revolving Credit Agreement at the end of 1995 were
primarily related to the "A" size transfer presses in production at the Verson
division and the normal seasonal needs at the Bush Hog division associated with
inventory build schedules prior to the spring selling season.
 
    During 1995, the Company retired all outstanding Series B and C preferred
shares through the use of internally generated funds.
 
LIQUIDITY AND CAPITAL RESOURCES
 
    At the end of 1996, the Company's sales backlog was in excess of
$142,000,000. The majority of this amount is related to the Verson division and
is represented by orders for new presses. Accumulated production costs are not
invoiced until shipment of the related press. In order to fund the cost of
production, the Verson division receives deposits from customers at the time the
press order is accepted and also frequently requires periodic progress payments
from the customer during the production process, which minimizes the Company's
cash requirements during the manufacturing cycle.
 
    At the Bush Hog division, cash collections associated with machine sales
generally are dependent upon the retail sale of the product by the dealer.
Extended payment terms are offered in the form of floor plan financing which is
customary within the agricultural equipment industry. Net farm cash income
increased significantly in 1996 due primarily to increased crop prices. It is
projected that farm income will decrease slightly in 1997 as crop prices are
expected to decrease. Weak cattle prices continued in 1996 resulting in
widespread liquidation of cattle herds. It is anticipated that this condition
will ease in 1997.
 
    During 1995, the Company reversed its previous valuation allowance
associated with certain net operating loss carryforwards, tax credits and timing
differences. In 1996 and future years, the Company has and will be recording a
tax provision based principally upon the Federal statutory rate in effect and
anticipates no reductions in future tax provisions from additional tax credits
at this time. However, the Company projects that future Federal income tax
payments will be based upon the Alternative Minimum Tax rate as the Company
continues to utilize its substantial tax loss carryforwards for tax reporting
purposes.
 
    Reference is made to Note 10 of Notes to Consolidated Financial Statements
for a current discussion on outstanding environmental and legal issues and other
contingent liabilities.
 
    During the last half of 1996, the Company entered into an Amended and
Restated Credit Agreement with the same lenders as under the Revolving Credit
Agreement. Reference is made to Note 5 of Notes to Consolidated Financial
Statements for a description of the major terms of this new agreement which
replaces the Revolving Credit Agreement.
 
    As of December 31, 1996, the Company had cash and cash equivalents of
$833,000 and additional funds of $67,056,000 available under its Amended and
Restated Credit agreement of which $42,056,000 is available for general
corporate and operating purposes (including
 
12
<PAGE>
costs incurred by the Verson division in connection with new press orders from
the major U. S. automotive manufacturers) and an additional $25,000,000 which is
available for new Verson business as noted above. The Company believes that its
expected operating cash flow and funds available under the Amended and Restated
Credit Agreement are adequate to finance its operations and capital expenditures
in the near future. During 1996, the Company has been in compliance with all
provisions of loan agreements in effect.
 
    Subsequent to the end of 1996, the Company purchased 417,601 additional
shares of its common stock for treasury purposes.
 
IMPACT FROM NOT YET EFFECTIVE RULES
 
    In October 1996, the American Institute of Certified Public Accountants
issued Statement of Position (SOP) 96-1--Environmental Remediation Liabilities.
This SOP provides that liabilities for environmental remediation should be
accrued when the criteria for the recognition of liabilities are met under
generally accepted accounting principles and provides guidance to aid in the
determination of when environmental remediation liabilities should be
recognized. The SOP also includes guidance as to costs that should be included
in the accrual, basis for measurement of these costs, and display and disclosure
of environmental remediation liabilities. Adoption of this SOP is required for
fiscal years beginning after December 15, 1996. The Company anticipates that any
adjustment from the application of this SOP in 1997 will not have a material
effect on its financial position or results of operations.
 
                                                                              13
<PAGE>
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
                         REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Shareholders and Board of Directors
  of Allied Products Corporation
 
    We have audited the consolidated balance sheets of Allied Products
Corporation and consolidated subsidiaries as of December 31, 1996 and 1995, and
the related consolidated statements of income, shareholders' investment and cash
flows for each of the three years in the period ended December 31, 1996. We have
also audited the financial statement schedule listed in Part IV of Form 10-K,
Item 14(a)2 for each of the three years in the period ended December 31, 1996.
These financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial statement schedule based on
our audits.
 
    We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
    In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Allied Products
Corporation and consolidated subsidiaries as of December 31, 1996 and 1995, and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended December 31, 1996 in conformity with
generally accepted accounting principles. In addition, in our opinion, the
financial statement schedule referred to above, when considered in relation to
the financial statements taken as a whole, presents fairly, in all material
respects, the information required to be included therein.
 
                                          COOPERS & LYBRAND L. L. P.
 
Chicago, Illinois
February 6, 1997
 
14
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
 
<TABLE>
<CAPTION>
                                                                            YEAR ENDED DECEMBER 31,
                                                              ----------------------------------------------------
                                                                    1996              1995              1994
                                                              ----------------  ----------------  ----------------
<S>                                                           <C>               <C>               <C>
Net sales from continuing operations........................  $    274,414,000  $    260,861,000  $    215,529,000
Cost of products sold.......................................       209,118,000       199,544,000       160,836,000
                                                              ----------------  ----------------  ----------------
  Gross profit..............................................  $     65,296,000  $     61,317,000  $     54,693,000
                                                              ----------------  ----------------  ----------------
Other costs and expenses:
  Selling and administrative expenses.......................  $     33,400,000  $     34,452,000  $     31,072,000
  Interest expense..........................................         1,557,000         1,052,000         1,859,000
  Other (income) expense, net...............................           631,000         7,483,000         1,198,000
                                                              ----------------  ----------------  ----------------
                                                              $     35,588,000  $     42,987,000  $     34,129,000
                                                              ----------------  ----------------  ----------------
Income before taxes from continuing operations..............  $     29,708,000  $     18,330,000  $     20,564,000
Provision (credit) for income taxes:
  Current...................................................           921,000           989,000           877,000
  Deferred..................................................         9,783,000       (16,648,000)        --
                                                              ----------------  ----------------  ----------------
Income from continuing operations...........................  $     19,004,000  $     33,989,000  $     19,687,000
Discontinued operations--loss on disposition of discontinued
 operations and other costs, net of tax.....................         --                --               (5,354,000)
                                                              ----------------  ----------------  ----------------
Net income..................................................  $     19,004,000  $     33,989,000  $     14,333,000
                                                              ----------------  ----------------  ----------------
                                                              ----------------  ----------------  ----------------
Net income applicable to common stock.......................  $     19,004,000  $     32,789,000  $     12,440,000
                                                              ----------------  ----------------  ----------------
                                                              ----------------  ----------------  ----------------
Earnings (loss) per common share:
 Primary--
  Continuing operations.....................................       $2.11             $3.48             $1.96
  Discontinued operations...................................         --                --              (0.59)
                                                                   -----             -----             -----
  Income per common share...................................       $2.11             $3.48             $1.37
                                                                   -----             -----             -----
                                                                   -----             -----             -----
 Fully diluted--
  Continuing operations.....................................       $2.11             $3.45             $1.96
  Discontinued operations...................................         --                --              (0.59)
                                                                   -----             -----             -----
  Income per common share...................................       $2.11             $3.45             $1.37
                                                                   -----             -----             -----
                                                                   -----             -----             -----
Weighted average shares outstanding:
  Primary...................................................     9,014,000         9,414,000         9,102,000
                                                                 ---------         ---------         ---------
                                                                 ---------         ---------         ---------
  Full diluted..............................................     9,014,000         9,494,000         9,102,000
                                                                 ---------         ---------         ---------
                                                                 ---------         ---------         ---------
</TABLE>
 
          The accompanying notes to consolidated financial statements
                   are an integral part of these statements.
 
                                                                              15
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
 
                                     ASSETS
 
<TABLE>
<CAPTION>
                                                                                        DECEMBER 31,
                                                                             ----------------------------------
                                                                                   1996              1995
                                                                             ----------------  ----------------
<S>                                                                          <C>               <C>
Current Assets:
  Cash and cash equivalents................................................  $        833,000  $        744,000
                                                                             ----------------  ----------------
  Notes and accounts receivable, less allowances of $629,000 and $948,000,
   respectively............................................................  $     52,914,000  $     44,293,000
                                                                             ----------------  ----------------
  Inventories:
    Raw materials..........................................................  $      9,524,000  $     12,037,000
    Work in process........................................................        28,269,000        20,438,000
    Finished goods.........................................................        18,997,000        19,931,000
                                                                             ----------------  ----------------
                                                                             $     56,790,000  $     52,406,000
                                                                             ----------------  ----------------
  Deferred tax asset.......................................................  $     14,532,000  $     22,538,000
                                                                             ----------------  ----------------
  Prepaid expenses.........................................................  $        191,000  $        323,000
                                                                             ----------------  ----------------
      Total current assets.................................................  $    125,260,000  $    120,304,000
                                                                             ----------------  ----------------
Plant and Equipment, at cost:
  Land.....................................................................  $      2,155,000  $      2,172,000
  Buildings and improvements...............................................        37,196,000        36,269,000
  Machinery and equipment..................................................        50,083,000        47,078,000
                                                                             ----------------  ----------------
                                                                             $     89,434,000  $     85,519,000
  Less--Accumulated depreciation and amortization..........................        51,048,000        47,083,000
                                                                             ----------------  ----------------
                                                                             $     38,386,000  $     38,436,000
                                                                             ----------------  ----------------
Other Assets:
  Notes receivable, due after one year, less allowances of $7,165,000 and
   $7,699,000, respectively................................................  $      --         $         40,000
  Deferred tax asset.......................................................         5,282,000         4,823,000
  Deferred charges (goodwill), net of amortization.........................         1,668,000         1,845,000
  Other....................................................................         1,353,000         1,295,000
                                                                             ----------------  ----------------
                                                                             $      8,303,000  $      8,003,000
                                                                             ----------------  ----------------
                                                                             $    171,949,000  $    166,743,000
                                                                             ----------------  ----------------
                                                                             ----------------  ----------------
</TABLE>
 
          The accompanying notes to consolidated financial statements
                   are an integral part of these statements.
 
16
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                    LIABILITIES AND SHAREHOLDERS' INVESTMENT
 
<TABLE>
<CAPTION>
                                                                                        DECEMBER 31,
                                                                             ----------------------------------
                                                                                   1996              1995
                                                                             ----------------  ----------------
<S>                                                                          <C>               <C>
Current Liabilities:
  Revolving credit agreement...............................................  $     27,000,000  $     11,200,000
  Current portion of long-term debt........................................           193,000           621,000
  Accounts payable.........................................................        16,692,000        21,152,000
  Accrued expenses.........................................................        30,575,000        32,384,000
                                                                             ----------------  ----------------
      Total current liabilities............................................  $     74,460,000  $     65,357,000
                                                                             ----------------  ----------------
Long-term debt, less current portion shown above...........................  $        489,000  $        315,000
                                                                             ----------------  ----------------
Other long-term liabilities................................................  $      3,547,000  $      2,806,000
                                                                             ----------------  ----------------
Commitments and Contingencies
Shareholders' Investment:
  Preferred stock:
    Undesignated--authorized 1,500,000 shares at December 31, 1996 and
     1995; none issued.....................................................  $      --         $      --
  Common stock, par value $.01 per share; authorized 25,000,000 shares;
   issued 9,364,844 and 9,138,344 shares at December 31, 1996 and 1995,
   respectively............................................................            94,000            91,000
  Additional paid-in capital...............................................        94,671,000        93,143,000
  Retained earnings........................................................        22,227,000         5,031,000
                                                                             ----------------  ----------------
                                                                             $    116,992,000  $     98,265,000
  Less: Treasury stock, at cost: 905,071 shares at
   December 31, 1996.......................................................       (23,539,000)        --
                                                                             ----------------  ----------------
      Total shareholder's equity...........................................  $     93,453,000  $     98,265,000
                                                                             ----------------  ----------------
                                                                             $    171,949,000  $    166,743,000
                                                                             ----------------  ----------------
                                                                             ----------------  ----------------
</TABLE>
 
          The accompanying notes to consolidated financial statements
                   are an integral part of these statements.
 
                                                                              17
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                                        YEAR ENDED DECEMBER 31,
                                                                          ----------------------------------------------------
                                                                                1996              1995              1994
                                                                          ----------------  ----------------  ----------------
<S>                                                                       <C>               <C>               <C>
Cash Flows from Operating Activities:
  Net income............................................................  $     19,004,000  $     33,989,000  $     14,333,000
  Adjustments to reconcile net income to net cash provided from
   operating activities:
    Depreciation and amortization.......................................         5,075,000         5,033,000         5,159,000
    Amortization of deferred charges....................................           177,000         2,068,000         2,067,000
    Deferred income tax provision (benefit).............................         9,534,000       (16,648,000)        --
    Provision for collectability of long-term receivable................         --                7,699,000         --
    Changes in noncash assets and liabilities, net of effects of
     assets/businesses sold and noncash transactions:
      (Increase) decrease in accounts receivable........................        (8,835,000)           99,000          (100,000)
      (Increase) in inventories.........................................        (4,384,000)       (3,951,000)       (5,596,000)
      Decrease in prepaid expenses......................................           132,000           133,000         1,459,000
      Decrease in notes receivable, due after one year..................            40,000           423,000           807,000
      Increase (decrease) in accounts payable and accrued expenses......        (6,621,000)        1,349,000        (8,490,000)
    Other, net..........................................................           332,000        (1,198,000)         (695,000)
                                                                          ----------------  ----------------  ----------------
  Net cash provided from operating activities...........................  $     14,454,000  $     28,996,000  $      8,944,000
                                                                          ----------------  ----------------  ----------------
Cash Flows from Investing Activities:
  Additions to plant and equipment......................................  $     (4,684,000) $    (14,378,000) $     (6,957,000)
  Proceeds from sales of plant and equipment............................           207,000         3,611,000         2,452,000
  Proceeds from sales of assets/businesses..............................         --                --                  343,000
                                                                          ----------------  ----------------  ----------------
  Net cash used for investing activities................................  $     (4,477,000) $    (10,767,000) $     (4,162,000)
                                                                          ----------------  ----------------  ----------------
Cash Flows from Financing Activities:
  Borrowings under revolving loan and credit agreements.................  $    119,650,000  $    110,300,000  $     81,346,000
  Payments under revolving loan and credit agreements...................      (103,850,000)     (109,400,000)      (90,308,000)
  Payments of short and long-term debt..................................          (696,000)         (827,000)      (33,881,000)
  Redemptions of preferred stock........................................         --              (17,997,000)       (3,100,000)
  Common stock issued...................................................         1,501,000         --                --
  Purchases of treasury stock...........................................       (25,993,000)        --                --
  Dividends paid........................................................        (1,808,000)       (1,883,000)       (1,893,000)
  Stock option transactions.............................................         1,308,000           668,000           292,000
                                                                          ----------------  ----------------  ----------------
  Net cash used for financing activities................................  $     (9,888,000) $    (19,139,000) $    (47,544,000)
                                                                          ----------------  ----------------  ----------------
Net increase (decrease) in cash and cash equivalents....................  $         89,000  $       (910,000) $    (42,762,000)
Cash and cash equivalents at beginning of year..........................           744,000         1,654,000        44,416,000
                                                                          ----------------  ----------------  ----------------
Cash and cash equivalents at end of year................................  $        833,000  $        744,000  $      1,654,000
                                                                          ----------------  ----------------  ----------------
                                                                          ----------------  ----------------  ----------------
</TABLE>
 
          The accompanying notes to consolidated financial statements
                   are an integral part of these statements.
 
18
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                                    YEAR ENDED DECEMBER 31,
                                                                           -----------------------------------------
                                                                               1996          1995          1994
                                                                           -------------  -----------  -------------
<C>        <S>                                                             <C>            <C>          <C>
Supplemental Information:
      (A)  Noncash investing and financing activities:
       1.  Assets acquired through the assumption of debt................  $     442,000  $   444,000  $     115,000
                                                                           -------------  -----------  -------------
                                                                           -------------  -----------  -------------
       2.  Treasury shares received in lieu of cash for stock option
             exercise....................................................  $      86,000  $   --       $    --
                                                                           -------------  -----------  -------------
                                                                           -------------  -----------  -------------
       3.  Treasury shares issued for non cash exercise of stock
             options.....................................................  $     773,000  $   --       $    --
                                                                           -------------  -----------  -------------
                                                                           -------------  -----------  -------------
       4.  Proceeds (primarily notes receivable) received from the sales
             of discontinued operations..................................  $    --        $   --       $   2,011,000
                                                                           -------------  -----------  -------------
                                                                           -------------  -----------  -------------
      (B)  Interest paid during year.....................................  $   1,636,000  $   939,000  $   2,657,000
                                                                           -------------  -----------  -------------
                                                                           -------------  -----------  -------------
      (C)  Income/franchise taxes paid during year, net of refunds.......  $   1,291,000  $   471,000  $     522,000
                                                                           -------------  -----------  -------------
                                                                           -------------  -----------  -------------
</TABLE>
 
          The accompanying notes to consolidated financial statements
                   are an integral part of these statements.
 
                                                                              19
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
                      PREFERRED, COMMON AND TREASURY STOCK
 
<TABLE>
<CAPTION>
                                                                SERIES B
                                                             PREFERRED ($50    COMMON ($.01
                                                              STATED VALUE       PAR VALUE     TREASURY STOCK,
                                                               PER SHARE)       PER SHARE)         AT COST
                                                             ---------------  ---------------  ---------------
<S>                                                          <C>              <C>              <C>
Balance at December 31, 1993...............................   $   9,040,000       $    91,000   $    --
  Redemption of 34,000 Series B preferred shares...........      (1,700,000)        --               --
  Issuance of 14,734 common shares in connection with the
   exercises of stock options..............................        --               --               --
                                                             ---------------  ---------------  ---------------
Balance at December 31, 1994...............................   $   7,340,000       $    91,000   $    --
  Redemption of 146,800 Series B preferred shares..........      (7,340,000)        --               --
  Issuance of 35,000 common shares in connection with the
   exercises of stock options..............................        --               --               --
                                                             ---------------  ---------------  ---------------
Balance at December 31, 1995...............................   $    --             $    91,000   $    --
  Issuance of 226,500 common shares in connection with the
   exercises of stock options..............................        --                   3,000        --
  Purchase of 1,016,309 common shares for treasury
   purposes................................................        --               --            (26,079,000)
  Treasury shares issued (111,238) in connection with the
   exercises of stock options..............................        --               --              2,540,000
                                                             ---------------  ---------------  ---------------
Balance at December 31, 1996...............................   $    --             $    94,000   $ (23,539,000)
                                                             ---------------  ---------------  ---------------
                                                             ---------------  ---------------  ---------------
</TABLE>
 
          The accompanying notes to consolidated financial statements
                   are an integral part of these statements.
 
20
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
           ADDITIONAL PAID-IN CAPITAL AND RETAINED EARNINGS (DEFICIT)
 
<TABLE>
<CAPTION>
                                                                                      ADDITIONAL       RETAINED
                                                                                       PAID-IN         EARNINGS
                                                                                       CAPITAL         (DEFICIT)
                                                                                    --------------  ---------------
<S>                                                                                 <C>             <C>
Balance at December 31, 1993......................................................  $   92,395,000  $   (39,515,000)
  Net income for the year.........................................................        --             14,333,000
  Preferred dividends declared and paid:
    Series B (variable based on prime rate--$3.375 per share).....................        --               (574,000)
    Series C--$10.81 per share....................................................        --             (1,319,000)
  Excess of cost ($843,000) over fair market value of 59,979 common shares
   purchased and reissued in connection with the Company's incentive stock plan...        (375,000)       --
  Issuance of 14,734 common shares in connection with the exercises of stock
   options........................................................................         126,000        --
                                                                                    --------------  ---------------
Balance at December 31, 1994......................................................  $   92,146,000  $   (27,075,000)
  Net income for the year.........................................................        --             33,989,000
  Preferred dividends declared and paid:
    Series B (variable based on prime rate--$1.825 per share).....................        --               (268,000)
    Series C--$8.1075 per share...................................................        --               (932,000)
  Common dividends declared and paid--$.075 per share.............................        --               (683,000)
  Issuance of 35,000 common shares in connection with the exercises of stock
   options........................................................................         205,000        --
  Excess of cost ($589,000) over fair market value of 41,961 common shares
   purchased and reissued in connection with the Company's contribution to the
   Employee Stock Plan............................................................         (30,000)       --
  Excess of cost ($614,000) over fair market value of 42,500 common shares
   purchased and reissued in connection with the Company's incentive stock plan...        (151,000)       --
  Excess of stated value over cost ($5,516,000) in connection with the early
   retirement of the Series B preferred stock.....................................         973,000        --
                                                                                    --------------  ---------------
Balance at December 31, 1995......................................................  $   93,143,000  $     5,031,000
  Net income for the year.........................................................        --             19,004,000
  Common dividends declared and paid--$.20 per share..............................        --             (1,808,000)
  Issuance of 226,500 common shares in connection with the exercises of stock
   options........................................................................       1,584,000        --
  Excess of cost of treasury shares issued over exercise price in connection with
   the exercises of stock options.................................................      (1,754,000)       --
  Tax benefit associated with stock option exercises..............................       1,698,000        --
                                                                                    --------------  ---------------
Balance at December 31, 1996......................................................  $   94,671,000  $    22,227,000
                                                                                    --------------  ---------------
                                                                                    --------------  ---------------
</TABLE>
 
          The accompanying notes to consolidated financial statements
                    are an integral part of these statements
 
                                                                              21
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
 
  PRINCIPLES OF CONSOLIDATION--
 
    The consolidated financial statements include the accounts of the Company
and its majority owned subsidiaries. All significant intercompany items and
transactions have been eliminated.
 
  NATURE OF OPERATIONS--
 
    Allied Products Corporation manufactures large metal stamping presses and
implements and machinery used in agriculture, landscaping and ground maintenance
businesses, and supplies thermoplastic compounds and additives. All
manufacturing operations are within the United States. Implements and machinery
manufactured by the Bush Hog division are primarily sold through dealerships in
the United States with some limited export sales to Canada. Metal stamping
presses produced by the Verson division are sold directly to the end users which
include automobile manufacturers, first and second tier automotive parts
producing companies and the appliance industry. Automobile manufacturers and
automotive parts producing companies account for approximately 80% of the Verson
division's revenues. Press sales generally are concentrated in the United States
and Mexico. The Coz division provides a complete line of thermoplastic resins
and related services to the plastic molding and extrusion industry. Sales are
concentrated in the northeastern portion of the United States.
 
  USE OF ESTIMATES--
 
    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
 
  REVENUE RECOGNITION--
 
    Sales by the Bush Hog division are recorded when products are shipped to
independent dealers in accordance with industry practices. Provisions for sales
incentives and other sales related expenses are made at the time of the sale.
Revenues and profits are recognized on a percentage of completion basis for
major contracts at the Verson division. Changes in the Verson divison's
estimated sales, costs and profits are recognized in the period in which they
are determinable. Additionally, any anticipated losses on contracts are charged
to operations as soon as they are determinable. Other products are recorded as
sales when shipped.
 
  ACCOUNTS RECEIVABLE--
 
    Current accounts receivables for the Bush Hog division are net of provisions
for sales incentive programs and returns and allowances. Extended payment terms
(up to one year) are offered to dealers in the form of floor plan financing
which is customary within the industry. Such receivables (with the exception of
receivables associated with service parts) are generally not collected until the
dealer sells the related piece of equipment to a retail customer. The Company
maintains a security interest in the equipment related to such receivables to
minimize the risk of loss.
 
  INVENTORIES--
 
    The basis of all of the Company's inventories is determined by using the
lower of FIFO cost or market method.
 
    Included in work in process inventory are accumulated costs ($23,674,000 at
December 31, 1996 and $15,983,000 at December 31, 1995) associated with
contracts under which the Company recognizes revenue on a percentage of
completion basis. These balances include unbilled actual production costs
incurred plus a measure of profit recognized in relation to the sales recorded,
less customer
 
22
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
payments ($43,579,000 at December 31, 1996 and $55,381,000 at December 31, 1995)
associated with the work in process inventory. A significant portion of the work
in process inventory will be completed, shipped and invoiced prior to the end of
the following year.
 
  PLANT AND EQUIPMENT--
 
    Expenditures for the maintenance and repair of plant and equipment are
charged to expense as incurred. Expenditures for major replacement or betterment
are capitalized. The cost and related accumulated depreciation of plant and
equipment replaced, retired or otherwise disposed of is removed from the
accounts and any gain or loss is reflected in earnings.
 
  DEPRECIATION--
 
    Depreciation of the original cost of plant and equipment is charged to
expense over the estimated useful lives of such assets calculated under the
straight-line method. Estimated useful lives are 20 to 40 years for buildings
and improvements and 3 to 12 years for machinery and equipment.
 
  DEFERRED CHARGES (GOODWILL)--
 
    Deferred charges (goodwill) associated with the 1986 acquisition of Verson
(approximately $13,113,000) are being amortized on a straight line basis over a
period of 20 years. The Company assesses at each balance sheet date whether
there has been a permanent impairment in the value of goodwill. Such assessment
includes obsolescence, demand, new technology, competition and other pertinent
economic factors and trends that may have an impact on the value of remaining
useful life of goodwill.
 
  EARNINGS (LOSS) PER COMMON SHARE--
 
    Earnings (loss) per common share is based on the average number of common
shares outstanding (9,014,000, 9,126,000 and 9,102,000 for the years ended
December 31, 1996, 1995 and 1994, respectively) after decreasing net income for
preferred dividend requirements ($1,200,000 and $1,893,000 for the years ended
December 31, 1995 and 1994, respectively). For 1995, the average number of
common shares outstanding was increased by the dilutive effect of outstanding
stock options (288,000 shares as it relates to weighted average shares
outstanding--primary and 368,000 shares as it relates to weighted average shares
outstanding--fully diluted). The assumed exercise of stock options would not
result in a material dilution for the years ended December 31, 1996 and 1994.
 
  INCOME TAXES--
 
    Income taxes are accounted for under the asset and liability method in
accordance with Financial Accounting Standards Board (FASB) Statement of
Financial Accounting Standards No. 109 (SFAS 109)--Accounting for Income Taxes.
See Note 4.
 
  STATEMENT OF CASH FLOWS--
 
    For purposes of the Consolidated Statements of Cash Flows, the Company
considers investments with original maturities of three months or less to be
cash equivalents.
 
  FINANCIAL INSTRUMENTS--
 
    The fair value of cash and cash equivalents approximates the carrying value
of these assets due to the short maturity of these instruments. The fair value
of the Company's debt, current and long-term, is estimated to approximate the
carrying value of these liabilities based upon borrowing rates currently
available to the Company for borrowings with similar terms.
 
  RECENTLY ISSUED ACCOUNTING STANDARD--
 
    In October 1996, the American Institute of Certified Public Accountants
issued Statement of Position (SOP) 96-1 -- Environmental Remediation
Liabilities. This SOP provides that liabilities for environmental remediation
should be accrued when the criteria for the recognition of liabilities are met
under generally accepted accounting principles and provides guidance to aid in
the determination
 
                                                                              23
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
of when environmental remediation liabilities should be recognized. The SOP also
includes guidance as to costs that should be included in the accrual, basis for
measurement of these costs, and display and disclosure of environmental
remediation liabilities. Adoption of this SOP is required for fiscal years
beginning after December 15, 1996. The Company anticipates that any adjustment
from the application of this SOP in 1997 will not have a material effect on its
financial position or results of operations.
 
2.  ACCRUED EXPENSES:
 
    The Company's accrued expenses consist of the following:
 
<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,
                                                                              ------------------------------
                                                                                   1996            1995
                                                                              --------------  --------------
<S>                                                                           <C>             <C>
Salaries and wages..........................................................  $    6,026,000  $    5,542,000
Warranty....................................................................       9,559,000       9,077,000
Self insurance accruals.....................................................       4,046,000       4,411,000
Restructuring and other costs, primarily related to discontinued
 operations.................................................................        --             1,494,000
Pensions, including retirees' health........................................       6,417,000       5,901,000
Taxes, other than income taxes..............................................         811,000         738,000
Environmental matters.......................................................       2,020,000       3,019,000
Other.......................................................................       1,696,000       2,202,000
                                                                              --------------  --------------
                                                                              $   30,575,000  $   32,384,000
                                                                              --------------  --------------
                                                                              --------------  --------------
</TABLE>
 
3.  DISCONTINUED OPERATIONS:
 
    Prior to 1994, the Company closed the manufacturing operations of the
Kewanee Farm Equipment division, the Charles City machining and foundry division
and the R/B Die and Prototype division. Machinery and equipment associated with
these divisions were sold. The Company also sold the majority of the assets of
the Smith Energy Services division and closed the International Agro division
prior to 1994. At the end of 1993, the Company sold for cash substantially all
of the assets and liabilities of the White-New Idea Farm Equipment division. In
connection with this sale, the purchaser is required to purchase the real estate
located in Coldwater, Ohio pending a favorable review of environmental matters.
The Company is in the process of completing an evaluation of the status of
environmental conditions at this location--see Note 10. During 1995, the Company
and the purchaser of the White-New Idea division agreed to a five-year lease of
the Coldwater, Ohio facility while the Company completes the evaluation. Sale of
the facility to the purchaser of the White-New Idea division will occur after
completion of the evaluation and after resolution of any issues raised by the
evaluation. During 1995 and 1994, the Company provided additional amounts (based
upon an independent review) for the environmental clean up of this facility. The
Company also sold in 1994 the business and certain assets of the Cooper division
for cash and a collateralized short-term note. In 1994, discontinued operations
include operating losses at the Cooper division related to the delayed sale of
this business and additional provisions primarily related to environmental
issues and a dispute resolution on a business sold in 1993, net of an income tax
benefit allocation of $211,000.
 
  RESTRUCTURING COSTS--
 
    Prior to 1994, the Company provided $14,700,000 for the impact of an
operational restructuring plan designed to reduce operating losses by closing,
consolidating or scaling back certain operations. The restructuring of the
Company was substantially completed during 1996 with the remaining reserve being
allocated to accruals associated with certain noncontinuing businesses. Net
charges to the restructuring reserve in 1996, 1995 and 1994 were $748,000,
$1,879,000 and $3,931,000, respectively. Additional charges were made to the
restructuring reserve prior to 1994.
 
24
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
    As of December 31, 1996, the accompanying consolidated balance sheet
includes real estate with a net book value of $2,257,000, which is held for
sale, including $1,601,000 related to real estate under lease to the purchaser
of the White-New Idea division as discussed above.
 
4.  INCOME TAXES:
 
    Provision (credit) for income taxes in 1996, 1995 and 1994 consists of the
following:
 
<TABLE>
<CAPTION>
                                                                        YEAR ENDED DECEMBER 31,
                                                            -----------------------------------------------
                                                                 1996            1995             1994
                                                            --------------  ---------------  --------------
<S>                                                         <C>             <C>              <C>
Federal--current..........................................  $      688,000  $       756,000  $      422,000
Federal--deferred.........................................       9,783,000      (16,648,000)       --
State--current............................................         233,000          233,000         244,000
                                                            --------------  ---------------  --------------
Total provision (credit)                                    $   10,704,000  $   (15,659,000) $      666,000
                                                            --------------  ---------------  --------------
                                                            --------------  ---------------  --------------
</TABLE>
 
    Allocation of the provision (credit) for income taxes in the 1996, 1995 and
1994 Consolidated Statements of Income include the following:
 
<TABLE>
<CAPTION>
                                                                        YEAR ENDED DECEMBER 31,
                                                            -----------------------------------------------
                                                                 1996            1995             1994
                                                            --------------  ---------------  --------------
<S>                                                         <C>             <C>              <C>
Continuing operations.....................................  $   10,704,000  $   (15,659,000) $      877,000
Discontinued operations--loss on disposition of
 discontinued operations and other costs..................        --              --               (211,000)
                                                            --------------  ---------------  --------------
Total provision (credit)..................................  $   10,704,000  $   (15,659,000) $      666,000
                                                            --------------  ---------------  --------------
                                                            --------------  ---------------  --------------
</TABLE>
 
    The provision (credit) for income taxes in 1996, 1995 and 1994 differs from
amounts computed by applying the statutory rate to pretax income as follows:
 
<TABLE>
<CAPTION>
                                                                        YEAR ENDED DECEMBER 31,
                                                            -----------------------------------------------
                                                                 1996            1995             1994
                                                            --------------  ---------------  --------------
<S>                                                         <C>             <C>              <C>
Income tax at statutory rate..............................  $   10,398,000  $     6,416,000  $    5,250,000
Utilization of net operating loss carryforward............        --             (5,997,000)     (5,547,000)
State income tax, net of federal tax benefit..............         151,000          151,000         159,000
Permanent book over tax differences on acquired assets....         104,000          910,000         910,000
Stock option transactions.................................        --               (296,000)       (137,000)
Adjustment to deferred tax asset valuation allowance......        --            (16,648,000)       --
Other, net................................................          51,000         (195,000)         31,000
                                                            --------------  ---------------  --------------
Total provision (credit)..................................  $   10,704,000  $   (15,659,000) $      666,000
                                                            --------------  ---------------  --------------
                                                            --------------  ---------------  --------------
</TABLE>
 
                                                                              25
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
    The significant components of deferred tax assets and liabilities were as
follows:
 
<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,
                                                                              ------------------------------
                                                                                   1996            1995
                                                                              --------------  --------------
<S>                                                                           <C>             <C>
Deferred tax assets:
  Net operating loss and tax credits carryforwards..........................  $     --        $    6,887,000
  Self-insurance accruals...................................................       1,934,000       1,894,000
  Inventories...............................................................       1,999,000       1,899,000
  Receivables...............................................................       2,845,000       3,026,000
  Sale/leaseback transaction................................................       1,557,000       1,493,000
  Restructuring reserve.....................................................        --               523,000
  Employee benefits, including pensions.....................................       4,696,000       4,239,000
  Warranty..................................................................       3,489,000       3,177,000
  Sales allowances..........................................................       2,200,000       2,079,000
  Environmental matters.....................................................         737,000       1,056,000
  Other.....................................................................         357,000       1,456,000
                                                                              --------------  --------------
    Total deferred tax asset................................................  $   19,814,000  $   27,729,000
                                                                              --------------  --------------
Deferred tax liabilities:
  Depreciation..............................................................  $     --        $      327,000
  Other.....................................................................        --                41,000
                                                                              --------------  --------------
    Total deferred tax liabilities..........................................  $     --        $      368,000
                                                                              --------------  --------------
    Net deferred tax asset..................................................  $   19,814,000  $   27,361,000
                                                                              --------------  --------------
                                                                              --------------  --------------
</TABLE>
 
    During 1995, the Company evaluated its net operating loss carryforwards and
other deferred tax assets in relation to its earnings history over the past few
years and the estimated projected future earnings over the next few years. As a
result of this review, the Company recorded a deferred tax asset ($27,361,000)
which represented a reversal of a valuation allowance recorded prior to 1995.
The related credit to income taxes was reduced by $10,713,000 representing the
elimination of goodwill associated with certain acquisitions which included net
operating loss carryforwards. In addition to the above noted tax asset, the
Company has available net operating loss carryforwards of up to $166,893,000 (of
which $86,177,000 results from various acquisitions) which expire between 1997
and 2008, and investment tax credit carryforwards of $1,797,000 (which expire
between 1997 and 2004) including up to $99,000 resulting from acquisitions.
 
    In years subsequent to 1996, the Company will be recording a tax provision
based upon the Federal statutory rate in effect and anticipates no reductions in
future tax provisions from additional tax credits at this time. However, the
Company projects that future Federal income tax payments will be based upon the
Alternative Minimum Tax rate as substantial tax loss carryforwards still exist
for tax reporting purposes.
 
    Tax returns for the years subsequent to 1992 are potentially subject to
audit by the Internal Revenue Service.
 
26
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
 
5.  FINANCIAL ARRANGEMENTS:
 
    The Company's debt consists of the following:
 
<TABLE>
<CAPTION>
                                                                                                DECEMBER 31,
                                                                                          ------------------------
                                                                                             1996         1995
                                                                                          -----------  -----------
<S>                                                                                       <C>          <C>
Capitalized lease obligations, at interest rates from 7.5% to 12% (weighted average of
 10.3% and 10.1% at December 31, 1996 and 1995, respectively), due in varying amounts
 through 2002 (Note 6)..................................................................  $   682,000  $   882,000
Notes/mortgages payable.................................................................      --            54,000
                                                                                          -----------  -----------
                                                                                          $   682,000  $   936,000
Less current portion....................................................................      193,000      621,000
                                                                                          -----------  -----------
                                                                                          $   489,000  $   315,000
                                                                                          -----------  -----------
                                                                                          -----------  -----------
</TABLE>
 
    Scheduled maturities of the noncurrent portion of long-term debt at December
31, 1996 are due as follows:
 
<TABLE>
<S>                                                                <C>
1998.............................................................  $ 162,000
1999.............................................................    148,000
2000.............................................................    121,000
2001.............................................................     53,000
2002.............................................................      5,000
                                                                   ---------
                                                                   $ 489,000
                                                                   ---------
                                                                   ---------
</TABLE>
 
    During 1994, the Company entered into a Revolving Credit Agreement (which
was subsequently amended in 1995) with two banks providing for up to $35,000,000
in working capital related loans (of which $11,200,000 was borrowed at December
31, 1995) and up to $15,000,000 in standby letters of credit required for the
Company's self-insurance program and for other commercial purposes, of which
approximately $13,000,000 was outstanding at December 31, 1995. Interest was at
prime rate or at other alternate variable rates as provided within the
agreement. During the last half of 1996, the Company entered into an Amended and
Restated Credit Agreement (which replaced the Revolving Credit Agreement) with
the same two banks. The new agreement provides for up to $100,000,000 of
borrowings and/or letters of credit at either a floating prime or fixed LIBOR
(with the rate dependent on the ratio of Funded Debt to Operating Cash Flow)
rate. Under the Amended and Restated Credit Agreement, the Company must meet
certain periodic financial tests, including minimum net worth, debt coverage and
fixed charge coverage ratio and maximum funded debt/operating cash flow ratio.
The agreement expires on September 30, 1999.
 
    The weighted average interest rate on borrowings outstanding at December 31,
1996 and 1995 was 7.4% and 7.8%, respectively.
 
6.  LEASES:
 
  CAPITAL LEASES--
 
    The Company conducts a portion of its business in leased facilities.
Purchase options for such facilities were exercised during 1996. The Company
also leases various types of manufacturing, office and transportation equipment.
 
                                                                              27
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
    Capital leases included in Plant and Equipment in the accompanying balance
sheets are as follows:
 
<TABLE>
<CAPTION>
                                                                          DECEMBER 31,
                                                                  ----------------------------
                                                                      1996           1995
                                                                  -------------  -------------
<S>                                                               <C>            <C>
Land............................................................  $    --        $     396,000
Buildings and improvements......................................       --            1,111,000
Machinery and equipment.........................................      2,558,000      4,233,000
                                                                  -------------  -------------
                                                                  $   2,558,000  $   5,740,000
Less--Accumulated amortization..................................      1,764,000      3,378,000
                                                                  -------------  -------------
                                                                  $     794,000  $   2,362,000
                                                                  -------------  -------------
                                                                  -------------  -------------
</TABLE>
 
    See Note 5 for information as to future debt payments relating to the above
leases.
 
  OPERATING LEASES--
 
    Rent expense for operating leases, which is charged against income, was as
follows:
 
<TABLE>
<CAPTION>
                                                             YEAR ENDED DECEMBER 31,
                                                   -------------------------------------------
                                                       1996           1995           1994
                                                   -------------  -------------  -------------
<S>                                                <C>            <C>            <C>
Minimum rentals..................................  $   1,943,000  $   1,922,000  $   2,165,000
Contingent rentals...............................         79,000         89,000        657,000
                                                   -------------  -------------  -------------
                                                   $   2,022,000  $   2,011,000  $   2,822,000
                                                   -------------  -------------  -------------
                                                   -------------  -------------  -------------
</TABLE>
 
    Contingent rentals are composed primarily of truck fleet unit charges for
actual usage. Some leases contain renewal and purchase options. The leases
generally provide that the Company pay taxes, maintenance, insurance and certain
other operating expenses.
 
    At December 31, 1996, future minimum rental payment commitments under
operating leases that have initial or remaining noncancelable lease terms in
excess of one year are as follows:
 
<TABLE>
<CAPTION>
                                                       MINIMUM       SUBLEASE     NET MINIMUM
                                                    ANNUAL RENTAL     RENTAL     ANNUAL RENTAL
                                                      PAYMENTS        INCOME       PAYMENTS
                                                    -------------  ------------  -------------
<S>                                                 <C>            <C>           <C>
Year ending December 31,
  1997............................................  $   2,343,000  $   (147,000) $   2,196,000
  1998............................................      1,938,000      (122,000)     1,816,000
  1999............................................      1,439,000       --           1,439,000
  2000............................................      1,176,000       --           1,176,000
  2001............................................        381,000       --             381,000
  Later...........................................        857,000       --             857,000
                                                    -------------  ------------  -------------
                                                    $   8,134,000  $   (269,000) $   7,865,000
                                                    -------------  ------------  -------------
                                                    -------------  ------------  -------------
</TABLE>
 
7.  PREFERRED STOCK:
 
    The Company has 2,000,000 shares of authorized preferred stock of which
350,000 shares are designated as Series B Variable Rate Cumulative Preferred
Stock and 150,000 shares are designated as Series C Cumulative Preferred Stock.
The remaining 1,500,000 shares of authorized preferred stock are undesignated
and unissued at December 31, 1996.
 
  SERIES B--
 
    The holder of the Series B Preferred Stock was entitled to receive
cumulative quarterly dividends at variable rates, computed by multiplying $50
times 1/4 of the prime rate in effect on the first day of the
 
28
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
quarter preceding the dividend date. At December 31, 1994, there were 146,800
shares of the Series B Preferred Stock outstanding. In addition to the scheduled
redemption of 17,000 shares, the Company redeemed the remaining 129,800 shares
at a discount of $973,000 during 1995. The discount was credited to Additional
Paid-in Capital.
 
  SERIES C--
 
    Holders of the Series C Cumulative Preferred Stock were entitled to receive
cumulative quarterly dividends at the annual rate of $10.81 per share. At
December 31, 1994, there were 115,000 shares of the Series C Cumulative
Preferred Stock outstanding. In addition to the permitted redemption of 50,000
shares, the Company redeemed the remaining 65,000 shares at a premium of
$130,000 during 1995.
 
8.  COMMON STOCK AND OPTIONS:
 
    The Company has an incentive stock plan (the 1977 plan) which authorizes
stock incentives for key employees in the form of stock awards, stock
appreciation rights and stock options. Options under the 1977 plan, which are
granted at fair market value at date of grant, are non-qualified options (not
"incentive stock options" as defined by the Internal Revenue Code). Options
currently outstanding under the 1977 plan become exercisable to the extent of
25% one year from date of grant and 25% in each of the next three years, and
expire 10 years from the date of grant. There were no stock awards issued under
this plan in 1996, 1995 or 1994. No stock appreciation rights have been granted
to date under this plan. There are 61,905 options outstanding under this plan at
December 31, 1996 and are included in the table below. Additional stock
incentives will not be issued under this plan.
 
    In 1990, the Company's Board of Directors approved a new incentive stock
plan, the 1990 Long Term Incentive Stock Plan (the 1990 plan) which authorizes
stock incentives for key employees in the form of stock awards and stock
options. The 1990 plan, as amended, authorizes the issuance of up to 1,000,000
shares of the Company's Common Stock. Options under the 1990 plan, which are
granted at fair market value at date of grant, may be granted as either
incentive stock options or non-statutory stock options. Options granted become
exercisable to the extent of 50% one year from date of grant and the remaining
50% two years from date of grant. Since the inception of the 1990 plan, the
Company has issued options to purchase 986,251 shares (net of forfeitures) of
the Company's Common Stock at prices between $1.50 and $28.50 per share. There
are 412,767 options outstanding under this plan at December 31, 1996 and are
included in the table below. At December 31, 1996, the Company has the capacity
to issue an additional 13,749 stock incentives under the 1990 plan.
 
    In 1994, shareholders approved a new incentive plan, the 1993 Directors
Incentive Plan (the 1993 plan) which authorizes the issuance of stock options to
members of the Board of Directors who are not employees of the Company. Options
under the 1993 plan, which are granted at fair market value at date of grant,
are granted as non-statutory stock options. Options granted become exercisable
to the extent of 50% one year from date of grant and the remaining 50% two years
from date of grant. Since the inception of the 1993 plan, the Company has issued
options to purchase 146,500 shares of the Company's Common Stock at prices
between $12.50 and $28.50 per share. During 1996, options to purchase 70,000
shares of the Company's Common Stock were issued subject to shareholder
approval. All options issued are outstanding under this plan at December 31,
1996 and are included in the table below.
 
                                                                              29
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
    Stock option transactions in 1996, 1995 and 1994 were as follows:
 
<TABLE>
<CAPTION>
                                                   1996                     1995                     1994
                                          -----------------------  -----------------------  -----------------------
                                                       WEIGHTED                 WEIGHTED                 WEIGHTED
                                                        AVERAGE                  AVERAGE                  AVERAGE
                                                       EXERCISE                 EXERCISE                 EXERCISE
                                            SHARES       PRICE       SHARES       PRICE       SHARES       PRICE
                                          ----------  -----------  ----------  -----------  ----------  -----------
<S>                                       <C>         <C>          <C>         <C>          <C>         <C>
Outstanding at beginning of year........     765,350   $   11.56      744,349   $   10.85      519,637   $    9.45
  Granted...............................     275,500       24.27      127,001       14.48      318,500       12.50
  Exercised.............................    (418,012)      10.04      (77,500)       8.62      (74,713)       7.96
  Expired...............................      --          --           --          --             (375)      12.25
  Forfeited.............................      (1,666)      14.25      (28,500)      13.84      (18,700)      11.81
                                          ----------               ----------               ----------
Outstanding at end of year..............     621,172   $   18.22      765,350   $   11.56      744,349   $   10.85
                                          ----------               ----------               ----------
                                          ----------               ----------               ----------
 
Options exercisable at end of year......     316,339   $   14.40      504,599   $   10.63      383,349   $   10.16
 
Weighted average fair value of options
 granted during the year................       $5.71                    $5.77                    $6.18
</TABLE>
 
    The fair value of each option grant was estimated on the date of grant using
the Black-Scholes option-pricing model with the following assumptions:
 
<TABLE>
<CAPTION>
                                                          YEAR ENDED DECEMBER 31,
                                                      -------------------------------
                                                        1996       1995       1994
                                                      ---------  ---------  ---------
<S>                                                   <C>        <C>        <C>
Risk free interest rate.............................       5.80%      7.70%      5.15%
Dividend yield......................................       0.80%      0.40%    --
Expected lives......................................    4 years    4 years    4 years
Volatility..........................................      22.00%     39.00%     58.00%
</TABLE>
 
    The following table summarizes information about stock options outstanding
at December 31, 1996:
 
<TABLE>
<CAPTION>
                                               OPTIONS OUTSTANDING
                                       ------------------------------------   OPTIONS EXERCISABLE
                                                    WEIGHTED                 ----------------------
                                                    AVERAGE      WEIGHTED                WEIGHTED
                                                   REMAINING      AVERAGE                 AVERAGE
                                                  CONTRACTUAL    EXERCISE                EXERCISE
      RANGES OF EXERCISE PRICES         SHARES        LIFE         PRICE      SHARES       PRICE
-------------------------------------  ---------  ------------  -----------  ---------  -----------
<S>                                    <C>        <C>           <C>          <C>        <C>
             $2.625-5.75                  41,850    4.4 years    $    4.21      41,850   $    4.21
            12.50-18.125                 271,112    6.6 years        13.60     218,279       13.41
            19.375-28.50                 308,210    8.2 years        24.18      56,210       25.81
                                       ---------                             ---------
            $2.625-28.50                 621,172    7.2 years    $   18.22     316,339   $   14.40
                                       ---------                             ---------
                                       ---------                             ---------
</TABLE>
 
30
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
 
    At December 31, 1996, the Company has three stock options plans, which are
described above. The Company applied Accounting Principles Board (APB) Opinion
25 and related interpretations in accounting for these plans. Accordingly, no
compensation costs have been recognized for these plans. Had compensation costs
for the Company's stock option plans been determined based on the fair value at
the grant date for options granted under these plans consistent with the method
of SFAS 123-- Accounting for Stock-Based Compensation, the Company's net income
and earnings per share would have been reduced to the pro forma amounts
indicated below:
 
<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                           ------------------------------
                                                                1996            1995
                                                           --------------  --------------
<S>                                        <C>             <C>             <C>
Net Income                                 As reported     $   19,004,000  $   33,989,000
                                           Pro forma           18,581,000      33,651,000
 
Primary earnings per share                 As reported     $         2.11  $         3.48
                                           Pro forma                 2.06            3.45
 
Fully diluted earnings per share           As reported     $         2.11  $         3.45
                                           Pro forma                 2.06            3.42
</TABLE>
 
    Under provisions of SFAS 123, the above pro forma disclosures are not
representative of the effects on reported net income of options issued during
the financial reporting phase in period as options vest over a two year period
from date of issuance and have, in some instances, been issued on several
occasions during each year.
 
    On February 15, 1991, the Company declared a dividend distribution of one
right ("Right") to purchase an additional share of the Company's Common Stock
for $50 on each share of Common Stock outstanding. The Rights become exercisable
10 days after a person or group acquires, or tenders for, 20% or more of the
Company's Common Stock. The Company is entitled to redeem the Rights at $.01 per
Right at any time until 10 days after any person or group has acquired 20% of
the Common Shares. If a person or group acquires 20% or more of the Company's
Common Stock (other than pursuant to an acquisition from the Company or pursuant
to a tender offer deemed fair by the Board of Directors), then each Right, other
than Rights held by the acquiring person or group, entitles the holder to
purchase for $50 that number of shares of the Company's Common Stock having a
current market value of $100. If a person or group acquires 20% or more of the
Company's Common Stock and prior to the person or group acquiring 50% of such
outstanding stock, the Company may convert each outstanding Right, other than
the Rights held by the acquiring person or group, into one new share of the
Company's Common Stock. If a person or group acquiring more than 20% of the
Company's Common Stock merges with the Company or engages in certain other
transactions with the Company, each Right, other than Rights held by the
acquiring person or group, entitles the holder to purchase shares of common
stock of the acquiring person or group having a current market value of $100 for
$50. The Rights attach to all of the Company's Common Stock outstanding as of
February 15, 1991, or subsequently issued, and have a term of 10 years. The
Rights also expire upon a merger or acquisition of the Company undertaken with
the consent of the Company's Board of Directors.
 
9.  RETIREMENT, PENSION AND POSTRETIREMENT HEALTH PLANS:
 
    The Company sponsors several defined benefit pension plans which cover
certain union and office employees. Benefits under these plans generally are
based on the employee's years of service and compensation during the years
immediately preceding retirement. The Company's general funding policy is to
contribute amounts deductible for Federal income tax purposes.
 
    Effective January 1, 1994, the Company instituted an unfunded deferred
compensation defined benefit pension plan called the Executive Retirement Plan.
The noncontributory plan is designed to
 
                                                                              31
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
provide supplemental retirement benefits to certain executive officers of the
Company as determined by the Board of Directors. Retirement benefits will be
reduced by benefits received under the Target Benefit Plan described below.
 
    Net periodic pension costs as they relate to defined benefit plans for
continuing operations were as follows:
 
<TABLE>
<CAPTION>
                                                           YEAR ENDED DECEMBER 31,
                                                ----------------------------------------------
                                                     1996            1995            1994
                                                --------------  --------------  --------------
<S>                                             <C>             <C>             <C>
Service cost..................................  $      658,000  $      673,000  $      652,000
Interest cost.................................       2,438,000       2,284,000       2,260,000
Actual loss (gain) on plan assets.............      (2,787,000)     (7,989,000)        327,000
Net amortization and deferral.................         316,000       6,038,000      (2,422,000)
Curtailment (income)..........................        --               (64,000)       --
                                                --------------  --------------  --------------
Net periodic pension cost.....................  $      625,000  $      942,000  $      817,000
                                                --------------  --------------  --------------
                                                --------------  --------------  --------------
</TABLE>
 
    Although the actual return on plan assets is shown, the expected long-term
rate of return used in determining the net periodic pension cost in all years
was 7.5%. The difference between the actual return and the expected return is
included in the "Net amortization and deferral" in the above table. The
actuarial present value of benefits was determined using a discount rate of
7.75% in 1996, 7% in 1995 and 7.25% in 1994. The rate of compensation increase
used to measure the projected benefit obligation in two plans was 5%. All other
plans are based on current compensation levels.
 
    The following table sets forth the funded status of the Company's defined
benefit pension plans:
 
<TABLE>
<CAPTION>
                                                                        DECEMBER 31,
                                            --------------------------------------------------------------------
                                                          1996                               1995
                                            ---------------------------------  ---------------------------------
                                             ASSETS EXCEED     ACCUMULATED      ASSETS EXCEED     ACCUMULATED
                                              ACCUMULATED    BENEFITS EXCEED     ACCUMULATED    BENEFITS EXCEED
                                               BENEFITS           ASSETS          BENEFITS           ASSETS
                                            ---------------  ----------------  ---------------  ----------------
<S>                                         <C>              <C>               <C>              <C>
Plan assets at fair value.................  $    41,270,000   $     --         $    36,455,000   $     --
                                            ---------------  ----------------  ---------------  ----------------
Actuarial present value of benefit
 obligations:
  Vested benefits.........................  $    28,981,000   $      843,000   $    28,970,000   $      604,000
  Nonvested benefits......................        1,456,000         --               1,555,000           51,000
                                            ---------------  ----------------  ---------------  ----------------
Accumulated benefit obligation............  $    30,437,000   $      843,000   $    30,525,000   $      655,000
Effect of projected future compensation
 increases................................        1,750,000          382,000         2,326,000          481,000
                                            ---------------  ----------------  ---------------  ----------------
Projected benefit obligation..............  $    32,187,000   $    1,225,000   $    32,851,000   $    1,136,000
                                            ---------------  ----------------  ---------------  ----------------
Plan assets in excess of (less than)
 projected benefit obligation.............  $     9,083,000   $   (1,225,000)  $     3,604,000   $   (1,136,000)
Unrecorded net (gain) loss from past
 experience different from that assumed
 and effect of changes in assumptions.....      (10,913,000)        (115,000)       (4,651,000)         (52,000)
Unrecorded prior service cost.............          226,000          407,000           249,000          538,000
Unrecognized net (asset) at date of
 initial application......................       (1,427,000)        --              (1,900,000)        --
                                            ---------------  ----------------  ---------------  ----------------
(Accrued) pension costs...................  $    (3,031,000)  $     (933,000)  $    (2,698,000)  $     (650,000)
                                            ---------------  ----------------  ---------------  ----------------
                                            ---------------  ----------------  ---------------  ----------------
</TABLE>
 
32
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
    The plans' assets include common stocks, fixed income securities, short-term
investments and cash. Common stock investments include approximately 164,000 and
314,000 shares of the Company's Common Stock at December 31, 1996 and 1995,
respectively.
 
    The Company also has a defined contribution retirement plan which covers
certain employees. There are no prior service costs associated with this plan.
The Company follows the policy of funding retirement contributions under this
plan as accrued. Contributions to this plan for continuing operations were
$217,000 in 1996, $206,000 in 1995 and $255,000 in 1994.
 
    The Company employees are also eligible to become participants in the Save
Money and Reduce Taxes (SMART) plan. Under terms of the plan, the trustee is
directed by each employee on how to invest the employee's deposit. Investment
alternatives include a money market fund, four mutual funds and a fixed income
fund. As of December 31, 1996 and 1995, assets of the SMART plan include
approximately 483,000 and 524,000 shares, respectively, of the Company's Common
Stock.
 
    The Company has a noncontributory defined contribution plan (the Employee
Stock Plan). All non-union employees not covered by pension plans are covered
under the Employee Stock Plan. Company contributions were $450,000 in 1994. No
contribution was made in 1996 and 1995.
 
    Effective January 1, 1995, the Company instituted a noncontributory defined
contribution retirement plan called the Target Benefit Plan. All employees
covered by the Employee Stock Plan are covered under the Target Benefit Plan.
Under the terms of the Target Benefit Plan, the Company will make an actuarially
determined annual contribution based upon each eligible employee's years of
service and earnings as defined. Employee investment alternatives include a
money market fund, four mutual funds and a fixed income fund. Employees become
vested in the Company contribution after five years of service. Provisions for
the contribution to this plan in 1996 and 1995 were $773,000 and $932,000,
respectively.
 
    The Company provides medical benefits for retirees and their spouses at one
operating division and certain other individuals related to several discontinued
operations. Accruals for such costs are recognized in the financial statements
over the service lives of these employees. Contributions are required of most
retirees for medical coverage. The current obligation was determined by
application of the terms of the related medical plans, including the effects of
established maximums on covered costs, together with relevant actuarial
assumptions and health-care cost trend rates projected at annual rates ranging
ratably from 8.2% for retirees under age 65 (7.4% for retirees age 65 and older)
in 1997 to 5.5% over 25 years. The effect of a 1% annual increase in these
assumed cost trend rates would increase the accumulated postretirement benefit
obligation by approximately $65,000. The annual service costs would not be
materially affected.
 
    The following table provides information on the status of these plans:
 
<TABLE>
<CAPTION>
                                                                                              DECEMBER 31,
                                                                                      ----------------------------
                                                                                           1996           1995
                                                                                      --------------  ------------
<S>                                                                                   <C>             <C>
Accumulated postretirement benefit obligation:
  Retirees and their dependents.....................................................  $     (265,000) $   (287,000)
  Fully eligible active plan participants...........................................         (55,000)      (43,000)
  Active employees not fully eligible...............................................        (447,000)     (464,000)
                                                                                      --------------  ------------
Accumulated postretirement benefit obligation.......................................  $     (767,000) $   (794,000)
Plan assets.........................................................................        --             --
Unrecognized prior service costs....................................................          12,000        13,000
Unamortized net (gain) loss.........................................................        (274,000)     (139,000)
                                                                                      --------------  ------------
(Accrued) postretirement benefit costs..............................................  $   (1,029,000) $   (920,000)
                                                                                      --------------  ------------
                                                                                      --------------  ------------
</TABLE>
 
                                                                              33
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
    Net periodic postretirement benefit costs include the following:
 
<TABLE>
<CAPTION>
                                                                      YEAR ENDED DECEMBER 31,
                                                                  -------------------------------
                                                                    1996       1995       1994
                                                                  ---------  ---------  ---------
<S>                                                               <C>        <C>        <C>
Service cost....................................................  $  37,000  $  33,000  $  31,000
Interest cost...................................................     40,000     56,000     53,000
Amortization of unrecognized net (gain) loss....................     (3,000)   (18,000)    (3,000)
Amortization of prior plan amendment............................      1,000      1,000      1,000
                                                                  ---------  ---------  ---------
Net periodic postretirement benefit cost........................  $  75,000  $  72,000  $  82,000
                                                                  ---------  ---------  ---------
                                                                  ---------  ---------  ---------
</TABLE>
 
    Measurement of the accumulated postretirement benefit obligation was based
on a discount rate of 7.75% in 1996, 7.0% in 1995 and 8.0% in 1994.
 
    During 1995, the Company made provisions totaling $1,543,000 for the
termination/retirement of certain individuals.
 
10.  ENVIRONMENTAL, LEGAL AND CONTINGENT LIABILITIES:
 
  ENVIRONMENTAL MATTERS--
 
    The Company's manufacturing plants generate both hazardous and nonhazardous
wastes, the treatment, storage, transportation and disposal of which are subject
to federal, state and local laws and regulations. The Company believes that its
manufacturing plants are in substantial compliance with the various federal,
state and local laws and regulations, and does not anticipate any material
expenditures to remain in compliance.
 
    Under the Comprehensive Environmental Response Compensation and Liability
Act of 1980, as amended (CERCLA), and other statutes, the United States
Environmental Protection Agency (EPA) and the states have the authority to
impose liability on waste generators, site owners and operators, and others
regardless of fault or the legality of the original disposal activity.
Accordingly, the Company has been named as a potentially responsible party
(PRP), or may otherwise face potential liability for environmental remediation
or cleanup, in connection with the sites described below that are in various
stages of investigation or remediation.
 
    At one site, the Company is one of seven PRP's because of its apparent
absentee ownership of four parcels of land from 1967 to 1969 which may have held
part or all of one or more settling ponds operated by a tenant business. The
Company has already paid $85,000 as its share of a settlement of an EPA demand
for $415,000 in past response costs, and the EPA has sought payment from the
PRP's of an additional $572,000 in response costs. The EPA has ordered the
Company and one other PRP to undertake the design and construction of the
remediation project. All PRP's have agreed to undertake the design and
construction of the remediation project pursuant to a financial participation
agreement. The EPA estimates the present value of the cost to implement its
selected cleanup method to be approximately $1,869,000. The Company has accrued
its estimated share of the remaining cleanup cost which is not considered
significant. The Company has also filed a claim against its insurers.
 
    Pursuant to a consent decree entered into in November 1991 with the U.S.
Department of Justice, the Company has agreed to close and remediate a landfill
leased by the Company and formerly used for the disposal of spent foundry sands.
The Company provided for remediation costs associated with this landfill. During
1995, remedial action required by the consent decree was completed, and the EPA
approved the Remedial Action Report submitted by the Company. The Company's
remaining obligations under the consent decree include periodic inspections,
monitoring and maintenance as needed.
 
    The Company has also been named as a PRP, along with numerous parties, at
various hazardous waste sites undergoing cleanup or investigation for cleanup.
The Company believes that at each of these sites, it has been improperly named
or will be considered to be a "de minimis" party.
 
34
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
    The Company is a defendant in an action where a private party seeks recovery
of costs associated with an environmental cleanup at a site formerly owned by
the Company. At this site, which the Company or one of its subsidiaries owned
from 1968 until 1976, the plaintiff and current owner seeks to recover in excess
of $1,500,000 from the Company and other defendants. The estimated present value
of a remediation plan proposed by the state environmental agency is
approximately $1,900,000. The Company has denied liability and asserted a
counter-claim against plaintiff and cross-claims against the co-defendants.
 
    The Company is in the process of investigating or has determined the need to
perform environmental remediation or clean up at certain manufacturing sites
formerly operated and still owned by the Company. At the sites where the Company
has determined that some remediation or cleanup is required, the Company has
provided for the estimated cost for such remediation or cleanup.
 
    One site, located in Coldwater, Ohio, is under contract to be sold to the
purchaser of the White-New Idea business. That sale is contingent on completion
of an environmental study (now in progress), remediation, if any, determined by
the Company's independent consultant to be necessary, and the issuance of a
covenant not to sue and related no further action letters by the State of Ohio
under the Ohio Voluntary Action Program. Following the completion of the sale of
the White-New Idea business in 1993, an independent consultant retained by the
Company indicated cleanup costs at the site could range from $500,000 to
$5,300,000. The Company provided in 1994 and 1993 for amounts equal to the lower
value of this range. The Company is discussing financial contribution with the
prior owner of the facility for any cleanup costs as a significant portion of
the environmental conditions under review existed prior to the Company's
ownership of the facility.
 
    During 1996, 1995 and 1994, the Company recorded provisions (credits) of
approximately $(418,000), $921,000 and $1,383,000, respectively, toward various
environmental matters discussed above. At December 31, 1996, the Company has
accruals, including those discussed above, of $2,020,000 for the estimated cost
to resolve its potential liability with the above and other, less significant,
matters. Additional liabilities are possible and the ultimate outcome of these
matters may have an effect on the financial position or results of operations in
a future period. However, the Company believes that the above accruals are
adequate for the resolution of known environmental matters and the outcome of
these matters is not expected to have a material adverse effect on the Company's
financial position or its ongoing results of operations.
 
  OTHER--
 
    In connection with the sale of the business and assets of the Littell
division in 1991, the Company entered into a "License Agreement" pursuant to
which the Company licensed certain technology to the purchaser for which the
purchaser agreed to pay royalties totaling $8,063,000 plus interest, in minimum
quarterly installments of $312,500 commencing in November 1992, with a final
lump sum payment ($7,342,000) due May 22, 1996. The purchaser's payment
obligation is secured by the technology license and is guaranteed by the
purchaser's parent. The Company initially recorded this agreement as a long-term
note receivable. In 1995, however, the Company established a reserve of
$7,699,000 (reduced to $7,165,000 at December 31, 1996) against the receivable,
due to published adverse financial information about the purchaser and its
parent which raised serious concerns about the collectability of the receivable.
 
    Through the end of the third quarter of 1994, the Company received the
required minimum quarterly payments, usually 30 days after the due date. During
the fourth quarter of 1994, the purchaser withheld payment of the minimum
quarterly payment beyond 30 days and asserted that the Company had violated
certain non-compete and non-referral covenants contained in the license
agreement. On March 10, 1995, the purchaser filed an action in the Circuit Court
of Cook County, Illinois, seeking a reduction in royalties of approximately
$8,000,000 and unspecified damages for
 
                                                                              35
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
alleged breach of contract. At December 31, 1996, the amounts due the Company
under this agreement is approximately $8,415,000, plus interest accruing from
May 22, 1996 at the contract rate of 10%. During 1995, as noted above, the
Company made provisions against the collectability of this receivable. After
taking into consideration counsel's evaluation of the above facts, the Company
is of the opinion that the outcome of this action would not have a significant
adverse effect on the Company's consolidated financial statements.
 
    The Company is involved in a number of other legal proceedings as a
defending party, including product liability claims for which additional
liability is reasonably possible. It is the Company's policy to reserve on a
non-discounted basis for all known product liability claims, with necessary
reserves ($3,168,000 and $2,342,000 at December 31, 1996 and 1995, respectively)
determined in consultation with independent insurance companies and legal
counsel. Payment of these claims may take place over the next several years.
Additional liabilities are possible and the ultimate outcome of these matters
may have an effect on the financial position or results of operations in a
future period. However, after consideration of relevant data, including
insurance coverage and accruals, management believes that the eventual outcome
of these matters will not have a material adverse effect on the Company's
financial position or its ongoing results of operations.
 
    At December 31, 1996, the Company was contingently liable for approximately
$2,300,000 primarily relating to outstanding letters of credit.
 
    The Company has entered into agreements with certain executive officers of
the Company which provide that, if within one year following a defined change in
ownership or control of the Company there shall be an involuntary termination of
such executive's employment, or if there shall be defined patterns of activity
during such period by the Company causing such executive to resign, then,
subject to prevailing tax laws and regulations, the executive shall be entitled
to payments equal to approximately three years' compensation.
 
11.  OPERATIONS BY INDUSTRY SEGMENT:
 
    The Company's operations involve a single industry segment as described in
Note 1.
 
    Approximately 16%, 11% and 2% of the Company's net sales from continuing
operations in 1996, 1995 and 1994, respectively, were exported principally to
Canada and Mexico.
 
    Approximately 39%, 29% and 14% of the Company's net sales from continuing
operations in 1996, 1995 and 1994, respectively, were derived from sales to the
three major U.S. automobile manufacturers.
 
36
<PAGE>
           ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
12.  SUMMARY OF OTHER (INCOME) EXPENSE:
 
    Other (income) expense consists of the following:
 
<TABLE>
<CAPTION>
                                                                               YEAR ENDED DECEMBER 31,
                                                                    ----------------------------------------------
                                                                         1996            1995            1994
                                                                    --------------  --------------  --------------
<S>                                                                 <C>             <C>             <C>
Interest income...................................................  $     (112,000) $     (437,000) $   (1,293,000)
Goodwill amortization.............................................         177,000       2,068,000       2,067,000
Loan cost expenses/amortization...................................         333,000         440,000         563,000
Environmental related expenses (credits)..........................        (418,000)      1,110,000         410,000
Net gain on sales of operating and non-operating assets...........        (106,000)     (2,000,000)       (222,000)
Provision (credit) for collectability (recovery) of long-term note
 receivable (Note 10).............................................        (534,000)      7,699,000        --
Idle facility income..............................................        (147,000)        (30,000)       (361,000)
Litigation settlements/insurance provisions.......................       1,512,000      (1,125,000)       --
Other miscellaneous...............................................         (74,000)       (242,000)         34,000
                                                                    --------------  --------------  --------------
                                                                    $      631,000  $    7,483,000  $    1,198,000
                                                                    --------------  --------------  --------------
                                                                    --------------  --------------  --------------
</TABLE>
 
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
       ACCOUNTING AND FINANCIAL DISCLOSURE
 
    None.
 
                                                                              37
<PAGE>
                                    PART III
 
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
 
    See the Company's Proxy Statement incorporated by reference as part of this
Part III, under the caption "Proposal 1: Election of Directors" for information
with respect to the directors. In addition, see the information under the
caption "Executive Officers of the Company" as part of Part I, Item 1 of this
Report which is incorporated herein by reference.
 
ITEM 11.  EXECUTIVE COMPENSATION
 
    See the Company's Proxy Statement incorporated by reference as part of Part
III, Item 10 of this report, under the captions "Management Compensation" for
information with respect to executive compensation.
 
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
    (a)  Security Ownership of Certain Beneficial Owners.
 
    See the Company's Proxy Statement incorporated by reference as part of Part
III, Item 10 of this report, under the captions "Outstanding Stock and Voting
Rights", "Beneficial Owners" and "Principal Stockholders and Management
Ownership" for information with respect to the ownership of certain beneficial
owners of Common Stock of the Company.
 
    (b)  Security Ownership of Management.
 
    See the Company's Proxy Statement incorporated by reference as part of Part
III, Item 10 of this report, under the caption "Principal Stockholders and
Management Ownership" for information with respect to the beneficial ownership
by management of capital stock of the Company.
 
    (c)  Changes in Control.
 
    There is no arrangement known to the Company, the operation of which may at
a subsequent date result in a change in control of the Company.
 
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
    See the Company's Proxy Statement incorporated by reference as part of Part
III, Item 10 of this report, under the captions "Proposal 1: Election of
Directors" and "Management Compensation" for information with respect to certain
relationships and related transactions with management.
 
                                    PART IV
 
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
          FORM 8-K
 
(a) 1.  FINANCIAL STATEMENTS
 
    Included in Part II of this report:
 
       Report of Independent Accountants
       Consolidated statements of income for the years ended December 31, 1996,
       1995 and 1994
       Consolidated balance sheets as of December 31, 1996 and 1995
       Consolidated statements of cash flows for the years ended December 31,
       1996, 1995 and 1994
       Consolidated statements of shareholders' investment for the years ended
       December 31, 1996,
         1995 and 1994
       Notes to consolidated financial statements
 
(a) 2.  FINANCIAL STATEMENT SCHEDULES
 
    Included in Part IV of this report:
 
      Schedule II--Valuation and qualifying accounts for the years ended
      December 31, 1996, 1995 and 1994
 
38
<PAGE>
(a) 3.  EXHIBITS
 
    The following exhibits are incorporated by reference as noted below:
 
<TABLE>
<S>        <C>
3(a)       The Registrant's Restated Certificate of Incorporation, as amended, is
            incorporated by reference to Exhibit 3 of the Company's 1988 Annual Report
            on Form 10-K (File No. 1-5530).
3(b)       The Registrant's Amendments to Restated Certificate of Incorporation is
            incorporated by reference to Exhibit 3 of the Company's 1990 Annual Report
            on Form 10-K (File No. 1-5530).
3(c)       The Registrant's By-Laws of the Company, as amended, are incorporated by
            reference to Exhibit 3 of the Company's 1989 Annual Report on Form 10-K
            (File No. 1-5530).
10(a)      The Registrant's 1977 Incentive Stock Plan is incorporated by reference to
            Exhibit 10(a) of the Company's 1980 Annual Report on Form 10-K (File No.
            1-5530).
10(b)      The Registrant's SMART Plan is incorporated by reference to Exhibit 10(d) of
            the Company's 1984 Annual Report on Form 10-K (File No. 1-5530).
10(c)      The Registrant's 1990 Long-Term Incentive Stock Plan is incorporated by
            reference to Exhibit 10 of the Company's 1991 Annual Report on Form 10-K
            (File No. 1-5530).
10(d)      The Registrant's Agreement for the sale of the assets of the White-New Idea
            Farm Equipment Division of Allied Products Corporation is incorporated by
            reference to Exhibit(c)(2)(a)(i) of the Company's report on Form 8-K dated
            January 14, 1994 (File No. 1-5530).
10(e)      The Registrant's Credit Agreement dated as of March 17, 1994 among Allied
            Products Corporation, the Banks Named Herein and Continental Bank N.A.,
            individually and as agent is incorporated by reference to Exhibit 10(I) of
            the Company's report on Form 8-K dated April 8, 1994 (File No. 1-5530).
10(f)      The Registrant's Allied Products Corporation Executive Retirement Plan dated
            April 4, 1994 is incorporated by reference to Exhibit 10(a) of the
            Company's 1994 Annual Report on Form 10-K (File No. 1-5530).
10(g)      The Registrant's Executive Officer's Agreement in Event of Change in Control
            or Ownership of Allied Products Corporation dated April 1, 1994 is
            incorporated by reference to Exhibit 10(b) of the Company's 1994 Annual
            Report on Form 10-K (File No. 1-5530).
10(h)      The Registrant's Second Amendment to Credit Agreement dated February 15,
            1995 is incorporated by reference to Exhibit 10(c) of the Company's 1994
            Annual Report on Form 10-K (File No. 1-5530).
10(i)      The Registrant's Allied Products Corporation Retirement Plan dated as of
            December 31, 1993 is incorporated by reference to Exhibit 10(d) of the
            Company's 1994 Annual Report on Form 10-K (File No. 1-5530).
10(j)      The Registrant's Bush Hog Segment of the Allied Products Corporation
            Combined Retirement Plan effective December 31, 1993 is incorporated by
            reference to Exhibit 10(e) of the Company's 1994 Annual Report on Form 10-K
            (File No. 1-5530).
10(k)      The Registrant's Verson Segment of the Allied Products Corporation Combined
            Retirement Plan effective December 31, 1993 is incorporated by reference to
            Exhibit 10(f) of the Company's 1994 Annual Report on Form 10-K (File No.
            1-5530).
10(l)      The Registrant's Littell Segment of the Allied Products Corporation Combined
            Retirement Plan effective December 31, 1993 is incorporated by reference to
            Exhibit 10(g) of the Company's 1994 Annual Report on Form 10-K (File No.
            1-5530).
</TABLE>
 
                                                                              39
<PAGE>
    The following exhibits are attached only to the copies of this report filed
with the Securities and Exchange Commission:
 
<TABLE>
<CAPTION>
  EXHIBIT NO.    NAME OF EXHIBIT
---------------  --------------------------------------------------------------------------------------
<C>              <S>
      10A        Material Contract--Amended and Restated Credit Agreement.
      10B        Material Contract--Consent to Stock Repurchases.
      11         Computation of Earnings per Share.
      21         Subsidiaries of the Registrant.
      23         Consent of Independent Accountants.
      24         Power of Attorney.
      27         Financial Data Schedule.
</TABLE>
 
    Other financial statements, schedules and exhibits not included above have
been omitted as inapplicable or because the required information is included in
the consolidated financial statements or notes thereto.
 
(b) REPORTS ON FORM 8-K
 
    No reports on Form 8-K were filed by the Company during the fourth quarter
of the year ended December 31, 1996.
 
ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
 
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
 
<TABLE>
<CAPTION>
                                                       YEAR ENDED DECEMBER 31,
                                            ---------------------------------------------
                                                 1996           1995            1994
<S>                                         <C>             <C>            <C>
-----------------------------------------------------------------------------------------
Allowance for doubtful accounts--
  Current receivables:
    Balance at beginning of year..........  $      948,000  $   1,521,000  $    1,996,000
    Add (deduct)--
      Provision charged to income.........         214,000        451,000         256,000
      Receivables charged off as bad
       debts, net of recoveries...........        (533,000)    (1,024,000)       (731,000)
                                            --------------  -------------  --------------
    Balance at end of year................  $      629,000  $     948,000  $    1,521,000
                                            --------------  -------------  --------------
                                            --------------  -------------  --------------
  Long-term receivables:
    Balance at beginning of year..........  $    7,699,000  $    --        $     --
    Add (deduct)--
      Provision charged to income.........        --            7,699,000        --
      Receivable recoveries...............        (534,000)      --              --
                                            --------------  -------------  --------------
    Balance at end of year................  $    7,165,000  $   7,699,000  $     --
                                            --------------  -------------  --------------
                                            --------------  -------------  --------------
</TABLE>
 
40
<PAGE>
                                   SIGNATURES
 
    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
 
                                      ALLIED PRODUCTS CORPORATION
                                      (Registrant)
 
                                      By:                 /s/ RICHARD A. DREXLER
 
                                         ---------------------------------------
                                                Richard A. Drexler, CHAIRMAN,
                                                PRESIDENT AND CHIEF EXECUTIVE
                                                         OFFICER
March 12, 1997
 
    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
 
<TABLE>
<S>                                        <C>        <C>
                                           *                     /s/ [RICHARD A. DREXLER]
                                                      ----------------------------------------------
                                                        Richard A. Drexler, CHAIRMAN, PRESIDENT AND
                                                             CHIEF EXECUTIVE OFFICER; DIRECTOR
 
                                           *                      /s/ [KENNETH B. LIGHT]
                                                      ----------------------------------------------
                                                        Kenneth B. Light, EXECUTIVE VICE PRESIDENT,
                                                                           CHIEF
                                                      FINANCIAL AND ADMINISTRATIVE OFFICER; DIRECTOR
 
                                           *                       /s/ [ROBERT J. FLECK]
                                                      ----------------------------------------------
                                                      Robert J. Fleck, VICE PRESIDENT--ACCOUNTING AND
                                                                 CHIEF ACCOUNTING OFFICER
March 12, 1997
 
                                           *                        /s/ [LLOYD DREXLER]
                                                      ----------------------------------------------
                                                                      Lloyd Drexler,
                                                                         DIRECTOR
 
                                           *                     /s/ [WILLIAM D. FISCHER]
                                                      ----------------------------------------------
                                                                    William D. Fischer,
                                                                         DIRECTOR
 
                                           *                     /s/ [STANLEY J. GOLDRING]
                                                      ----------------------------------------------
                                                                   Stanley J. Goldring,
                                                                         DIRECTOR
 
                                           *                        /s/ [JOHN E. JONES]
                                                      ----------------------------------------------
                                                                      John E. Jones,
                                                                         DIRECTOR
 
                                           *                        /s/ [JOHN W. PUTH]
                                                      ----------------------------------------------
                                                                       John W. Puth,
                                                                         DIRECTOR
 
                                           *                      /s/ [MITCHELL I. QUAIN]
                                                      ----------------------------------------------
                                                                    Mitchell I. Quain,
                                                                         DIRECTOR
</TABLE>
 
                                                                              41
<PAGE>
<TABLE>
<S>                                        <C>        <C>
                                           *                        /s/ [S. S. SHERMAN]
                                                      ----------------------------------------------
                                                                      S. S. Sherman,
                                                                         DIRECTOR
 
                                           *          By:                      /s/ [DAVID B. CORWINE]
                                                        -------------------------------------------
                                                                     David B. Corwine,
                                                                     ATTORNEY-IN-FACT
</TABLE>
 
42