UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington,
D.C.  20549
___________ FORM 10–Q (Mark One) x
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR
  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31,
2001 OR o
  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 0–13198
___________ MORTON INDUSTRIAL
GROUP, INC.
(Exact name of registrant as specified in its charter)  Georgia(State or other jurisdiction of
  Incorporation or organization)
  38–0811650(IRS Employer
  Identification No.) 1021 W. Birchwood, Morton, Illinois 61550(Address of principal executive offices) (309) 266–7176(Registrant's telephone number, including area code)
___________ Indicate
by check mark whether the registrant: (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  YesxNoo   PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL
STATEMENTS

MORTON INDUSTRIAL GROUP, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
For the Three Months Ended March 31, 2001 and April 1, 2000
(Dollars in thousands, except per share data)
(Unaudited)

Three Months EndedMarch 31, 2001
  April 1, 2000Net
  sales
  $74,404
  73,094Cost
  of sales
  64,827
  62,325Gross profit
  9,577
  10,769Operating
  expenses:Selling expenses
  1,641
  1,499Administrative expenses
  5,340
  4,980Total operating expenses
  6,981
  6,479Operating income
  2,596
  4,290Other
  income (expense):Interest expense
  (2,564)
  (2,591)Other
  2
  12Total other income (expense)
  (2,562)
  (2,579)Earnings before income taxes
  34
  1,711Income
  taxes
  
  660Net earnings
  34
  1,051Accretion
  of discount on preferred shares
  (235)
  (198)Net earnings (loss) available to
  common shareholders
  $(201)
  853Net
  earnings (loss) available to common stockholders per sharebasic
  $(.04)
  0.19Net
  earnings (loss) available to common stockholders per sharediluted
  $(.04)
  0.18Weighted
  average number of common sharesBasic
  4,600,850
  4,504,745Diluted
  4,600,850
  4,655,662See
accompanying notes to condensed consolidated financial statements.

MORTON INDUSTRIAL GROUP, INC.
AND SUBSIDIARIES

Condensed Consolidated Balance
Sheets
March 31, 2001 and December 31, 2000
(Dollars in thousands)



March 31, 2001
  December 31, 2000(Unaudited)AssetsCurrent
  assets:Trade accounts receivable, less allowance
  for doubtful accounts of $390 in 2001              and $1,324 in 2000
  $30,756
  28,198Inventories
  29,420
  29,429Prepaid expenses
  2,859
  2,474Deferred income taxes
  1,650
  1,650Total current assets
  64,685
  61,751Property,
  plant, and equipment, net
  50,820
  51,555Intangible
  assets, at cost, less accumulated amortization
  10,995
  11,186Deferred
  income taxes
  5,398
  5,398Other
  assets
  608
  643$132,506
  130,533Liabilities and
  Stockholders' Equity (Deficit)Current
  liabilities:Outstanding checks in excess of bank
  balance
  $2,911
  2,792Current installments of long-term debt
  10,632
  10,201Accounts payable
  34,792
  30,735Accrued expenses
  5,535
  5,165Total current liabilities
  53,870
  48,893Long-term
  debt, excluding current installments
  75,118
  78,156Other
  liabilities
  701
  280Total liabilities
  129,689
  127,329Redeemable
  preferred stock
  6,512
  6,277Stockholders
  equity (deficit):Class A common stock
  44
  44Class B common stock
  2
  2Additional paid-in capital
  20,883
  20,883Retained deficit
  (24,203)
  (24,002)Accumulated other comprehensive loss
  (421)
  -Total stockholders equity
  (deficit)
  (3,695)
  (3,073)$132,506
  130,533See
accompanying notes to condensed consolidated financial statements.

MORTON INDUSTRIAL GROUP, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2001 and April 1, 2000
(Dollars in thousands)
(Unaudited)

2001
  2000Net
  cash provided by (used in) operating activities
  $3,859
  (1,335)Cash
  flows from investing activities:Capital expenditures
  (1,371)
  (1,402)Net cash used in investing
  activities
  (1,371)
  (1,402)Cash
  flows from financing activities:Net borrowings (repayments) under
  revolving credit facility
  (539)
  4,524Increase in checks issued in excess of
  bank balance
  119
  1,954Principal payments on long-term debt and
  capital leases
  (2,068)
  (3,741)Net cash (used in)
  provided by financing activities
  (2,488)
  2,737Net
  change in cash
  
  Cash
  at beginning of period
  
  Cash
  at end of period
  $
  Supplemental
  disclosures of cash flow information:Cash paid during the year for:Interest
  $2,564
  2,599Income taxes
  $24
  17See
accompanying notes to condensed consolidated financial statements.

MORTON INDUSTRIAL GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders Equity
(Deficit)
For the Three Months Ended March 31, 2001
(Dollars in thousands)
(Unaudited)

Class Acommon stock
  Class Bcommon stock
  Additional
  Retained
  Accumulated
  otherShares
  issued
  Amount
  Shares
  issued
  Amount
  paid-incapital
  earnings(deficit)
  comprehensive
  loss
  TotalBalance,
  December 31, 2000
  4,400,850
  $44
  200,000
  $2
  $20,883
  $(24,002)
  $
  $(3,073)Comprehensive lossNet earnings
  
  
  
  
  
  34
  
  34Other comprehensive income,    loss on derivative instruments
  
  
  
  
  
  
  (337)
  (337)Total comprehensive loss
  
  
  
  
  
  
  
  (303)Transition
  adjustment     resulting from adoption of    SFAS 133
  __
  __
  __
  __
  __
  __
  (84)
  (84)Accretion of discount on     preferred shares
  __
  __
  __
  __
  __
  (235)
  __
  (235)Balance,
  March 31, 2001
  4,400,850
  $44
  200,000
  $2
  $20,883
  $(24,203)
  $(421)
  $(3,695)See accompanying notes to condensed
consolidated financial statements.

MORTON
INDUSTRIAL GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2001 and April 1, 2000 (Unaudited)



(1)  Nature of Business.

The Company, operating through its
subsidiaries, is a contract manufacturer and supplier of high–quality
fabricated sheet metal and plastic components and subassemblies for
construction, agricultural, and industrial original equipment manufacturers
located primarily in the Midwestern and Southeastern United States.

(2)  Interim Financial Data.

The
Condensed Consolidated Financial Statements at March 31, 2001, and April
1, 2000, and for the quarters then ended are unaudited and reflect all
adjustments, consisting of normal recurring accruals which are, in the opinion
of management, necessary for a fair presentation of the financial position,
operating results, and cash flows for the interim periods indicated. The
Company's fiscal quarters end on a Saturday (nearest to a quarter end) except
for the fourth quarter which ends on December 31. For the quarters ended
March 31, 2001, and April 1, 2000, there were 64 and 65 shipping days,
respectively.  Results of operations for
the interim periods are not necessarily indicative of the results of operations
for the full fiscal year. The condensed consolidated financial statements
should be read in connection with the consolidated financial statements and
notes thereto, together with management's discussion and 
analysis of financial condition and results of operations of Morton Industrial
Group, Inc. contained in the Company's Annual Report on Form 10–K
for the year ended December 31, 2000.

Certain amounts presented in prior
years' financial statements have been reclassified to conform to the current
year presentation.

(3)
  The Company's inventory, in thousands
  of dollars, as of March 31, 2001, and December 31, 2000, is summarized
  as follows:

March 31, 2001
  December 31, 2000Raw
  materials, purchased parts and manufactured components
  $12,425
  $12,753Work–in–process
  6,952
  7,121Finished
  goods
  10,043
  9,555$29,420
  $29,429



(4) Earnings Per Share.

The following reflects the
reconciliation of the numerators and denominators of the earnings per share and
the earnings per share assuming dilution computations:

Quarter Ended March 31, 2001
  Quarter Ended April 1, 2000(Loss) (Numerator)
  Shares (Denominator)
  Per Share
  Amount
  Earnings (Numerator)
  Shares (Denominator)
  Per Share
  AmountBasic
  income (loss) available to common shareholders
  $(201,000)
  4,600,850
  $(.04)
  $853,000
  4,504,745
  $.19Effect
  of dilutive securities, stock options
  
  -
  -
  
  150,917
  -Diluted
  income (loss) available to common shareholders
  
  4,600,850
  $(.04)
  
  4,655,662
  $.18

(5) Segment Reporting.

The Company has two reportable
segments, contract metal fabrication and contract plastic fabrication. The
contract metal fabrication segment provides full service fabrication of parts
and sub–assemblies for the construction, agricultural and industrial
equipment industries. The contract plastic fabrication segment provides full–service
vacuum formed and injected–molded parts and sub–assemblies for the
construction, agricultural and industrial equipment industries. The following
segment data is for the quarters ended March 31, 2001 and April 1, 2000:

Contract
  Metal
  Fabrication
  Contract
  Plastic
  Fabrication
  TotalQuarter
  Ended March 31, 2001Revenues
  from external customers
  $41,258
  $33,146
  $74,404Segment
  operating income
  2,286
  310
  2,596Quarter
  Ended April 1, 2000Revenues
  from external customers
  $40,958
  $32,136
  $73,094Segment
  operating income
  3,718
  572
  4,290(6)
Derivative Instruments

The Company adopted Statement of
Financial Accounting Standards No. 133 Accounting for Derivative Instruments
and Hedging Activities (SFAS 133) as amended by SFAS No. 137 and No. 138 on
January 1, 2001.  SFAS 133 requires that
all derivative instruments be recorded on the balance sheet at their fair
value.  Gains or losses resulting from
changes in the values of those derivatives would be accounted for depending on
the use of the derivative and whether it qualifies for hedge accounting.  The Company uses derivative financial
instruments (interest rate swaps) to mitigate its interest rate risk on a
related financial instrument.  SFAS 133
requires that changes in the fair value of derivatives that qualify as cash
flow hedges be recognized in other comprehensive income while the ineffective
portion of the derivatives change in fair value be recognized immediately in
earnings.  SFAS 133 requires that
unrealized gains and losses on that portion of derivatives not qualifying for
hedge accounting be recognized currently in earnings.  The cumulative effect of a change in accounting principle due to
the adoption of SFAS 133 as of January 1, 2001 was $84 and was recorded in
accumulated other comprehensive income as a transition adjustment.  The Company recorded a net loss of $337 in
other comprehensive income for its interest rate swap contracts qualifying for
hedge accounting for the three month period ended March 31, 2001.

ITEM 2. MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and
analysis describes changes in the Company's financial condition since
December 31, 2000. The analysis of results of operations compares the
quarters ended March 31, 2001 and April 1, 2000.

RESULTS OF OPERATIONS

FIRST QUARTER, 2001 VERSUS
FIRST QUARTER, 2000

Our net revenues for the first
quarter, 2001 were $74.4 million compared to $73.1 million for the
first quarter of 2000, an increase of $1.3 million, or 1.8%.  The sales increase resulted from new
projects for major customers that replaced prior projects being phased out.

Our sales to Deere &
Company and Caterpillar Inc., were approximately 59% and 56% of our
revenues for the first quarters, 2001 and 2000, respectively.  Revenues from these customers increased
approximately 8% over the same period in 2000.

Our gross profits for the first
quarter, 2001 decreased by approximately $1.2 million, a decrease of
11.1%, versus the same three months in 2000. The overall gross profit
percentage decreased to 12.9% for the first quarter of 2001 from 14.7% for the
first quarter of 2000. The decrease in gross profit dollars and percentage
resulted primarily from a change in product mix for the comparable quarters.

Our selling and administrative
expenses for the first quarter, 2001 amounted to $7.0 million, or 9.4% of
net sales compared to $6.5 million, or 8.9% of net sales for the second
quarter of 2000.

Our interest expense was
approximately $2.6 million for the first quarter of both 2000 and
2001.  Although our overall debt level
has decreased from a year ago, increases in the average interest rates for the
comparable quarters has offset the benefits associated with the lower debt
levels.

For the first quarter of 2001, we
provided no income taxes on pre–tax income of $34 thousand. For the first
quarter of 2000, we provided $660 thousand of income taxes on pre-tax income of
$1.7 million.  The effective rate was
approximately 38.5%.

LIQUIDITY AND CAPITAL RESOURCES

Our consolidated working capital at
March 31, 2001 was $10.8 million compared to $12.9 million at
December 31, 2000, a decrease in working capital of approximately
$2.1 million.  The decrease relates
primarily to an increase in accounts payable since year end.

We have two separate credit
facilities. The first facility is with Harris Trust and Savings Bank (Harris),
and serves the company's operations other than the operations acquired from
Worthington Custom Plastics, Inc. (Worthington). The second facility, with
General Electric Capital Corporation (GECC), serves the operations acquired
from Worthington during the second quarter, 1999. These facilities are separate
and provide financing for the named operations. The two credit facilities are
separately secured by the assets of the operations they support.

On May 28, 1998, we entered into a
credit agreement with Harris, as Agent. The credit agreement, as last amended
in December, 2000, provides a credit facility with the following
components: (i) a $23 million secured revolving credit facility;
(ii) a $25 million secured term loan that matures in May, 2003; and
(iii) a $30 million secured term loan that matures in May, 2005.  Both term loans fully amortize over their
respective terms with quarterly payments. The interest rates on the loans vary
from 1% to 3.75% above the lender's prime rate. We used the proceeds under the
facility to refinance the then existing indebtedness, to finance the 1998
acquisitions, and for general corporate purposes.

The amount of revolving credit
availability is calculated using a borrowing base of qualified accounts
receivable and inventory.  As of March
31, 2001, we had additional availability of approximately $3.5 million
under the Harris facility. We are paying this lender a fee of .125% per month
based upon the amount of the revolving credit commitment and the balance of the
term loans.

In connection with the Harris
financing, we have two fixed interest rate swap agreements with a commercial
bank (the "counter party"). The first agreement has a notional
principal amount of $7.5 million and a termination date of May 31,
2003. The second agreement has a notional principal amount of $14.3 million
and a termination date of June 30, 2003. The notional principal amount
declines over the term of both agreements based upon a defined amortization
schedule. The counter party has the unilateral right to cancel both agreements
as of June 30, 2001. As described below, these agreements are for the
purpose of limiting the effects of interest rate increases on half of the
Company's floating rate term debt.

Our sources of funds to
meet near term liquidity requirements for the businesses not acquired from
Worthington will be the cash flows from operations, the Harris line of credit,
and management of working capital to reflect current levels of operations. We
believe that these sources will be adequate through the end of the current
fiscal year and beyond.

Our separate financing arrangements
for the operations acquired from Worthington are described below.

On April 15, 1999, we entered
into a financing agreement with GECC. The agreement contains a 4 1⁄2 year secured
revolving credit facility with maximum availability of $24 million and a
$26 million secured term loan with a 4 1⁄2 year term. The amount of
availability is based upon a borrowing base of qualified accounts receivable
and inventory. Both of the facilities bear interest at variable interest rates
based on the prime rate, plus variable margins. We also incur a fee based upon
a certain percentage of the unused revolving credit facility. The term loan
facility amortizes quarterly throughout its term. We must also prepay certain
amounts from the sale of assets, the issuance of new equity capital and from
"excess cash flow", as defined in the agreement.

As of March 31, 2001, we had
additional availability of $1.1 million under the GECC credit facility. We
believe that the agreement with GECC, as amended in March, 2001, will provide
the necessary term and revolving financing, and along with cash flows from
operations, will provide the necessary levels of liquidity for the operations
acquired from Worthington through the end of the current fiscal year and
beyond.

As part of the financing for the
Worthington acquisition, we issued 10,000 shares of redeemable preferred stock,
which we must redeem in April 2004 at $1,000 per share plus any dividends
accrued since April 15, 1999. The $10 million face value preferred stock
was recorded at its fair value of $4.25 million. We are accreting the
discount over a five year period using the effective yield method. Dividends
are payable in kind at the rate of 8% per annum. We believe that certain
provisions of the agreement with Worthington preclude the payment of dividends,
and no dividends have been accrued since December 31, 1999. There are current
legal proceedings related to certain Worthington matters as described in Form
10-K filed with the Securities and Exchange Commission on April 2, 2001.

On November 3, 2000, the
Company entered into an agreement with First Union Securities, Inc.
("FUSI"), under which FUSI will act as the Company's exclusive
financial advisor with respect to possible debt or equity financings or recapitalizations.
A director of the Company is a Managing Director at FUSI.

We incurred $1.4 million of capital
expenditures during the first quarter of 2001, primarily for purchases of
manufacturing equipment.

We estimate that our capital
expenditures in 2001 will total approximately $5.5 million of which
$2.0 million will be for new production equipment and the remaining
$3.5 million will be for normal replacement items.

FORWARD LOOKING STATEMENTS

"Safe Harbor" Statement
Under The Private Securities Litigation Reform Act Of 1995: This Form 10–Q
contains "forward looking statements" within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934, including statements containing the words "anticipates,"
"believes," "intends," "estimates,"
"expects," "projects" and similar words. The forward
looking statements involve known and unknown risks, uncertainties and other
factors that may cause our actual results to be materially different from any
future results expressed or implied by such forward looking statements. Such
factors include, among others, the following: the loss of certain significant
customers; the cyclicality of our construction and agricultural sales; risks
associated with our acquisition strategy; general economic and business
conditions, both nationally and in the markets in which we operate or will
operate; competition; and other factors referenced in the Company's reports and
registration statements filed with the Securities and Exchange Commission. Given
these uncertainties, prospective investors are cautioned not to place undue
reliance on such forward-looking statements. The forward-looking statements
contained herein speak only of the Company's expectation as of the date of this
annual report. We disclaim any obligations to update any such factors or
publicly announce the result of any revisions to any of the forward looking
statements contained herein to reflect future events or developments.

ITEM 3. QUANTITATIVE AND
QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company is exposed to interest
rate changes primarily as a result of its line of credit and long–term
debt used for maintaining liquidity, funding capital expenditures, and
expanding our operations. The Company's interest rate risk management objective
is to limit the impact of interest rate changes on earnings and cash flow and
to lower overall borrowing costs. To achieve its objectives, the Company has
entered into two separate financing agreements, as described more fully above,
for term loans and revolving credit facilities. The Company has also entered
into two interest rate swap agreements, as required by its Harris financing
arrangements, to limit the effect of increases in the interest rates on half of
its floating rate term debt. Under the swap agreements, which expire
May 31, 2003 to June 30, 2003, a LIBOR–equivalent interest rate
component of the interest rate is limited to 5.875% on half of the Company's
$35.4 million term loans.

The Company does not enter into
interest rate transactions for speculative purposes.

PART
II  OTHER
INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

There
have been no significant changes in the status of the Worthington Industries,
Inc. suit referenced in the Company's Form 10-K for 2000 filed with the
Securities and Exchange Commission on April 2, 2001.

ITEM 5.  OTHER INFORMATION

Effective
April 11, 2001, the Company's ticker symbol on the Nasdaq SmallCap Market was
restored to MGRP. The Company, which had been trading temporarily since October
20, 2000 under MGRPC, has satisfied the net income standard for continued
listing on the Nasdaq SmallCap Market.

ITEM 6. EXHIBITS AND REPORTS ON
FORM 8–K

(A)       Exhibits


11.        The
computation can be determined from this report.


(B)        Reports on Form 8–K.

None

SIGNATURES

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

MORTON
  INDUSTRIAL GROUP, INC.By:
  /s/
  THOMAS D. LAUERMANThomas
  D. LauermanVice
  President of Finance

Dated:
May 15, 2001