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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



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FORM 10-Q/A(Amendment No. 1)

(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 29, 2003
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 0-13198



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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)



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

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

The
aggregate market value of the common stock held by non-affiliates of
the registrant (based upon the last reported sale price on the Nasdaq
Small Cap Market) on the last business day of the registrant's most
recently completed second fiscal quarter was approximately $440,000.

|                                     |  |                   |           | 
|------------------------------------ |  | ----------------- | --------- | 
|                                     |  | Outstanding as of
|                                     |  | April 26, 2002   
|                                     |  |                  
|Class A Common Stock, $.01 par value |  |                   | 4,400,850 | 
|Class B Common Stock, $.01 par value |  |                   | 200,000   | 



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TABLE OF CONTENTS



|                                                         |  |  |  |  |  |  |  | 
|-------------------------------------------------------- |  |  |  |  |  |  |  | 
|Part I  Financial Information                          
|Condensed Consolidated Statements of Operations         
|Condensed Consolidated Balance Sheets                   
|Consolidated Statement of Stockholders Equity (Deficit)
|Condensed Consolidated Statements of Cash Flows         
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS    
|PART II  OTHER INFORMATION                             
|SIGNATURES                                              
|Certification                                           
|Certification                                           
|906 Certification                                       
|906 Certification                                       



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##### Table of Contents



MORTON INDUSTRIAL GROUP, INC.
List of Items Amended




Part I  Financial Information

| |  |         |  |                                                                                                     
| |  | ------- |  | ----------------------------------------------------------------------------------------------------
| |  | Item 1. |  | Financial Statements                                                                                
| |  |         |  |                                                                                                     
| |  |         |  | Condensed Consolidated Statements of Operations
Notes to Condensed Consolidated Financial Statements

TEXT OF AMENDMENT

Explanatory Note:

In July 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible
Assets. SFAS 142 requires that goodwill and intangible assets with indefinite
useful lives no longer be amortized, but instead tested for impairment at least
annually in accordance with the provisions of SFAS 142. SFAS 142 requires that
intangible assets with estimable useful lives be amortized over their
respective estimated useful lives to their estimated residual values, and
reviewed for impairment at least annually.

The Company adopted SFAS 142 effective January 1, 2002, and for the six
month period ending on June 29, 2002, the Company completed its
impairment evaluation and recognized the impairment of goodwill at one of its reporting
units as a cumulative effect of change in accounting principle of $8.1 million
on Form 10-Q filed with the SEC on November 5, 2002.

Since the date of adoption was January 1, 2002, that cumulative effect of
change in accounting principle should have been included in the Condensed
Consolidated Statement of Operations for the quarter ended March 30, 2002 as
reported in Form 10-Q for the quarter ended March 29, 2003 as filed with the
SEC on May 13, 2003.

The impact on the quarter ended March 30, 2002 is to increase the
cumulative effect of change in accounting principal by $8.1 million and to
increase the net loss available to common shareholders by $8.1 million.

There is no effect on the results for the quarter ended March 29, 2003,
nor is there any effect on the results for the year ended December 31, 2002 as
reported on Form 10-K filed with the SEC on March 31, 2003.

2



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MORTON INDUSTRIAL GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
For the Three Months Ended March 29, 2003 and March 30, 2002
(Dollars in thousands, except per share data)
(Unaudited)

|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |        |               |        |  
|------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------- | ------------------------------------------------------------------------------------------------ | ----- | ------------------ | ----- | -------------- | ------ | ------------- | ------ | -
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       | Three Months Ended
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                   
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       | March 29, 2003     |       | March 30, 2002
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |               
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |        | (as restated)
|Net sales                                                                             |                                                                                                                   | $                                                     | 32,380                                                                                           |       |                    |       | 29,177         |       
|Cost of sales                                                                         |                                                                                                                   |                                                       | 27,789                                                                                           |       |                    |       | 25,060         |       
|                                                                                      |                                                                                                                   |                                                       | Gross profit                                                                                     |       |                    | 4,591 |                |        |               | 4,117  |  
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|Operating expenses:                                                                   |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|                                                                                      | Selling expenses                                                                                                  |                                                       |                                                                                                  | 701   |                    |       |                | 706    |              
|                                                                                      | Administrative expenses                                                                                           |                                                       |                                                                                                  | 2,607 |                    |       |                | 2,251  |              
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|                                                                                      |                                                                                                                   |                                                       | Total operating expenses                                                                         |       |                    | 3,308 |                |        |               | 2,957  |  
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|                                                                                      |                                                                                                                   |                                                       | Operating income                                                                                 |       |                    | 1,283 |                |        |               | 1,160  |  
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|Other income (expense):                                                               |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|                                                                                      | Interest expense                                                                                                  |                                                       |                                                                                                  | (933  | )                  |       |                | (1,213 | )            
|                                                                                      | Other                                                                                                             |                                                       |                                                                                                  | 166   |                    |       |                | 237    |              
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|                                                                                      |                                                                                                                   |                                                       | Total other income (expense)                                                                     |       |                    | (767  | )              |        |               | (976   | )
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|                                                                                      |                                                                                                                   |                                                       | Earnings before income taxes, discontinued operations and
cumulative effect of accounting change |       |                    | 516   |                |        |               | 184    |  
|Income taxes                                                                          |                                                                                                                   |                                                       | 200                                                                                              |       |                    |       |               |       
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|                                                                                      |                                                                                                                   |                                                       | Earnings before discontinued operations and cumulative effect of
accounting change               |       |                    | 316   |                |        |               | 184    |  
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|Discontinued operations (note 3):                                                     |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|                                                                                      | Net earnings (loss) from operations of discontinued plastics operations                                           |                                                       |                                                                                                  | 225   |                    |       |                | (526   | )            
|                                                                                      | Income taxes                                                                                                      |                                                       |                                                                                                  | 90    |                    |       |                |       |              
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|                                                                                      |                                                                                                                   |                                                       | 135                                                                                              |       |                    |       | (526           | )     
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|                                                                                      |                                                                                                                   |                                                       | Net earnings (loss) before cumulative effect of accounting change                                |       |                    | 451   |                |        |               | (342   | )
|Cumulative effect of accounting change, net of tax of $0                              |                                                                                                                   |                                                       |                                                                                                 |       |                    |       | (8,118         | )     
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|                                                                                      |                                                                                                                   |                                                       | Net earnings (loss)                                                                              |       |                    | 451   |                |        |               | (8,460 | )
|Accretion of discount on preferred shares                                             |                                                                                                                   |                                                       | (332                                                                                             | )     |                    |       | (279           | )     
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|                                                                                      |                                                                                                                   |                                                       | Net earnings (loss) available to common shareholders                                             |       | $                  | 119   |                |        |               | (8,739 | )
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|Earnings
(loss) available to common shareholders per common share
basic and diluted: |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|                                                                                      | Earnings (loss) from continuing operations                                                                        |                                                       | $                                                                                                | 0.00  |                    |       |                | (0.02  | )            
|                                                                                      | Earnings (loss) from discontinued operations                                                                      |                                                       |                                                                                                  | 0.03  |                    |       |                | (0.12  | )            
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|                                                                                      | Net earnings (loss) available to common shareholders before cumulative
effect of a change in accounting principle |                                                       |                                                                                                  | 0.03  |                    |       |                | (0.14  | )            
|                                                                                      |                                                                                                                   | Cumulative effect of a change in accounting principle |                                                                                                  |       |                   |       |                |        | (1.76         | )     
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       
|                                                                                      | Net earnings (loss) available to common shareholders                                                              |                                                       | $                                                                                                | 0.03  |                    |       |                | (1.90  | )            
|                                                                                      |                                                                                                                   |                                                       |                                                                                                  |       |                    |       |                |       

See accompanying notes to condensed consolidated financial statements.

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MORTON INDUSTRIAL GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
March 29, 2003 and December 31, 2002
(Dollars in thousands)
(Unaudited)

|                                                          |                                                                                                 |                                                |                                      |         |   |           |        |              |   |         |   | 
|--------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ---------------------------------------------- | ------------------------------------ | ------- | - | --------- | ------ | ------------ | - | ------- | - | 
|                                                          |                                                                                                 |                                                |                                      |         |   | March 29, |        | December 31,
|                                                          |                                                                                                 |                                                |                                      |         |   | 2003      |        | 2002        
|                                                          |                                                                                                 |                                                |                                      |         |   |           |        |             
|                                                          |                                                                                                 |                                                |                                      | Assets  |   |           |        |              |   |         |   | 
|Current assets:                                           |                                                                                                 |                                                |                                      |         |   |           |        |             
|                                                          | Trade accounts receivable, less allowance for
doubtful accounts of $132 in 2003 and $92 in 2002 |                                                | $                                    | 7,612   |   |           |        | 5,251        |  
|                                                          | Inventories                                                                                     |                                                |                                      | 12,138  |   |           |        | 14,322       |  
|                                                          | Prepaid expenses and other current assets                                                       |                                                |                                      | 1,902   |   |           |        | 1,179        |  
|                                                          | Deferred income taxes                                                                           |                                                |                                      | 110     |   |           |        | 400          |  
|                                                          | Assets held for sale                                                                            |                                                |                                      | 8,766   |   |           |        | 8,990        |  
|                                                          |                                                                                                 |                                                |                                      |         |   |           |        |              |  
|                                                          |                                                                                                 |                                                | Total current assets                 |         |   | 30,528    |        |              |   | 30,142  |  
|                                                          |                                                                                                 |                                                |                                      |         |   |           |        |              |  
|Property, plant, and equipment, net                       |                                                                                                 |                                                | 22,996                               |         |   |           | 23,364 |             
|Intangible assets, at cost, less accumulated amortization |                                                                                                 |                                                | 1,360                                |         |   |           | 1,336  |             
|Deferred income taxes                                     |                                                                                                 |                                                | 1,351                                |         |   |           | 1,351  |             
|Other assets                                              |                                                                                                 |                                                | 613                                  |         |   |           | 660    |             
|                                                          |                                                                                                 |                                                |                                      |         |   |           |        |              |  
|                                                          |                                                                                                 | $                                              | 56,848                               |         |   |           | 56,853 |             
|                                                          |                                                                                                 |                                                |                                      |         |   |           |        |              |  
|                                                          |                                                                                                 | Liabilities and Stockholders Equity (Deficit) |                                      |         |   |           |        |              |   |        
|Current liabilities:                                      |                                                                                                 |                                                |                                      |         |   |           |        |             
|                                                          | Outstanding checks in excess of bank balance                                                    |                                                | $                                    | 2,645   |   |           |        | 1,289        |  
|                                                          | Current installments of long-term debt                                                          |                                                |                                      | 5,439   |   |           |        | 5,331        |  
|                                                          | Accounts payable                                                                                |                                                |                                      | 12,189  |   |           |        | 14,731       |  
|                                                          | Accrued expenses                                                                                |                                                |                                      | 6,449   |   |           |        | 4,831        |  
|                                                          | Liabilities held for sale                                                                       |                                                |                                      | 6,353   |   |           |        | 6,254        |  
|                                                          |                                                                                                 |                                                |                                      |         |   |           |        |              |  
|                                                          |                                                                                                 |                                                | Total current liabilities            |         |   | 33,075    |        |              |   | 32,436  |  
|Long-term debt, excluding current installments            |                                                                                                 |                                                | 38,647                               |         |   |           | 39,771 |             
|Other liabilities                                         |                                                                                                 |                                                | 291                                  |         |   |           | 262    |             
|                                                          |                                                                                                 |                                                |                                      |         |   |           |        |              |  
|                                                          |                                                                                                 |                                                | Total liabilities                    |         |   | 72,013    |        |              |   | 72,469  |  
|                                                          |                                                                                                 |                                                |                                      |         |   |           |        |              |  
|Redeemable preferred stock                                |                                                                                                 |                                                | 8,940                                |         |   |           | 8,608  |             
|                                                          |                                                                                                 |                                                |                                      |         |   |           |        |              |  
|Stockholders equity (deficit):                           |                                                                                                 |                                                |                                      |         |   |           |        |             
|                                                          | Class A common stock                                                                            |                                                |                                      | 45      |   |           |        | 45           |  
|                                                          | Class B common stock                                                                            |                                                |                                      | 2       |   |           |        | 2            |  
|                                                          | Additional paid-in capital                                                                      |                                                |                                      | 20,895  |   |           |        | 20,895       |  
|                                                          | Retained deficit                                                                                |                                                |                                      | (45,047 | ) |           |        | (45,166      | )
|                                                          |                                                                                                 |                                                |                                      |         |   |           |        |              |  
|                                                          |                                                                                                 |                                                | Total stockholders equity (deficit) |         |   | (24,105   | )      |              |   | (24,224 | )
|                                                          |                                                                                                 |                                                |                                      |         |   |           |        |              |  
|                                                          |                                                                                                 | $                                              | 56,848                               |         |   |           | 56,853 |             
|                                                          |                                                                                                 |                                                |                                      |         |   |           |        |              |  

See accompanying notes to condensed consolidated financial statements.

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MORTON INDUSTRIAL GROUP, INC. AND SUBSIDIARIES
Consolidated Statement of Stockholders Equity (Deficit)
For the Three Months Ended March 29, 2003
(Dollars in thousands)
(Unaudited)

|                           |                                           |  |              |   |              |   |            |   |          |  |         |   |           |   |         |   |          |   |        |   |  |   |         |      |   |   |         |      |  
|-------------------------- | ----------------------------------------- |  | ------------ | - | ------------ | - | ---------- | - | -------- |  | ------- | - | --------- | - | ------- | - | -------- | - | ------ | - |  | - | ------- | ---- | - | - | ------- | ---- | -
|                           |                                           |  | Class A      |   | Class B      |   |            |   |          |  |         |   |           |   |         |   |         
|                           |                                           |  | common stock |   | common stock |   |            |   |          |  |         |   |           |   |         |   |         
|                           |                                           |  |              |   |              |   | Additional |   | Retained |  |         |   |          
|                           |                                           |  | Shares       |   |              |   |            |   | Shares   |  |         |   |           |   | paid-in |   | earnings |   |        |   | 
|                           |                                           |  | issued       |   | Amount       |   | issued     |   | Amount   |  | capital |   | (deficit) |   | Total  
|                           |                                           |  |              |   |              |   |            |   |          |  |         |   |           |   |        
|Balance, December 31, 2002 |                                           |  | 4,460,547    |   |              | $ | 45         |   |          |  | 200,000 |   |           | $ | 2       |   |          | $ | 20,895 |   |  | $ | (45,166 | )    |   | $ | (24,224 | )   
|                           | Net earnings                              |  |              |  |              |   |            |  |          |  |         |  |           |   |         |  |          |   |        |  |  |   |         | 451  |   |   |         | 451  |  
|                           | Accretion of discount
on preferred shares |  |              |  |              |   |            |  |          |  |         |  |           |   |         |  |          |   |        |  |  |   |         | (332 | ) |   |         | (332 | )
|                           |                                           |  |              |   |              |   |            |   |          |  |         |   |           |   |         |   |          |   |        |   |  |   |         |      |   |   |         |     
|Balance, March 29, 2003    |                                           |  | 4,460,547    |   |              | $ | 45         |   |          |  | 200,000 |   |           | $ | 2       |   |          | $ | 20,895 |   |  | $ | (45,047 | )    |   | $ | (24,105 | )   
|                           |                                           |  |              |   |              |   |            |   |          |  |         |   |           |   |         |   |          |   |        |   |  |   |         |      |   |   |         |     

See accompanying notes to condensed consolidated financial statements.

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MORTON INDUSTRIAL GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 29, 2003 and March 30, 2002
(Dollars in thousands)
(Unaudited)

|                                                    |                                                                     |              |                                           |       |                    |      |                |        |       |      |  
|--------------------------------------------------- | ------------------------------------------------------------------- | ------------ | ----------------------------------------- | ----- | ------------------ | ---- | -------------- | ------ | ----- | ---- | -
|                                                    |                                                                     |              |                                           |       | Three Months Ended
|                                                    |                                                                     |              |                                           |       |                   
|                                                    |                                                                     |              |                                           |       | March 29, 2003     |      | March 30, 2002
|                                                    |                                                                     |              |                                           |       |                    |      |               
|Net cash provided by (used in) operating activities |                                                                     | $            | 929                                       |       |                    |      | (177           | )     
|                                                    |                                                                     |              |                                           |       |                    |      |                |       
|Cash flows from investing activities:               |                                                                     |              |                                           |       |                    |      |                |       
|                                                    | Proceeds from sale of machinery and equipment                       |              |                                           |      |                    |      |                | 65     |      
|                                                    | Capital expenditures                                                |              |                                           | (969  | )                  |      |                | (756   | )    
|                                                    |                                                                     |              |                                           |       |                    |      |                |       
|                                                    |                                                                     |              | Net cash used in investing activities     |       |                    | (969 | )              |        |       | (691 | )
|                                                    |                                                                     |              |                                           |       |                    |      |                |       
|Cash flows from financing activities:               |                                                                     |              |                                           |       |                    |      |                |       
|                                                    | Net repayments under revolving credit facility                      |              |                                           | (500  | )                  |      |                | (2,641 | )    
|                                                    | Increase (decrease) in outstanding checks in excess of bank balance |              |                                           | 1,356 |                    |      |                | (1,512 | )    
|                                                    | Proceeds from issuance of long-term debt                            |              |                                           |      |                    |      |                | 6,003  |      
|                                                    | Increase in financing fees                                          |              |                                           | (300  | )                  |      |                | (691   | )    
|                                                    | Principal payments on long-term debt and capital leases             |              |                                           | (516  | )                  |      |                | (291   | )    
|                                                    |                                                                     |              |                                           |       |                    |      |                |       
|                                                    |                                                                     |              | Net cash provided by financing activities |       |                    | 40   |                |        |       | 868  |  
|                                                    |                                                                     |              |                                           |       |                    |      |                |       
|Net change in cash                                  |                                                                     |              |                                          |       |                    |      |               |       
|Cash at beginning of period                         |                                                                     |              |                                          |       |                    |      |               |       
|Cash at end of period                               |                                                                     | $            |                                          |       |                    |      |               |       
|                                                    |                                                                     |              |                                           |       |                    |      |                |       
|Supplemental disclosures of cash flow information:  |                                                                     |              |                                           |       |                    |      |                |       
|                                                    | Cash paid during the period for:                                    |              |                                           |       |                    |      |                |        |      
|                                                    |                                                                     | Interest     |                                           | $     | 525                |      |                |        | 1,393 |     
|                                                    |                                                                     |              |                                           |       |                    |      |                |       
|                                                    |                                                                     | Income taxes |                                           | $     |                   |      |                |        |      |     
|                                                    |                                                                     |              |                                           |       |                    |      |                |       

See accompanying notes to condensed consolidated financial statements.

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MORTON INDUSTRIAL GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 29, 2003 and March 30, 2002
(Unaudited)

(1) Nature of Business

Through our operating subsidiaries, we are a contract manufacturer and
supplier of high-quality fabricated sheet metal components and subassemblies
for industrial, construction and agricultural original equipment manufacturers
located primarily in the Midwestern and Southeastern United States.

(2) Interim Financial Data

The Condensed Consolidated Financial Statements at March 29, 2003, and for
the three months ended March 29, 2003 and March 30, 2002, are unaudited and
reflect all adjustments, consisting of normal recurring accruals and other
adjustments which, in the opinion of our management, are necessary for a fair
presentation of the financial position, operating results, and cash flows for
the interim periods indicated. Our fiscal quarters end on a Saturday (nearest
to a quarter end) except for the fourth quarter which ends on December 31. For
the quarter ended March 29, 2003, there were 62 shipping days, and for the
quarter ended March 30, 2002, there were 63 shipping days. Results of
operations for the interim periods are not necessarily indicative of the
results of operations for the full fiscal year. You should read the condensed
consolidated financial statements 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, 2002, as filed on March 31, 2003.

(3) Restatement of Financial Statements

In July 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible
Assets. SFAS 142 requires that goodwill and intangible assets with indefinite
useful lives no longer be amortized, but instead tested for impairment at least
annually in accordance with the provisions of SFAS 142. SFAS 142 requires that
intangible assets with estimable useful lives be amortized over their
respective estimated useful lives to their estimated residual values, and
reviewed for impairment at least annually.

The Company adopted SFAS 142 effective January 1, 2002, and for the six
month period ending on June 29, 2002, the Company completed its
impairment evaluation and recognized the impairment of goodwill at one of its reporting
units as a cumulative effect of change in accounting principle of $8.1 million
on Form 10-Q filed with the SEC on November 5, 2002.

Since the date of adoption was January 1, 2002, that cumulative effect of
change in accounting principle should have been included in the Condensed
Consolidated Statement of Operations for the quarter ended March 30, 2002 as
reported in Form 10-Q for the quarter ended March 29, 2003 as filed with the
SEC on May 13, 2003.

The impact on the quarter ended March 30, 2002 is to increase the
cumulative effect of change in accounting principal by $8.1 million and to
increase the net loss available to common shareholders by $8.1 million.

The condensed consolidated statements of operations for the three months
ended March 30, 2002, and notes thereto in this report on Form 10-Q/A have been
restated to include the effect of the correction of this error.

7



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|                                     |                                                                                 |  |                |       |             |  |   |        |  
|------------------------------------ | ------------------------------------------------------------------------------- |  | -------------- | ----- | ----------- |  | - | ------ | -
|                                     |                                                                                 |  | March 30, 2002 |       | March 30,  
|                                     |                                                                                 |  | as previously  |       | 2002       
|                                     |                                                                                 |  | reported       |       | as restated
|                                     |                                                                                 |  |                |       |            
|Consolidated Statement of Operations |                                                                                 |  |                |       |             |  |   |       
|                                     | Cumulative effect of accounting change                                          |  | $              | 0     |             |  | $ | (8,118 | )
|                                     | Net loss                                                                        |  |                | (342  | )           |  |   | (8,460 | )
|                                     | Accretion of discount on preferred shares                                       |  |                | (279  | )           |  |   | (279   | )
|                                     | Net loss available to common shareholders                                       |  |                | (621  | )           |  |   | (8,739 | )
|                                     | Loss available to common shareholders per share                                |  |                |       |             |  |   |        |  
|                                     | basic and diluted, before
cumulative effect of a change in
accounting principle |  |                | (0.14 | )           |  |   | (0.14  | )
|                                     | Loss available to common shareholders per share                                |  |                |       |             |  |   |        |  
|                                     | basic and diluted from
cumulative effect of a change in
accounting principle    |  |                |      |             |  |   | (1.76  | )
|                                     | Loss available to common shareholders per share                                |  |                |       |             |  |   |        |  
|                                     | basic and diluted                                                               |  |                | (0.14 | )           |  |   | (1.90  | )

8



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(4) Discontinued Operations

The results from discontinued operations for the three months ended March
30, 2002 reflect the results of both Morton Custom Plastics, LLC, which we sold
on December 24, 2002, and Mid-Central Plastics, Inc., which we currently
classify as held for sale. The results from discontinued operations for the
three months ended March 29, 2003 reflect the results of Mid-Central Plastics,
Inc., which is a contract manufacturer of plastics components for industrial,
agricultural and recreational original equipment manufacturers located
primarily in the Midwestern United States.

Amounts held for sale of Mid-Central Plastics, Inc., in thousands of dollars,
as of March 29, 2003 and December 31, 2002 consist of the following:

|                                                      |                           |   |           |       |              |   |       |       | 
|----------------------------------------------------- | ------------------------- | - | --------- | ----- | ------------ | - | ----- | ----- | 
|                                                      |                           |   | March 29, |       | December 31,
|                                                      |                           |   | 2003      |       | 2002        
|                                                      |                           |   |           |       |             
|Accounts receivable, net of allowance of $67 and $134 |                           | $ | 1,100     |       |              | $ | 1,423 |      
|Inventories                                           |                           |   | 2,247     |       |              |   | 2,241 |      
|Other current assets                                  |                           |   | 408       |       |              |   | 427   |      
|Property, plant and equipment, net                    |                           |   | 5,011     |       |              |   | 4,899 |      
|                                                      |                           |   |           |       |              |   |       |      
|                                                      | Assets held for sale      |   | $         | 8,766 |              |   | $     | 8,990 | 
|                                                      |                           |   |           |       |              |   |       |      
|Current liabilities                                   |                           | $ | 2,603     |       |              | $ | 2,504 |      
|Estimated debt required to be repaid upon sale        |                           |   | 3,750     |       |              |   | 3,750 |      
|                                                      |                           |   |           |       |              |   |       |      
|                                                      | Liabilities held for sale |   | $         | 6,353 |              |   | $     | 6,254 | 
|                                                      |                           |   |           |       |              |   |       |      

(5) Inventory

The Companys inventory, in thousands of dollars, as of March 29, 2003,
and December 31, 2002, is summarized as follows:

|                                                           |  |           |        |              |  |   |        | 
|---------------------------------------------------------- |  | --------- | ------ | ------------ |  | - | ------ | 
|                                                           |  | March 29, |        | December 31,
|                                                           |  | 2003      |        | 2002        
|                                                           |  |           |        |             
|Raw materials, purchased parts and manufactured components |  | $         | 2,588  |              |  | $ | 3,645  | 
|Work-in-process                                            |  |           | 6,305  |              |  |   | 6,087  | 
|Finished goods                                             |  |           | 3,245  |              |  |   | 4,590  | 
|                                                           |  |           |        |              |  |   |        | 
|                                                           |  | $         | 12,138 |              |  | $ | 14,322 | 
|                                                           |  |           |        |              |  |   |        | 

(6) 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 29, 2003 |         | Quarter Ended March 30, 2002
|                                                          |  |                              |         |                             
|                                                          |  | Earnings                     |         | Shares                       |  | Per Share |           | (Loss)      |  | Shares        |      | Per Share
|                                                          |  | (Numerator)                  |         | (Denominator)                |  | Amount    |           | (Numerator) |  | (Denominator) |      | Amount   
|                                                          |  |                              |         |                              |  |           |           |             |  |               |      |          
|Basic earnings
(loss) available to
common shareholders    |  | $                            | 119,000 |                              |  |           | 4,660,547 |             |  | $             | 0.03 |           |  | $ | (8,739,000 | ) |  |  | 4,600,850 |  |  | $ | (1.90 | )
|Effect of dilutive
securities, stock
options and
warrants |  |                              |         |                              |  |           | 224,529   |             |  |               |     |           |  |   |            |   |  |  |          |  |  |   |      |  
|                                                          |  |                              |         |                              |  |           |           |             |  |               |      |           |  |   |            |   |  |  |           |  |  |   |       |  
|Diluted earnings
(loss) available to
common shareholders  |  | $                            | 119,000 |                              |  |           | 4,885,076 |             |  | $             | 0.03 |           |  | $ | (8,739,000 | ) |  |  | 4,600,850 |  |  | $ | (1.90 | )
|                                                          |  |                              |         |                              |  |           |           |             |  |               |      |           |  |   |            |   |  |  |           |  |  |   |       |  

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At March 29, 2003 and March 30, 2002, 911,620 and 1,334,615, respectively,
options and warrants were excluded from the computation of diluted earnings per
share due to their anti-dilutive effect.

(7) Segment Reporting

Due to the previously reported sale of Morton Custom Plastics, LLC., and
the anticipated sale of Mid-Central Plastics, Inc., we have only one remaining
segment  the contract metals fabrication segment.

(8) Debt

In February 2002, we entered into a new secured revolving credit facility
with a syndicate of banks led by Harris Trust and Savings Bank, as Agent (the
Harris syndicate). The revolving credit agreement permits us to borrow up to a
maximum of $21.0 million. The agreement requires payment of a quarterly
commitment fee of .50% per annum of the average daily unused portion of the
revolving credit facility. Interest is due monthly and is based on bank prime
plus 1.5% (effective rate of 5.75% at March 29, 2003). Alternatively, we could
select a LIBOR plus 4.0% interest rate. The amount available under the original
provisions of the revolving credit facility was limited to 85% of qualified
accounts receivable, 50% of eligible inventory, plus $2.5 million of other
assets. The revolving credit agreement was originally set to mature on July 1,
2003. As described below, the date has been extended to April 1, 2004. At
March 29, 2003, we had $18.1 million outstanding and $699,000 available under
this credit facility.

In February 2002, we entered into an amended and restated secured term
loan arrangement with the Harris syndicate for a term loan of $32.9 million.
The new Harris syndicate term loan arrangement replaced existing term loans and
did not provide additional availability. The term loan under this financing
arrangement is amortized monthly with principal payments ranging from $235,000
to $500,000 and the balance of $24.9 million due originally on July 1, 2003
(now extended to April 1, 2004). Interest is due monthly and is based on bank
prime plus 1.5% (effective rate of 5.75% at March 29, 2003). Alternatively, we
could select a LIBOR plus 4.0% interest rate.

The February, 2002 Harris syndicate agreement has been amended three
times, most recently on February 28, 2003. Among the key provisions of the
amendments: (i) extension of the maturity date to April 1, 2004; (ii) revisions
in the monthly amortization of principal, with $50,000 payable on February 28,
2003, $100,000 payable on March 31, 2003, $350,000 payable on April 30, 2003,
$500,000 payable each month end from May 31, 2003 through December 31, 2003,
and $250,000 payable each month end thereafter until the April 1, 2004 maturity
date, at which time the term loan balance of $22.2 million will be due. Also,
effective February 28, 2003, the limit of eligible inventory under the
revolving credit facility was increased to 60% and the amount of other assets
eligible became $3.5 million. The Company intends to obtain loans or funding
support from other sources, or extend its existing credit facility, by the
maturity date of the current agreement, but there are no assurances that we
will be successful in our efforts.

In connection with these Harris syndicate loans, we have granted the
lender a first lien on all of our accounts receivable, inventory, equipment and
various other assets. These Harris syndicate debt agreements contain
restrictions on capital expenditures, additional debt or liens, investments,
mergers and acquisitions, asset sales and payments such as dividends or stock
repurchases. No amounts are available for the payment of dividends at March 29,
2003. The agreements also impose various financial covenants, including
financial performance ratios.

Should we sell the Mid-Central Plastics, Inc. operations prior to maturity
of the Harris syndicate loans, a portion of the net cash proceeds from the sale
must be applied against the balance of the revolving line of credit. We
estimate the amount required to be repaid to be $3.75 million, which is
included in liabilities held for sale (Note 3).

(9) Stock Option Plan

We account for our stock option plan in accordance with the provisions of
Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued
to Employees,and related interpretations. As such, we would record
compensation expense on the date of grant only if the current market price of
the underlying stock exceeded the exercise price. We issue all of our options
at the current market price on the date of issuance and, accordingly, we have
not recognized any stock-based employee compensation cost for stock options in
our financial statements.

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The per share weighted-average fair value of stock options granted during
the first quarter of 2003 was $0.13 on the date of grant using the Black
Scholes option-pricing model with the following weighted-average assumptions:
expected dividend yield of 0%, risk-free interest rate of 6%, volatility of
91%, and an expected life of 10 years. We did not grant any stock options
during the first quarter of 2002.

Had we determined compensation cost based on the fair value at the grant
date for our stock options under SFAS No. 123, Accounting for Stock-Based
Compensation, our net earnings, in thousands of dollars, would have been
reduced to the pro forma amounts indicated below:

|                                                                              |                                                                                                         |  |      |      |                   |  |  |        |  
|----------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------- |  | ---- | ---- | ----------------- |  |  | ------ | -
|                                                                              |                                                                                                         |  | 2003 |      | 2002(as
restated)
|                                                                              |                                                                                                         |  |      |      |                  
|Net earnings (loss) available to common shareholders:                         |                                                                                                         |  |      |      |                   |  |  |       
|                                                                              | As reported                                                                                             |  | $    | 119  |                   |  |  | (8,739 | )
|                                                                              | Total stock-based employee compensation
expense determined under fair value based
method for all awards |  |      | (36  | )                 |  |  | (54    | )
|                                                                              |                                                                                                         |  |      |      |                   |  |  |        |  
|                                                                              | Pro forma                                                                                               |  | $    | 83   |                   |  |  | (8,793 | )
|                                                                              |                                                                                                         |  |      |      |                   |  |  |        |  
|Basic and diluted earnings (loss) available to
common shareholders per share: |                                                                                                         |  |      |      |                   |  |  |       
|                                                                              | As reported                                                                                             |  | $    | 0.03 |                   |  |  | (1.90  | )
|                                                                              | Pro forma                                                                                               |  | $    | 0.02 |                   |  |  | (1.91  | )

(10) Goodwill and Transition Adjustment.

The Company adopted Financial Accounting Standards Board Statement No.142,
Goodwill and Other Intangible Assets (SFAS No. 142), effective January 1,
2002, and recorded a non-cash transition charge of $8,118, or a $1.76 loss per
share, for impairment of goodwill during the first quarter, 2002.

The charge has been treated as the cumulative effect of a change in
accounting principle. On January 1, 2002, the fair value of one of the
Companys reporting units (based on a multiple of projected EBITDA, less total
debt) was less than the carrying value of its net assets, including goodwill,
which indicated an impairment of goodwill. Under SFAS No. 142, fair value was
allocated to the assets and liabilities of the reporting unit based on the
purchase accounting method. This calculation indicated that the full amount of
goodwill was impaired at the date of adoption of SFAS No. 142.

(11) Impact of Recently Issued Accounting Standards

In June 2002, FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal Activities.SFAS No. 146 requires companies recognize
costs associated with exit or disposal activities when they are incurred rather
than at the date of a commitment to an exit or disposal plan. SFAS No. 146 is
to be applied prospectively to exit or disposal activities initiated after
December 31, 2002. The adoption of this statement did not have a material
impact on financial position, results of operations, or cash flows.

On December 31, 2002, FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation-Transition and Disclosure.SFAS No. 148 amends SFAS No. 123,
Accounting for Stock-Based Compensation, to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, SFAS No. 148 amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in
both annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The Company does not currently have plans to change to the fair value
method of accounting for stock-based compensation. The disclosure requirements
have been implemented.

In November 2002, FASB issued Interpretation No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others(Interpretation 45), which addresses the
disclosure to be made by a guarantor in its interim and annual financial
statements about its obligations under guarantees. Interpretation 45 also
requires the recognition of a liability by a guarantor at the inception of
certain guarantees.

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Interpretation 45 requires the guarantor to recognize a liability for the
non-contingent component of the guarantee, which is the obligation to stand
ready to perform in the event that specified triggering events or conditions
occur. The initial measurement of this liability is the fair value of the
guarantee at inception. The recognition of the liability is required even if it
is not probable that payments will be required under the guarantee or if the
guarantee was issued with a premium payment or as part of a transaction with
multiple elements. The adoption of Interpretation 45 did not have a material
impact on the financial statements.

In January 2003, FASB issued Interpretation 46, Consolidation of Variable
Interest Entities (Interpretation 46), which addresses consolidation of
certain variable interest entities and is effective January 31, 2003. The
Company does not anticipate that the adoption of Interpretation 46 will have a
material impact on its financial statements.

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, 2002. The analysis of results of
operations compares the quarters ended March 29, 2003 and March 30, 2002. Any
references to December 31, 2002 relate to data found in Form 10-K as filed with
the Securities and Exchange Commission on March 31, 2003.

RESULTS OF OPERATIONS

FIRST QUARTER, 2003 VERSUS FIRST QUARTER, 2002

Our net revenues for the first quarter, 2003 were $32.4 million compared
to $29.2 million for the first quarter of 2002, an increase of $3.2 million, or
11.0%. The sales increase resulted primarily from increased demand by existing
customers due to a combination of production order awards for new parts and
general volume increases on existing parts.

Our sales to Deere & Company and Caterpillar Inc., were approximately 91%
and 92% of our revenues for the first quarters, 2003 and 2002, respectively.
Revenues from these customers increased approximately 10% from the same period
in 2002, due to a combination of production order awards for new parts and
general volume increases on existing parts.

Our gross profits for the first quarter, 2003 increased by approximately
$474,000, an increase of 11.5%, versus the same three months in 2002. The
overall gross profit percentage increased to 14.2% for the first quarter of
2003 from 14.1% for the first quarter of 2002. The increase in gross profit
dollars resulted primarily from increased sales. The modest increase in the
gross profit percentage resulted from various continuing manufacturing cost
savings initiatives, offset by modest continued pricing pressure from
customers.

Our selling and administrative expenses for the first quarter, 2003
amounted to $3.3 million, or 10.2% of net sales compared to $3.0 million, or
10.1% of net sales for the first quarter of 2002. The 11.9% increase in costs
related to the increase in sales.

Our interest expense was $0.9 million for the first quarter of 2003,
compared with $1.2 million for the first quarter of 2002. While interest rates
have remained steady for comparable quarters, a decrease in the overall debt
level has decreased interest expense for the comparable quarters.

Our other income was $166,000 for the first quarter of 2003, compared with
other income of $237,000 for the first quarter of 2002, primarily due to
unrealized gains on the Companys interest rate swap instruments. These swap
agreements expire at the end of June, 2003.

For the first quarter of 2003, we recorded a tax provision of $200,000
(approximately 39%) on pre-tax income of $516,000 from continuing operations,
and a tax provision of $90,000 (40%) on pre-tax income of $225,000 from
discontinued operations. We will utilize net operating losses to the extent of
taxable income, and we have recorded a resulting decrease in the current
deferred tax asset. For the first quarter of 2002, we did not provide a tax
provision on $184 of pre-tax income. The impact on the net operating loss
carryforward was offset by changes in the valuation allowance with no impact on
the net deferred tax assets.

12



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Discontinued operations reflect pre-tax earnings of $225,000 for the first
quarter of 2003 compared to a loss of $526,000 in the first quarter of 2002.
As described in Note 3 above, the first quarter of 2003 includes only the
operations of Mid-Central Plastics, Inc., while the first quarter of 2002 also
included the operations of Morton Custom Plastics, LLC, which was sustaining
losses from its operations.

LIQUIDITY AND CAPITAL RESOURCES

Our consolidated working capital at March 29, 2003 was a deficit of $2.5
million compared to a working capital deficit of $2.3 million at December 31,
2002. This represents a decrease in working capital of approximately $0.2
million. During the quarter ended March 29, 2003, there were no significant
changes in total current assets or total current liabilities as compared with
December 31, 2002.

In February 2002, we entered into a new secured revolving credit facility
with a syndicate of banks led by Harris Trust and Savings Bank, as Agent (the
Harris syndicate). The revolving credit agreement permits us to borrow up to a
maximum of $21.0 million. The agreement requires payment of a quarterly
commitment fee of .50% per annum of the average daily unused portion of the
revolving credit facility. Interest is due monthly and is based on bank prime
plus 1.5% (effective rate of 5.75% at March 29, 2003). Alternatively, we could
select a LIBOR plus 4.0% interest rate. The amount available under the original
provisions of the revolving credit facility was limited to 85% of qualified
accounts receivable, 50% of eligible inventory, plus $2.5 million of other
assets. The revolving credit agreement was originally set to mature on July 1,
2003. As described below, the date has been extended to April 1, 2004. At
March 29, 2003, we had $18.1 million outstanding and $699,000 available under
this credit facility.

In February 2002, we entered into an amended and restated secured term
loan arrangement with the Harris syndicate for a term loan of $32.9 million.
The new Harris syndicate term loan arrangement replaced existing term loans and
did not provide additional availability. The term loan under this financing
arrangement is amortized monthly with principal payments ranging from $235,000
to $500,000 and the balance of $24.9 million due originally on July 1, 2003
(now extended to April 1, 2004). Interest is due monthly and is based on bank
prime plus 1.5% (effective rate of 5.75% at March 29, 2003). Alternatively, we
could select a LIBOR plus 4.0% interest rate.

The February, 2002 Harris syndicate agreement has been amended three
times, most recently on February 28, 2003. Among the key provisions of the
amendments: (i) extension of the maturity date to April 1, 2004; (ii) revisions
in the monthly amortization of principal, with $50,000 payable on February 28,
2003, $100,000 payable on March 31, 2003, $350,000 payable on April 30, 2003,
$500,000 payable each month end from May 31, 2003 through December 31, 2003,
and $250,000 payable each month end thereafter until the April 1, 2004 maturity
date, at which time the term loan balance of $22.2 million will be due. Also,
effective February 28, 2003, the limit of eligible inventory under the
revolving credit facility was increased to 60% and the amount of other assets
eligible became $3.5 million. All of our indebtedness to the Harris syndicate
matures on April 1, 2004. We intend to obtain loans or funding support from
other sources, or extend the existing credit facility by the maturity date of
the current agreement, but there are no assurances that we will be successful
in our efforts.

In connection with these Harris syndicate loans, we have granted the
lender a first lien on all of our accounts receivable, inventory, equipment and
various other assets. These Harris syndicate debt agreements contain
restrictions on capital expenditures, additional debt or liens, investments,
mergers and acquisitions, asset sales and payments such as dividends or stock
repurchases. No amounts are available for the payment of dividends at March 29,
2003. The agreements also impose various financial covenants, including
financial performance ratios.

Should we sell the Mid-Central Plastics, Inc. operations prior to maturity
of the Harris syndicate loans, a portion of the net cash proceeds from the sale
must be applied against the balance of the revolving line of credit. We
estimate the amount required to be repaid to be $3.75 million, which is
included in liabilities held for sale (Note 3).

13



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##### Table of Contents



In connection with the Harris syndicate 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 $2.0 million and a
termination date of May 31, 2003. The second agreement has a notional principal
amount of $13.9 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 waived its unilateral right to cancel
both agreements as of June 30, 2001. As described in Item 7A 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.

Historically, we have met our near term liquidity requirements with cash
flow from operations, the Harris syndicate line of credit, and management of
our working capital to reflect current levels of operations. The national
economic slowdown has increased pressure on these sources of liquidity. The
February, 2002 Harris syndicate revolving credit facility and term loans
replaced existing credit facilities and did not provide additional
availability. We anticipate that the February, 2002 agreements with the Harris
syndicate, as amended on February 28, 2003, will assist us in meeting our
liquidity requirements through the term of these agreements.

Preferred Stock

As part of the financing for the 1999 Morton Custom Plastics, LLC
acquisition from Worthington Industries, Inc. (Worthington) , we issued 10,000
shares of redeemable preferred stock, which becomes redeemable on April 15,
2004 at $1,000 per share plus any dividends accrued since April 15, 1999. We
recorded the $10 million face value preferred stock 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. Certain provisions of the agreement with Worthington preclude the
payment of dividends, and no dividends have been accrued since 1999. There are
legal proceedings related to certain Worthington matters as described in Part
II, Item 1. We plan to continue negotiations with Worthington to resolve all
of
the issues presented by the preferred stock within the limitations of our
available liquidity in 2004, but there are no assurances that we will be
successful in our efforts.

Capital Expenditures

We incurred $0.9 million of capital expenditures during the first quarter
of 2003, including $0.8 related to continuing operations, primarily for the
update and purchase of manufacturing equipment.

We estimate that our capital expenditures in 2003 will total approximately
$2.4 million, of which $1.0 million will be for new production equipment and
the remaining $1.4 million will be for normal replacement items.

Significant Cash Commitments

The following table summarizes the Companys contractual obligations at
March 29, 2003:

|                                   |                          |       |                        |        |  |       |           |       |       |       |        |        |         |  |       |   |  |  |   |   | 
|---------------------------------- | ------------------------ | ----- | ---------------------- | ------ |  | ----- | --------- | ----- | ----- | ----- | ------ | ------ | ------- |  | ----- | - |  |  | - | - | 
|                                   |                          |       | Payments Due by Period
|                                   |                          |       |                       
|                                   |                          |       |                        |        |  |       | Less than |       | 1 - 3 |       | 4 - 5  |        | After 5
|(In Thousands)                     |                          | Total |                        | 1 Year |  | Years |           | Years |       | Years
|                                   |                          |       |                        |        |  |       |           |       |       |      
|Bank indebtedness                  |                          |       |                        |        |  |       |           |       |       |       |        |        |         |  |       |   |  |  |   |  
|                                   | Term loan                |       | $                      | 27,280 |  |       |           | 5,100 |       |       |        | 22,180 |         |  |       |  |  |  |   |  | 
|                                   | Revolving line of credit |       |                        | 18,100 |  |       |           |      |       |       |        | 18,100 |         |  |       |  |  |  |   |  | 
|Other debt obligations             |                          |       | 2,221                  |        |  |       | 339       |       |       |       | 1,237  |        |         |  | 645   |   |  |  |  |  
|Operating leases                   |                          |       | 20,816                 |        |  |       | 6,400     |       |       |       | 12,186 |        |         |  | 2,230 |   |  |  |  |  
|                                   |                          |       |                        |        |  |       |           |       |       |       |        |        |         |  |       |   |  |  |   |   | 
|Total contractual cash
obligations |                          | $     | 68,417                 |        |  |       | 11,839    |       |       |       | 53,703 |        |         |  | 2,875 |   |  |  |  |  
|                                   |                          |       |                        |        |  |       |           |       |       |       |        |        |         |  |       |   |  |  |   |   | 

Under our bank credit facility, we have $618,000 standby letters of credit
outstanding at March 29, 2003 in connection with lease obligations. Management
expects that cash flow from operations and availability under its bank
revolving line of credit will assist us in meeting our liquidity requirements
through the term of its bank credit facility. At March 29, 2003, we had
$699,000 in unused availability under the bank revolving line of credit.

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As described previously in the Financial Position and Liquidity section of
this Form 10-Q, the preferred stock issued by the Company becomes redeemable on
April 15, 2004. There are legal proceedings related to certain Worthington
matters as described in Part II, Item 1. We plan to continue negotiations with
Worthington to resolve all of the issues presented by the preferred stock,
within the limitations of our available liquidity in 2004, but there are no
assurances that we will be successful in our efforts.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In June 2002, FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal Activities.SFAS No. 146 requires companies recognize
costs associated with exit or disposal activities when they are incurred rather
than at the date of a commitment to an exit or disposal plan. SFAS No. 146 is
to be applied prospectively to exit or disposal activities initiated after
December 31, 2002. The adoption of this statement did not have a material
impact on financial position, results of operations, or cash flows.

On December 31, 2002, FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation-Transition and Disclosure.SFAS No. 148 amends SFAS No. 123,
Accounting for Stock-Based Compensation, to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, SFAS No. 148 amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in
both annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The Company does not currently have plans to change to the fair value
method of accounting for stock-based compensation. The disclosure requirements
have been implemented.

In November 2002, FASB issued Interpretation No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others(Interpretation 45), which addresses the
disclosure to be made by a guarantor in its interim and annual financial
statements about its obligations under guarantees. Interpretation 45 also
requires the recognition of a liability by a guarantor at the inception of
certain guarantees.

Interpretation 45 requires the guarantor to recognize a liability for the
non-contingent component of the guarantee, which is the obligation to stand
ready to perform in the event that specified triggering events or conditions
occur. The initial measurement of this liability is the fair value of the
guarantee at inception. The recognition of the liability is required even if it
is not probable that payments will be required under the guarantee or if the
guarantee was issued with a premium payment or as part of a transaction with
multiple elements. The adoption of Interpretation 45 did not have a material
impact on the financial statements.

In January 2003, FASB issued Interpretation 46, Consolidation of Variable
Interest Entities (Interpretation 46), which addresses consolidation of
certain variable interest entities and is effective January 31, 2003. The
Company does not anticipate that the adoption of Interpretation 46 will have a
material impact on its financial statements.

FORWARD LOOKING STATEMENTS

Safe Harbor Statement Under The Private Securities Litigation Reform Act
Of 1995: This quarterly report 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 acquisitions; the orders of
our two major customers; 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 quarterly
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.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We are exposed to interest rate changes primarily as a result of our lines
of credit and long term debt used for maintaining liquidity, funding capital
expenditures, and funding the growth of our business. Our 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 our
objectives, we entered into a financing agreement with a bank syndicate. This
agreement contains a term loan and a revolving credit facility. Interest is
based on our lead banks prime rate plus an applicable variable margin. We
have also entered into two interest rate swap agreements, as required by our
bank syndicate financing arrangement, 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 $27.9 million term loans. If interest rates moved 100 basis
points, the effect on income before income taxes would be $279,000 annually.

We do not enter into interest rate transactions for speculative purposes.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

Within the 90 days prior to the date of this report, we carried out an
evaluation of the effectiveness of the design and operation of the our
disclosure controls and procedures, as defined in the Securities Exchange Act
of 1934 (Exchange Act) Rules 13a-14(c) and 15d-14(c), under the supervision
and with the participation of our management, including our Chief Executive
Officer and Vice President of Finance. Based upon that evaluation, our Chief
Executive Officer and Vice President of Finance concluded that our disclosure
controls and procedures are effective.

Disclosure controls and procedures are controls and other procedures that
are designed to ensure that information required to be disclosed in Company
reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities
and Exchange Commissions rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed in our reports filed under the Securities
and Exchange Act is accumulated and communicated to management to allow timely
decisions regarding required disclosure.

Changes in internal controls

We seek to maintain a system of internal accounting controls that are
intended to provide reasonable assurances that our books and records accurately
reflect our transactions and that our established policies and procedures are
followed. There were no significant changes in our internal controls or, to
our knowledge, in other factors that could significantly affect our disclosure
controls and procedures subsequent to the date we carried out this evaluation.




PART II  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On May 1, 2000, Worthington Industries, Inc. (Worthington) filed suit (in
the United States District Court for the Southern District of Ohio, Eastern
Division) against us and Morton Custom Plastics, LLC (MCP, LLC) related to
MCP, LLCs 1999 acquisition of the non-automotive plastics business from
Worthington. Worthington claimed that it was owed additional amounts under the
sale agreement and a related service agreement, and that it was owed dividends
on shares of our preferred stock that it received. We believed that under the
terms of the agreement, none of the amounts claimed by Worthington were owed by
us. The case has been stayed because of the bankruptcy of MCP, LLC, although
Worthington may attempt to continue the litigation against us on the dividend
matter.

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ITEM 2. CHANGES IN SECURITIES

On September 20, 2000, the Company issued warrants to purchase 238,548
shares of its Class A Common Stock at an exercise price of $.01 per share.
Under the terms of the February, 2003 amendment with Harris Bank, the warrants
may be exercised at any time through December 31, 2005.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



|(A) |  | Exhibits
|--- |  | --------



| | 11.  |  | The computation can be determined from this report.                                                         
| | ---- |  | ------------------------------------------------------------------------------------------------------------
|
| | 31.1 |  | Certification pursuant to Rule 13a-14(a)                                                                    
|
| | 31.2 |  | Certification pursuant to Rule 13a-14(a)                                                                    
|
| | 32.1 |  | Certification pursuant to 18 U.S.C. Section 1350,
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
| | 32.2 |  | Certification pursuant to 18 U.S.C. Section 1350,
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.



|(B) |  | Reports on Form 8-K.                                                                                       
|--- |  | -----------------------------------------------------------------------------------------------------------
|   
|    |  | Form 8-K filed on February 5, 2003 announcing personnel changes.                                           
|   
|    |  | Form 8-K filed on April 3, 2003 announcing the earnings press release for the year ended December 31, 2002.

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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/ RODNEY B. HARRISON                     
| |  |                               |  |                                            
| |  |                               |  | Rodney B.
HarrisonVice President of Finance

18