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

(Mark One)

            |X| Annual Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                    For the fiscal year ended January 1, 2000

                                       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 0-22053

                           GENERAL BEARING CORPORATION
                           ---------------------------
             (Exact name of registrant as specified in its charter)

           Delaware                                      13-2796245
           --------                                       ----------
(State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                        Identification No.)

44 High Street, West Nyack, New York                       10994
-------------------------------------                      -----
(Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code: (914) 358-6000

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

Securities registered pursuant to Section 12(g) of the Act:

                      Common Stock $.01 par value per share
                      -------------------------------------
                                (Title of class)

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.
|X| Yes  |_| No
<PAGE>

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. |X|

At March 15, 2000 the aggregate market value of the Registrant's outstanding
common stock, $.01 par value per share, held by non-affiliates, was $5,700,000,
based on the closing sale price as reported March 15, 2000 on the NASDAQ Small
Cap Market.

At March 15, 2000, the Registrant had issued 3,924,950 shares of common stock,
$.01 par value per share, and had outstanding 3,917,950 shares.

                       DOCUMENTS INCORPORATED BY REFERENCE

      None of the documents indicated on Form 10-K have been incorporated herein
by reference.
<PAGE>

                CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING
         INFORMATION FOR THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE
                PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.

      The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements, which are statements other than those of
historical fact, including, without limitation, ones identified by the use of
the words:"anticipates," "estimates," "expects," "intends," "plans," "predicts,"
and similar expressions. In this Annual Report such statements may relate to the
recoverability of deferred taxes, likely industry trends, the continued
availability of credit lines, the suitability of facilities, access to suppliers
and implementation of joint ventures and marketing programs. Such forward
looking statements involve important risks and uncertainties that could cause
actual results to differ materially from those expected by the Company, and such
statements should be read along with the cautionary statements accompanying them
and mindful of the following additional risks and uncertainties possibly
affecting the Company: the possibility of a general economic downturn, which is
likely to have an important impact on historically cyclical industries such as
manufacturing; significant price, quality or marketing efforts from domestic or
overseas competitors; the loss of, or substantial reduction in orders from, a
major customer; the loss of, or failure to attain, additional quality
certifications; changes in U.S. or foreign government regulations and policies,
including the imposition of antidumping orders on the Company or any of its
suppliers; a significant judgment or order against the Company in a legal or
administrative proceeding; and potential delays in implementing planned sales
and marketing expansion efforts and the failure of their effectiveness upon
implementation.
<PAGE>

                           GENERAL BEARING CORPORATION

                           ANNUAL REPORT ON FORM 10-K
                    FOR THE FISCAL YEAR ENDED JANUARY 1, 2000

                                TABLE OF CONTENTS

No.                                                                         Page
---                                                                         ----

PART I
      Item 1.  Business...................................................     1
      Item 2.  Properties.................................................     6
      Item 3.  Legal Proceedings..........................................     7
      Item 4.  Submission of Matters to a Vote of Security Holders........     8

PART II
      Item 5.  Market for Registrant's Common Equity and Related
               Stockholder Matters........................................     9
      Item 6.  Selected Financial Data....................................    10
      Item 7.  Management's Discussion and Analysis of Results of
               Operations and Financial Condition.........................    11
      Item 7a. Quantitative and Qualitative Disclosure about Market Risk..    16
      Item 8.  Financial Statements and Supplementary Data................    18
      Item 9.  Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosures.......................    42

PART III
      Item 10. Directors and Executive Officers of the Registrant.........    43
      Item 11. Executive Compensation.....................................    46
      Item 12. Security Ownership of Certain Beneficial Owners and
               Management.................................................    48
      Item 13. Certain Relationships and Related Transactions.............    49

PART IV
      Item 14. Exhibits, Financial Statement Schedules, and Reports
               on Form 8-K................................................    52
<PAGE>

                                     PART I

Item 1. Business.

      General Bearing Corporation ("Company") manufactures, sources, assembles
and distributes a variety of bearing components and bearing products, including
ball bearings, tapered roller bearings, spherical roller bearings and
cylindrical roller bearings. Under the Hyatt(R) and The General(R) trademarks,
the Company supplies original equipment manufacturers ("OEMs") and the
industrial aftermarket principally in the United States ("U.S."). The Company's
products are used in a broad range of applications, including automobiles,
railroad cars, locomotives, trucks, heavy duty trailers, office equipment,
machinery and appliances.

      The Company operates in two divisions: the OEM Division, which supplies
OEMs, and the Distribution Division, which serves distributors that supply the
repair and maintenance aftermarket and small OEMs. Current OEM Division
customers include Ford Motor Company ("Ford"), the locomotive division of
General Motors Corporation ("GM"), Trailmobile Corp. ("Trailmobile"), Gunite
Corporation ("Gunite"), Great Dane Limited Partnership "(Great Dane"),Burlington
Northern/Santa Fe Railroad Co. ("Burlington Northern"), Pitney Bowes ("Pitney
Bowes") and Eastman Kodak ("Kodak"). The Distribution Division has customers
ranging in size from Motion Industries Inc. ("Motion Industries") and Applied
Industrial Technologies Inc. ("Applied Industrial"), each of which has more than
400 outlets, to independent single outlet operations. The Distribution
Division's individual shipments are typically smaller in volume but have higher
gross margins.

      Through flexibility in manufacturing and sourcing, as well as attentive
customer service, the Company strives to be a reliable, innovative and cost
effective provider of bearing components and products to the approximately $6
billion per year U.S. bearing market. The Company's strategy to accomplish this
objective includes the following:

      * PROVIDE HIGH QUALITY PRODUCTS AND SUPERIOR CUSTOMER SERVICE. The Company
      maintains a detailed and extensive Quality Assurance Program and has been
      certified to the M 1003 standard by the Association of American Railroads
      ("AAR") and the MIL-I-45208 standard by General Dynamics, a military
      contractor. The Company has been granted "Unconditional Approval" from the
      AAR for its tapered journal bearings. The Company also maintains ISO 9001
      and QS 9000 registrations from the International Standards Organization
      ("ISO"). The Company also requires that both its affiliated and
      unaffiliated suppliers conform to Company and customer quality and
      engineering standards. Certain of the Company's products also have been
      specifically certified by the AAR for use in railroad cars. In addition,
      the Company has been qualified as an authorized supplier by leading
      automobile and truck trailer manufacturers (including GM, Ford, Great
      Dane, Gunite, Trailmobile, Stoughton Trailers, Inc., Strick Corporation
      and Hyundai Precision America Inc.), railroads (including Burlington
      Northern, the Atchison, Topeka and Santa Fe Railway, Missouri Pacific
      Railroad Company, Southern Pacific Rail Corporation and Norfolk Southern
      Corp.) and national distributors of bearings, including Motion Industries
      and Applied Industrial. These certifications and qualifications, which
      often take significant time to obtain because of testing and other
      requirements, enable the Company to supply large markets currently served
      by a limited number of competitors.


                                       1
<PAGE>

      * PRESENCE IN CHINA. In 1987, the Company formed a joint venture, Shanghai
      General Bearing Co., Ltd. ("SGBC"), in the People's Republic of China
      ("PRC") to establish a low cost, quality controlled source for bearings
      and bearing components. The Company has formed other joint ventures in the
      PRC, and it continues to investigate joint venture opportunities. The
      Company believes that potential customers in the U.S. intending to
      establish or expand manufacturing and other facilities in the PRC have,
      and will continue to have, an incentive to purchase bearings from the
      Company in order to satisfy Chinese counter purchasing and local content
      requirements. In addition, on February 3, 1997, the U.S. Department of
      Commerce ("Commerce") granted the Company's joint venture, SGBC, partial
      revocation of the antidumping order affecting tapered roller bearings from
      the PRC. As a result of SGBC receiving zero or de minimis antidumping
      margins for the periods from 1990-1993 ("4th, 5th and 6th Reviews"),
      Commerce revoked the antidumping order as to SGBC in the 1993-1994 period
      ("7th Review"). As a result of the revocation, SGBC and the Company are no
      longer required to participate in the annual reviews of the antidumping
      order conducted by Commerce. The Company believes its revocation provides
      it with a competitive advantage. See Legal Proceedings.

      * MANUFACTURING AND SOURCING FLEXIBILITY. The Company operates on the
      principle that a flexible method of combining product and component
      purchasing with its own manufacturing and assembly capabilities can
      provide customers with high quality products and cost advantages. The
      Company uses its manufacturing, engineering and purchasing expertise to
      determine the highest quality and most cost effective methods of
      production. The Company currently sources bearing components and products
      from over 20 factories outside the U.S. In order to maintain the Company's
      flexibility to change with the market, the Company typically limits the
      term of its supply contracts to one year.

PRODUCTS

      The Company and its joint ventures manufacture and market high quality,
precision ball and roller bearings used in a broad range of applications
including automotive and trucking (e.g., steering columns, wheels and axles),
rail car and locomotive (e.g., wheel and axle assemblies), appliances (e.g.,
fans and vacuum cleaners), lawn and garden implements (e.g., lawn mowers),
office equipment (e.g., copiers and mailing machines), consumer products (e.g.,
exercise equipment), medical equipment (e.g., wheelchairs), material handling
(e.g., conveyor assemblies and hand trucks), power tools (e.g., drills and
lathes), chemical processing and the oil industry (e.g., drilling rigs).

      The Company sells approximately 1,500 products. The Company's product line
includes standard and metric precision ball bearings, double row ball bearings,
unground bearings, and special ball bearings. The Company offers its products in
standard, modified, and custom designs where appropriate. The Company produces
standard, special and niche market bearings. Special bearings are specifically
manufactured to the requirements of a customer, as determined in cooperation
with the Company's engineering staff. Examples of these products include
bearings for copier machines, automotive steering columns, postal equipment and
wheelchairs. Niche bearings are bearings used in specific industries, and are
produced by a limited number of manufacturers. Under the Hyatt(R) brand the
Company produces select tapered roller bearings (TRB's), tapered journal
bearings, spherical roller bearings and cylindrical roller bearings which are
used in railroad, truck/trailer, automotive and other industrial applications.


                                       2
<PAGE>

MANUFACTURING AND SOURCING

      The Company primarily manufactures and assembles bearings at its
facilities in New York and at the Company's joint venture facilities, SGBC in
Shanghai, PRC and Ningbo General Bearing Co., Ltd. ("NGBC") in Yuyao City, PRC.
Certain imports from various locations have been subject to antidumping duties
since 1987, requiring importing companies to post cash deposits. TRB's imported
from SGBC, the Company's Chinese joint venture and principal source of imported
product, have not been subject to antidumping duties since 1991.

      The Company obtains 77% of its bearing and component requirements from
various Chinese joint ventures. The Company currently relies on approximately 51
unaffiliated manufacturers to produce the remaining 23% of its requirements. The
Company has no long-term contracts with its unaffiliated manufacturing sources.
The Company attempts to maintain sourcing flexibility by not engaging in any
purchasing contracts that exceed one year.

CHINESE JOINT VENTURES

      The Company has entered into four joint ventures with manufacturers in the
PRC to enable it to secure a reliable source of high quality low cost bearings
and bearing components. In addition, World Machinery Company ("World"), which
owns 75.2% of the Company's common stock, has entered into two additional joint
ventures with a Chinese bearing manufacturer and the Company has arrangements
with such joint ventures. By entering into joint ventures, rather than long-term
manufacturing contracts, the Company is better able to monitor and control
production and quality assurance by having access to the factories at both
management and production levels. Furthermore, by sourcing from joint ventures,
the Company may not be required to incur inventory carrying costs, since the
joint ventures may hold all inventory until needed by the Company. The joint
ventures also provide a far less capital intensive alternative to building
Company-owned facilities.

      SGBC was established by the Company and Shanghai Roller Bearing Factory
("SRBF") in June 1987 as a joint venture limited liability company in accordance
with PRC law for an initial term of ten years, which has been extended to June
2008. SGBC produces tapered roller and ball bearings, which the Company imports
into the U.S. for further assembly, inspection, testing and distribution. The
Company contributed 25% of the initial capital of SGBC in the form of capital
equipment valued by the parties at $750,000 and the Company's joint venture
partner, SRBF, contributed 75% of the initial capital of SGBC in the form of
facilities and equipment, valued by the parties at $1,500,000 and $750,000,
respectively. Upon the receipt of $1,375,000 in dividends, the Company will
cease to receive any further dividends.

      The Company has the exclusive right to sell the products of SGBC in the
U.S. In 1997, 1998 and 1999, the Company imported $5.8 million, $10.3 million
and $10.5 million respectively, in bearings from SGBC. Purchases are made upon
terms and conditions established periodically by negotiation between the Company
and SGBC. Governance, operations, distributions and the dissolution of SGBC are
governed by PRC law and by SGBC's joint venture contract and articles of
association. SGBC's eight-member Board of Directors, which consists of five
directors chosen by SRBF and three directors chosen by the Company, exercises
authority over the joint venture by majority vote. Certain decisions involving
annual strategy, budgeting and production plans require the vote of at least one
Director chosen by the Company. Unanimous consent of the Board of Directors is
required for all fundamental corporate changes.


                                       3
<PAGE>

      Shanghai Pudong General Bearing Company ("SPGBC"), a joint venture between
General Bearing Corporation and Shanghai Xiua Industrial Corporation was
established in 1996. Located in the Pudong Industrial Zone of Shanghai, this
venture produces ball bearings for sale in the U.S. by the Company. The Company
contributed $150,000; 25% of the registered capital, in 1998. In 1998 and 1999,
the Company imported $1.6 million and $1.7 million from SPGBC, respectively.

      NGBC, a joint venture between General Bearing Corporation and China Ningbo
Genda Bearing Company, Ltd., was established in early 1998. Located in Yuyao
City, China, this venture manufactures ball and roller bearings and their
components. Initially, the ventures production has been directed to electric
motor bearings. In its second stage, its production will be heavily weighted
toward product for sale by the Company to the U.S. automotive industry. The
Company's initial contribution was $1 million; 33.3% of the registered capital.
In 1999, the joint venture partners agreed to increase the registered capital of
NGBC for expansion. The Company contributed $450,000 in cash and equipment in
line with its ownership. The Company imported $3.4 million and $8.1 million from
NGBC in 1998 and 1999, respectively.

      Jiangsu General Ball & Roller, Ltd. ("JGBR"), a joint venture with Jiangsu
Lixing Steel Ball Factory (Group) ("JSBF"), was established in 1999. Located in
Rugao City, China, this venture is comprised of the operations of JSBF, a
manufacturer of rolling elements for bearings. In March 2000, the Company formed
NN General, LLC, a joint venture with NN Ball & Roller, Inc. ("NN"). The Company
and NN each hold a 50% interest in NN General which holds a 60% interest in
JGBR. The Company invested net cash for these transactions of $100,000 in 2000.
Also in 2000, the Company advanced $900,000.

      In addition, World has entered into two additional joint ventures with a
Chinese bearing manufacturer. These joint ventures are suppliers to the Company.

      Rockland Manufacturing Company, ("Rockland") a joint venture between a
subsidiary of World and Wafangdian USA Ltd., was established in 1993 and exists
at the facilities of the Company. Rockland offers flexibility to the Company by
providing readily accessible inventory which the Company pays for at the time it
is needed to fill customer orders. The Company purchased $5.2 million and $3.5
million from Rockland in 1998 and 1999, respectively.

      Wafangdian General Bearing Co., Ltd. ("WGBC"), is a joint venture between
World and Wafangdian Bearing Company. WGBC produces components for spherical
roller bearings and railroad bearings in the PRC. The Company sells the WGBC
bearings in the U.S. In its second stage, it is proposed that WGBC will produce
rear wheel automotive bearings. The Company did not import directly from WGBC in
1998 and 1999. WGBC is a supplier to certain joint ventures and affiliates of
the Company.

      In 1997, World granted the Company options, exercisable prior to December
31, 1999, to purchase from World, its interest in Rockland and WGBC, for
$400,000 and $846,000 (subject to adjustment based on change in accounts payable
by WGBC to World), respectively, representing the estimated capital
contributions, advances for administrative expenses and other costs paid by
World with respect to such ventures prior to January 2, 1999; plus any
additional capital contributions made and administrative expenses incurred on
behalf of the joint venture by World after such date. The Company did not
exercise the options.

SALES, MARKETING AND CUSTOMERS

      The Company markets its products in the U.S. and abroad through 12
salaried sales employees as well as 30 commissioned independent sales
representative organizations, aggregating 115 sales persons. In addition, the
Company has 11 customer service representatives responsible for handling orders
and providing sales support. Products sold through the OEM Division bear The
General(R) label for ball bearings and the Hyatt(R) brand for all types of
roller bearings.


                                       4
<PAGE>

      The Company participates in trade shows sponsored by the Truck Maintenance
Council, American Trucking Association and the Railway Supply Association. The
Company spent $278,000 on advertising for fiscal 1999 and it anticipates that
its advertising expenditures for fiscal 2000 will be about the same.

      Current OEM customers include GM, Ford, Trailmobile, Great Dane, Union
Pacific, Burlington Northern, Pitney Bowes, Kodak and A. O. Smith. The OEM
Division has approximately 400 customers. The Distribution Division markets the
same broad line of bearing products as the OEM division. The Distribution
Division has over 1,050 customers, ranging in size from Motion Industries and
Applied Industrial, each of which has approximately 400 stores in the U.S., to
independent single outlet operations. The OEM Division focuses on the
transportation industry: e.g., truck/trailer manufacturers, railroad locomotive
and freight car manufacturers and automotive manufacturers. In 1999, sales to
Ford represented more than 10% of the company's total net sales. There were no
individual customers representing at least 10% of sales in 1998 or 1997.

      The Distribution Division generally ships product within 24 hours of the
time an order is placed. The OEM Division ships products within one to 365 days
from the date an order is placed. Actual shipments are dependent upon production
schedules of the Company's customers. The Company's arrangements with its North
American customers typically provide that payments are due within 30 days
following the date of shipment of goods. Foreign customers are generally
required to pay by letter of credit.

EMPLOYEES

      As of January 1, 2000, the Company had 157 full-time employees, of whom 96
were engaged in production, shipping and receiving, quality control, and
maintenance, and 23 of whom were engaged in sales and marketing. The balance of
the Company's full-time employees is primarily administration. 82 of the
Company's employees engaged in production, shipping and receiving, quality
control and maintenance, are subject to collective bargaining and are
represented by the United Brotherhood of Carpenters and Joiners of America,
AFL-CIO, Local 3127 ("Union"). The current collective bargaining agreement with
the Union expires on April 30, 2000. The Company is currently in discussions
with the Union regarding renewal. The Company believes that relations with its
employees, including those subject to collective bargaining, are good. The
Company has a 20 year relationship with the Union and has never experienced a
Union work stoppage.

COMPETITION

      The ball and roller bearing industry is highly competitive. The Company
believes that competition within the precision ball and roller bearing market is
based principally on quality, price and the ability to meet customer delivery
requirements. The Company's primary domestic and foreign competitors are Timken,
SKF USA Inc., NSK Corporation, American Koyo Corp., NTN Bearing Corporation of
America, the Torrington Company and FAG Holding Corporation. Management believes
that the Company's manufacturing and sourcing capabilities and its reputation
for consistent quality and reliability have positioned the Company for continued
growth in both market share and sales.


                                       5
<PAGE>

PATENTS, TRADEMARKS AND LICENSES

      Except for The General(R) trademark and the Hyatt(R) trademark, the
Company does not own any U.S. or foreign patents, trademarks or licenses that
are material to its business. The Company does rely on certain data, including
costing and customer lists, and the success of its business depends, to some
extent, on such information remaining confidential. Each employee who may have
access to confidential information is subject to a confidentiality agreement.

      The Company's use of the Hyatt(R) trademark is pursuant to a license with
General Motors. Under the Hyatt License, the Company has the right to use the
terms "Hyatt," "Hyatt Railway," "Hyatt Railway Products," "Hyatt Manufacturing,"
"Hyatt General" and various derivatives of "Hyatt" in connection with locomotive
journal boxes, traction motor bearings, component parts thereof, and other
products. The initial term of the Hyatt License extended until January 1, 2000.
The license has been renewed for an additional ten year term. The Company paid
GM an initial fee of $30,000 upon execution of the Hyatt License and has paid an
annual licensing fee to GM in an amount increasing from $20,000 in 1990 to
$35,000 in 1999. The fee payable by the Company upon the exercise of its option
to renew the Hyatt License is based upon a benchmark of $35,000 indexed for
inflation between 1990 and the year of payment.

ENVIRONMENTAL COMPLIANCE

      The Company's operations are subject to federal, state and local
regulatory requirements relating to pollution control and protection of the
environment. Based on information compiled to date, management believes that the
Company's current operations are in material compliance with applicable
environmental laws and regulations. See Legal Proceedings.

Item 2. Properties.

      The Company leases a facility located in West Nyack, New York, which has
approximately 190,000 square feet of floor space. Management believes that the
plant is adequate for the Company's present needs and anticipated expansion. The
West Nyack facility, which is used principally for administrative, assembly,
manufacturing, and distribution purposes, is owned by Gussack Realty Company
("Realty"). On November 1, 1996, the Company and Realty entered into a lease for
the West Nyack facility ("Lease"), which provides for an initial term expiring
on October 31, 2003, and is renewable at the option of the Company for an
additional six year term. The lease specifies a base rent of $4.81 per square
foot (or $913,000) annually, payable in monthly rent payments of $76,000. The
Lease provides for an increase in the rent every other year, commencing in 1998,
to the greater of (i) 106% of the preceding year's rent or (ii) the preceding
years rent multiplied by a fraction the numerator of which is the Consumer Price
Index for the area including Rockland County or, if no such index is published,
for Northern Jersey ("CPI") in effect 90 days prior to November 1 of the new
rent year and the denominator of which is the CPI in effect 90 days prior to
November 1 of the preceding year. The November 1998 increase amounted to 6% of
the preceding year, resulting in rent of $5.0986 per square foot (or $968,000)
annually effective through October 31, 2000. Simultaneously, the Company entered
into a sublease with WMW Machinery Co. and World for approximately 31,000 and
5,500 square feet of the West Nyack facility, respectively. See "Item 13 -
Certain Relationships and Related Transactions."


                                       6
<PAGE>

Item 3. Legal Proceedings.

Timken vs. United States

      On August 25, 1986, Timken, a U.S. producer of tapered roller bearings,
filed a petition on behalf of the U.S. tapered roller bearing industry with both
the ITC and Commerce seeking the imposition of antidumping duties on imports of
tapered roller bearings from Japan, Italy, the former Yugoslavia, Romania,
Hungary and the PRC. In May 1987, Commerce found that tapered roller bearings
from each of the aforementioned countries were being sold in the U.S. at less
than fair value, as determined by Commerce based upon an estimate of the foreign
market value of tapered roller bearings (i.e. the price at which the same or
similar merchandise is sold or offered for sale in the principal markets of the
home market country). Commerce subsequently issued an antidumping order imposing
duties on the unfairly traded tapered roller bearings equal to the percentage
difference between the selling prices in the U.S. and the foreign market value
of the imported tapered roller bearings during specified review periods. Among
others, the order named SGBC, the Company's joint venture in the PRC. Importers
subject to the antidumping order are required to post a cash deposit with the
U.S. Customs Service equal to the antidumping margin percentage multiplied by
the export price of any imported product covered by the dumping petition. On
February 3, 1997, Commerce granted the Company's joint venture, SGBC, partial
revocation of the antidumping order affecting tapered roller bearings from the
PRC. As a result of SGBC receiving zero or de minimis antidumping margins for
the 4th, 5th and 6th annual reviews of the antidumping order ("Reviews"),
Commerce revoked the antidumping order as to SGBC in the 7th Review. As a result
of the revocation, SGBC and the Company will no longer be required to
participate in the annual reviews of the antidumping order conducted by
Commerce. Timken filed actions against the United States in the Court of
International Trade challenging Commerce's final antidumping determinations of
the 4th, 5th, 6th and 7th reviews, including the revocation as to SGBC.

      In 1998, the Court of International Trade (CIT) issued a ruling in the
action challenging Commerce's determinations in the 4th, 5th and 6th Reviews.

      In that portion of the ruling potentially applicable to the Company, the
CIT affirmed the findings of Commerce but remanded certain issues back to
Commerce for redetermination. On August 25th, 1998 Commerce issued the final
results of its redeterminations, which did not materially affect the antidumping
margins of SGBC and had no impact on SGBC's partial revocation of the
antidumping order. On December 7, 1998, the CIT affirmed Commerce's remand
determinations and the action challenging Commerce's determinations in the 4th,
5th and 6th Reviews was dismissed. Timken filed an appeal with the U.S. Court of
Appeals for the Federal Circuit, which affirmed the decision of the CIT in 1999.

      In the CIT action challenging the results of the 7th review, the CIT
issued a ruling on July 30, 1999 remanding certain issues to Commerce for
redetermination. The redeterminations were issued by Commerce on December 13,
1999 and did not change any aspect affecting SGBC's status. On February 8, 2000
the CIT entered a judgement affirming the remand results and dismissing the
case.

Gussack Realty Company and General Bearing Corporation vs. Xerox

      In 1995 Gussack Realty Company ("Realty") and the Company filed an action
against Xerox in the United States District Court for the Southern District of
New York related to the discharge by Xerox of contaminants into the subsurface
at a property in the vicinity of property formerly leased by the Company


                                       7
<PAGE>

and owned by Realty in Blauvelt, New York ("Blauvelt Property"). Realty and the
Company, among other things, alleged that the subsurface discharge has adversely
affected the Blauvelt Property. In July, 1997, Xerox filed a counterclaim
against the Company and Realty, seeking contribution for Xerox's remediation
costs based upon Xerox's allegation of a discharge of contaminants into the
subsurface at the Blauvelt facility .

      On April, 22, 1999, the jury in the above matter found in favor of Realty
and the Company, and against Xerox on both the complaint and the counterclaim.
On May 28th, 1999, the Court entered judgment in favor of Realty and the Company
for compensatory damages of $1,083,000 and sanctions of $28,000.

      On June 14th, 1999, Xerox filed a motion for entry of a judgment in favor
of Xerox notwithstanding the verdict, pursuant to Rule 50(b) of the Federal
Rules of Civil Procedure, which the Court denied.

      On June 24th, 1999, Realty and the Company filed an appeal with the United
States Court of Appeals for the Second Circuit (the"appellate court"),
challenging several rulings of the trial judge, including, among other things,
his denial of prejudgment interest and refusal to allow the jury to consider
punitive damages.

      On July 23rd, 1999, Xerox filed a cross appeal.

      All appellate briefs have been filed and the parties expect oral argument
to take place in the last week of April, 2000.

      Additionally, in October, 1997, the Company filed a motion with the United
States Bankruptcy Court for the Southern District of New York, seeking to hold
Xerox in Contempt and for sanctions, on the grounds that the counterclaim filed
by Xerox against the Company was discharged upon confirmation of the Company's
Chapter 11 Reorganization Plan in 1993. In its response Xerox alleged that its
counterclaims were not discharged and that even if they were discharged, Xerox
can use them to offset the Company's claims against Xerox. On March 3, 1999, the
Company filed a motion for partial summary judgment before the U.S. Bankruptcy
Court judge on the contempt matter and Xerox filed a cross-motion for summary
judgment. After hearing oral argument on April 9, 1999, the Bankruptcy court
judge denied both motions. The case is awaiting further hearing.

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

      None.


                                       8
<PAGE>

                                     PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.

      The Company's Common Stock has been quoted on the NASDAQ Small Cap market
under the symbol "GNRL" since the Company's initial public offering effective
February 7, 1997.

      The following charts set forth the high and low bid prices for each
quarterly period in the last two fiscal years.

                                                           1999
                                             ---------------------------------
Stock Prices                                    High                  Low
                                             ---------------------------------
      1st Quarter                               10                   6

      2nd Quarter                               10 7/8               6 11/16

      3rd Quarter                                8 1/2               5 3/4

      4th Quarter                                8 3/8               4 5/16

                                                           1998
                                             ---------------------------------
Stock Prices                                    High                  Low
                                             ---------------------------------
      1st Quarter                               18                  11 1/8

      2nd Quarter                               13 3/8               7 5/8

      3rd Quarter                               10                   5

      4th Quarter                                9 1/2               4 5/8

      The Company has never declared or paid any cash dividends on its capital
stock. The Company currently intends to retain any earnings for future growth
and, therefore, does not anticipate declaring or paying any cash dividends in
the foreseeable future.

      At February 29, 2000, the Company believes it had in excess of 700 holders
of its Common Stock.


                                       9
<PAGE>

Item 6. Selected Financial Data

      The selected financial data set forth below is derived from the Company's
consolidated financial statements and should be read in conjunction with the
consolidated financial statements and related notes included elsewhere in this
Annual report. See Management Discussion and Analysis of Results of Operations
and Financial Condition.

                           General Bearing Corporation
                             Selected Financial Data
                    (In Thousands Except for Per Share Data)

<TABLE>
<CAPTION>
                                                                              Years Ended
------------------------------------------------------------------------------------------------------------------------------
                                              December 30,      December 28,    December 27,      January 2,        January 1,
                                                  1995             1996             1997             1999              2000
------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>               <C>              <C>              <C>              <C>
Statement of Operations Data:

Sales                                           $ 42,070          $ 38,362         $ 42,153         $ 45,461         $ 51,855

Operating income                                $    354          $  3,201         $  4,053         $  4,920         $  5,636

Income (loss) before extraordinary

     item and income tax (benefit)              $ (2,229)         $  1,998         $  3,246         $  4,569         $  5,223

Net income (loss)                               $ (1,729)         $  2,198         $  5,346         $  2,881         $  3,319

Net income (loss) per basic share

   (before extraordinary item)                  $   (.58)         $    .73         $   1.41         $    .74         $    .85


Net income (loss) per basic share               $   (.58)         $    .73         $   1.41         $    .74         $    .85

Net income (loss) per diluted share             $   (.58)         $    .73         $   1.38         $    .73         $    .85
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                                             Years Ended
------------------------------------------------------------------------------------------------------------------------------
                                            December 30,     December 28,    December 27,      January 2,       January 1,
                                               1995             1996             1997             1999             2000
------------------------------------------------------------------------------------------------------------------------------
Balance Sheet Data:
<S>                                           <C>              <C>              <C>              <C>              <C>
Total Assets                                  $27,086          $24,399          $26,802          $30,338          $36,327

Long-term debt (excluding current
portion)                                      $ 4,817          $ 4,493          $   910          $ 1,951          $12,842
</TABLE>


                                       10
<PAGE>

Item 7. Management's Discussion and Analysis of Results of Operations and
        Financial Condition

Results of Operations

Fiscal 1999 compared to Fiscal 1998

      Sales. Sales for fiscal 1999 of $51,855,000 represents a 14.1% increase
over 1998. Sales in the OEM Division increased 23.8% over 1998 to $38,567,000
primarily as a result of higher sales volume to existing customers as well as
new contracts awarded during the year. The largest increase was in tapered
roller bearings for heavy duty truck trailers. The Company also increased sales
to the automotive industry as a result of the first full year of shipments on a
two-year, $14,000,000 contract with the Ford Motor Company to supply certain
ball bearings as well as new contracts to supply certain driveline components.
The Distribution Division was able to selectively increase prices, however,
softness in the industrial distribution aftermarket resulted in a net decrease
in sales of 7.2% from 1998 to $13,288,000.

      Gross Profit. Gross profit for fiscal 1999 of $15,630,000 represents an
11.7% increase over 1998. As a percentage of sales, gross profit (GP%) was 30.1%
for 1999 compared to 30.8% for 1998. Overall GP% was adversely impacted by
product mix resulting from growth in sales to original equipment manufacturers
combined with softness in the industrial distribution aftermarket. Sales of the
OEM Division and the Distribution Division represented 74% and 26% of total
sales, respectively, in 1999 compared to 69% and 31%, respectively, in 1998. GP%
for the OEM Division was 22.1% in 1999 compared to 21.7% in 1998. This
improvement is primarily due to cost reductions achieved through strategic
sourcing with our joint ventures. GP% for the Distribution Division was 53.6% in
1999 compared to 50.5% in 1998. This increase was due to price increases,
product mix and cost reductions.

      Selling, General and Administrative Expenses. Selling, general and
administrative expenses (S,G&A) as a percentage of sales were 19.3% for 1999
compared to 20.0% in 1998. This reduction reflects the effect of the increased
sales volume. S,G&A increased by $918,000. This is primarily attributable to
increases in salary, warehousing and freight out expenses in the OEM Division to
support its current year and projected growth. This was partially offset by
lower travel and entertainment.

      Operating Income. Operating income for fiscal 1999 of $5,636,000
represents a 14.6% increase over 1998. The operating income for the OEM Division
increased 48.0% over 1998 to $3,181,000 primarily due to the sales and gross
profit changes described above. Operating income in the Distribution Division
decreased 11.4% compared to 1998 to $2,445,000 reflecting lower sales volume
partially offset by higher GP%.

      Interest Expense. Interest expense was $705,000 in 1999 compared to
$747,000 in 1998. This decrease is primarily due to lower interest rates.

      Other. The Company recognized other income of $350,000 in 1998 from the
sale of fixed assets to WGBC. There was no other income in 1999.


                                       11
<PAGE>

      Income Tax. The Company's effective income tax rate was 36.5% in 1999
compared to 36.9% in 1998. Both amounts reflect a normal rate of taxation.

      Net Income. Net income for 1999 increased 15.2% from 1998 to $3,319,000 or
$.85 per basic and diluted share, from $2,881,000 or $.74 and $.73 per basic and
diluted share, respectively in 1998. The increase is primarily due to the higher
sales volume.

Fiscal 1998 compared to Fiscal 1997

      Sales. Sales for fiscal 1998 of $45,461,000 represents a 7.8% increase
over 1997. Sales in the OEM Division increased 19.9% over 1997 to $31,148,000
primarily as a result of higher sales volume to existing customers as well as
new contracts awarded during the year. The largest increase, in automotive ball
bearings, resulted from the beginning of shipments on a two- year, $14,000,000
contract with The Ford Motor Company. The Distribution Division was able to gain
a 5% price increase, however, softness in the industrial distribution
aftermarket during the second half of the year resulted in a net decrease in
sales of 11.5% from 1997 to $14,313,000. Overall, the Company's sales volume
increases were in tapered roller bearings, tapered journal bearings, "special"
and automotive ball bearings, and ball transfers. These increases were partially
offset by decreased sales of certain standard ball bearings and the elimination
of the mounted units product line.

      Gross Profit. Gross profit for fiscal 1998 of $13,996,000 represents a
7.1% increase over 1997. GP% was 30.8% for 1998 compared to 31.0% for 1997.
Overall, the Company's GP% was favorably affected by the Company's strategy to
de-emphasize sales of low margin commodity bearings. However, on an overall
basis, GP% was adversely impacted by product mix resulting from growth in sales
to original equipment manufacturers combined with softness in the industrial
distribution aftermarket. Sales of the OEM Division and the Distribution
Division represented 69% and 31% of total sales, respectively, in 1998 compared
to 62% and 38%, respectively, in 1997. Both the OEM and Distribution Divisions
were favorably affected by the implementation of a program to increase
efficiency in plant operations. This program entailed the consolidation of
operations at the Company's West Nyack, New York facility which resulted in a
significant reduction of plant personnel and overhead costs as well as
simplification of tooling and quality control functions. Additionally, the
Company increased sourcing from joint ventures and believes that savings
associated with this lower cost sourcing method reduced cost of goods sold. GP%
for the OEM Division was 21.7% in 1998 compared to 22.8% in 1997. The effects of
product mix and introductory pricing necessary to increase market share offset
the cost reductions mentioned above. The Company intends to increase GP% in 1999
as a result of firmer pricing, cost reduction projects completed during 1998,
and new cost reduction projects already underway. GP% for the Distribution
Division was 50.5% in 1998 compared to 44.1% in 1997. This increase was due to
price increases and cost reductions.

      Selling, General and Administrative Expenses. Selling, general and
administrative expenses (S,G&A) as a percentage of sales were 20.0% for 1998
compared to 20.4% in 1997. This reduction reflects the effect of the increased
sales volume. S,G&A increased by $469,000. This is primarily attributable to
increases in commission, travel and salary expenses in the OEM Division to
support its current year and projected growth.


                                       12
<PAGE>

      Operating Income. Operating income for fiscal 1998 of $4,920,000
represents a 21.4% increase over 1997. The increase in the OEM Division of 58.8%
over 1997 to $2,150,000 was due primarily to the sales and gross profit changes
detailed above. Additionally, increased S,G&A of $445,000 was offset by the
elimination of one-time plant closing costs relating to the New Jersey plant
consolidation into New York of $403,000 incurred in 1997. Operating income in
the Distribution Division increased 2.6% over 1997 to $2,770,000 where the
increased GP% offset lower sales volume.

      Interest Expense. Interest expense was $747,000 in 1998 compared to
$851,000 in 1997. As a percentage of sales, interest was 1.6% for 1998 compared
to 2.0% in 1997. This decrease is primarily due to lower interest rates in 1998.

      Other. The Company recognized other income of $350,000 in 1998 from the
sale of fixed assets to WGBC.

      Income Tax (Benefit). The Company recorded income tax expense of
$1,688,000 for 1998 compared to a tax benefit of ($2,100,000) in 1997. The tax
benefit in 1997 resulted from the creation of a deferred tax asset related to
the anticipated use of net operating loss carry forwards. The tax expense in
1998 reflects a normal rate of taxation.

      Net Income. Income before taxes for 1998 increased 40.8% from 1997. Net
income for 1998 decreased to $2,881,000 or $.74 and $.73 per basic and diluted
share, respectively, from $5,346,000 or $1.41 and $1.38 per basic and diluted
share, respectively in 1997. The decrease is primarily due to the accrual for
income taxes in 1998 compared to the tax benefit recorded in 1997.

   Financial Condition, Liquidity and Capital Resources

      During the three years ended January 1, 2000, the Company's primary
sources of capital have been net cash provided by operating activities, a term
loan, sale of common stock and financing from affiliates. Working capital
requirements also have been financed by a Revolving Credit Facility. The primary
demands on the Company's capital resources have been the need to fund inventory
and receivables growth created in normal business expansion. At January 2, 1999,
and January 1, 2000, the Company had working capital of $13.1 million and $28.0
million respectively. This improvement is primarily due to refinancing the
Company's short term debt with long term debt.

      Historically, the Company has used cash provided by operations to fund a
portion of its operating requirements and capital expenditures. In 1999, cash
provided by operating activities was $816,000. Cash provided from net income and
deferred income taxes was partially offset by increased inventory. The primary
reasons for the inventory increase are to support current and future demand for
tapered journal bearings and truck size tapered roller bearings.

      The Company also has relied on borrowings under a $15.0 million Revolving
Credit Facility with Bank of New York Commercial Corporation ("BNYCC") to fund
operations. All amounts owing under this facility were repaid in December 1999
using proceeds from a new $21.0 million Revolving Credit Facility with KeyBank
National Association. In addition to the increased commitment, the new agreement
provides


                                       13
<PAGE>

greater flexibility and lower interest rates. The Credit Agreement allows for
borrowings, from time to time, not to exceed the revolving commitment amount
then in effect less certain amounts owed to lender by World and any letters of
credit.

      At January 1, 2000, the Company had outstanding debt of $11,406,000 under
its Revolving Credit Facility and had further availability of approximately $6.2
million. The Credit Agreement contains covenants that, among other things, limit
the Company's ability to incur additional indebtedness, limit capital
expenditures and investments, and requires the Company to maintain certain
financial ratios relating to funded debt, fixed charge coverage and interest
coverage. At January 1, 2000, the Company was in compliance with all loan
covenants.

      Investment in affiliates increased by $450,000 due to the Company's
additional investment in its joint venture, NGBC. This investment, consisting of
$150,000 in cash and $300,000 in machinery and equipment, was made in accordance
with the terms of the joint venture agreement and was proportionally matched by
the joint venture partner. The Company's investment in SGBC decreased $49,000
due to an equity distribution received during 1999.

      Cash used in investing activities also includes $532,000 for capital
expenditures. The Company anticipates that capital expenditures for the 2000
fiscal year will be approximately $750,000. However, the Company, from time to
time, may consider the implementation of programs to expand or improve its
operations, which could increase capital expenditures above this level.

      The cash balance of $2,272,000 at January 1, 2000 includes $1,818,000 held
at General Motors Acceptance Corporation, formerly known as BNYCC. As a result
of the termination of the credit facility, cash collateral was required to
secure all outstanding letters of credit issued by BNYCC.

      The Company believes that funds generated from continuing operations,
capital lease financing and borrowings under the existing and any future
revolving credit facilities will be sufficient to finance the Company's stock
buyback program, as well as its anticipated working capital and capital
expenditure requirements for at least the next 24 months.

Year 2000 Compliance

      The "Year 2000" problem refers to and arises from deficient computer
programs and related products, such as embedded chips, which do not properly
recognize or process a year that begins with "20" instead of "19". If not
corrected, many computer applications could fail or create erroneous results.

A. The Company's Readiness:

      1. (i) Information Technology (IT) systems: The Company has conducted a
comprehensive review of its computer systems to identify those that could be
affected by the Year 2000 issue. The Company has made changes or installed
upgrades where necessary. Our systems remain fully operational in 2000.


                                       14
<PAGE>

      (ii) Non IT systems: Non IT systems are those which typically include
"embedded" technology such as microcontrollers and chips. These systems are
compliant.

      2. Third Parties: Due to the pervasive use of computers by the Company in
its dealings with suppliers, customers, financial institutions, and other third
parties, the Year 2000 problem could have a material impact on the Company if
not timely addressed by such third parties. To assess third party readiness, the
Company has surveyed its principal suppliers and financial institutions and
received responses which indicate that all such parties have adequately
addressed the problem. While the company has not surveyed its customers, it has
received surveys from its principal customers which indicate that they are also
addressing the problem.

B. Cost: The Company has not allocated anticipated year 2000 remediation costs
among the various systems which may be affected but believes that total
remediation costs were immaterial.

C. Risks: The Company believes that the greatest risk presented by the year 2000
problem is from third parties, such as suppliers, financial institutions,
utility providers, etc. who may not have adequately addressed the problem. A
failure of any such third party's computer or other applicable systems in
sufficient magnitude could materially and adversely affect the Company. The
Company has not experienced any such failures.

D. Contingency Plans: The Company documented its Year 2000 contingency plan
including creation of detailed manual procedures for every department should the
Year 2000 problem cause an interruption in computer services, issuance of a
comprehensive set of year-end reports prior to January 1, 2000 to ensure that
the necessary information is available to conduct business in an uninterrupted
fashion until any problems are resolved and paper back up of the transactions
executed during downtime, if any.

The Company has experienced no Year 2000 problems.

Inflation

      The effect of inflation on the Company has not been significant during the
last two fiscal years.

Recent Accounting Standards

      In June 1998, the Financial Accounting Standards Board issued SFAS No. 133
("SFAS 133"), Accounting for Derivative Investments and Hedging Activities
Income. SFAS 133 is effective for transactions entered into after June 15, 2000.
SFAS 133 requires that all derivative instruments be recorded on the balance
sheet at fair value. Changes in the fair value of the derivatives are recorded
each period in current earnings or other comprehensive income, depending on
whether a derivative is designated as part of the hedged transaction and the
type of hedge transaction. The ineffective portion of all hedges will be
recognized in earnings. The Company believes that the adoption of SFAS 133 will
not have any effect on its results of operations and financial position as it
does not use derivative financial instruments.


                                       15
<PAGE>

Forward Looking Statements

      Except for historical information contained herein, statements contained
in this Form 10-K constitute forward-looking statements made pursuant to the
safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve material risks and uncertainties,
including, without limitation, statements as to management's beliefs,
strategies, plans, projections, expectations or opinions related to the
Company's future performance which are based on a number of assumptions that may
ultimately prove to be inaccurate.

Item 7a. Quantitative and Qualitative Disclosure about Market Risk

INTEREST RATE RISK

      The Company's primary market risks are fluctuations in interest rates and
variability in interest rate spread relationships (i.e., prime to LIBOR spreads)
on its bank debt (see Note 9). The Company does not use derivative
financial instruments.

      The Company's management believes that fluctuations in interest rates in
the near term would not materially affect the Company's consolidated operating
results, financial position or cash flows as the Company has limited risks
related to interest rate fluctuations.

FOREIGN CURRENCY RISK

      The Company does not use foreign currency forward exchange contracts or
purchased currency options to hedge local currency cash flows or for trading
purposes. All sales arrangements with international customers are denominated in
U.S. dollars. Only a small fraction of the Company's purchases are denominated
in foreign currency. Due to this limited activity, the Company does not expect
any material loss with respect to foreign currency risk.


                                       16
<PAGE>

                           GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                    FOR THE THREE YEARS ENDED JANUARY 1, 2000


                                       17
<PAGE>

Item 8. Financial Statements and Supplementary Data

                   Index to Consolidated Financial Statements

                                                                       Page
                                                                       ----

     Report of Independent Certified Public Accountants .............  F-19

     Consolidated Balance Sheets, January 2, 1999 and
       January 1, 2000 ..............................................  F-20

     Consolidated Statements of Operations for the Years Ended
       December 27, 1997, January 2, 1999 and January 1, 2000 .......  F-21

     Consolidated Statements of Changes in Stockholders' Equity
       for the Years Ended December 27, 1997, January 2, 1999
       and January 1, 2000 ..........................................  F-22

     Consolidated Statements of Cash Flows for the Years Ended
       December 27, 1997, January 2, 1999 and January 1, 2000 .......  F-23

     Summary of Significant Accounting Policies .....................  F-24 - 26

     Notes to Consolidated Financial Statements .....................  F-27 - 40


                                       18
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

General Bearing Corporation
West Nyack, New York

We have audited the accompanying consolidated balance sheets of General Bearing
Corporation and subsidiaries as of January 2, 1999 and January 1, 2000, and the
related consolidated statements of operations, stockholders' equity and cash
flows for each of the three years in the period ended January 1, 2000. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of General Bearing
Corporation and subsidiaries as of January 2, 1999 and January 1, 2000, and the
results of their operations and their cash flows for each of the three years in
the period ended January 1, 2000, in conformity with generally accepted
accounting principles.


BDO Seidman, LLP

New York, New York
February 17, 2000


                                                                            F-19
<PAGE>

                           GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
               (In Thousands Except for Shares and Per Share Data)

<TABLE>
<CAPTION>
                                                                January 2,  January 1,
                                                                   1999        2000
                                                                ----------  ----------
<S>                                                              <C>         <C>
                        ASSETS
Current:
    Cash and cash equivalents                                    $     29    $  2,272
    Accounts receivable - trade, less allowance for doubtful
       accounts of $200 and $137                                    5,772       6,205
    Inventories                                                    16,423      18,896
    Prepaid expenses and other current assets                         358         836
    Advances to affiliates                                            940       1,040
    Advances to parent                                                 --         588
    Deferred tax asset                                                437         587
                                                                 --------    --------
          Total current assets                                     23,959      30,424

Fixed assets, net                                                   3,277       2,811
Investment in affiliates                                            1,695       2,388
Advances to affiliate                                                 423         442
Deferred tax asset                                                    956          --
Other assets                                                           28         262
                                                                 --------    --------

Total Assets                                                     $ 30,338    $ 36,327
                                                                 ========    ========
       LIABILITIES AND STOCKHOLDERS' EQUITY
Current:
    Note payable - bank                                          $  8,126    $     --
    Accounts payable:
       Trade                                                        1,271       1,056
       Affiliates                                                       3         133
       Parent                                                          94          --
    Accrued expenses and other current liabilities                  1,128       1,184
    Current maturities of long-term debt                              286          63
                                                                 --------    --------
          Total current liabilities                                10,908       2,436
                                                                 --------    --------

Long-term debt, less current maturities:
    Bank                                                              557      11,406
    Other                                                             440         440
    Affiliate                                                         954         996
                                                                 --------    --------
          Total long-term debt                                      1,951      12,842
                                                                 --------    --------

Deferred taxes                                                         --         205

Commitments and contingencies

Stockholders' equity:
    Preferred stock par value $.01 per share - shares
       authorized 1,000,000 none issued and outstanding                --          --
    Common stock par value $.01 per share - shares
       authorized 19,000,000, issued and outstanding 3,918,950
       and 3,924,950 shares                                            39          39
    Additional paid-in capital                                     28,758      28,804
    Deficit                                                       (11,318)     (7,999)
                                                                 --------    --------
          Total stockholders' equity                               17,479      20,844
                                                                 --------    --------

Total liabilities and stockholders' equity                       $ 30,338    $ 36,327
                                                                 ========    ========
</TABLE>

           See accompanying summary of significant accounting policies
                and notes to consolidated financial statements.


                                                                            F-20
<PAGE>

                           GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
               (In Thousands Except for Shares and Per Share Data)

<TABLE>
<CAPTION>
                                                              Years Ended
                                               -----------------------------------------
                                               December 27,    January 2,     January 1,
                                                  1997           1999           2000
                                               -----------    -----------    -----------
<S>                                            <C>            <C>            <C>
Sales                                          $    42,153    $    45,461    $    51,855
Cost of sales                                       29,090         31,465         36,225
                                               -----------    -----------    -----------

     Gross profit                                   13,063         13,996         15,630

Selling, general and administrative expenses         8,607          9,076          9,994
Plant closing costs, net                               403             --             --
                                               -----------    -----------    -----------

     Operating income                                4,053          4,920          5,636
                                               -----------    -----------    -----------

Other (income) expense
     Interest, net, including $21,
         ($13), ($36) to (from) parent                 851            747            705
     Equity in income of affiliates                    (25)           (46)          (292)
     Other                                             (19)          (350)            --
                                               -----------    -----------    -----------

Total Other (income) expense                           807            351            413
                                               -----------    -----------    -----------

     Income before income taxes                      3,246          4,569          5,223

Income tax (benefit)                                (2,100)         1,688          1,904
                                               -----------    -----------    -----------

     Net Income                                $     5,346    $     2,881    $     3,319
                                               ===========    ===========    ===========

Income per common share:
     Basic                                     $      1.41    $       .74    $       .85
                                               -----------    -----------    -----------

     Diluted                                   $      1.38    $       .73    $       .85
                                               -----------    -----------    -----------

Weighted average number of common shares

     Basic                                       3,798,904      3,914,809      3,922,453
                                               -----------    -----------    -----------

     Diluted                                     3,868,610      3,972,397      3,922,602
                                               -----------    -----------    -----------
</TABLE>

           See accompanying summary of significant accounting policies
                and notes to consolidated financial statements.


                                                                            F-21
<PAGE>

                           GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF CHANGES
                             IN STOCKHOLDERS' EQUITY
                        (In Thousands Except for Shares)

<TABLE>
<CAPTION>
                                        Preferred Stock                 Common Stock             Additional
                                  --------------------------      --------------------------       paid-in
                                    Shares          Amount          Shares          Amount         capital          Deficit
                                  ----------      ----------      ----------      ----------     -----------       ----------
<S>                                       <C>             <C>      <C>            <C>             <C>              <C>
Balance, December 28, 1996                --              --       3,000,000              30          23,655          (19,545)

Sale of 900,000 Common Shares             --              --         900,000               9           4,937               --

Net income                                --              --              --              --              --            5,346
                                  ----------      ----------      ----------      ----------      ----------       ----------

Balance, December 27, 1997                --              --       3,900,000              39          28,592          (14,199)

Sale of 18,950 Common Shares-
  Stock Options Exercised                 --              --          18,950               0             132               --

Tax benefit- Stock Options
  Exercised                               --              --              --              --              34               --

Net Income                                --              --              --              --              --            2,881
                                  ----------      ----------      ----------      ----------      ----------       ----------

Balance, January 2, 1999                  --              --       3,918,950              39          28,758          (11,318)

Sale of 6,000 Common Shares-
  Stock Options Exercised                 --              --           6,000              --              42               --

Tax benefit-Stock Options
  Exercised                               --              --              --              --               4               --

Net Income                                                                --              --              --            3,319
                                  ----------      ----------      ----------      ----------      ----------       ----------

Balance,  January 1, 2000                 --              --       3,924,950      $       39      $   28,804       $   (7,999)
                                  ==========      ==========      ==========      ==========      ==========       ==========
</TABLE>

           See accompanying summary of significant accounting policies
                and notes to consolidated financial statements.


                                                                            F-22
<PAGE>

                           GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                        Year ended
                                                            ------------------------------------
                                                            December 27,  January 2,  January 1,
                                                                1997         1999       2000
                                                                ----         ----       ----
<S>                                                           <C>         <C>         <C>
Cash flows from operating activities:
    Net income                                                $  5,346    $  2,881    $  3,319
Add (deduct) noncash items charged(credited) to income:
    Deferred income taxes                                       (2,180)      1,521       1,011
    Depreciation and amortization                                  511         490         507
    Equity in income of affiliates                                 (25)        (46)       (292)
    Loss (gain) on disposal of fixed assets                        (36)       (316)          2

Add (deduct) changes in operating assets and liabilities:
    Accounts receivable                                           (898)       (299)       (433)
    Inventories                                                  2,152      (4,676)     (2,473)
    Prepaid expenses and other assets                               42         521        (720)
    Due to (from) affiliates                                    (3,661)        300          53
    Accounts payable and accrued expenses                         (991)       (504)       (158)
                                                              --------    --------    --------

        Net cash provided by (used in)
            operating activities                                   260        (128)        816
                                                              --------    --------    --------

Cash flows from investing activities:
    Investment in affiliates, net                                   --        (936)       (101)
    Fixed asset purchases                                         (605)       (906)       (532)
    Proceeds from sale of fixed assets                             351         694          --
                                                              --------    --------    --------

        Net cash used in investing activities                     (254)     (1,148)       (633)
                                                              --------    --------    --------

Cash flows from financing activities:
    Proceeds from sale of common shares, net                     4,947         132          42
    Net proceeds from revolving credit facility                     --          --      11,406
    Repayment of long-term debt - bank                            (223)       (223)       (780)
    Increase (decrease) in note payable - bank                  (4,087)      2,686      (8,126)
    Repayment of long-term debt and other balances - parent       (538)     (1,408)       (482)
                                                              --------    --------    --------

        Net cash provided by financing activities                   99       1,187       2,060
                                                              --------    --------    --------

Net increase (decrease) in cash and cash equivalents               105         (89)      2,243

Cash and cash equivalents, beginning of year                        13         118          29
                                                              --------    --------    --------

Cash and cash equivalents, end of year                        $    118    $     29    $  2,272
                                                              ========    ========    ========
</TABLE>

           See accompanying summary of significant accounting policies
                and notes to consolidated financial statements.


                                                                            F-23
<PAGE>

                           GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company         General Bearing Corporation ("General") and subsidiaries
                    (collectively, the "Company") manufactures, sources,
                    assembles and distributes a variety of bearing components
                    and bearing products, including ball bearings, tapered
                    roller bearings, spherical roller bearings and cylindrical
                    roller bearings. Under the Hyatt(R)and The
                    General(R)trademarks, the Company supplies original
                    equipment manufacturers ("OEMs") and the industrial
                    aftermarket principally in the United States ("U.S."). The
                    Company's products are used in a broad range of
                    applications, including automobiles, railroad cars,
                    locomotives, trucks, heavy duty trailers, office equipment,
                    machinery and appliances. At January 1, 2000, 76.4% of the
                    Company is owned by World Machinery Company ("World" or
                    "Parent").

Principles of       The accompanying consolidated financial statements include
Consolidation       the accounts of General and two majority-owned subsidiaries
                    which are inactive at the end of fiscal 1999. Investments in
                    20% to 50% owned companies are accounted for on the equity
                    method and accordingly, all dividends received are treated
                    as a return of capital.

                    All significant intercompany accounts and transactions have
                    been eliminated.

Cash and            The Company considers all highly liquid investments with a
Cash Equivalents    maturity of three months or less when purchased to be cash
                    equivalents.

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

Fixed Assets        The cost of depreciable plant and equipment is depreciated
                    for financial reporting purposes over the estimated useful
                    lives using the straight-line method. The estimated lives
                    for each property classification are as follows:

                    ------------------------------------------------------------
                    Machinery and equipment                        3 to 10 years
                    Furniture and fixtures                              10 years
                    Transportation equipment                        3 to 5 years
                    Leasehold improvements            Lesser of life of lease or
                                                                     useful life
                    ============================================================

                    Expenditures for maintenance, repairs and minor renewals or
                    betterments are charged against income. Major renewals and
                    replacements are capitalized.


                                                                            F-24
<PAGE>

                           GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Evaluating          The Company reviews the carrying values of its long-lived
Recoverability of   and identifiable intangible assets for possible impairment
Long Lived Assets   whenever events or changes in circumstances indicate that
                    the carrying amount of the assets may not be recoverable.
                    The Company assesses recoverability of these assets by
                    estimating future nondiscounted cash flows. Any long-lived
                    assets held for disposal are reported at the lower of their
                    carrying amounts or fair value less cost to sell.

Revenue             The Company recognizes revenue when products are shipped.
Recognition

Reporting Period    The reporting period for the Company is a 52-53 week period.
                    There were 52 weeks in the period ended December 27, 1997,
                    53 weeks in the period ended January 2, 1999, and 52 weeks
                    in the period ended January 1, 2000.

Income Taxes        The Company filed a consolidated Federal income tax return
                    with its Parent through the date of its initial public
                    offering, completed in February, 1997; thereafter, it files
                    its own federal return. State and local tax returns are
                    filed separately. Federal income taxes are calculated as if
                    the Company filed its tax return on a separate return basis
                    for all periods presented.

                    Deferred income taxes reflect the net tax effect of
                    temporary differences between the carrying amounts of assets
                    and liabilities for financial reporting purposes and the
                    amounts used for income tax purposes, as well as recoverable
                    Alternative Minimum Tax payments.

Use of Estimates    The preparation of financial statements in conformity with
                    generally accepted accounting principles requires management
                    to make estimates and assumptions that affect the reported
                    amounts of assets and liabilities and disclosure of
                    contingent assets and liabilities at the date of the
                    financial statements and the reported amounts of revenues
                    and expenses during the reporting period. Actual results
                    could differ from those estimates.

Estimated Fair      Statement of Financial Accounting Standards ("SFAS") No.
Value of Financial  107, "Disclosure About Fair Value of Financial Instruments",
Instruments         requires disclosures of fair value information about
                    financial instruments, for which it is practicable to
                    estimate the value, whether or not recognized on the balance
                    sheet.

                    The fair value of financial instruments, including cash,
                    accounts receivable and accounts payable, approximate their
                    carrying value because of the current nature of these
                    instruments. The carrying amounts of the Company's note
                    payable - bank and long-term debt - bank approximate fair
                    value because the interest rates on these instruments are
                    subject to changes with market interest rates. It is not
                    practical to determine the fair value of receivables from,
                    payables to and long-term debt payable to affiliates and
                    other because of the nature of their terms.


                                                                            F-25
<PAGE>

                           GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Concentrations of   The Company extends credit based on an evaluation of the
Risk                customer's financial condition, generally without requiring
                    collateral. Exposure to losses on receivables is principally
                    dependent on each customer's financial condition. The
                    Company monitors its exposure for credit losses and
                    maintains allowances for anticipated losses. The Company
                    obtained 52%, 72% and 77% of its bearing and component
                    requirements from various Chinese joint ventures in the
                    years ended December 27, 1997, January 2, 1999 and January
                    1, 2000, respectively.

Stock-Based         The Financial Accounting Standards Board Statement of
Compensation        Financial Accounting Standards No. 123, "Accounting for
                    Stock-Based Compensation" ("SFAS No. 123") requires entities
                    which have arrangements under which employees receive shares
                    of stock or other equity instruments of the employer or the
                    employer incurs liabilities to employees in amounts based on
                    the price of its stock to either record the fair value of
                    the arrangements or disclose the proforma effects of the
                    fair value of the arrangements. The Company has adopted the
                    disclosure method of SFAS No. 123.

Earnings Per        Earnings per common share are computed on the basis of the
Common Share        weighted average number of common shares outstanding during
                    the year. In 1997, the Financial Accounting Standards Board
                    issued Statement of Financial Accounting Standards No. 128,
                    Earnings per Share. Statement 128 replaced the previously
                    reported primary and fully diluted earnings per share with
                    basic and diluted earnings per share. Unlike primary
                    earnings per share, basic earnings per share excludes any
                    dilutive effects of options, warrants, and convertible
                    securities. Diluted earnings per share is very similar to
                    the previously reported fully diluted earnings per share.

Recent Accounting   In June 1998, the Financial Accounting Standards Board
Standards           issued SFAS No. 133 ("SFAS 133"), Accounting for Derivative
                    Investments and Hedging Activities Income. SFAS 133 is
                    effective for transactions entered into after June 15, 2000.
                    SFAS 133 requires that all derivative instruments be
                    recorded on the balance sheet at fair value. Changes in the
                    fair value of the derivatives are recorded each period in
                    current earnings or other comprehensive income, depending on
                    whether a derivative is designated as part of the hedged
                    transaction and the type of hedge transaction. The
                    ineffective portion of all hedges will be recognized in
                    earnings. The Company believes that the adoption of SFAS 133
                    will not have any effect on its results of operations and
                    financial position as it does not use derivative financial
                    instruments.


                                                                            F-26
<PAGE>

                          GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  Initial Public  In February, 1997, the Company completed an initial public
    Offering        offering ("IPO") in which 900,000 shares of common stock
                    were sold for $ 7 per share for a total consideration of $
                    6.3 million. Net proceeds received by the Company amounted
                    to approximately $ 4.9 million. The Company has used a
                    portion of these proceeds as working capital and to pay down
                    debt.

2.  Inventories     Inventories consist of the following: (In Thousands)

                                                         January 2,   January 1,
                                                            1999         2000
                    ------------------------------------------------------------
                    Finished goods                         $7,140       $6,738

                    Raw materials, purchased parts and
                    work-in-process                         9,283       12,158
                    ------------------------------------------------------------
                                                          $16,423      $18,896
                    ============================================================

3.  Fixed Assets    Fixed assets consist of the following: (In Thousands)

                                                         January 2,   January 1,
                                                            1999         2000
                    ------------------------------------------------------------
                    Machinery and equipment                $4,960       $4,835
                    Furniture and fixtures                    380          394
                    Leasehold improvements                    674          690
                    Transportation equipment                  152          173
                    ------------------------------------------------------------
                                                            6,166        6,092

                    Less: Accumulated depreciation          2,889        3,281
                    ------------------------------------------------------------
                                                           $3,277       $2,811
                    ============================================================

                    Included in machinery and equipment is construction in
                    process of $407,000. The Company estimates that it will cost
                    $75,000 to complete construction in process.

                    Depreciation expense was $508,000, $486,000 and $495,000 for
                    the years 1997, 1998 and 1999, respectively.

                    In 1998, the Company purchased $114,000 of machinery and
                    equipment from an affiliate.


                                                                            F-27
<PAGE>

                          GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4.  Investment
    In Affiliates   Investment in affiliates consists of the following:
                    (In Thousands)

                                                         January 2,   January 1,
                                                            1999         2000
                    ------------------------------------------------------------
                    Less than 50% owned - at equity:

                    Shanghai General Bearing Co., Ltd.
                    (25% owned) (a)                         $566         $828

                    Ningbo General Bearing Co., Ltd.
                    (33.3% owned) (b)                        977        1,404

                    Shanghai Pudong General Bearing
                    Co., Ltd. (25% owned) (c)                152          156
                    ------------------------------------------------------------
                                                          $1,695       $2,388
                    ============================================================

                    (a)  Shanghai General Bearing Co., Ltd. ("SGBC") was formed
                         in June 1987 for an initial term of ten years. During
                         1996, the Company extended the term to June 2008 and
                         can further extend the term for an additional ten year
                         interval upon six months notice and unanimous consent
                         of SGBC's board of directors. The Company is not
                         required to contribute additional capital. Upon receipt
                         of a total of $1,375,000 in dividends, the Company will
                         cease to receive any further dividends. Through January
                         1, 2000, the Company has received $315,000 in dividends
                         from SGBC. After termination of the joint venture, all
                         equipment and machinery contributed by the Company will
                         be turned over to the joint venture partner without
                         compensation to the Company.

                    (b)  Ningbo General Bearing Company Ltd., ("NGBC") was
                         formed in March 1998 for a term of sixteen years. Upon
                         expiration or early termination of the business term,
                         assets will be distributed in the same proportion as
                         the respective paid investments to the registered
                         capital. The Company is not required to contribute
                         additional capital.

                    (c)  Shanghai Pudong General Bearing Company Ltd., ("SPGBC")
                         was formed in 1996. The Company is not required to
                         contribute additional capital.


                                      F-28
<PAGE>

                          GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5.  Advances to
    Affiliates      Advances to affiliates consists of the following:
                    (In Thousands)

<TABLE>
<CAPTION>
                                                           January 2,   January 1,
                    Current:                                  1999        2000
                    --------------------------------------------------------------
                    <S>                                       <C>         <C>
                    Rockland Manufacturing Company (a)        $580        $  766
                    WMW Machinery Co., Inc. (b)                 90           167
                    Shanghai General Bearing Co., Ltd.         254            53
                    Gussack Realty Company                      --            37
                    Shanghai Pudong General Bearing Co., Ltd.   16            17
                    --------------------------------------------------------------
                                                              $940        $1,040
                    ==============================================================

                    Long-term:
                    General IKL Corp. (see Note 13(e))        $423          $442
                    ==============================================================
</TABLE>

                    (a)  Rockland Manufacturing Company is a joint venture of
                         the Parent and the advances are used primarily for
                         inventory purchases and administrative expenses.

                    (b)  WMW Machinery Company is a wholly owned subsidiary of
                         the Parent and the advances relate primarily to
                         administrative expenses.

6.  Note Payable    At January 2, 1999, the Company was obligated to a bank
    - Bank          under a revolving line of credit which was replaced with
                    proceeds from a new credit agreement (see Note 9).

7.  Accrued
    Expenses
    and Other
    Current         Accrued expenses and other current liabilities consist of
    Liabilities     the following: (In Thousands)

                                                       January 2,     January 1,
                                                          1999           2000
                    ------------------------------------------------------------
                    Payroll & related benefits          $  290         $  376
                    Sales commissions                      267            199
                    Sales rebates                          177            149
                    Other                                  394            460
                    ------------------------------------------------------------
                    Total                               $1,128         $1,184
                    ============================================================


                                                                            F-29
<PAGE>

                          GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8.  Taxes on
    Income          The federal, state and local income taxes (benefits) consist
                    of the following:

<TABLE>
<CAPTION>
                                                                                  Years Ended
                                                                       -----------------------------------
                                                                       December    January 2,   January 1,
                               (In Thousands)                          27, 1997       1999         2000
                    --------------------------------------------------------------------------------------
                    <S>                                                <C>           <C>          <C>
                    Deferred:

                       Federal                                         $(2,092)      $ 1,436      $   977

                       State and local                                     (88)           85           34
                    --------------------------------------------------------------------------------------

                                                                        (2,180)        1,521        1,011

                    Current:

                       Federal                                              80            80          656

                       State and local                                      --            87          237
                    --------------------------------------------------------------------------------------
                                                                       $(2,100)      $ 1,688      $ 1,904
                    ======================================================================================
</TABLE>

                    The major elements contributing to the difference between
                    Federal statutory rate and the Company's effective tax rate
                    are as follows:

<TABLE>
<CAPTION>
                                                                                Year ended
                                                                  ---------------------------------------
                                                                  December 27,   January 2,    January 1,
                                                                     1997          1999          2000
                    -------------------------------------------------------------------------------------
                    <S>                                             <C>            <C>           <C>
                    Statutory rate                                   34.0%         34.0%         34.0%
                    Increase (decrease) in valuation allowance
                      (due primarily to non-utilization of net
                      operating loss)                               (90.6)           --            --
                    State and local income taxes (tax benefit)
                      less federal income tax benefit                (1.8)          2.5           3.4
                    Permanent and other differences                   0.4           0.4          (0.9)
                    -------------------------------------------------------------------------------------
                    Effective rate                                  (58.0%)        36.9%         36.5%
                    =====================================================================================
</TABLE>

                    Temporary differences which give rise to deferred tax assets
                    and liabilities are as follows: (In Thousands)

<TABLE>
<CAPTION>
                                                                       January 2,   January 1,
                                                                          1999         2000
                    --------------------------------------------------------------------------
                    <S>                                                  <C>         <C>
                    Gross deferred tax assets:
                       Accounts receivable and inventory                 $  425      $  199
                       Net operating loss carry forwards                  1,065          --
                       Tax Credits                                           80         379
                       Other                                                  9           9
                    --------------------------------------------------------------------------
                                                                          1,579         587
                    Gross deferred tax liabilities:
                       Plant and equipment depreciation differences         186         205
                    --------------------------------------------------------------------------
                    Net deferred tax asset                               $1,393      $  382
                    ==========================================================================
</TABLE>

                    Management believes the tax credits will be fully realized
                    in 2000 based on the Company's historical earnings and
                    future expectations of adjusted taxable income.


                                                                            F-30
<PAGE>

                          GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.  Long-term
    Debt            (In Thousands)

<TABLE>
<CAPTION>
                                                                                     January 2,   January 1,
                                                                                        1999        2000
                    ----------------------------------------------------------------------------------------
                    <S>                                                               <C>          <C>
                    Bank:

                       $1,560,000 three year loan from the same bank referred to
                       in Note 6                                                      $   780      $    --

                       $21,000,000 revolving line of credit                                --       11,406
                    ----------------------------------------------------------------------------------------
                                                                                          780       11,406
                       Less: Current maturities                                           223           --
                    ----------------------------------------------------------------------------------------
                                                                                      $   557      $11,406

                    ========================================================================================
                    Affiliates:
                       General-IKL Corp. (see Note 13(e))                             $   954      $   996
                    ----------------------------------------------------------------------------------------
                                                                                      $   954      $   996
                    ========================================================================================
</TABLE>

                    The Company is obligated to a bank under a revolving line of
                    credit which expires on April 30, 2003. The credit agreement
                    provides the Company with a secured line of credit of up to
                    $21 million for acquisitions, working capital and general
                    corporate purposes. The maximum amount available is reduced
                    by outstanding letters of credit and certain amounts owed to
                    lender by World. Interest on outstanding obligations is
                    payable at either the bank's prime rate plus up to 1.00%, or
                    LIBOR plus 1.00% to 2.00%. These percentages are determined
                    quarterly based upon the financial performance of the
                    Company. The average monthly rate in effect at January 1,
                    2000 was 7.60%. Also based upon the financial performance of
                    the Company is a commitment fee of either .125% or .25% of
                    unused availability. The loan is secured by the Company's
                    assets. The credit agreement also contains certain
                    restrictive covenants which include, among others,
                    maintenance of financial ratios relating to funded debt,
                    fixed charge coverage and interest coverage, and limitations
                    on capital expenditures and investments. At January 1, 2000,
                    the Company was in compliance with all loan covenants.

                    As of January 1, 2000, borrowing under the credit line
                    amounted to $11,406,000. Letter of credit commitments under
                    this credit line amounted to $156,000 at January 1, 2000.
                    Also as of January 1, 2000, additional letter of credit
                    commitments of $1,515,000 issued by the Company's former
                    lender were collateralized with cash of $1,818,000.

                    The outstanding bank debt at January 2, 1999 was repaid with
                    proceeds from this line of credit.

                    The $440,000 in other long term debt is attributable to the
                    Company financing $504,000 of its fixed asset purchases via
                    capital lease (see note 14(b)).


                                                                            F-31
<PAGE>

                          GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. Discretionary   The Company maintains a profit sharing plan covering
    Profit          eligible salaried and nonunion employees. Contributions are
    Sharing Plan    made to the plan at the discretion of the management of the
                    Company. The Company accrued expense of $180,000 in 1997,
                    $120,000 in 1998 and $140,000 in 1999 for contribution in
                    1998, 1999 and 2000, respectively.

11. Plant Closing   In connection with the closing of its New Jersey facility in
    Costs, Net      October 1997, the Company recorded scrap sales of $150,000,
                    a gain on sale of equipment of $50,000, and plant closing
                    costs of $603,000.

12. Operating
    Items           Other (income) expense consists of: (In Thousands)

<TABLE>
<CAPTION>
                                                December 27,      January 2,      January 1,
                                                    1997             1999            2000
                    ------------------------------------------------------------------------
                    <S>                            <C>              <C>              <C>
                    Gain on sale of equipment      $  --            $(350)           $ --
                    Other                            (19)              --              --
                    ------------------------------------------------------------------------
                                                   $ (19)           $(350)           $ --
                    ========================================================================
</TABLE>

                    The Company incurred interest expense of $1,002,000,
                    $853,000 and $782,000 in 1997, 1998 and 1999, respectively.

                    In 1997 the Company liquidated two product lines which in
                    the prior year were partially reserved. Related to these
                    product lines, inventory reserves were reduced by $554,000.

                    In 1999 the Company adjusted the book value of certain of
                    its inventory to net realizable value. In line with this
                    adjustment, inventory reserves were reduced by $792,000.

13. Transactions    (a)  The Company made purchases of approximately $10.0
    with                 million, $20.5 million and $23.8 million from
    Affiliates           affiliates in 1997, 1998 and 1999, respectively.
                         Accounts payable - affiliates relate primarily to
                         these purchases.

                    (b)  The Company subleases office facilities and provides
                         services for an affiliate. The Company charged this
                         affiliate $120,000 per year in each of the 3 years
                         ended January 1, 2000 for such services.

                    (c)  The Company leases its corporate headquarters from
                         Gussack Realty Company ("Realty"), which is owned by
                         certain shareholders of World. Rent and real estate
                         taxes paid to the affiliate were approximately
                         $1,144,000, $1,144,000 and $1,188,000 in 1997, 1998 and
                         1999, respectively.

                    (d)  The Company made payments for and advances to certain
                         affiliates for payroll, benefits, and other expenses.
                         Such payments aggregated $1,102,000, $1,227,000 and
                         $947,000 for the fiscal years ended 1997, 1998 and
                         1999, respectively.


                                                                            F-32
<PAGE>

                          GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    (e)  The amounts receivable from and payable to General-IKL
                         Corp., a corporate joint venture with a manufacturer
                         located in the former Republic of Yugoslavia, are
                         restricted due to the suspension, by the United States
                         government, of certain economic activity with that
                         country. The Company accrues interest on the balances
                         due to and from this affiliate.

                    (f)  Gain on sale of equipment of $350,000 in 1998 resulted
                         from equipment sold to Wafangdian General Bearing Co.,
                         Ltd.

14. Commitments
        and         (a)  Rent expense and certain operating leases on various
    Contingencies        equipment consist of the following: (In Thousands).

<TABLE>
<CAPTION>
                                                                       Year ended
                                                        ----------------------------------------
                                                        December 27,     January 2,   January 1,
                                                            1997           1999          2000
                    ----------------------------------------------------------------------------
                    <S>                                    <C>            <C>           <C>
                    Gross rent paid (excluding taxes)      $  913         $  925        $1,080
                    Less: Reimbursed from affiliates          185            197           226
                    ----------------------------------------------------------------------------
                    Net rent expense                       $  728         $  728        $  854
                    ============================================================================
</TABLE>

                    Minimum annual rentals and rental income under these
                    agreements are as follows: (In Thousands)

                                         Minimum           Rental        Net
                    Year              Annual Rentals       Income        Rent
                    ------------------------------------------------------------
                    2000                 $1,085            $  (229)     $  856
                    2001                  1,097               (235)        862
                    2002                  1,092               (237)        855
                    2003                  1,149               (251)        898
                    2004                  1,173               (256)        917
                    ------------------------------------------------------------
                    Total                $5,596            $(1,208)     $4,388
                    ============================================================

                    The Company entered into a lease agreement with Realty for
                    its new premises effective November 1, 1996 for an initial
                    term of seven years. Concurrently, the Company entered into
                    sublease agreements with World and WMW Machinery Co., Inc.,
                    an affiliate.

                    (b)  Capital Lease Obligations:

                         The Company leases certain equipment under capital
                         leases. The assets acquired under capital leases have a
                         cost of $504,000 and accumulated depreciation of
                         $76,000 as of January 1, 2000.

                         The following is a schedule, by year, of future minimum
                         lease payments under capitalized leases, together with
                         the present value of the net minimum lease payments at
                         January 1, 2000.


                                                                            F-33
<PAGE>

                          GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    Payments for the year ending: (In Thousands)

                    2000                                                 $ 92
                    2001                                                  122
                    2002                                                  122
                    2003                                                  122
                    2004                                                  122
                    2005                                                   32
                    ------------------------------------------------------------
                    Total minimum lease payments                         $612

                    Less: Amount representing interest                    109
                    ------------------------------------------------------------
                    Present value of net minimum lease payments          $503

                    Less: Current portion                                  63
                    ------------------------------------------------------------
                    Long-term lease obligations                          $440

                    ============================================================

                    During 1999, the Company made payments of interest only
                    pending the lease closing.

                    (c)  The Company has a management consulting and
                         noncompetition agreement with a former officer and
                         stockholder. The agreement, which commenced as of
                         January 1, 2000, provides for monthly payments
                         aggregating $55,000 per annum for ten years. As of
                         January 1, 2000, future payments required under the
                         agreement total $547,000.

                    (d)  US Customs has a claim against the Company, which the
                         Company believes to be without merit. The Company
                         intends to vigorously defend this claim and believes
                         that the claim will not have a material impact on the
                         financial condition, operations or liquidity of the
                         Company.

                         World and Subsidiaries are currently undergoing a 1996
                         tax audit by the Internal Revenue Service. The Company
                         believes that the audit will not have a material impact
                         on the financial condition, operations or liquidity of
                         the Company.

                         The Company is currently undergoing a New York State
                         Sales and Use Tax audit for the June 1996 - February
                         1999 periods. The Company believes that the audit will
                         not have a material impact on the financial condition,
                         operations or liquidity of the Company.

                         The Company will undergo the following audits by the
                         State of New Jersey in 2000; July 1995 - December 1997
                         Sales and Use Tax, January 1994 - December 1997
                         Corporate Business Tax, and January 1995 - December
                         1997 Income Tax. The Company believes that these audits
                         will not have a material impact on the financial
                         condition, operations or liquidity of the Company.

                    (e)  The current collective bargaining agreement with the
                         United Brotherhood of Carpenters and Joiners of
                         America, AFL-CIO, Local 3127 expires on April 30, 2000.
                         The Company believes that such expiration and
                         subsequent renewal will not have a material impact on
                         the financial condition, operations or liquidity of the
                         Company.


                                                                            F-34
<PAGE>

                          GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    (f)  The Company is party to a trademark license agreement
                         which provides for increasing annual fees of between
                         $20,000 and $35,000 through 1999, and $35,000 per year
                         plus an inflation factor thereafter until 2009. The
                         agreement contains an acceleration clause which
                         provides for immediate payment of all remaining fees in
                         the event of breach of contract.

                    (g)  The Company has guaranteed certain of Realty's
                         outstanding obligations of $728,000 to a bank and other
                         parties.

                    (h)  In 1995 Realty and the Company filed an action against
                         Xerox Corporation, for contamination caused by Xerox of
                         property formerly leased by the Company and owned by
                         Realty in Blauvelt, New York. Xerox counterclaimed
                         alleging that the Company contaminated the property and
                         increased remedial costs to Xerox. On April, 22, 1999,
                         the jury in the above matter found in favor of Realty
                         and the Company, and against Xerox on both the
                         complaint and the counterclaim. On May 28th, 1999, the
                         Court entered judgment in favor of Realty and the
                         Company for compensatory damages of $1,083,000 and
                         sanctions of $28,000. On June 14th, 1999, Xerox filed a
                         motion for entry of a judgment in favor of Xerox
                         notwithstanding the verdict, pursuant to Rule 50(b) of
                         the Federal Rules of Civil Procedure, which the Court
                         denied. On June 24th, 1999, Realty and the Company
                         filed an appeal with the United States Court of Appeals
                         for the Second Circuit (the"appellate court"),
                         challenging several rulings of the trial judge,
                         including, among other things, his denial of
                         prejudgment interest and refusal to allow the jury to
                         consider punitive damages. On July 23rd, 1999, Xerox
                         filed a cross appeal. All appellate briefs have been
                         filed and the parties expect oral argument to take
                         place in the last week of April, 2000. The Company has
                         not recognized any amounts related to this judgment in
                         its financial statements.

15. Stock Options   In September 1996, the Company adopted the 1996 Stock Option
                    and Performance Award Plan ("1996 Plan"), which authorizes
                    the granting to directors, officers and key employees of the
                    Company of incentive or non-qualified stock options,
                    performance shares, restricted shares and performance units.
                    The 1996 Plan covers up to 500,000 shares of common stock.

                    The exercise price of any incentive stock option granted to
                    an eligible employee may not be less than 100% of the fair
                    market value of the shares underlying such option on the
                    date of grant, unless such employee owns more than 10% of
                    the outstanding common stock or stock of any subsidiary or
                    parent of the Company, in which case the exercise price of
                    any incentive stock option may not be less than 110% of such
                    fair market value. No option may be exercisable more than
                    ten years after the date of grant and, in the case of an
                    incentive stock option granted to an eligible employee
                    owning more than 10% of the common stock or stock of any
                    subsidiary or parent of the Company, no more than five years
                    from its date of grant. Options are not transferable, except
                    upon the death of the optionee. Upon death of the optionee,
                    vested options are exercisable according to the original
                    term of the option grant. In general, upon termination of
                    employment of an optionee, all options granted to such
                    person which are not exercisable on the date of such
                    termination immediately expire, and any options that are
                    exercisable expire three months following termination of
                    employment, if such termination is not the result of death
                    or retirement and one year following such termination if
                    such termination was because of disability or retirement
                    under the provisions of any retirement plan that may be
                    established by the Company, or with the consent of the
                    Company.


                                                                            F-35
<PAGE>

                          GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    The Company estimates the fair value of each stock option at
                    the grant date by using the Black-Scholes option-pricing
                    model with the following weighted average assumptions used
                    for grants in fiscal 1997: no dividend yield, expected
                    volatility of 35.0%, risk free interest rates of 6.0% to
                    6.5% and expected lives of 5 to 10 years. For fiscal 1998,
                    the weighted average assumptions used for grants were: no
                    dividend yield, expected volatility of 37.3%, risk free
                    interest rates of 4.7% to 5.5% and expected lives of 5 to 10
                    years. For the fiscal 1999 grant, the assumptions were no
                    dividend yield, expected volatility of 45.8%, risk free
                    interest rate of 5.0% and expected life of 5 to 10 years. If
                    compensation cost for the Company's stock option plan had
                    been determined in accordance with SFAS No. 123, net income
                    would have been reduced by approximately $157,000 or $.04
                    per diluted share in fiscal 1997, $211,000 or $.05 per
                    diluted share in fiscal 1998 and $169,000 or $.04 per
                    diluted share in fiscal 1999.

                    The following table summarizes information about stock
                    options outstanding at January 1, 2000.

<TABLE>
<CAPTION>
                                                             Options Outstanding
                                          -------------------------------------------------------
                                                         Weighted average
                                                             remaining               Weighted
                                            Number        contractual life       average exercise
                                          Outstanding         (years)                  price
                                          -------------------------------------------------------
                    <S>                     <C>                 <C>                    <C>
                    Exercise Prices

                      $7.00 to $7.70        259,800             7.5                    $7.15
</TABLE>

                    Transactions under the stock option plan are summarized as
                    follows:

<TABLE>
<CAPTION>
                                                     December, 27, 1997           January 2, 1999           January 1, 2000
                                                   -----------------------    -----------------------    ---------------------
                                                     Shares       Weighted      Shares       Weighted      Shares     Weighted
                                                                   average                    average                  average
                                                                  exercise                   exercise                 exercise
                                                                     price                      price                    price
                                                   ---------------------------------------------------------------------------
                    <S>                             <C>              <C>       <C>              <C>       <C>            <C>
                    Outstanding at beginning
                    of year                             --           $ --      257,500          $7.19     269,550        $8.72

                    Granted                         257,500           7.19      94,000          12.32       5,000         7.63

                    Exercised                           --             --      (18,950)          7.00      (6,000)        7.00

                    Canceled                            --             --      (63,000)          8.18      (8,750)        7.00
                    ----------------------------------------------------------------------------------------------------------
                    Outstanding at end of year      257,500          $7.19     269,550          $8.72     259,800        $7.15
                    ==========================================================================================================
                    Options exercisable at year
                    end                                 --           $ --       32,800          $7.27      85,450        $7.20
                    ==========================================================================================================
                    Weighted average fair
                    value of options granted
                    during the year                                  $3.31                      $6.92                    $4.30
                    ==========================================================================================================
</TABLE>


                                                                            F-36
<PAGE>

                          GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    In connection with the Company's IPO, the Company issued
                    90,000 warrants with an exercise price of $9.80. These
                    warrants expire in February 2002.

                    During 1999, the Company repriced options to purchase 80,000
                    shares with a weighted average exercise price of $12.36 to
                    $7.00.

16. Earnings Per    Earnings per share was computed as follows: (In Thousands
    Share           Except Shares and Per Share Data)

<TABLE>
<CAPTION>
                                                                                     Year Ended
                                                                      ------------------------------------------
                                                                      December 27,    January 2,      January 1,
                                                                         1997            1999            2000
                                                                      ------------------------------------------
                    <S>                                               <C>             <C>             <C>
                    Net income available to common
                    stockholders                                      $    5,346      $    2,881      $    3,319
                                                                      ------------------------------------------
                    Basic earnings per share computation:

                      Weighted Average Common shares outstanding       3,798,904       3,914,809       3,922,453

                      Basic earnings per share                        $     1.41      $      .74      $      .85
                                                                      ------------------------------------------
                    Diluted earnings per share computation

                      Weighted Average Common shares outstanding       3,798,904       3,914,809       3,922,453

                      Incremental shares from assumed exercise
                      of dilutive options                                 69,706          57,588             149
                                                                      ------------------------------------------
                                                                       3,868,610       3,972,397       3,922,602
                                                                      ------------------------------------------
                      Diluted earnings per share                      $     1.38      $      .73      $      .85
                                                                      ------------------------------------------
</TABLE>

                    For the year ended December 27, 1997, there were no options
                    and warrants that were anti-dilutive. For the years ended
                    January 2, 1999 and January 1, 2000, 172,000 and 349,800
                    options and warrants outstanding, respectively, were
                    anti-dilutive.

17. Supplemental    For the years ended December 27, 1997, January 2, 1999 and
    Cash Flow       January 1, 2000, the Company paid interest of approximately
    Information     $940,000, $864,000, and $710,000 respectively. During 1998,
                    the Company entered into a capital lease obligation of
                    $504,000 for new equipment.

                    The Company paid income taxes of $85,000, $173,000 and
                    $1,108,000 in 1997, 1998 and 1999, respectively.

                    During 1999, the Company negotiated a price reduction of
                    $200,000 on a previously capitalized fixed asset. This non
                    cash transaction is not reflected in investing activities.
                    There is a corresponding offset to the previously recorded
                    liability to the parent in financing activities.

                    Also during 1999, the Company transferred a machine valued
                    at $300,000 as payment for additional investment in NGBC
                    (Note 4(b)).


                                                                            F-37
<PAGE>

                          GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18. Segment         During 1998, the Company adopted Statement of Financial
    Information     Accounting Standards No. 131 ("FAS 131"), Disclosures about
                    Segments of an Enterprise and Related Information. FAS 131
                    supersedes FAS 14, Financial Reporting for Segments of a
                    Business Enterprise, replacing the "industry segment"
                    approach with the "management" approach. The management
                    approach designates the internal reporting that is used by
                    management for making operating decisions and assessing
                    performance as the source of the Company's reportable
                    segments.

                    The Company operates in two segments: the OEM Division,
                    which supplies Original Equipment Manufacturers (OEM's), and
                    the Distribution Division, which serves distributors that
                    supply the repair and maintenance aftermarket and small
                    OEM's. The two divisions supply principally in the United
                    States.

                    The accounting policies of the segments are the same as
                    those described in the summary of significant accounting
                    policies. The Company evaluates segment performance based on
                    operating income.

                    The following table presents information about the Company's
                    business segments.

                       Segment Information: (In Thousands)

--------------------------------------------------------------------------------
                                      1999
--------------------------------------------------------------------------------

                                       OEM  DISTRIBUTION   UNALLOCATED     TOTAL

Net Sales from External Customers  $38,567       $13,288        $   --   $51,855
Gross Profit                         8,510         7,120            --    15,630
Operating Income                     3,181         2,455            --     5,636
Depreciation/Amortization              408            99            --       507
Capital Expenditures                   403            31            98       532
Total Assets                        20,671         6,505         9,151    36,327

--------------------------------------------------------------------------------
                                      1998
--------------------------------------------------------------------------------

                                       OEM  DISTRIBUTION   UNALLOCATED     TOTAL

Net Sales from External Customers  $31,148       $14,313        $   --   $45,461
Gross Profit                         6,770         7,226            --    13,996
Operating Income                     2,150         2,770            --     4,920
Depreciation/Amortization              327           163            --       490
Capital Expenditures                 1,056            35           319     1,410
Total Assets                        17,203         7,408         5,727    30,338

--------------------------------------------------------------------------------
                                      1997
--------------------------------------------------------------------------------

                                       OEM  DISTRIBUTION   UNALLOCATED     TOTAL

Net Sales from External Customers  $25,978       $16,175        $   --   $42,153
Gross Profit                         5,932         7,131            --    13,063
Operating Income                     1,354         2,699            --     4,053


                                                                            F-38
<PAGE>

                          GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Depreciation/Amortization              185           323            --       508
Capital Expenditures                   261            62           282       605
Total Assets                        10,700         8,089         8,013    26,802
--------------------------------------------------------------------------------

                    In fiscal 1997, the Company operated from two locations. One
                    location housed the OEM Division manufacturing operations
                    while the other location represented Distribution Division
                    manufacturing and administrative functions. Depreciation
                    expense on unallocated capital expenditures was charged
                    based on the physical location of the assets. Following the
                    consolidation of the Company's operations into a single
                    location in West Nyack, NY, fiscal 1998 and fiscal 1999
                    depreciation expense was allocated based on material, labor,
                    and overhead.

                    In fiscal 1999, the Company had one customer that
                    represented approximately 16% of total sales. These sales
                    are included in the OEM segment. There were no individual
                    customers representing at least 10% of total sales in fiscal
                    1998 or fiscal 1997.

19. Subsequent      In January 2000, the Company acquired a 60% interest in
    Events          Jiangsu General Ball & Roller Co., Ltd. ("JGBR"). This new
                    company is comprised of the operations of the Jiangsu Lixing
                    Steel Ball Factory (Group) in the People's Republic of
                    China. JGBR is a manufacturer of rolling elements for
                    bearings.

                    Also in January 2000, the Company agreed upon the formation
                    of a joint venture with NN Ball & Roller to equally share
                    the 60% interest in JGBR. The Company's net cash investment
                    for these transactions was $100,000. The Company also
                    advanced $900,000.

20. Quarterly              (In Thousands, except per share data)
    Financial                           (unaudited)
    Data

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
1999                    Net Sales   Gross Profit   Net Income     Basic Earnings   Diluted Earnings
                                                                       Per Share          Per Share
---------------------------------------------------------------------------------------------------
<S>                       <C>             <C>          <C>                  <C>                <C>
First Quarter             $13,722         $4,339       $1,002               $.26               $.26

Second Quarter             14,437          4,358        1,013                .26                .26

Third Quarter              11,687          3,584          698                .18                .18

Fourth Quarter             12,009          3,349          606                .15                .15
---------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
1998                    Net Sales   Gross Profit   Net Income     Basic Earnings   Diluted Earnings
                                                                       Per Share          Per Share
---------------------------------------------------------------------------------------------------
<S>                       <C>             <C>            <C>                <C>                <C>
First Quarter             $10,337         $3,030         $627               $.16               $.15

Second Quarter             11,011          3,828          670                .17                .17

Third Quarter              11,382          3,564          768                .20                .20

Fourth Quarter             12,731          3,574          816                .21                .21
---------------------------------------------------------------------------------------------------
</TABLE>

                                                                            F-39
<PAGE>

                          GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

First Quarter 1999:      The sales volume increase was primarily attributable to
                         an increase in tapered roller bearings, where the
                         Company is a primary supplier to the heavy duty truck
                         trailer market.

Third Quarter 1999:      The sales volume decrease was mainly due to seasonality
                         in the OEM Division as well as timing for orders
                         received on a new product line. The first large order
                         received on this product line was shipped in the second
                         quarter.

Fourth Quarter 1998:     The sales volume increase was primarily due to the
                         Company's achievement of full contract quarterly
                         volumes with the Ford Motor Company on a two year $14
                         million contract to supply certain ball bearings.


                                                                            F-40
<PAGE>

                          Supplementary Financial Data
                            Furnished Pursuant to the
                            Requirements of Form 10-K
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

General Bearing Corporation
West Nyack, New York

     The audits referred to in our report dated February 17, 2000 relating to
the consolidated financial statements of General Bearing Corporation and
subsidiaries, which is referred to in Item 8 of this Form 10-K, includes the
audits of the accompanying financial statement schedule for each of the three
years in the period ended January 1, 2000. This financial statement schedule is
the responsibility of the Company's management. Our responsibility is to express
an opinion on this financial statement schedule based upon our audits.

     In our opinion, such financial statement schedule presents fairly, in all
material respects, the information set forth therein for each of the three years
in the period ended January 1, 2000.


                                              BDO Seidman, LLP

New York, New York
February 17, 2000


                                       41
<PAGE>

                           GENERAL BEARING CORPORATION
                                AND SUBSIDIARIES

Schedule II - Valuation and Qualifying Accounts (In Thousands)

<TABLE>
<CAPTION>
           Column A                     Column B       Column C      Column D           Column E
           --------                     --------       --------      --------           --------

                                                         Add
                                                      ----------

                                        Balance at    Charged to
                                       Beginning of   Costs and                         Balance at
          Description                    Period       Expenses     Deductions (1)      End of Period
          -----------                  ------------   ----------   --------------      -------------
<S>                                       <C>           <C>             <C>                <C>
Year Ended December 27, 1997
   Allowance for Doubtful Accounts        $ 235            --              --              $ 235
                                          -----         -----           -----              -----
                                          $ 235            --              --              $ 235
                                          =====         =====           =====              =====

Year Ended January 2, 1999
   Allowance for Doubtful Accounts        $ 235         ($ 31)          $   4              $ 200
                                          -----         -----           -----              -----
                                          $ 235         ($ 31)          $   4              $ 200
                                          =====         =====           =====              =====

Year Ended January 1, 2000
   Allowance for Doubtful Accounts        $ 200         ($ 50)          $  13              $ 137
                                          -----         -----           -----              -----
                                          $ 200         ($ 50)          $  13              $ 137
                                          =====         =====           =====              =====
</TABLE>

Note: (1) Uncollectible accounts written off net of recoveries.

Item 9. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosures

        Since the Company's inception, there has not been any Form 8-K filed
        under the Securities and Exchange Act of 1934 reporting a change in
        accountants in which there was a reported disagreement on any matter
        of accounting principles or practices or financial statement
        disclosure.


                                       42
<PAGE>

                                    PART III

Item 10. Directors and Executive Officers of the Registrant

      The directors and executive officers of the Company are as follows:

      NAME                    AGE            POSITION
      ----                    ---            --------

      Seymour I. Gussack ...  76    Chairman of the Board of Directors
      David L. Gussack .....  42    President and Director
      Robert E. Baruc ......  48    Director
      Peter Barotz .........  72    Director
      Nina M. Gussack ......  44    Director
      Barbara M. Henagan ...  41    Director
      Alistair G. Crannis ..  52    Vice President - Sales & Marketing
      William F. Kurtz .....  41    Vice President - Director of Operations
      Joseph J. Hoo ........  65    Vice President - Advanced Technology and
                                      China Affairs
      Barry A. Morris ......  45    Chief Financial Officer
      John E. Stein, Esq ...  43    Secretary & General Counsel

      Set forth below is certain additional information with respect to the
Directors, and executive officers.

      SEYMOUR I. GUSSACK founded the Company in 1958 and has served as Chairman
of the Board of Directors and a Director of the Company since its formation.
Seymour I. Gussack is also the Chairman of the Board of Directors and a Director
of World and a partner of Realty. See "Certain Relationships and Related
Transactions" and "Principal Stockholder." Seymour I. Gussack's son is David L.
Gussack, President of the Company and a Director.

      DAVID L. GUSSACK became President of the Company in 1993 and has been a
Director of the Company since 1987. David L. Gussack has held various positions
with the Company since 1979, including Executive Vice President from 1991 to
1992, General Manager of the OEM Division from 1988 to 1990, Supervisor and
Coordinator, Hyatt Absorption Project from 1987 to 1988, Plant Manager from 1986
to 1987, Office Facilities Manager from 1985 to 1986, and Manager of Special
Projects from 1983 to 1985. David L. Gussack is a Director of SGBC and NGBC. He
also is a partner of Realty. See "Certain Relationships and Related
Transactions." David L. Gussack is a graduate of the University of Pennsylvania.
David L. Gussack's father is Seymour I. Gussack, Chairman of the Board of
Directors of the Company.

      ALISTAIR G. CRANNIS has served as Vice President - Sales & Marketing since
June 1999. Mr. Crannis was also General Manager - OEM Division of the Company
from January 1997 to June 1999. Prior to joining the Company, Mr. Crannis served
as President of RHP Bearings, Inc., the U.S. Subsidiary of RHP Bearing Ltd.
United Kingdom. He holds a B.S. Industrial Engineering Degree from the
University of Hartfordshire in England.


                                       43
<PAGE>

      WILLIAM F. KURTZ has served as Vice President - Director of Operations
since 1997. He served as Vice President - Technical Services of the Company from
1993 to 1997. Mr. Kurtz was Chief Engineer of the Company from 1989 to 1993 and
Senior Project Engineer of the Company from 1988 to 1989. He is a graduate of
Manhattan College (B.E. and M.E. in Mechanical Engineering) and a licensed
professional engineer.

      JOSEPH J. HOO has served as Vice President - Advanced Technology and
China Affairs of the Company since August 1995. Mr. Hoo served as General
Manager, Industrial Products Division, from 1991 to 1995 and as Chief
Metallurgist from 1987 to 1991. Mr. Hoo is a graduate of the National University
of Japan (B.S. in Engineering) and University of Michigan (M.S.E. in Metallurgy
and Engineering).

      BARRY A. MORRIS was appointed Chief Financial Officer of the Company in
July 1998. Prior to joining the Company, Mr. Morris served as Director of
Financial Services at the U.S. headquarters of BTR, plc, United Kingdom. He
holds a Master of Business Administration from the University of Connecticut and
a B.S. in Accounting from American International College.

      JOHN E. STEIN has served as Secretary and General Counsel since July 1998.
From February 1997 to June 1998, he served as General Counsel. From April 1995
to January 1997, Mr. Stein served as Staff Counsel to the Company. Mr. Stein is
a graduate of the State University of New York, Purchase, (B.A. in Philosophy)
and Brooklyn Law School (J.D.). He is a member of the bars of New York, New
Jersey and District of Columbia.

      ROBERT E. BARUC has been a Director of the Company since February 1997.
Since January 1999, Mr. Baruc has been Co-President of Unapix Entertainment,
Inc., an independent distributor of film and television programming. From April
1994 to December 1998, Mr. Baruc was an Executive Vice President of Unapix
Entertainment, Inc. Since September 1999, he has been the Chief Executive
Officer of A-Pix Entertainment, Inc. From August 1993 to August 1999, he was
President and Chief Executive Officer of A-Pix Entertainment, Inc. From December
1992 to August 1993, Mr. Baruc was President of Triboro Entertainment Group, a
company engaged principally in home video distribution. From January 1991 to
December 1992, Mr. Baruc primarily acted as an independent consultant to the
entertainment industry. He is the son-in-law of Seymour I. Gussack and the
brother-in-law of David L. Gussack and Nina M. Gussack.

      PETER BAROTZ has been a Director of the Company since December 30, 1997.
For the past 25 years, Mr. Barotz has been the President of Panda Capital
Corporation.

      NINA M. GUSSACK has been a Director of the Company since February 1997.
Ms. Gussack has been litigation partner at the law firm of Pepper Hamilton LLP
in Philadelphia, Pennsylvania since 1987. She is a graduate of the University of
Pennsylvania (B.S. in History and M.S. in Secondary Education) and Villanova
University School of Law (J.D.). She is a member of the Pennsylvania bar. She is
the daughter of Seymour I. Gussack and the sister of David L. Gussack.

      BARBARA M. HENAGAN was elected a Director of the Company on March 30,
1999. Mrs. Henagan is presently Managing Director of Linx Partners. Previously
Ms. Henagan was Senior Managing Director of Bradford Ventures Ltd. She is also a
Director of Hampton Industries, V-Span, Inc. and Batteries Batteries, Inc. Mrs.
Henagan is a graduate of Princeton University and Columbia University's MBA
program.


                                       44
<PAGE>

      Directors hold office until the next annual meeting of stockholders
following their election, or until their successors are elected and qualified.
Officers are elected annually by the Board of Directors and serve at the
discretion of the Board of Directors.

      The standing committees of the Board of Directors are the Audit Committee
and the Compensation/ Stock Option Committee.

      The Audit Committee of the Board of Directors consists of three directors,
David L. Gussack, Robert E. Baruc and Barbara M. Henagan. The Audit Committee's
function is to review and report to the Board of Directors with respect to the
selection and the terms of engagement of the Company's independent public
accountants, and to maintain communications among the Board of Directors, such
independent public accountants, and the Company's internal accounting staff with
respect to accounting and audit procedures, the implementation of
recommendations by such independent public accountants, the adequacy of the
Company's internal controls and related matters. The Audit Committee also
reviews certain related party transactions and any potential conflict of
interest situations involving officers, directors or stockholders beneficially
owning more than 10% of an equity security of the Company.

      The Compensation/Stock Option Committee consists of Messrs. Peter Barotz
and Robert E. Baruc, each of whom is an independent Director. The
Compensation/Stock Option Committee's function is to review and approve annual
salaries and bonuses for all employees with salaries in excess of $100,000 and
review, approve and recommend to the Board of Directors the terms and conditions
of all employee benefit plans or changes thereto, including the granting of
stock options pursuant to the Company's 1996 Option Plan.


                                       45
<PAGE>

Item 11. Executive Compensation

    The following table sets forth the aggregate compensation paid for services
rendered in all capacities to the Company's most highly compensated executive
officers during the fiscal year ended January 1, 2000:

<TABLE>
<CAPTION>
                                               ANNUAL
                                           COMPENSATION(1)                  LONG-TERM COMPENSATION
-------------------------------------------------------------------------------------------------------------
                                                                    Restricted
     Name and                        Fiscal    Salary     Bonus       Stock         Stock        All Other
Principal Position                    Year       $          $         Awards       Options#     Compensation
-------------------------------------------------------------------------------------------------------------
<S>                                   <C>      <C>        <C>           <C>        <C>            <C>
David L. Gussack, President           1999     221,927    75,133        --         20,000 (2)          --
                                      1998     181,981    10,379        --         20,000              --
                                      1997     177,151    14,955        --         45,000         207,589 (3)
Alistair G. Crannis, VP Sales &
    Marketing                         1999*    133,356    19,401        --         10,000 (2)          --
Barry A. Morris, Chief Financial
    Officer                           1999*    120,000    18,462        --         10,000 (2)          --
Joseph J. Hoo, V.P. Advanced
    Technology & China Affairs        1999*    118,680    16,604        --          5,000 (2)          --
William F. Kurtz, V.P. Director
    of Operations                     1999*    101,694    15,341        --          5,000 (2)          --
</TABLE>

* Fiscal 1999 was the first year of reportable compensation.

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
                                                                 Number of
                                                                Securities
                                                                Underlying          Value of
                                                                Unexercised      Unexercised In-the-
                                                                Options at        Money Options at
                                                              January 1, 2000     January 1, 2000
                                                              ---------------------------------------
                       Shares Acquired on
                            Exercise         Value Realized     Exercisable/         Exercisable/
          Name                  #                  $            Unexercisable        Unexercisable
-----------------------------------------------------------------------------------------------------
<S>                             <C>                <C>         <C>                       <C>
David L Gussack                 0                  0           27,500 / 37,500           N/A
Alistair G. Crannis             0                  0            2,000 /  8,000           N/A
Barry A. Morris                 0                  0            2,500 /  7,500           N/A
Joseph J. Hoo                   0                  0            7,000 / 13,000           N/A
William F. Kurtz                0                  0            4,800 / 10,000           N/A
</TABLE>


                                       46
<PAGE>

Compensation of Directors

      Standard Arrangements:

      All fees described herein are for non-management directors only.

            a.    Attendance fee - $1,000 for actual physical attendance or $500
                  if attendance is by telephone.

            b.    Committee fee - $500 fee per director unless the committee
                  meets immediately before or after a board meeting in which
                  case the fee will be $250. Fees will be halved for telephone
                  attendance.

            c.    Stock grant - 2,000 shares per director per year will be
                  issued at calendar year end for the year served. The intent of
                  this specific quantity is to approximate $12,000 - $15,000 in
                  value. It may be changed annually to reflect this goal.

            d.    Each member of the board shall receive an option for 5,000
                  shares (at the then market price) when joining the board.

Other Arrangements (1):

Seymour I. Gussack Chairman of the Board of Directors, received salary of
$208,695 and bonus of $41,023.

      (1)   Perquisites and other personal benefits are not included because
            they do not exceed the lesser of $50,000 or 10% of the total base
            salary and annual bonus for the named executive officer.
      (2)   Repricing.
      (3)   Represents deferred compensation.


                                       47
<PAGE>

Item 12. Security Ownership of Certain Beneficial Owners and Management.

      The following table sets forth, as of the date of this Report certain
information concerning the beneficial ownership of Common Stock as to each
director and current executive officer of the Company, and each person who, to
the Company's knowledge, beneficially owns more than 5% of the outstanding
Common Stock.

<TABLE>
<CAPTION>
                                                        NUMBER OF
                                                        SHARES
NAME AND ADDRESS OF                                     BENEFICIALLY      PERCENTAGE OF SHARES
BENEFICIAL OWNER                                        OWNED (1)         BENEFICIALLY OWNED(1)
----------------                                        ------------      ---------------------
<S>                                                  <C>                      <C>
World Machinery Company .........................       2,950,000(2)          75.2%
44 High Street, West Nyack, New York 10994

Seymour I. Gussack ..............................    2,966,200(3)(4)          75.6%

David L Gussack .................................    2,965,300(3)(4)          75.6%

Nina M. Gussack .................................           6,000(4)          *

Robert E. Baruc .................................                500          *

William F. Kurtz ................................                200          *

Barry A. Morris .................................              1,000          *

All Directors and Executive
 Officers as a Group ............................          2,979,200
</TABLE>

* Less than 1%

(1) Pursuant to Rule 13d-3 under the U.S. Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared voting
power (including the power to vote or direct the voting) and/or sole or shared
investment power (including the power to dispose or direct the disposition) with
respect to a security whether through a contract, arrangement, understanding,
relationship or otherwise.

(2) Seymour I. Gussack, the Company's Chairman of the Board, David L. Gussack,
the Company's President and Nina M. Gussack, a Director of the Company own or
control approximately 13.8%, 18.0% and 18.0%, respectively, of the Common Stock
of World. Family members of Seymour I. Gussack, David L. Gussack and Nina M.
Gussack own or control an additional approximately 28.5% of the stock of World.
The estate of Harold S. Geneen, a former Director of the Company, and Joseph J.
Hoo, Vice President - Advanced Technology and China Affairs of the Company, own
approximately 19.6% and 2.0% of the Common Stock of World, respectively.


                                       48
<PAGE>

(3) Includes for each of Seymour I. Gussack and David L. Gussack, 2,950,000
shares beneficially owned by World. Seymour I. Gussack and David L. Gussack are
the two directors of World and each may be deemed to share with the other the
power to vote and dispose of the shares owned by that corporation. Seymour I.
Gussack and David L. Gussack disclaim beneficial ownership of the shares of
Common Stock owned by World.

(4) Includes 5,000 shares of Common Stock owned by Realty over which Seymour I.
Gussack, David L. Gussack, and Nina M. Gussack as general partners of Realty,
may be deemed to share the power to vote and dispose of. Each of Seymour I.
Gussack, David L. Gussack and Nina M. Gussack disclaim beneficial ownership of
the shares of Common Stock owned by Realty.

Item 13. Certain Relationships and Related Transactions

LEASES WITH REALTY

      The Company leases a facility located at West Nyack, New York comprising
189,833 square feet owned by Realty, whose partners include Seymour I. Gussack,
David L. Gussack and Nina M. Gussack, each a member of the Board of Directors of
the Company. The Company and Realty entered into the Lease effective as of
November 1, 1996, which provides for an initial term expiring on October 31,
2003, renewable at the option of the Company for an additional six year term.
The Company initially paid rent of $4.81 per square foot (or $913,000) annually,
payable in monthly rent payments of $76,000. The Lease provides for an increase
every other year to the greater of: (i) 106% of the preceding year's rent; or
(ii) the preceding year's rent multiplied by a fraction the numerator of which
is the CPI for the area including Rockland County or if no such index is
published, for Northern New Jersey in effect 90 days prior to November 1 of the
new rent year and the denominator of which is the CPI in effect 90 days prior to
November 1 of the preceding year. The November 1998 increase amounted to 6% of
the preceding year, resulting in rent of $5.0986 per square foot (or $968,000)
annually effective through October 31, 2000.

      The Company is the guarantor with respect to a mortgage loan currently in
the principal amount of $428,000 from the Job Development Authority of Rockland
County and a mortgage loan currently in the principal amount of $300,000 from
the Industrial Development Authority of Rockland County on the property in
Blauvelt, New York. These mortgage loans were created for the purpose of
building a facility in 1983 which the Company subsequently occupied for 12 years
until 1996.

SUBLEASES TO WMW MACHINERY CO. AND WORLD

      The Company currently subleases 30,949 square feet and 5,500 square feet
at the West Nyack facility to WMW Machinery Co., a subsidiary of World, and
World, respectively, pursuant to subleases in each case effective November 1,
1996. The subleases are coterminous with the Lease. The sublease with WMW
Machinery Co. provided for rent of $5.50 per square foot or $170,000 per year
until November 1998, payable to the Company in equal monthly installments. The
sublease with World provided for rent of $33,000 per year until November 1998,
payable to the Company in equal monthly installments. Each sublease provided for
an increase in rent every other year to the greater of: (i) 106% of the
preceding year's rent; or (ii) the preceding year's rent multiplied by a
fraction the numerator of which is the CPI in effect 90 days prior to November 1
of the next rent year and the denominator of which is the CPI in effect 90 days


                                       49
<PAGE>

prior to November 1 of the preceding year. The November 1998 rent increase
amounted to 6% of the preceding year, or $180,000 and $35,000 annually to WMW
Machinery Co., Inc. and World, respectively through October 2000. The subleases
with WMW Machinery Co., Inc and World expire on October 31, 2003.

OTHER TRANSACTIONS WITH WORLD AND WORLD AFFILIATES

      The Company made payments for and advances to World, World subsidiaries
and joint ventures and certain affiliates for payroll, benefits and other
expenses. Such payments aggregated approximately $947,000 for 1999. The advances
bear interest at the rate of 8% per annum which is accrued monthly. In certain
cases, the obligation to repay advances made by the Company were satisfied by
offsetting the price of bearings or bearing products purchased from joint
ventures obligated to the Company. The Company's purchases from World affiliates
aggregated $3.5 million for 1999. The Company anticipates that it will continue
to purchase bearings from joint ventures in which World has an interest and to
make advances to or for the benefit of World and such joint ventures for the
payment of their expenses related to the supply of products to the Company.
These advances either have or will be repaid by World or the joint venture or
will be offset against the price of bearings purchased by the Company.

      In 1997, World also granted options to the Company, exercisable prior to
December 31, 1999, to purchase from World its interest in two joint ventures,
Rockland and WGBC, for $400,000 and $846,000 (subject to adjustment based on
change in accounts payable by WGBC to World), respectively. These amounts
represent the estimated capital contributions, advances for administrative
expenses and other costs paid by World with respect to such ventures prior to
January 2, 1999; plus any additional capital contributions made and
administrative expenses incurred on behalf of the joint venture by World after
such date. The Company did not exercise the options.

TAX SHARING AGREEMENT

      The Company has been, and will be, included in the consolidated federal
income tax returns filed by World during all periods in which it has been or,
will be, a wholly-owned subsidiary of World ("Affiliation Years"). Upon the
completion of the IPO, the Company ceased to be included in the consolidated
federal income tax returns filed by World, and has filed on a separate basis. As
a result, the Company and World have entered into an agreement ("Tax Sharing
Agreement") providing for the manner of determining payments with respect to
federal income tax liabilities and benefits arising during the Affiliation
Years. Under the Tax Sharing Agreement, the Company has paid, or will pay, to
World an amount equal to the Company's share of World's consolidated federal
income tax liability, generally determined on a separate return basis, for the
tax years which have ended and the portion of the tax year preceding
consummation of the IPO, and World will pay the Company for the use of the
Company's losses, and credits arising in such periods, in each case net of any
amounts theretofore paid or credited by World or the Company to the other with
respect thereto. In the event that World's consolidated federal income tax
liability for any Affiliation Year is adjusted upon audit or otherwise, the
Company will bear any additional liability or receive any refund which is
attributable to adjustments of items of income, deduction, gain, loss or credit
of the Company. World shall permit the Company to participate in any audits or
litigation with respect to Affiliation Years, at the Company's expense, to the
extent that such audit or litigation could result in an indemnification payment
from the Company to World.


                                       50
<PAGE>

REGISTRATION RIGHTS AGREEMENT

      World has certain rights with respect to the registration under the
Securities Act of 1933, as amended ("the Act") of shares of Common Stock owned
by it ("Registrable Shares"). Such rights will be exercisable by any person or
entity (together with World, "Holders") acquiring Registrable Shares from World,
including any options, warrant to purchase, or other security exchangeable for
or convertible into Registrable Shares other than pursuant to an effective
registration statement under the Act. If the Company proposes to register any
securities under the Act (other than a registration on Form S-4 or Form S-8),
whether or not for its own account, the Holders are entitled to include
Registrable Shares, subject to the right of the managing underwriter of any such
offering to exclude, due to market conditions, some or all of such Registrable
Shares from such registration. In addition, commencing February 7, 1998, the
Holders have the right to require the Company to prepare and file registration
statements under the Act with respect to the Registrable Shares. The right may
be requested by any Holder holding Registrable Shares aggregating at least
50,000 shares of the Company's Common Stock outstanding at the date of the
Company's Initial Public Offering. The Company generally is required to bear the
expenses (except underwriting discounts and commissions and fees and expenses of
separate counsel) of all such registrations, whether or not initiated by any
Holder.


                                       51
<PAGE>

                                     PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a) 1. Financial Statements (included in Part II of this report):

                  Report of Independent Certified Public Accountants dated
                  February 17, 2000.

                  Consolidated Balance Sheets for years ended January 2, 1999
                  and January 1, 2000.

                  Consolidated Statements of Operations for years ended December
                  27, 1997, January 2, 1999, and January 1, 2000.

                  Consolidated Statement of Changes in Stockholders' Equity at,
                  December 28, 1996, December 27, 1997, January 2, 1999 and
                  January 1, 2000.

                  Consolidated Statement of Cash Flows for year ended December
                  27, 1997, January 2, 1999 and January 1, 2000.

                  Summary of Significant Accounting Policies and Notes to
                  Consolidated Financial Statements.

(a) 2. Financial Statement Schedules (included pursuant to Item 14(d) at page 42
of this report):

                  Report of Independent Certified Public Accountants dated
                  February 17, 2000.

                  Schedule II - Valuation and Qualifying Accounts.

(a) 3. Exhibits:

                  Reference is made to the Exhibit Index commencing on page 54,
                  filed pursuant to Item 14(c). The Exhibits include the
                  following management contract or compensatory plan or
                  arrangement required to be filed as an exhibit to this report:
                  Board Member Compensation Plan.

(b) Reports on Form 8-K:

                  None.


                                       52
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to
be signed on its behalf by the undersigned, thereunto duly authorized, on
March 31, 2000.

                   GENERAL BEARING CORPORATION
                   By: /s/ David L. Gussack
                      --------------------------
                   David L. Gussack, President
                   (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual
Report on Form 10-K has been signed below by the following persons on behalf of
the registrant and in the capacities indicated, on March 31, 2000.

           Signatures            Title                            Date
           ----------            -----                            ----


 /s/ Seymour I. Gussack          Chairman of the Board of         March 31, 2000
------------------------------   Directors
       Seymour I. Gussack


/s/ David L. Gussack             President and Director           March 31, 2000
------------------------------   (Principal Executive Officer)
       David L. Gussack


/s/ Barry A. Morris              Chief Financial Officer          March 31, 2000
------------------------------
       Barry A. Morris


/s/ Barbara M. Henagan           Director                         March 31, 2000
------------------------------
       Barbara M. Henagan


/s/ Nina M. Gussack              Director                         March 31, 2000
------------------------------
       Nina M. Gussack


/s/ Peter Barotz                 Director                         March 31, 2000
------------------------------
       Peter Barotz


/s/ Robert E. Baruc              Director                         March 31, 2000
------------------------------
       Robert E. Baruc


                                       53
<PAGE>

                                  EXHIBIT INDEX

NOTE: Except as to those items marked with an "*", which are filed herewith, all
Exhibits have been previously filed with the Company's Registration Statement on
Form S-1 effective February 7, 1997 (Registration No. 333-15477), or the
Company's Annual Report on Form 10-K for fiscal years 1996 , 1997 and 1998.

    Exhibit No.         Description of Exhibit
    -----------         ----------------------

       3.1              Second Restated Certificate of Incorporation

       3.2              By-Laws of the Company

       4.1              Specimen Stock Certificate

       10.1             Loan and Security Agreement dated December 20, 1993 by
                        and among the Bank of New York Commercial Corporation,
                        the Company and Hyatt Railway Products Corp., including
                        amendments 1 through 8 thereto

       10.2             Contract dated June 1988 by and between Shanghai Rolling
                        Bearing Factory and the Company, including Agreement for
                        the Revision and Amendment to the Contract

       10.3             Lease Agreement dated November 1, 1996 by and between
                        Gussack Realty Company and the Company relating to West
                        Nyack, New York premises

       10.4             Lease dated March 15, 1988 by and between Lamington
                        Associates II and the Company relating to the Union, New
                        Jersey premise

       10.5             Sublease Agreement dated November 1, 1996 between the
                        Company and World Machinery Company

       10.6             Sublease Agreement dated November 1, 1996 between the
                        Company and WMW Machinery Co.

       10.9             1996 Stock Option and Performance Award Plan

       10.10            Form of Representative's Warrant

       10.11            Form of Registration Rights Agreement between the
                        Company and World (previously filed exhibit as 4.2)

       10.12            Form of Tax Sharing and Indemnification Agreement
                        between the Company and World Machinery Company

       10.13            Amendment Letter dated March 7, 1997 between the Company
                        and Bank of New York Commercial Corporation

       10.14            Amendment No. 9 dated June, 1997 to the Loan and
                        Security Agreement between the Company and Bank of New
                        York Commercial Corporation.

       10.15            Amendment No. 10 dated March 20, 1998 to the Loan and
                        Security Agreement between the Company and Bank of New
                        York Commercial Corporation.


                                       54
<PAGE>

       10.16            Amendment Letter dated April 7, 1998 to the Loan and
                        Security Agreement between the Company and Bank of New
                        York Commercial Corporation.

       10.17            Amendment No. 11 dated May, 1998 to the Loan and
                        Security Agreement between the Company and Bank of New
                        York Commercial Corporation.

       10.18            Amendment No. 12 dated April 1, 1999 to the Loan and
                        Security Agreement between the Company and Bank of New
                        York Commercial Corporation .

       10.19            Board Member Compensation Plan*

       10.20            Credit Agreement dated December 20, 1999 between KeyBank
                        National Association and the Company*

       21               List of Subsidiaries of the Company

       23               Consent of Independent Certified Public Accountants (see
                        page 41) *

       27               Financial Data Schedule*


                                       55