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

  [x] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                                  Act of 1934.
                 For the fiscal year ended September 30, 2000.

    [ ] 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 333-28751

                             NEENAH FOUNDRY COMPANY
            (Exact name of registrant as it appears in its charter)

           Wisconsin                                             39-1580331
(State or other jurisdiction of                       (IRS Employer ID Number)
 Incorporation or organization)

2121 Brooks Avenue, P.O. Box 729, Neenah, Wisconsin                    54957
(Address of principal executive offices)                            (Zip Code)

                                 (920) 725-7000
              (Registrant's telephone number, including area code)

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

Securities registered pursuant to section 12(g) of the Act:     NONE

                                (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. Yes [X] No [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock, Class A, $100 par value- 1,000 shares as of November 30, 2000
Common Stock, Class B, $100 par value-     0 shares as of November 30, 2000












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                                     PART I
Item 1.    BUSINESS

THE COMPANY (OTHER THAN THE ACQUIRED SUBSIDIARIES)

Overview

     On April 30, 1997, pursuant to an Agreement and Plan of Reorganization (the
"Merger Agreement") with NC Merger Company and NFC Castings, Inc., Neenah
Corporation (the "Predecessor Company") was acquired by NFC Castings, Inc., a
holding company and a wholly owned subsidiary of ACP Holding Company ("ACP
Holdings") (the "Merger"). Prior to July 1, 1997, Neenah Foundry Company was one
of three wholly owned subsidiaries of Neenah Corporation, a holding company with
no significant assets or operations other than its holdings in the common stock
of its three wholly owned subsidiaries. On July 1, 1997, Neenah Foundry Company
merged with and into Neenah Corporation and the surviving company changed its
name to Neenah Foundry Company (the "Company"). Unless otherwise stated in this
document or unless the context otherwise requires, references herein to the
"Company" include Neenah Foundry Company, Hartley Controls Corporation ("Hartley
Controls") and Neenah Transport, Inc., and exclude Deeter Foundry, Inc.
("Deeter"), Mercer Forge Corporation ("Mercer"), Dalton Corporation ("Dalton"),
Niemen Porter & Co. d/b/a Cast Alloys, Inc. ("Cast Alloys"), Gregg Industries,
Inc. ("Gregg"), and their respective subsidiaries, each of which were acquired
by the Company and Advanced Cast Products ("ACP") and its respective
subsidiaries, whose capital stock was contributed to the Company by ACP
Holdings. Deeter, Mercer, Dalton, Cast Alloys, Gregg and ACP are referred to
herein as the "Acquired Subsidiaries." The Company changed its fiscal year end
to September 30 from March 31 effective September 30, 1997.

      The Company, founded in 1872, is one of the largest manufacturers of a
wide range of high quality ductile and gray iron castings for the heavy
municipal market and selected segments of the industrial market. The Company
believes it is the largest manufacturer of heavy municipal iron castings in the
United States with approximately a 19% market share in calendar year 1999. The
Company's broad range of heavy municipal iron castings includes manhole covers
and frames, storm sewer frames and grates, heavy duty airport castings,
specialized trench drain castings, specialty flood control castings and
ornamental tree grates. These municipal castings are sold throughout the United
States to state and local government entities, utility companies, precast
concrete manhole structure producers and contractors for both new construction
and infrastructure replacement. The heavy municipal market generated
approximately 45% of the Company's net sales for the year ended September 30,
2000. The Company believes it is also a leading manufacturer of a wide range of
complex industrial castings, including castings for medium- and heavy-duty truck
drive line components, a broad range of castings for the farm equipment industry
and specific components for compressors used in heating, ventilation and air
conditioning systems. The industrial market generated approximately 53% of the
Company's net sales for the year ended September 30, 2000.








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     The Company currently operates two modern foundries with an annual
aggregate rated capacity of approximately 187,000 tons at a single site in
Neenah, Wisconsin. The Company invested heavily in a major plant modernization
program. This plant modernization program was a critical part of a long-term
strategy to produce higher volume, value-added castings for its existing
industrial customers and to penetrate other selected segments of the industrial
market, while preserving its position as the leader in the heavy municipal
market.

Products, Customers and Markets

     The Company provides a variety of products to both the heavy municipal and
industrial markets. The heavy municipal market is comprised of storm and
sanitary sewer castings, manhole covers and frames, and storm sewer frames and
grates. It also includes heavy airport castings, specialized trench drain
castings, specialty flood control castings and ornamental tree grates. Customers
for these products include state and local government entities, utility
companies, precast concrete structure producers, and contractors.

    The industrial market is comprised of differential carriers and casings,
transmission, gear and axle housings, calipers, yokes, planting and harvesting
equipment parts, and compressor components. Customers for these products include
medium and heavy-duty truck, farm equipment and heating, ventilating, and
air-conditioning manufacturers.

     Heavy Municipal. Based on industry reported data, the Company believes it
is the largest manufacturer of heavy municipal iron castings in the United
States with an estimated 19% market share in calendar year 1999. The Company's
broad heavy municipal product line consists of two general categories of
castings, "standard" and "specialty" castings. Standard castings principally
consist of storm and sanitary sewer castings that are consistent with
pre-existing dimension and strength specifications established by local
authorities. Standard castings are generally high volume items that are
routinely used in new construction and infrastructure replacement. Specialty
castings are generally lower volume, higher margin products which include
heavy-duty airport castings, trench drain castings, flood control castings,
special manhole and inlet castings and ornamental tree grates. These specialty
items are frequently selected and/or specified from the Company's municipal
product catalog and its tree grate catalog, which together encompass over 4,400
standard and specialty patterns. For many of these specialty products, the
Company believes it is the only manufacturer with existing patterns to produce
such a particular casting, although a competing manufacturer could elect to make
the investment in patterns or equipment necessary to produce a similar casting.

     The Company's municipal castings are sold to state and local government
entities, utility companies, pre-cast concrete manhole structure producers and
contractors for both new construction and infrastructure replacement. The
Company's 17,000 active municipal customers generally make purchase decisions
based on a number of criteria, including acceptability of the product per local
specification, quality, service, price and the customer's relationship with the
foundry. Relative to customers in the industrial market, municipal market
customers are less technically demanding and rely more on published product
specifications to ensure product performance.








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     Industrial. The Company believes it is a leading manufacturer of a wide
range of complex industrial castings, including castings for medium- and
heavy-duty truck drive line components and farm equipment as well as castings
for specific components for compressors used in heating, venting and air
conditioning (HVAC) systems. The Company's industrial castings have increased in
complexity since the early 1990's and are generally produced in higher volumes
than municipal castings. Complexity in the industrial market is determined by
the intricacy of a casting's shape, the thinness of its walls and the amount of
processing by a customer required before a part is suitable for use by it.
Original equipment manufacturers (OEMs) and their first tier suppliers have been
demanding higher complexity parts principally to reduce labor costs in their own
production processes by using fewer parts to manufacture the same finished
product or assembly and by using parts which require less preparation before
entering the production process.

     The Company's industrial castings are primarily sold to a limited number of
customers with whom the Company has established a close working relationship.
The Company has sold to certain industrial customers for over 20 years and
currently has a multi-year arrangement with one of those customers. These
customers make purchasing decisions based on, among other things, technical
ability, price, service, quality assurance systems, facility capabilities and
reputation. However, as in the municipal market, the Company's assistance in
product engineering plays an important role in winning bids for industrial
castings. The average industrial casting typically takes between 12 and 18
months to go from the design phase to full production and has an average product
life cycle of approximately 8 to 10 years. The patterns for industrial castings,
unlike the patterns for municipal castings, are owned by the Company's customers
rather than the Company. However, such industrial patterns are not readily
transferable to other foundries without, in most cases, significant additional
investment. Although foundries, including the Company, do not design industrial
castings, a close working relationship between a foundry and the customer during
a product launch is critical to reduce potential production problems and
minimize the customer's risk of incurring lost sales or reputation damage due to
a delayed launch. Involvement by a foundry early in the design process generally
improves the likelihood that the customer will design a casting within the
manufacturing capabilities of such foundry and also improves the likelihood that
such foundry will be awarded the casting for full production.

     The Company estimates that it has historically retained approximately 90%
of the castings it has been awarded throughout the product life cycle, which is
typical for the industry. The Company believes industrial customers will
continue to seek out foundries with a strong reputation for performance who are
capable of providing a cost-effective combination of manufacturing technology
and quality. The Company's strategy is to further its relationships with
existing customers by participating in the design and production of more complex
industrial castings, while seeking out selected new customers who would value
the Company's performance reputation, technical ability and high level of
quality and service.

Sales and Marketing

     Heavy Municipal. Over its 70 years of heavy municipal market participation,
the Company has emphasized sales and marketing and believes it has built a
strong reputation for customer service. The Company believes that it is one of
the leaders in U.S. heavy municipal casting production and that it has strong
name recognition. The Company has the largest sales and marketing effort of any
foundry serving the heavy municipal market, including 57 Company employees and
20 commissioned representatives. The dedicated sales force works out of regional
sales offices to market the Company's municipal castings to contractors and
state and local governmental entities throughout the United States. The Company
operates a number of regional distribution and sales centers throughout the
Unites States. The Company believes this regional approach enhances its
knowledge of local specifications and its position in the heavy municipal
market.






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     Industrial. The Company employs a dedicated industrial casting sales force
based in Neenah, Wisconsin. The sales force supports ongoing customer
relationships and organizes the scheduling and delivery of shipments, as well as
working with customers' engineers and procurement representatives, Company
engineers, manufacturing management and quality assurance representatives
throughout all stages of the production process to ensure that the final product
consistently meets or exceeds customer specifications. This team approach,
consisting of sales, marketing, manufacturing, engineering and quality assurance
efforts is an integral part of the Company's marketing strategy.

Manufacturing Process

    The Company operates two modern foundries with an annual rated capacity of
approximately 187,000 tons at a single location in Neenah, Wisconsin. The
Company's foundries manufacture gray and ductile iron and cast it into intricate
shapes according to customer metallurgical and dimensional specifications. The
Company continually invests in the improvement of process controls and product
performance and believes that these investments and its significant experience
in the industry have made it one of the most efficient manufacturers of
industrial and heavy municipal casting products.

     The casting process involves using metal, wood or urethane patterns to make
an impression of a casting product in a mold made primarily of sand. Cores, also
made primarily of sand, are used to make the internal cavities and openings in a
casting product. Once the casting impression is made in the mold, the cores are
set into the mold and the mold is closed. Molten metal is then poured into the
mold, which fills the mold cavity and takes on the shape of the desired casting
product. Once the iron has solidified and cooled, the mold is shaken from the
casting and the sand is recycled. The selection of the appropriate casting
method, pattern, core-making equipment and sand and other raw materials depends
on the final product, including its complexity, specifications, and function as
well as intended production volumes. Because the casting process involves many
critical variables, such as choice of raw materials, design and production of
tooling, iron chemistry and metallurgy, and core and molding sand properties, it
is important to monitor the process parameters closely to ensure dimensional
precision and metallurgical consistency.

     The Company continually seeks to find ways to expand the capabilities of
existing technology to improve manufacturing processes. An example of this
expansion is the Company's integration of Disamatic molding machines into its
operations. Disamatic molding machines are considered to be among the most
efficient sand molding machines because of their ability to produce high quality
molds at high production rates. Disamatic molding machines are also used by most
of the Company's direct competitors. Although the Company was not the first
foundry to acquire Disamatic molding machines, it has significantly enhanced the
equipment's range of production by combining the equipment with core-setting
capabilities which exceed those of most foundries. To further improve upon the
productivity of the Disamatic molding machines, the Company has recently
increased the length of two of its cooling lines, making each line among the
longest lines in the world for comparable Disamatic equipment. This extension
allows the Company to run its machines at higher production rates while
providing sufficient in-mold cooling time prior to mold shakeout to facilitate
the production of high quality castings. As a result of these and other similar
efforts, the Company has been able to increase productivity as measured in the
number of molds per hour.









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    The Company also achieves productivity gains by improving upon the
individual steps of the casting process such as reducing the amount of time
required to make a pattern change to produce a different casting product. The
reduced time permits it to profitably produce castings in medium volume
quantities on high volume, cost-effective equipment such as the Disamatic
molding machines. Additionally, extensive effort in real time process controls
permits the Company to produce a consistent, dimensionally accurate casting
product, which requires less time and effort in the final processing stages of
production. This accuracy contributes significantly to the Company's
manufacturing efficiency.

Quality Assurance

     Continual testing and monitoring of the manufacturing process is important
to maintain product quality. The Company has adopted sophisticated quality
assurance techniques and policies for its manufacturing operations. During and
after the casting process, the Company performs numerous tests, including
tensile, proof-load, radiography, ultrasonic, magnetic particle and chemical
analysis. The Company utilizes statistical process controls to measure and
control significant process variables and casting dimensions. The results of
this testing are documented in metallurgical certifications, which are provided
with each shipment to most industrial customers. The Company strives to maintain
systems that provide for continual improvement of operations and personnel,
emphasize defect prevention and reduce variation and waste in all areas.

Distribution

The Company sells a substantial amount of its municipal castings through its
network of two warehouses, ten distribution and sales centers and two other
sales offices. Industrial castings are shipped direct to customers from the
Company. For many municipal and a small portion of its industrial customers,
castings are delivered by Neenah Transport, Inc., a wholly owned subsidiary of
the Company ("Neenah Transport"), which operates a fleet of 30 tractors and 101
trailers that deliver products throughout the Midwest. For sales outside of the
Midwest, increased transportation costs impact the ability of the Company to
compete on a cost basis. Neenah Transport also backhauls raw materials for use
by the Company on return trips. Neenah Transport is staffed with professional
drivers who are trained in service standards and product knowledge as
representatives of the Company. To the Company's knowledge, none the Company's
major heavy municipal competitors have a captive transportation subsidiary. The
Company believes Neenah Transport's service and drivers provide another
differentiating factor in favor of the Company as compared to other major heavy
municipal manufacturers.

Raw Materials

     The primary raw materials used by the Company to manufacture ductile and
gray iron castings are steel scrap, pig iron, metallurgical coke and silica
sand. While there are multiple suppliers for each of these commodities, the
Company has single-source arrangements with its suppliers for each of these
major raw materials, with the exception of pig iron. Due to long standing
relationships with each of its suppliers, the Company believes that it will
continue to be able to secure raw materials at competitive prices. The primary
energy sources for the Company's operations, electricity and natural gas, are
purchased through utilities.









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     Although the prices of all raw materials used by the Company vary, the
fluctuations in the price of steel scrap are the most significant to the
Company. The Company has arrangements with most of its industrial customers
which allow the Company to adjust industrial casting prices to reflect scrap
price fluctuations. In periods of rapidly rising or falling scrap prices, these
adjustments will lag the current scrap price because they are generally based on
average market prices for prior periods, which periods vary by customer but are
generally no longer than six months. Castings are generally sold to the heavy
municipal market on a bid basis and, after a bid is won, the price for the
municipal casting generally cannot be adjusted for raw material price increases.
However, in most cases the Company believes it has been successful in obtaining
higher municipal casting unit prices in subsequent bids to compensate for rises
in scrap prices in prior periods. Rapidly fluctuating scrap prices may have an
adverse or positive effect on the Company's financial condition and results of
operations.

Competition

     The markets for the Company's products are highly competitive. Competition
is based not only on price, but also on quality of product, range of capability,
level of service and reliability of delivery. The Company competes with numerous
independent and captive foundries, as well as with a number of foreign iron
foundries, including certain foundries located in India. The Company also
competes with several large domestic manufacturers whose products are made with
materials other than ductile and gray iron, such as steel or aluminum. The
industry consolidation that has occurred over the past 20 years has resulted in
a significant reduction in the number of smaller foundries and a rise in the
share of production by larger foundries, some of which have significantly
greater financial resources than the Company. Competition from India has had a
strong presence in the heavy municipal market and continues to be a factor,
primarily in the western and eastern United States, due in part to costs
associated with transportation. However, foreign companies have been, and
continue to be, subject to antidumping and countervailing duty enforcement
litigation which the Company believes has had a negative effect on foreign
companies' ability to compete in the U.S. markets. There can be no assurance
that these factors will continue to mitigate the impact of foreign competition,
or that the Company will be able to maintain or improve its competitive position
in the markets in which it competes.

Hartley Controls Corporation

     Hartley Controls, a wholly owned subsidiary of the Company, engineers,
manufactures and sells customized sand control systems, which are an essential
part of the casting process, to other iron foundries. The sand molding media
used in all high production iron foundries is a critical element in determining
mold quality. Exacting and consistent control of this sand with respect to
moisture and chemical additives is an essential element for process control and
relates directly to casting quality, scrap rate and the ability to produce
complex molds for highly engineered castings. Hartley Controls is a major U.S.
supplier of sand control systems. Hartley Controls has made investments in
process technology and has several patented technologies related to sand
systems, including the "Automatic Moisture Controller," the "Even-Flo Bin," the
"Automatic Compactibility Tester," the "Automatic Bond Determinator," the "Green
Stand Reconditioner" and the "Sandman."

     On October 2, 2000, the Company sold all of the issued and outstanding
shares of stock of Hartley for a cash purchase price of $5.5 million. The
Company expects the disposition of Hartley will result in a gain which will be
recognized in the period in which the gain is realized. Revenues for Hartley for
the year ended September 30, 2000 were $5.5 million.








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Employees

     As of September 30, 2000 the Company had 985 full time employees, of whom
755 were hourly employees and 230 were salaried employees. The Local 121B of the
Glass, Molders, Pottery, Plastics and Allied Workers International Union AFL-CIO
is the major bargaining agent for the representative of 712 of the Company's
hourly employees. A collective bargaining agreement with Local 121B was reached
on January 1, 1999 and expires on December 31, 2001. The Independent
Patternmakers Union of Neenah, Wisconsin is the major bargaining agent for and
representative of 34 of the Company's hourly employees. A collective bargaining
agreement with the Independent Patternmakers Union was reached on January 1,
1998 and expires on December 31, 2000. The Company and the Union are currently
in the process of negotiating a new three-year agreement. The Company believes
that it has a good relationship with its employees.

Environmental Matters

     The facilities of the Company and Acquired Subsidiaries' are subject to
federal, state and local laws and regulations relating to the protection of the
environment and worker health and safety, including those relating to discharges
to air, water and land, the handling and disposal of solid and hazardous waste
and the cleanup of properties affected by hazardous substances. Such laws
include the Federal Clean Air Act, the Clean Water Act, the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 ("CERCLA"), and the Occupational Health
and Safety Act. The Company believes that its and each of the Acquired
Subsidiaries' operations are currently in substantial compliance with applicable
environmental laws, and that it has no liabilities arising under such
environmental laws, except as would not be expected to have a material adverse
effect on the Company's or any of the Acquired Subsidiaries' operations,
financial condition or competitive position. However, some risk of environmental
liability and other costs is inherent in each of the Company's and Acquired
Subsidiaries' businesses. Any of the Company or the Acquired Subsidiaries might
in the future incur significant costs to meet current or more stringent
compliance, cleanup or other obligations pursuant to environmental requirements.
Such costs may include expenditures related to remediation of historical
releases of hazardous substances or clean-up of physical structures prior to
decommissioning.

     Under the Federal Clean Air Act Amendments of 1990, the Environmental
Protection Agency ("EPA") is directed to establish maximum achievable control
technology ("MACT") standards for certain industrial operations that are major
sources of hazardous air pollutants ("HAPs"). The iron foundry industry is not
expected to be required to implement the MACT emission limits, control
technologies or work practices until the year 2004 at the earliest. Although the
Company cannot accurately estimate the costs to comply with the MACT standard
until it is issued, the MACT standard, when implemented, and state laws
governing the emission of toxic air pollutants may require that certain of the
Company's or the Acquired Subsidiaries' facilities incur significant costs for
air emission control equipment, air emission monitoring equipment or process
modifications.









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ACQUISITIONS

     On March 30, 1998, the Company acquired all the capital stock of Deeter for
$24.3 million (excluding fees and expenses incurred in connection with the
acquisition of $0.3 million), consisting of $20.4 million of cash and a $3.9
million seller note (the "Deeter Seller Note"). The Deeter Seller Note, which
did not bear interest, was issued to the selling shareholders of Deeter by ACP
Holdings and matured on March 30, 1999. The Company financed the cash portion of
the consideration and all fees and expenses from cash on hand. Since 1945,
Deeter has been producing gray iron castings for the heavy municipal market.
Deeter's municipal casting product line includes manhole frames and covers,
storm sewer inlet frames, grates and curbs, trench grating and tree grates.
Deeter also produces a wide variety of special application construction
castings. These products are utilized in waste treatment plants, airports,
telephone and electrical construction projects.

     On April 3, 1998, the Company acquired all the capital stock of Mercer for
$47.0 million in cash (excluding fees and expenses incurred in connection with
the acquisition of $0.5 million). The acquisition of Mercer was financed with
borrowings under Tranche B of the Company's Senior Bank Facilities. Founded in
1954, Mercer is a leading producer of complex-shaped forged components for use
in transportation, railroad, mining and heavy industrial applications. Mercer is
also a leading producer of microalloy forgings. Mercer sells directly to OEMs,
as well as to industrial end users.

     On September 8, 1998, the Company acquired all the capital stock of Dalton
for $102.0 million in cash (excluding fees and expenses incurred in connection
with the acquisition of $0.6 million). Dalton manufactures and sells gray iron
castings for refrigeration systems, air conditioners, heavy equipment, engines,
gear boxes, stationary transmissions, heavy duty truck transmissions and other
automotive parts. The acquisition of Dalton was financed with borrowings under
the Company's Senior Bank Facilities.

     On September 8, 1998, the capital stock of ACP was contributed to the
Company by ACP Holdings. In connection with the contribution, the Company
assumed $14.6 million of indebtedness of ACP which was refinanced with
borrowings under the Senior Bank Facilities. In addition, notes totaling $6.7
million due by ACP to its shareholder were converted into the equity of ACP by
its shareholder. ACP is a leading independent manufacturer of ductile and
malleable iron castings that are produced through both traditional casting
methods and through ACP's Evapcast lost foam casting process. ACP's production
capabilities also include a range of finishing operations including austempering
and machining. ACP sells its products primarily to companies in the heavy truck,
construction equipment, railroad, mining, electrical fittings and automotive
industries.

     On December 31, 1998, the Company purchased Niemin Porter & Co. d/b/a Cast
Alloys, Inc. ("Cast Alloys"), a manufacturer of investment-cast titanium and
stainless steel golf clubheads, for $40.1 million in cash (excluding fees and
expenses incurred in connection with the acquisition of $1.2 million). The
acquisition of Cast Alloys was financed out of a portion of the proceeds of the
issuance of the Company's 11 1/8% Senior Subordinated Notes due 2007 issued on
November 24, 1998.

     On November 30, 1999, the Company purchased Gregg, a manufacturer of gray
and ductile iron castings, for $22.9 million in cash (excluding fees and
expenses incurred in connection with the acquisition of $.5 million). Additional
purchase consideration of $6.5 million was paid in April 2000 based on Gregg's
operating results for the calendar year ended December 31, 1999. An additional
purchase consideration could be payable based on the operating results of Gregg
for the calendar year ended December 31, 2000. The acquisition of Gregg was
financed through borrowings under the Company's Senior Bank Facilities.







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     Currently, each of the Acquired Subsidiaries is operating as a separate
subsidiary of the Company with independent operations under the direction of the
management that was in place prior to its acquisition by the Company. Although
the Company currently does not have plans to integrate the operations of the
Company with the Acquired Subsidiaries, it may to some extent do so in the
future.

     Each of the Deeter, Mercer, Dalton ,Cast Alloys and Gregg acquisitions were
accounted for using the purchase method of accounting. The acquisition of ACP
was accounted for at historical cost in a manner similar to that in pooling of
interest accounting since the Company and ACP were under common control.

     The foregoing transactions are herein referred to as the "Acquisitions."





































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DALTON CORPORATION

Overview

     Dalton manufactures and sells gray iron castings for refrigeration systems,
air conditioners, heavy equipment, engines, gear boxes, stationary
transmissions, heavy duty truck transmissions and other automotive parts.
Dalton's operating facilities have been structured to manufacture or machine
specific components to customer specifications. Dalton specializes in using cold
box and shell core products as well as precision high-pressure molds to
manufacture gray iron castings. The majority of Dalton's castings range in size
from one pound to 700 pounds.

Products, Customers and Markets

      Dalton's revenues are generated from customers in several industries,
however, refrigeration and air conditioning represent the largest concentration
of tons shipped, which management estimates was approximately 45% of tons
shipped in 2000. The next largest markets served include heavy truck at an
estimated 16% and automotive/light truck at an estimated 12% of the tons shipped
in 2000. Dalton serves primarily three markets: refrigeration and air
conditioning, automotive/truck market and heavy equipment.

Raw Materials

     The primary raw materials used by Dalton to manufacture iron castings are
steel scrap, pig iron, metallurgical coke and silica sand. By using steel scrap
in its production process, Dalton becomes significant contributor to the
recycling efforts being undertaken around the world. While there are multiple
suppliers for each of these commodities, Dalton has sourcing arrangements with
its suppliers for each of these major raw materials, with the exception of pig
iron. Due to long standing relationships with each of its suppliers and the
supply availability, Dalton management believes that it will continue to be able
to secure raw materials from its suppliers at competitive prices. The primary
energy sources for Dalton's operations, electricity and natural gas, are
purchased through utilities.

     Although the prices of all raw materials used by Dalton vary, the
fluctuations in the price of steel scrap are the most significant to Dalton.
Dalton has arrangements with most of its industrial customers which require
Dalton to adjust industrial casting prices to reflect fluctuations in scrap
metal prices. In periods of rapidly rising or falling scrap prices, these
adjustments will lag the current scrap price because they are generally based on
average market prices for prior periods, which periods vary by customer but are
generally no longer than six months. Rapidly fluctuating scrap prices may have a
temporary adverse or positive effect on Dalton's results of operations.

Competition

     Dalton operates in the same industry as the Company and therefore faces the
same competitive environment as the company. See "-The Company (other than the
Acquired Subsidiaries) -Competition."

Manufacturing Facilities

     Dalton currently operates three facilities. The main foundry operation,
located in Warsaw, Indiana ("Warsaw") was established in 1910. In 1992 Dalton
acquired a second foundry operation located in Kendallville, Indiana
("Kendallville"). In addition to the foundry operations, Dalton owns a machining
facility in Stryker, Ohio ("Stryker"). Dalton has established a separate General
Office for centralized finance and MIS operations along with executive
management of Dalton.











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Employees

      At September 30, 2000, Dalton employed 1,308 individuals, consisting of
1,074 hourly employees and 234 salaried and clerical employees. Nearly all of
Dalton's production employees are members of either the Steel Workers' Union or
the Glass, Molders, Pottery, Plastics and Allied Workers International Union. A
collective bargaining agreement is negotiated every three to five years. The
current agreements expire as follows: Warsaw, April 5, 2003; and Kendallville,
June 28, 2002.

Environmental Matters

     Dalton is subject to environmental, health and safety laws comparable to
those governing the Company. See "-The Company (other than the Acquired
Subsidiaries) -Environmental Matters."


Compliance Impacts - Water Discharge Permit

      Dalton's Warsaw facility was issued an NPDES permit this year that limits
the level of chlorine and the temperature of its non-contact cooling water
permitted to be discharged to a waterway by the year 2003. Although the chlorine
is already in the water when purchased from the city, Dalton is responsible for
the elimination. Dalton has several alternatives to meet the chlorine discharge
permit requirements by 2003, including the installation of a re-circulating
water system. It is expected that the savings to be realized by reduced water
purchases from the city will offset the cost of the proposed re-circulating
water system.

ADVANCED CAST PRODUCTS, INC.

Overview

      ACP produces its products through three principal facilities. The largest
operation, Meadville, manufactures ductile iron castings through both the
traditional green sand molding process and its proprietary Evapcast lost foam
casting process. The Belcher operation manufactures malleable cast iron parts
primarily for the auto and electrical fittings industries. Finally, the Peerless
operation produces bearing adapters for use in rail cars. Peerless is one of
only three U.S. companies that manufacture railroad bearing adapters. Since
1990, ACP has generated gradually increasing sales and operating income
primarily due to increased volume of products shipped.

Products, Customers and Markets

     ACP is a leading independent manufacturer of ductile and malleable iron
castings that are produced through both traditional casting methods and through
ACP's Evapcast lost foam casting process. ACP's production capabilities also
include a range of finishing operations including austempering and machining.
ACP sells its products primarily to companies in the heavy truck, construction
equipment, railroad, mining, electrical fittings and automotive industries.















                                       12
<PAGE>   13
     Evapcast and CasTuf are two of ACP's proprietary casting processes.
Evapcast utilizes lost foam molding technology to produce near net-shape
castings, which allow for tighter tolerances, a smoother surface and enhanced
part complexity and require significantly less machining. CasTuf process
produces austempered ductile iron castings with superior strength
characteristics. CasTuf replaces more expensive steel castings, forgings and
fabrications, providing increased design flexibility. Management believes that
ACP is the first and only ductile foundry in the U.S. with its own in-house
austemper furnace and is one of only two ductile iron foundries to have
developed the lost-foam casting process. ACP is also a leading provider of
in-house machined castings through its expanded machining capability, which
utilizes state-of-the-art CNC machines.

     ACP's products and processes have enabled the development of long-term
working relationships with many key customers. This has allowed ACP to retain
existing customers, build on its customer base and obtain favorable pricing.

     ACP serves a diverse base of approximately 350 customers. ACP specializes
in meeting the more difficult requirements of its largest customers such as
Caterpillar, Freightliner and Dana. ACP has been presented supplier awards from
each of these OEMs and has earned the ability to obtain new part awards as they
become available.

     ACP works closely with its customers from the beginning of the design
process until the shipment of finished parts. Due to this level of customer
service along with its products and services, ACP has been able to increase
sales to existing customers as well as expand its customer base. ACP offers its
customers a package, which includes casting, austempering, machining, painting
and assembly. This combination of products and services reduces the risk of ACP
customers moving their products to other manufacturers.

Raw Materials

     The primary raw materials used by ACP to manufacture iron castings are
steel scrap, alloys and silica sand. While there are multiple suppliers for each
of these commodities, ACP has sourcing arrangements with its suppliers of each
of these major raw materials. Due to long standing relationships with each of
its suppliers, ACP believes that it will continue to be able to secure raw
materials from its suppliers at competitive prices. The primary energy sources
for ACP's operations, electricity and natural gas, are purchased through
utilities and competitive third party bidding.

     Although the prices of all raw materials used by ACP vary over time, the
fluctuations in the price of steel scrap are the most significant to ACP. ACP
has arrangements with most of its industrial customers which allow ACP to adjust
industrial casting prices to reflect scrap price fluctuations.













                                       13
<PAGE>   14
Competition

     ACP operates in the same industry as the Company and therefore faces the
same competitive environment as the Company. See "-The Company (other than the
Acquired Subsidiaries) -Competition."

Manufacturing Facilities

     ACP currently operates 3 facilities. ACP has made significant investment in
capital equipment to expand production capacity, improve efficiency, add new
production capabilities, replace equipment and improve the quality of its
products. ACP investments have included, for example, state of the art Disamatic
molding lines at both its Meadville and Belcher facilities and computer
numerical controlled ("CNC") machining centers at Meadville. The new molding
lines have increased capacity with the potential to reduce operating costs.

     In addition, new capital expenditures have been completed for Meadville
that include an autopour unit for its current Disamatic line, a larger Disamatic
molding line for larger castings, and additional CNC machines. Belcher's new
capital expenditures also include an autopour unit in addition to a heat treat
furnace.

Employees

     ACP has approximately 100 salaried and approximately 450 hourly employees
represented by the United Steelworkers of America. The collective bargaining
agreement for Belcher and Meadville expires in June 2004 and in October 2004,
respectively.

Intellectual Property

     Meadville holds trademark rights on two advanced proprietary processes,
Evapcast and CasTuf. ACP's Evapcast process utilizes a lost foam casting
technique which produces near net shape castings. Evapcast eliminates the need
for coring and reduces the need for machining resulting in significant cost
savings to the customer. CasTuf is a process to produce a line of austempered
ductile iron castings which have superior strength characteristics and are
easier to cast than steel products, thus providing greater design freedom.
Meadville is the only ductile iron casting company in North America with
in-house austempering capabilities (CasTuf) and one of only two independent,
ductile iron foundries with lost foam technology (Evapcast). Additionally,
Meadville was one of the first foundry operations to provide completely finished
parts through an integrated machining capability.















                                       14
<PAGE>   15
MERCER FORGE CORPORATION

Overview

     Founded in 1954, Mercer is a leading producer of complex-shaped forged
components for use in transportation, railroad, mining and heavy industrial
applications. Mercer is also a leading producer of microalloy forgings. Mercer
sells directly to OEMs, as well as to industrial end users. Mercer's subsidiary,
A&M Specialties, Inc.(A&M), machines forgings and castings for Mercer and other
industrial applications.

     Until the mid-1980's, Mercer produced military tank parts, but successfully
converted from a defense contractor to a commercial manufacturer and today is
one of the leading suppliers to the heavy duty truck sector. Mercer produces
approximately 500 individually forged components and has developed specialized
expertise in forgings of microalloy steel which management estimates accounts
for approximately 40% of its production.

Products, Customers and Markets

     Mercer manufactures its products to customer specification with typical
production runs of 1,000 or more units. Mercer currently operates eight
mechanical press lines, from 1,300 tons to 4,000 tons. Mercer's principal plant
is a 130,000 square foot facility located in Mercer, Pennsylvania. Key markets
for Mercer include truck and automotive parts, railroad equipment and general
industrial machinery.

     Mercer's in-house sales organization sells direct to end users and OEMs. A
key element of Mercer's sales strategy is its ability to develop strong customer
relationships through responsive engineering capability, dependable quality and
just-in-time performance. Mercer currently serves approximately 40 individual
customer accounts.

The Forged Components Market

     Demand for forged products for civilian application closely follows the
general business cycles of the various market segments and the demand level for
capital goods. While there is a more consistent base level of demand for the
replacement parts portion of the business, the strongest expansions in the
forging industry coincide with the periods of industrial segment economic
growth. Mercer's largest industry segment, the heavy truck segment is extremely
weak due to overbuilds and energy costs. Mercer's other market segments are also
showing weakness following general economic slowdowns in those industrial areas.
Management attributes this to normal industrial cycles in these markets and
adjustments to overbuilds in inventory levels as well as high energy costs.
Mercer experienced a three month strike in 1999 which had an adverse impact on
its volume levels and customers. After a five year settlement at the end of June
of 1999, management is continuing to work to restore its volume and customer
base amid a general industrial downturn.

Manufacturing Process

     Forgings and casting (together with a third process, fabrication) are the
principal commercial metal working processes. In forging, metal is pressed,
pounded or squeezed under great pressure, with or without the use of heat, into
parts that retain the metal's original grain flow, imparting high strength,
ductility and resistance properties.









                                       15
<PAGE>   16
     Forging itself usually entails one of four principal processes: impression
die; open die; cold; and seamless rolled ring forging. Impression die forging,
commonly referred to as "closed die" forging, is the principal process employed
by Mercer, and involves bringing two or more dies containing "impressions" of
the part shape together under extreme pressure, causing the forging stock to
undergo plastic reformation. Because the metal flow is restricted by die
containers, this process can yield more complex shapes and closer tolerances
than the "open die" forging process. Impression die forging is used to produce
products such as military and off-highway track and drive train parts;
automotive and truck drive train and suspension parts; railroad engine, coupling
and suspension parts; military ordinance parts and other items where close
tolerances are required.

     Once a rough forging is produced, regardless of the forging process, it
must generally still be machined. This process, known as "finishing" or
"conversion", smoothes the component's exterior and mating surfaces and adds any
required specification, such as groves, threads, bolt holes and brand name
markings. The finishing process can contribute significantly to the value of the
end product, in particular in certain custom situations where high value
specialized machining is required. Machining can be performed either in-house by
the forger, by a machine shop which performs this process exclusively or by the
end-user.

     An internal staff of five engineers designs products to meet customer
specifications incorporating computer assisted design (CAD) work stations for
tooling design. Because its forged products are inherently less expensive and
stronger, Mercer has been successful in replacing certain cast parts previously
supplied by third party foundries. Management believes that Mercer is an
industry leader in forging techniques using microalloy steel which produces
parts which are lighter and stronger than those forged from conventional carbon
steel.

Raw Materials

     The principal raw materials used in Mercer's products are carbon and
microalloy steel. Mercer purchases substantially all of its carbon steel from
four principal sources. Mercer typically maintains 10 to 30 days supply on hand.
Mercer buys approximately 25,000 tons of raw steel per year. While Mercer has
never suffered an interruption of materials supply, management believes that, in
the event of any disruption from any individual source, adequate alternative
sources of supply are available within the immediate vicinity.

Competition

     Mercer competes primarily in a highly fragmented industry which includes
several dozen other press forgers and hammer forge shops. Hammer shops cannot
typically match press forgers' for high volume, single component manufacturing,
or close tolerance production. Competition in the forging industry has also
historically been determined both by product and geography, with a large number
of relatively small forgers across the country carving out their own product and
customer niches. In addition, most end users manufacture some forgings
themselves, often maintaining a critical minimum level of production in-house
and contracting out the balance. The primary basis of competition in the forging
industry is price, but engineering, quality and dependability are also
important, particularly with respect to building and maintaining customer
relationships. Some of Mercer's competitors have significantly greater resources
than Mercer. There can be no assurance that Mercer will be able to maintain or
improve its competitive position in the markets in which it competes.

     Mercer is not aware of any significant offshore competition within its
current product categories. Due to the importance of customer relationships and
engineering capabilities, most foreign producers are unable to compete.






                                       16
<PAGE>   17
Manufacturing Facilities

     Mercer is located in northwest Pennsylvania, about 60 miles north and west
of the Greater Pittsburgh airport. Mercer owns it principal forging facility,
which occupies a twenty-one acre site, and consists of a 130,000 square foot
manufacturing facility and an adjacent office complex. Mercer's subsidiary, A&M,
also leases an 18,000 square foot machine shop facility located in Sharon,
Pennsylvania, approximately ten miles from Mercer's headquarters. A 20,000
square foot addition to the machining facility is presently nearing completion.

     Mercer's main plant is able to forge complex components in runs from 500 to
more than 10,000 units. Mercer manufactures approximately 500 individual
products (SKUs) of which approximately half run throughout the production year.
Heating capacity is 59,000 pounds per hour through eight induction heaters.
Mercer's existing equipment can handle forging weights from 3 to 100 pounds and
forging diameters ranging from 2 1/2 inches to 5 1/2 inches. Shear/saw
production can handle up to 6 inch diameter billets.

     Mercer presently operates eight press lines consisting of one 4,000 ton,
two 3,000 ton, two 2,000 ton and three 1,300 ton press lines with billet
loaders, induction furnaces, and trim presses. The plant uses four microalloy
conveyors. Mercer is also equipped with saws and shearers to cut billets from
round and square steel bars. Mercer maintains a fully equipped quality control
facility, magniflux machine, shot cleaning equipment, complete die welding
facility and die repair machine shop. A&M operates approximately 25 CNC lathes
and mills as well as a high speed die machining operation utilizing 2 CNC mills.

Employees

     Mercer currently employs approximately 140 full time hourly forging
employees and A&M employs approximately 46 full time hourly machining employees,
all of whom are represented by collective bargaining agreements with United
Steel Workers of America. Following a three month strike ending June 28, 1999,
Mercer has a five year contract ending in 2004. Management believes labor
relations are stable and improving following the three-month strike.

DEETER FOUNDRY, INC.

Overview

     Since 1945, Deeter has been producing gray iron castings for the heavy
municipal market. Deeter's municipal casting product line includes manhole
frames and covers, storm sewer inlet frames, grates and curbs, trench grating
and tree grates. Deeter also produces a wide variety of special application
construction castings. These products are utilized in waste treatment plants,
airports, telephone and electrical construction projects. Deeter's centralized
location in Lincoln, Nebraska allows it to service the majority of its
geographical market area with overnight delivery.

Products, Customers and Markets

     Deeter manufactures the same products, serves the same markets and sells to
the same customer and market base as Neenah's heavy municipal line. See "-The
Company (other than the Acquired Subsidiaries) -Products, Customers and
Markets."










                                       17
<PAGE>   18
Raw Materials

     The primary raw materials used by Deeter to manufacture iron castings are
cast iron scrap, metallurgical coke and silica sand. While there are multiple
suppliers for each of these commodities, Deeter has sourcing arrangements with
its suppliers of each of these major raw materials. Due to long standing
relationships with each of its suppliers, Deeter believes that it will continue
to be able to secure raw materials from its suppliers at competitive prices. The
primary energy sources for Deeter's operations, electricity and natural gas, are
purchased through utilities.

     Although the prices of all raw materials used by Deeter vary, the
fluctuations in the price of cast iron scrap are the most significant to Deeter.
Deeter builds to stock based on forecast sales during any given period and
generally does not have any long term customer contracts. As a result, in
periods of rapidly rising or falling scrap prices, prices charged to customers
will relatively quickly reflect the current scrap price. Rapidly fluctuating
scrap prices may have a temporary adverse or positive effect on Deeter's results
of operations.

Competition

     Deeter operates in the same industry as the Company and therefore faces the
same competitive environment as the Company. See "-The Company (other than the
Acquired Subsidiaries) -Competition."

Manufacturing Facilities

     Deeter is located on a 10 acre site with 65,000 square feet of
manufacturing area. Deeter operates three green sand molding lines with a
current annual capacity of 24,000 net saleable tons. Deeter maintains stockyards
located in Denver, Colorado and their primary distribution yard is located on
site in Lincoln, Nebraska.

Employees

     At September 30, 2000 Deeter had 98 full time hourly employees and 27
salaried employees. The workers are non-union and Deeter believes its relations
with its employees are good.

CAST ALLOYS INC.

Overview

     Cast Alloys manufactures and sells titanium and stainless steel clubheads
for the golf industry. Cast Alloy's operating facilities have been structured to
manufacture and machine specific components to customer specifications. Cast
Alloys uses an investment casting manufacturing process utilizing equipment
which will allow the expansion into alternative commercial products.

Products, Customers and Markets

     Cast Alloy's clubheads are generally used in premium-quality stainless
steel and titanium golf clubs targeted at the high end of the market. These
clubs must satisfy the requirements of highly-skilled amateur and professional
golfers, including touring professionals. Cast Alloys' clubheads are included in
a variety of leading metal woods, irons and putters.






                                       18
<PAGE>   19
     Substantially all of the clubheads manufactured by Cast Alloys are used by
leading golf equipment companies in the production of high-quality,
premium-priced golf clubs. Most golf club companies source the three principal
components of a golf club--the clubhead, shaft, and grip--from independent
suppliers like Cast Alloys, which manufacture these components to meet each
customer's specifications.

      Cast Alloys believes that it has successfully established close working
relationships with the leading golf club manufacturers. Cast Alloys' sales and
marketing activities are conducted by a limited number of direct sales
employees, as well as senior executives of Cast Alloys.

Manufacturing Process

     Investment Casting. Investment-casting is highly specialized method of
making metal products and has become the principal method for the manufacture of
metal clubheads. Investment casting permits greater flexibility in the shape and
weight distribution of clubheads than alternative methods such as forging and
machining. Investment-casting facilitates perimeter weighting, hollow forms and
the utilization of lighter and higher-performance alloys. It enhances
manufacturing precision and uniformity which is critical in the manufacture of
metal woods.

Polishing and finishing process. Cast Alloys conducts golf clubhead polishing
and finishing operations, including painting, at its facilities in Tijuana,
Mexico. Finishing of the head for an iron or putter can require more than 50
separate steps and finishing of a head for a metal wood can involve as many as
100 separate steps. When the process is completed, a fully finished golf
clubhead is delivered to the customer per their exact specifications.

Metal Alloys. All of the clubheads manufactured by Cast Alloys are made of
titanium or stainless steel alloys. Titanium clubheads have higher tensile
strength than stainless steel with approximately one-half the weight of steel.
Therefore, a larger oversized clubhead can be manufactured using titanium
without increasing clubhead weight. Cast Alloys' Northridge facility is designed
exclusively for high volume titanium casting operations.

Quality Control. Cast Alloys believes that its success as a leading supplier of
golf clubheads is largely attributable to its statistical quality control
measures. Cast Alloys attempts to monitor every aspect of the engineering and
manufacturing process to assure the quality of the clubheads manufactured.
Particular attention is paid to the quality of raw materials (principally wax,
ceramic and metal alloys), gating techniques employed in channeling the flow of
molten metal into the ceramic shell in the casting process, and rigorous
inspection standards to assure compliance with a customer's product
specifications throughout the manufacturing process. Statistical process control
is utilized to maintain consistency in manufacturing.

Raw Materials

     All of the clubheads and other commercial/industrial parts manufactured by
Cast Alloys are made of titanium or stainless steel alloys. Titanium clubheads
have higher tensile strength than stainless steel with approximately one-half
the weight of steel. Therefore, a larger oversized clubhead can be manufactured
using titanium alloys from overseas and steel is procured domestically, both at
very competitive prices with long term supply agreements.

Competition

     Cast Alloys operates in a highly competitive market and competes primarily
with four major golf clubhead manufacturers in the United States, including but
not limited to Coastcast Corporation, Sturm Ruger, Inc., Selmet, Inc., and
Hitchiner Manufacturing Co., Inc.





                                       19
<PAGE>   20
Manufacturing Facilities

     Cast Alloys' corporate and administrative offices and manufacturing
facilities currently occupy an aggregate of 231,277 square feet in six separate
locations. All of Cast Alloys' facilities are leased. Cast Alloys believes that
each of these properties are in good condition and that these facilities are
sufficient for current and anticipated needs. In June, 1999 Cast Alloys
purchased an R&D facility from Callaway Golf which it will use for its
manufacturing operations

Employees

     At September 30, 2000, Cast Alloys had 170 full time employees at its U.S.
locations and 1,320 full time employees at its three Mexican locations. The
workers are non-union and Cast Alloys believes its relations with its employees
are good.

Recent Operating Results

     Cast Alloys has experienced continued operating losses during the year
ended September 30, 2000. Management has completed a series of cost-saving
measures and a restructuring of operations to return the Company to
profitability. There is expected to be improvement in earnings in the future.

GREGG INDUSTRIES, INC.

Overview

     Gregg is the largest iron foundry in California and among the largest on
the west coast. Gregg is one of the nation's leading producers of complex,
highly cored iron castings. As a full-service, ISO-9002 and QS-9000 certified
foundry and machine shop, the company produces custom-designed components to the
state of completion defined by the customer. Presently, Gregg produces castings
in gray iron, ductile iron and ni-resist and, on a limited basis, other alloys.

     As determined by customer specifications, castings receive various
treatments including precision machining, annealing and stress relieving,
surface treating, painting, and assembly. Equipped with CNC lathe, mills and
machining centers, the Company's machine shop allows Gregg to provide finished,
machined castings from concept to machined part (to within 2/10,000ths of an
inch tolerance).

Products, Customers and Markets

     Gregg serves the Light and Heavy Truck, Automotive, Diesel Engine,
Industrial and Agricultural markets. Castings are provided in as-cast, machined,
or assembled condition, as defined by the customer. The Company's largest single
product category is turbocharger components, which eventually are used on light
and heavy duty trucks. It also serves the heavy truck sector by supplying
chassis and suspension components. The markets served in fiscal year 2001 are
projected to remain largely unchanged. Approximately 10% of shipments are made
outside the United States.

     Gregg has approximately 90 active customers across the listed industries.
Gregg has received supplier awards from its major customers, placing it in an
excellent position to obtain additional sales.







                                       20
<PAGE>   21

Raw Materials

     The primary raw materials used by Gregg to manufacture iron castings are
steel scrap and silica sand. By using steel scrap in its production process,
Gregg contributes significantly to the recycling efforts being undertaken around
the world. While there are multiple suppliers for each of these commodities,
Gregg has sourcing arrangements with its suppliers for each of these major raw
materials. Due to excellent relationships with each of its suppliers and the
supply availability, Gregg management believes that it will continue to be able
to secure raw materials from its suppliers at competitive prices and remain in
an excellent position to take advantage of additional reductions as they become
available.

     The primary energy sources for Gregg's operations are electricity and
natural gas, which are purchased through public utilities or third party
providers. Gregg participates in California's electricity interruption program,
providing significantly lower costs throughout the year in exchange for
voluntary interruptions as needed to maintain statewide electric distribution
grid reserve levels. This has proven very favorable in past fiscal years.
However, in fiscal year 2000 Gregg has interrupted production or used power on
several occasions at a substantially higher pricing. We expect this condition to
last through calendar year 2001 and mitigate in 2002.

Competition

     Gregg operates in the same industry as the Company and therefore faces the
same competitive environment as the company. See "-The Company (other than the
Acquired Subsidiaries) -Competition."

Manufacturing Facilities

     Gregg is located in El Monte, California, a suburb of Los Angeles. Both the
foundry and adjacent machining operation are owned by the company. The foundry
uses both automated and manual molding equipment, depending on the size and
demand for products. It has a wide variety of core making equipment providing
maximum flexibility in meeting customer demands for precision, cost and demand.
Gregg has an automated casting cleaning line which significantly shortens
production cycle times. The machining operation employs computer numerically
controlled (CNC) lathes and mills.

Employees

     At September 30, 2000, Gregg employed 446 individuals, consisting of 421
hourly employees and 25 salaried and clerical employees. All employees are
non-union.


                                       21
<PAGE>   22




Item 2.     PROPERTIES

     The Company and the Acquired Subsidiaries maintain the following locations.
All of the facilities are owned, with the exception of Cast Alloys' facilities
and Mercer's machining facility, which are leased.

<TABLE>
<CAPTION>
      ENTITY                        LOCATION                            PURPOSE
<S>                                <C>                         <C>
Neenah Foundry Company             Neenah, WI                  2 manufacturing facilities
                                                               Office facility
Dalton Corporation                 Warsaw, IN                  Manufacturing/office facilities
                                   Kendallville, IN            Manufacturing facility
                                   Stryker, OH                 Machining facility

Advanced Cast Products, Inc.       Meadville, PA               Manufacturing/office facility
                                   South Easton, MA            Manufacturing facility
                                   Ironton, OH                 Manufacturing facility

Mercer Forge Corporation           Mercer, PA                  Manufacturing/office facility
                                   Sharon, PA                  Machining facility

Deeter Foundry, Inc.               Lincoln, NE                 Manufacturing/office facility

Cast Alloys, Inc.                  Carlsbad, CA                Office facility / R&D Center
                                   Northridge, CA              Manufacturing facility
                                   Tijuana, B.C.N. Mexico      Manufacturing facility
                                   Chatsworth, CA              Storage facility

Gregg Industries, Inc.             El Monte, CA                Manufacturing/office facility
</TABLE>

The principal equipment at the facilities consists of molding machines, presses,
machining equipment, welding, grinding and painting equipment. The Company and
its acquired subsidiaries regard its plant and equipment as well maintained and
adequate for its needs. In addition to the facilities above, the Company owns
seven and leases six distribution and sales centers.

Item 3.     LEGAL PROCEEDINGS

     The Company and Acquired Subsidiaries are involved in routine litigation
incidental to its business. Such litigation is not, in the opinion of
management, likely to have a material adverse effect on the financial condition
or results of operations of the Company, or the Acquired Subsidiaries.

Item 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There were no matters submitted to a vote of security holders during the
year ended September 30, 2000.

                                       22
<PAGE>   23




                                     PART II

Item 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

      There is no public market for the common stock of the Company. There was
one holder of record of the Company's common stock as of September 30, 2000.

Item 6.   SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

      The following table sets forth the selected historical consolidated
financial and other data of the Predecessor Company for the two years ended
March 31,1997, the six months ended March 31, 1997, and the one month ended
April 30, 1997, which have been derived from the Predecessor Company's
historical consolidated financial statements before the Merger, and the selected
historical consolidated financial and other data of the Company for the five
months ended September 30, 1997 and the years ended September 30, 1998, 1999,
and 2000 which have been derived from the Company's historical consolidated
financial statements. The information contained in the following table should
also be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and the Company's historical
consolidated financial statements and related notes included elsewhere in this
report.

<TABLE>
<CAPTION>
                                                 Predecessor Company
                                  ------------------------------------------------
                                                           Six Months   One Month  Five Months          Fiscal Year Ended
                                     Fiscal Year Ended        Ended       Ended      Ended                 September 30
                                          March 31,          March 31,   April 30,  Sept. 30,    --------------------------------
   (Dollars in thousands)            1996         1997         1997        1997       1997       1998 (1)     1999(2)    2000 (3)
                                     ----         ----         ----        ----       ----       --------     -------    --------
<S>                                <C>           <C>       <C>          <C>        <C>           <C>          <C>        <C>
STATEMENT OF
  INCOME DATA:

  Net sales                        $161,518     $159,613     $72,749      $16,970   $106,168     $303,090     $530,354    $549,656

  Cost of sales                     118,606      113,431      52,096       11,127     76,237      224,548      434,722     454,813
                                   -----------------------------------------------------------------------------------------------

  Gross profit                       42,912       46,182      20,653        5,843     29,931       78,542       95,632      94,843
  Selling, general, and
    Administrative
    Expenses                         15,383       15,649       7,755        1,618      7,947       21,435       34,061      39,176
  Other expenses (4)                      -            -           -            -         10           38        7,502         104
  Amortization  expense                   -            -           -            -      3,900        7,727       11,696      11,641
                                   -----------------------------------------------------------------------------------------------

  Operating income                   27,529       30,533      12,898        4,225     18,074       49,342       42,373      43,922

  Interest expense
    (income), net                      (429)      (1,103)     (1,146)        (116)    10,025       27,208       42,401      47,782
                                   -----------------------------------------------------------------------------------------------
  Income (loss) from continuing
    operations before taxes &
    extraordinary item               27,958       31,636      14,044        4,341      8,049       22,134          (28)     (3,860)

  Provision for
  income taxes                       11,335       12,210       4,563        1,633      3,876       10,650        1,982       1,448
                                   -----------------------------------------------------------------------------------------------

  Income (loss) from continuing
  operations before
  extraordinary item                 16,623       19,426       9,481        2,708      4,173       11,484       (2,010)     (5,308)
  Income (loss) from
  discontinued operations (5)           519          412         234          (29)       193          397          118         165
  Extraordinary item (6)                  -            -           -            -     (1,630)        (392)           -           -
                                   -----------------------------------------------------------------------------------------------

  Net income (loss)                $ 17,142     $ 19,838     $ 9,715      $ 2,679   $  2,736     $ 11,489     $ (1,892)   $ (5,143)
                                   ===============================================================================================
</TABLE>

                                       23

<PAGE>   24

<TABLE>
<CAPTION>
                                                 Predecessor Company
                                  ------------------------------------------------
                                                           Six Months  One Month Five Months         Fiscal Year Ended
                                     Fiscal Year Ended       Ended       Ended     Ended               September 30
                                          March 31,         March 31,  April 30,  Sept. 30,   -------------------------------
   (Dollars in thousands)           1996         1997         1997        1997      1997      1998 (1)    1999(2)    2000 (3)
                                    ----         ----         ----        ----      ----      --------    -------    --------
<S>                                <C>          <C>         <C>        <C>        <C>         <C>         <C>        <C>
   BALANCE SHEET
     DATA (AT END
     OF PERIOD):
   Cash and cash                     $238       $10,126       $22,403    $29,046    $20,346     $19,978    $17,368    $19,478
     equivalents

   Working capital                 15,239        28,113        43,707     34,052     40,849      78,186     83,962     86,080

   Total assets                    73,813        82,957        93,869    102,067    358,406     584,309    641,702    666,218

   Total debt                         887           241           134        129    218,314     371,871    428,007    449,607


   Total stockholder's             43,198        54,970        68,857     74,458     47,407      67,922     63,750     58,518
     equity
</TABLE>
--------------------------------------------------------------------------------

(1)  The amounts include the results of Deeter subsequent to March 30, 1998, the
     results of Mercer subsequent to April 3, 1998 and the results of Dalton
     subsequent to September 8, 1998.
(2)  The amounts include the results of Cast Alloys subsequent to December 31,
     1998.
(3)  The amounts include the results of Gregg subsequent to November 30, 1999.
(4)  In 1999, other expenses includes a $6.7 million charge related to the
     closure of Dalton's Ashland facility.
(5)  On October 2, 2000, the Company sold all of the issued and outstanding
     shares of common stock of Hartley. The results of the operations of Hartley
     have been reported separately as discontinued operations for all periods
     presented.
(6)  Extraordinary item includes the write off of unamortized deferred financing
     costs due to the early extinguishment of debt net of tax of $260 and $999,
     for the year ended September 30, 1998 and the five months ended September
     30, 1997, respectively.
















                                       24






<PAGE>   25




Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

     Certain matters discussed in this Management's Discussion and Analysis of
Financial Condition and Results of Operations and other sections of this annual
report are "forward-looking statements" intended to qualify for the safe harbors
from liability established by the Private Securities Litigation Reform Act of
1995. These forward-looking statements can generally be identified as such
because the context of the statement will include words such as the Company
"believes," "anticipates," "expects" or words of similar import. Similarly,
statements that describe the Company's future plans, objectives or goals are
also forward-looking statements. Such forward-looking statements are subject to
certain risks and uncertainties which are described in close proximity to such
statements and which may cause actual results to differ materially from those
currently anticipated. The forward-looking statements made herein are made only
as of the date of this report and the Company undertakes no obligation to
publicly update such forward-looking statements to reflect subsequent events or
circumstances.

     The Recent Acquisitions have had a significant impact on the Company's
results of operations and financial condition as addressed in the following
discussion and analysis. Each of the Recent Acquisitions (other than the ACP
acquisition) was accounted for using the purchase method of accounting. These
Recent Acquisitions resulted in the recording of goodwill and identifiable
intangible assets totaling $141.2 million. These amounts are being amortized
over their estimated useful lives, ranging from 5 to 40 years. The Recent
Acquisitions have also resulted in a significant increase in the Company's
interest expense as a result of a substantially increased level of indebtedness
incurred to finance the Recent Acquisitions.



                                       25
<PAGE>   26





COMPARISON OF FISCAL YEAR ENDED SEPTEMBER 30, 2000 TO FISCAL YEAR ENDED
SEPTEMBER 30, 1999

     Net Sales. Net sales for the year ended September 30, 2000 were $549.7
million, which was $19.3 million or 3.6% higher than the year ended September
30, 1999. The increase in net sales resulted from the inclusion of the operating
results of Gregg after its acquisition, offset by lower sales volumes in the
fourth quarter of fiscal 2000 triggered by a slowdown in the heavy duty truck
market.

     Gross Profit. Gross profit for the year ended September 30, 2000 was $94.8
million, a decrease of $0.8 million or 0.8%, as compared to the year ended
September 30, 1999. The decrease was from lower operating results at Cast Alloys
and a $2.5 million provision for obsolete inventory at Cast Alloys. This was
partially offset by the inclusion of the operating results of Gregg after its
acquisition on November 30, 1999. Gross profit as a percentage of net sales
decreased to 17.3% (17.7% without the $2.5 million provision for obsolete
inventory) during the year ended September 30, 2000 from 18.0% for the fiscal
year ended September 30, 1999. Gross profit percentage was negatively impacted
during the year ended September 30, 2000 by the provision for obsolete inventory
and other operating difficulties at Cast Alloys. In addition, the Company has
experienced extreme market pressure to reduce pricing on its products.

     Selling, General and Administrative Expenses. Selling, general and
administrative expenses for the year ended September 30, 2000 were $39.2
million, an increase of $5.1 million over the $34.1 million for the year ended
September 30, 1999. As a percentage of net sales, selling, general and
administrative expenses increased from 6.4% for the fiscal year ended September
30, 1999 to 7.1% for the year ended September 30, 2000. The increase in selling,
general and administrative expense was due to the inclusion of expenses from
Gregg after its acquisition, costs to improve future operations at Cast Alloys
and the recognition of severance benefits payable to the former CEO of the
Company.

     Amortization of intangible assets. Amortization of intangible assets was
$11.6 million for the year ended September 30, 2000, a decrease of $0.1 million,
or 0.9%, as compared to the $11.7 million for the year ended September 30, 1999.
The decrease is due to the decreased amortization of certain identifiable
intangible assets, which were fully amortized in the year ended September 30,
1999.

     Other expenses. During the year ended September 30, 1999, a restructuring
charge of $6.7 million was recorded to exit the Company's operations at its
Ashland, Ohio facility. The decision to close the facility was made due to
recurring operating losses by the Ashland division over the past several years.
Of the $6.7 million charge, $6.0 million was a non-cash charge for impairment of
assets and $.7 million was cash outlays for exit activity costs which were paid
during the year ended September 30, 2000. Also included in other expenses for
the years ended September 30, 2000 and 1999 are losses of $0.1 and $0.8 million,
respectively, for the disposal of assets in the ordinary course of business.

     Operating Income. Operating income was $43.9 million for the year ended
September 30, 2000, an increase of $1.5 million or 3.5% from the year ended
September 30, 1999. The increase in operating income was caused by the $6.7
million charge related to the closing of the Ashland facility in 1999, with no
corresponding charge for the year ended September 30, 2000. This was partially
offset by higher selling, general and administrative expenses as noted above. As
a percentage of net sales, operating income remained at 8.0% for the years ended
September 30, 2000 and 1999.


                                       26
<PAGE>   27




     Net Interest Expense. Net interest expense increased from $42.4 million for
the year ended September 30, 1999 to $47.8 million for the year ended September
30, 2000. The increased interest expense resulted from interest on the drawings
under the Company's Senior Bank Facilities to finance the Gregg acquisition. In
addition, the Senior Subordinated Notes used to finance the Cast Alloys
acquisition were outstanding for the entire year ended September 30, 2000.

     Provision for Income Taxes. The provision for income taxes for the year
ended September 30, 2000 is higher than the amount computed by applying the
statutory rate of approximately 40% to income before income taxes mainly due to
the amortization of goodwill, which is not deductible for income tax purposes.

     Income from discontinued operations. Income from discontinued operations
includes the results of operations of Hartley, which was sold on October 2,
2000. The results are comparable for the years ended September 30, 1999 and
1998.

COMPARISON OF FISCAL YEAR ENDED SEPTEMBER 30, 1999 TO FISCAL YEAR ENDED
SEPTEMBER 30, 1998

Net Sales. Net sales for the year ended September 30, 1999 were $530.4 million,
which was $227.3 million or 75.0% higher than the year ended September 30, 1998.
The Acquired Subsidiaries accounted for an increase of $225.0 million in net
sales. Net sales of municipal castings increased by $9.1 million or 11.7% due
primarily to a strong economy in the upper Midwest and market share gains in
strategic focus areas of the East and Southwest. Net sales of industrial
castings decreased by $6.5 million or 5.2% as the continued strength of the
heavy duty truck market was more than offset by sharply lower demand in the
agricultural business.

     Gross Profit. Gross profit for the year ended September 30, 1999 was $95.6
million, an increase of $17.1 million or 21.8%, as compared to the year ended
September 30, 1998. The increase of $14.8 million was due to the inclusion of
the operating results of the Acquired Subsidiaries excluding ACP after their
acquisition. The remaining margin improvement was due to favorable pricing for
certain raw materials and improved efficiency in plant operations. Gross profit
as a percentage of net sales decreased to 18.0% during the year ended September
30, 1999 from 25.9% for the fiscal year ended September 30, 1998. Gross profit
was negatively impacted by a strike at Mercer, which began in April, 1999 and
was settled in July, 1999. In addition, Cast Alloys had a negative gross margin
for the first four months (January 1999 through April 1999) after its
acquisition.

     Selling, General and Administrative Expenses. Selling, general and
administrative expenses for the year ended September 30, 1999 were $34.1
million, an increase of $12.7 million over the $21.4 million for the year ended
September 30, 1998. The majority of the increase in selling, general and
administrative expense was due to the inclusion of $10.3 million of expenses
from the Acquired Subsidiaries. The remainder of the increase was due to higher
acquisition expenses. As a percentage of net sales, selling, general and
administrative expenses decreased from 7.1% for the year ended September 30,
1998 to 6.4% for the year ended September 30, 1999. The percentage decrease was
due to expenses being spread over a larger volume base with the inclusion of the
Acquired Subsidiaries' operating results.

     Amortization of intangible assets. Amortization of intangible assets was
$11.7 million for the year ended September 30, 1999, an increase of $4.0
million, or 51.9%, as compared to the $7.7 million for the year ended September
30, 1998. The increase is due to the increased amortization from goodwill and
identifiable intangible assets from the Acquired Subsidiaries, excluding ACP.



                                       27
<PAGE>   28




     Other expenses. During the year ended September 30, 1999, a restructuring
charge of $6.7 million was recorded to exit the Company's operations at its
Ashland, OH facility. The decision to close the facility was made due to
recurring operating losses by the Ashland division over the past several years.
Of the $6.7 million charge, $6.0 million is a non-cash charge for impairment of
assets and $.7 million was cash outlays for exit activity costs paid during the
year ended September 30, 2000. Also included in other expenses for the year
ended September 30, 1999 is a loss of $.8 million for the disposal of assets in
the ordinary course of business.

     Operating Income. Operating income was $42.4 million for the year ended
September 30, 1999, a decrease of $6.9 million or 14.0% from the year ended
September 30, 1998. The decrease in operating income was caused by a $6.7
million charge related to the closing of the Ashland facility and increased
amortization expense. This was partially offset by the inclusion of the
operating results of the Acquired Subsidiaries. As a percentage of net sales,
operating income decreased from 16.3% for the year ended September 30, 1998 to
8.0% for the year ended September 30, 1999.

     Net Interest Expense. Net interest expense increased from $27.2 million for
the year ended September 30, 1998 to $42.4 million for the year ended September
30, 1999. The increased interest expense resulted from the drawings under the
Company's Senior Bank Facilities to finance the Mercer, Deeter, Dalton, and ACP
acquisitions, which were outstanding for the entire year ended September 30,
1999. In addition, interest was incurred on the Senior Subordinated Notes issued
to finance the Cast Alloys acquisition.

     Provision for Income Taxes. The provision for income taxes for the year
ended September 30, 1999 is higher than the amount computed by applying the
statutory rate of approximately 40% to income before income taxes mainly due to
the amortization of goodwill, which is not deductible for income tax purposes.

     Income from discontinued operations. Income from discontinued operations
includes the results of operations of Hartley, which was sold on October 2,
2000. The results are comparable for the years ended September 30, 1999 and
1998.

     Extraordinary Item. During the year ended September 30, 1998, the Company
recorded an extraordinary loss of $0.4 million (which is net of an income tax
benefit of $0.3 million) for the write-off of unamortized deferred financing
costs in connection with the repayment in full of indebtedness of ACP prior to
its scheduled maturity.

LIQUIDITY AND CAPITAL RESOURCES

     The Company has outstanding $282.0 million principal of 11 1/8% Senior
Subordinated Notes due 2007 (the "Senior Subordinated Notes"). In addition, the
Company has entered into a credit agreement (the "Senior Bank Facility" or
"Credit Agreement") providing for term loans, an Acquisition Loan Facility and a
Revolving Credit Facility of up to $50.0 million. At September 30, 2000, there
are no borrowings outstanding on the Revolving Credit Facility, $27.3 million
principal amount outstanding on the Acquisition Loan Facility and $135.7 million
principal amount outstanding under the term loans.

     The Company's liquidity needs will arise primarily from debt service on the
above indebtedness, working capital needs, the funding of capital expenditures
and additional acquisitions. Borrowings under the Senior Bank Facilities bear
interest at variable interest rates. The Senior Bank Facility imposes
restrictions on the Company's ability to make capital expenditures and both the
Senior Bank Facility and the indentures governing the Senior Subordinated Notes
limit the Company's ability to incur additional indebtedness. The covenants
contained in the Senior Bank Facility also, among other things, restrict the
ability of the Company and its subsidiaries to dispose of assets, incur
guarantee obligations, prepay the Senior Subordinated Notes or amend its
indentures, pay dividends, create liens on assets, enter into sale and leaseback
transactions, make investments, loans or advances, make acquisitions, engage in
mergers or consolidations, change the business conducted by the Company, make
capital expenditures or engage in certain transactions with affiliates, and
otherwise restrict corporate activities.

                                       28
<PAGE>   29


     For the years ended September 30, 2000, 1999 and 1998, capital expenditures
were $19.3 million, $41.6 million, and $13.1 million, respectively. During the
years ended September 30, 2000 and 1999, the Company incurred additional capital
expenditures of $13.3 million and $1.1 million, respectively, which the Company
financed by entering into capital leases. The increased capital expenditures for
the year ended September 30, 1999 included normal capital expenditures at Neenah
of $7.2 million and significant expenditures for updating of molding machines,
melt and sand systems and purchase of an R&D facility at certain subsidiaries.

     The Company's principal source of cash to fund its liquidity needs will be
net cash from operating activities and borrowings under its Senior Bank
Facilities. Net cash from operating activities for the years ended September 30,
2000 and 1999 was $29.5 million and $31.1 million, respectively. The decrease
was due to decreased operating income (before amortization and restructuring
charges), partially offset by improved control of accounts receivable balances.
Cast Alloys recorded a non-cash charge of $2.5 million in the year ended
September 30, 2000 to write off obsolete inventory. Net cash from operating
activities for the year ended September 30, 1999 was $31.1 million, an increase
of $6.9 million from $24.2 million for the year ended September 30, 1998,
primarily as a result of an increase in operating income (before amortization
and restructuring charges) from the inclusion of the Acquired Subsidiaries.

     The Company believes that cash generated from operations and existing
revolving lines of credit under the Senior Bank Facilities will be sufficient to
meet its normal operating requirements, including working capital needs and
interest payments on the Company's outstanding indebtedness.

     Amounts under the $50 million Revolving Credit Facility may be used for
working capital and general corporate purposes, subject to certain limitations
under the Senior Bank Facilities. The Company believes that such resources,
together with the potential future use of debt or equity financing, will allow
the Company to pursue its strategic goal of growth and increased earnings.

 RAW MATERIALS

     Although the prices of all raw materials used by the Company vary, the
fluctuations in the price of steel scrap are the most significant to the
Company. The Company has arrangements with most of its industrial customers
which require the Company to adjust industrial casting prices to reflect scrap
price fluctuations. In periods of rapidly rising or falling scrap prices, these
adjustments will lag the current scrap price because they are generally based on
average market prices for prior periods, which periods vary by customer but are
generally no longer than six months. Castings are generally sold to the heavy
municipal market on a bid basis and, after a bid is won, the price for the
municipal casting subject to the bid generally cannot be adjusted for raw
material price increases. However, in most cases the Company has been successful
in obtaining higher municipal casting unit prices in subsequent bids to
compensate for rises in scrap prices in prior periods. Rapidly fluctuating scrap
prices may have a temporary adverse or positive effect on the Company's results
of operations.

INFLATION

     The Company does not believe that inflation has had a material impact on
its financial position or results of operations during the past three years.

CYCLICALITY AND SEASONALITY

     The Company has historically experienced moderate cyclicality in the heavy
municipal market. Sales of municipal products are influenced by, among other
things, public spending. In the industrial market, the Company has experienced
cyclicality in sales resulting from fluctuations in the medium- and heavy-duty
truck market and the farm equipment market, which are subject to general
economic trends.


                                       29
<PAGE>   30

     The Company experiences seasonality in its municipal business where sales
tend to be higher during the construction season, which occurs during the warmer
months, generally the third and fourth quarters of the Company's fiscal year.
The Company maintains level production throughout the year in anticipation of
such seasonality and does not experience production volume fluctuations as a
result. The Company builds inventory in anticipation of the construction season
with such inventories reaching a peak near the end of its second quarter in
March. The Company has not historically experienced seasonality in industrial
casting sales.

Item 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 The Company is exposed to market risk related to changes in interest rates. The
Company does not use derivative financial instruments for speculative, hedging
or trading purposes.

     Interest Rate Sensitivity. The Company's earnings are affected by changes
in short-term interest rates as a result of its borrowings under the Senior Bank
Facilities. If market interest rates for such borrowings averaged 1% more during
the fiscal year ended September 30, 2001 than they did during fiscal 2000, the
Company's interest expense would increase, and income before income taxes would
decrease by approximately $1.6 million. This analysis does not consider the
effects of the reduced level of overall economic activity that could exist in
such an environment. Further, in the event of a change of such magnitude,
management could take actions to further mitigate its exposure to the change.
However, due to the uncertainty of the specific actions that would be taken and
their possible effects, the sensitivity analysis assumes no changes in the
Company's financial structure.

Item 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The financial statements and schedules are listed in Part IV Item 14 of
this Form 10-K.


Item 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

     None.



                                       30
<PAGE>   31




                                    PART III

Item 10.       DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The following sets forth certain information as of September 30, 2000, with
respect to the persons who are members of the Board of Directors and executive
officers.

<TABLE>
<CAPTION>
        Name               Age                   Position
<S>                        <C>   <C>
James K. Hildebrand        64    Former Chairman of the Board and Chief Executive Officer
William M. Barrett         53    President and Chief Executive Officer
Gary W. LaChey             54    Corporate Vice President - Finance
Charles M. Kurtti          63    Executive Vice President
Phillip C. Zehner          58    Vice President, Secretary and Treasurer
Brenton F. Halsey          71    Director
David F. Thomas            50    Director
John D. Weber              36    Director
</TABLE>


     Mr. Hildebrand was Chairman of the Board and Chief Executive Officer of ACP
Holding Company, a position he held from May 1, 1997 until his retirement on May
15, 2000. Mr. Hildebrand had been President and Chief Executive Officer of
Advanced Cast Products, Inc. from 1988 to 1997. Previously, he served as
President of the Cast Products Group of Amcast Industrial Corp.

     Mr. Barrett is President and Chief Executive Officer of the Company, a
position he has held since May 15, 2000. Mr. Barrett joined the Company in 1992
serving as General Sales Manager - Industrial Castings until May 1, 1997. Mr.
Barrett was Vice President and General Manager from May 1, 1997 to September 30,
1998 and President from October 1, 1998 to April 30, 2000. From 1985 to 1992,
Mr. Barrett was the Vice President - Sales for Harvard Industries Cast Products
Group.

     Mr. LaChey is Corporate Vice President - Finance of the Company, a position
he has held since June 1, 2000. Mr. LaChey joined the Company in 1971, serving
in a variety of positions of increasing responsibility in the finance
department. Mr. LaChey was most recently Vice President - Finance, Treasurer and
Secretary of the Company.

     Mr. Kurtti is Executive Vice President of the Company, a position he has
held since July 2000. Mr. Kurtti joined the Company in 1976 as a salesman. Mr.
Kurtti has served as Director of Marketing, Director of Purchasing -
Engineering, Director - Manufacturing and Engineering and Vice President -
Manufacturing and Engineering.

     Mr. Zehner is Vice President, Secretary and Treasurer for the Company, a
position he has held since June 1, 2000. Mr. Zehner joined the Company in 1974,
serving in a variety of positions of increasing responsibility in the finance
department.

     Mr. Halsey is a director of the Company, a position he has held since May
1, 1997. Mr. Halsey was the founding Chief Executive Officer and Chairman of the
James River Corporation from 1969 to 1990. He continued as Chairman until 1992
when he became Chairman Emeritus.


     Mr. Thomas is a director of the Company, a position he has held since May
1, 1997. Mr. Thomas has been a Managing Director of Citicorp Venture Capital,
Ltd. for more than the past five years. Mr. Thomas is a director of Lifestyles
Furnishings International Ltd., Galey & Lord, Inc., Anvil Knitwear, Inc. and a
number of private companies.


                                       31
<PAGE>   32


     Mr. Weber is a director of the Company, a position he has held since May 1,
1997. Since 1994, Mr. Weber has been a Vice President at Citicorp Venture
Capital, Ltd. Previously, Mr. Weber worked at Putnam Investments from 1992
through 1994. Mr. Weber is a director of Anvil Knitwear, Inc. and a number of
private companies.


     Directors of the Company who are officers or employees of the Company or
its affiliates are presently not expected to receive compensation for their
services as directors. No determination has yet been made with respect to
compensation for directors of the Company who are not officers or employees of
the Company or any of its affiliates. Directors of the Company will be entitled
to reimbursement of their reasonable out-of-pocket expenses in connection with
their travel to and attendance at meetings of the board of directors or
committees thereof.




                                       32
<PAGE>   33




ITEM 11.     Executive Compensation

     The compensation of executive officers of the Company is determined by the
Board of Directors of the Company. The following table sets forth information
concerning compensation received by the officers of the Company for services
rendered in the fiscal years ended September 30, 2000, 1999 and 1998.



<TABLE>
<CAPTION>
                                                                                          Long-Term Compensation
                                         Annual Compensation                              ----------------------
   Name and Principal         Fiscal     -------------------       Other Annual      Options/      LTIP       All Other
        Position               Year     Salary       Bonus       Compensation(1)     SARs(#)      Payouts    Compensation
        --------               ----     ------       -----       ---------------     -------      -------    ------------
<S>                           <C>      <C>                       <C>                 <C>          <C>        <C>
James K. Hildebrand            2000    $500,000     $253,344             $38,010       --            --           --
   Former Chairman             1999     500,000      304,000              36,605
   and Chief                   1998     120,000       84,000              34,107
   Executive Officer

William M. Barrett             2000     275,000      160,738              31,866       --            --           --
   President and Chief         1999     240,629      140,000              30,271
   Executive Officer           1998     148,500       85,575              31,490

Gary W. LaChey                 2000     200,000      106,120              31,452       --            --           --
   Corporate Vice              1999     175,000      122,500              29,909
   President - Finance         1998     145,345       86,980              31,469

Charles M. Kurtti              2000     167,500       87,549              32,743       --            --           --
   Executive Vice              1999     150,100       97,020              31,063
   President                   1998     137,500       80,850              34,510

Phillip C. Zehner              2000     109,200       37,459              29,021       --            --           --
   Vice President,             1999      99,450       25,535              17,343
   Secretary and               1998      86,200        7,000              16,115
   Treasurer


Mark A. Clark                  2000     270,948      200,000              37,849       --            --           --
   President and Chief         1999     270,131       50,000              39,922
   Operating Officer-          1998     256,256       92,000              44,232
   Mercer Forge
</TABLE>



(1) The named officers have participated in the Company's profit sharing,
    Company 401(k) contributions, and excess benefit programs. The aggregate
    payments made by the Company pursuant to such programs are listed as Other
    Annual Compensation.

                                       33
<PAGE>   34



MANAGEMENT INCENTIVE PLAN

     The Company provides performance-based compensation awards to executive
officers and key employees for achievement during each year as part of a bonus
plan. Such compensation awards may be a function of individual performance and
consolidated corporate results. The qualitative and quantitative criteria will
be determined from time to time by the Board of Directors of the Company.

MANAGEMENT EQUITY PARTICIPATION

    In connection with the Merger, the then current Management Investors
acquired units representing membership interests in ACP Products, L.L.C., which
represent, in the aggregate, approximately a ten percent beneficial interest in
the Company (the "Purchased Interests"). In addition, in connection with certain
of the Recent Acquisitions, certain senior managers of certain of the Acquired
Subsidiaries purchased common interests in ACP Products, L.L.C. The Management
Investors and certain other employees of the Company may be given the
opportunity to purchase additional Purchased Interests either in connection with
future acquisitions or otherwise.

     Upon the termination of employment with the Company, an employee's
Purchased Interests will be subject to certain repurchase provisions exercisable
by ACP Products, L.L.C. or its designees. Any Purchased Interests issued in the
future are expected to be subject to rights and restrictions similar to those of
the Purchased Interests purchased in connection with the Merger. The price of
the future Purchased Interests will be established by ACP Products, L.L.C. in
consultation with the Board of Directors of the Company or a compensation
committee thereof.



Item 12.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The Company's authorized capital stock consists of 11,000 shares of common
stock, par value $100 per share (the "Common Stock"), 1,000 shares of which are
issued and outstanding and owned by NFC Castings, Inc. and are pledged to the
lenders under the Senior Bank Facilities. NFC Castings, Inc. is a wholly owned
subsidiary of ACP Holdings which in turn is wholly owned by ACP Products, L.L.C.

     The outstanding common units of ACP Products, L.L.C. consist of 95,000
Class A-3 Common Units (the "Class A Common Units"), 936,735 Class B-3 Common
Units (the "Class B Common Units") and 132,937 Class C-3 Common Units (the
"Class C Common Units"), and together with the Class A "Common Units" and the
Class B Common Units, the "Common Units"). Holders of Class A Common Units are
entitled to one vote per Class A Common Unit on all matters to be voted upon by
the holders of Class A Common Units. Holders of Class C Common Units are
entitled to a number of votes per Class C Common Unit based on the total number
of Class C Common Units outstanding, on all matters to be voted upon by the
holders of Class C Common Units. Holders of Class B Common Units have no right
to vote on any matters to be voted on by holders of Common Units. Holders of
Class B Common Units may elect at any time to convert any or all of such Units
into Class A Common Units, on a Common Unit-for-Common-Unit basis.

                                       34
<PAGE>   35



      Set forth below is certain information regarding the beneficial ownership
as of September 30, 2000 of Class A Common Units and Class C Common Units,
respectively, by each person who beneficially owns 5.0% or more of the
outstanding Class A Common Units or Class C Common Units, each director and
Named Executive Officer and all directors and Named Executive Officers as a
group. Except as indicated below, the address for each of the persons listed
below is c/o Neenah Foundry Company, 2121 Brooks Avenue, Box 729, Neenah,
Wisconsin 54957.

<TABLE>
<CAPTION>
--------------------------------------------- --------------- -------------- -------------- -------------- -------------
                                                 Number of        Number of    Percentage     Percentage     Percentage
                                                Voting Class    Voting Class   of Voting      of Voting      of Voting
NAME AND ADDRESS OF BENEFICIAL OWNER           A Common Units     C Common      Class A        Class C         Common
                                                                   Units      Common Units   Common Units      Units
--------------------------------------------- --------------- -------------- -------------- -------------- -------------
<S>                                            <C>            <C>             <C>           <C>            <C>
Citicorp Venture Capital, Ltd. (1) (2)                81,000             --         85.26%            --        35.54%
399 Park Avenue
New York, New York  10043
--------------------------------------------- --------------- -------------- -------------- -------------- -------------
Metropolitan Life Insurance Company (1)                5,000             --          5.26%            --         2.19%
One Madison Avenue
New York, New York  10010
--------------------------------------------- --------------- -------------- -------------- -------------- -------------
James K. Hildebrand                                       --         34,137            --          25.68%       14.98%
--------------------------------------------- --------------- -------------- -------------- -------------- -------------
Executive Officers (1)                                    --         64,000            --          48.10%       28.08%
--------------------------------------------- --------------- -------------- -------------- -------------- -------------
David F Thomas (1) (3)                                84,167             --         88.60%            --        36.93%
--------------------------------------------- --------------- -------------- -------------- -------------- -------------
John D. Weber (1) (3)                                 81,169             --         85.44%            --        35.61%
--------------------------------------------- --------------- -------------- -------------- -------------- -------------
Directors and named executive officers as a
group                                                 89,336         64,000         94.04%         48.10%       35.61%
--------------------------------------------- --------------- -------------- -------------- -------------- -------------
</TABLE>


     (1)  Such persons disclaim beneficial ownership of the Common Stock.

     (2)  Citicorp Venture Capital, Ltd. and its affiliates (collectively,
          "CVC") own 766,794 Class B Common Units representing 81.86% of the
          Class B Common Units outstanding.

     (3)  Consists of the Class A Common Units held directly by Messrs. Thomas
          and Weber and the 81,000 held by CVC, which may be deemed to be
          beneficially owned by Messrs. Thomas and Weber. Messrs. Thomas and
          Weber disclaim beneficial ownership of Units held by CVC. Mr. Thomas
          is a managing director of CVC. Mr. Weber is a vice president of CVC.



                                       35
<PAGE>   36





ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

RELATIONSHIP WITH ACP HOLDINGS

     ACP Products, L.L.C. holds all of the issued and outstanding shares of
capital stock of ACP Holdings. ACP Holdings is the parent company of NFC
Castings, Inc., and thus ACP Holdings indirectly owns 100% of the Common Stock
of the Company. William M. Barrett, who serves as the President and Chief
Executive Officer of the Company, currently serves as President and Chief
Executive Officer of ACP Holdings.

SHAREHOLDER RELATIONSHIPS

     The Management Investors and certain institutional investors, including
Citicorp Venture Capital, Ltd., are parties to the Fifth Amended and Restated
Limited Liability Agreement of ACP Products, L.L.C. (the "L.L.C. Agreement").
The L.L.C. Agreement contains certain provisions with respect to the beneficial
equity interests and corporate governance of the Company. The L.L.C. Agreement
provides that the Investor Group and the Management Investors, as the only
members of ACP Products, L.L.C. holding beneficial interests in the Company,
have the right to direct all actions taken in respect of NFC Castings, Inc. and
the Company, including, without limitation, appointing members of the Board of
Directors of the Company and of NFC Castings, Inc..

CONTRIBUTION OF ACP CAPITAL STOCK

     On September 8, 1998, the capital stock of ACP was contributed to the
Company by ACP Holdings. In connection with the contribution, the Company
assumed $14.6 million of indebtedness of ACP, which was refinanced through
borrowings of Tranche A Loans. In connection with the contribution of the
capital stock of ACP to the Company, (i) NFC Castings, Inc. issued a $4.2
million senior subordinated note to CVC in exchange for a $4.2 million current
pay obligation of ACP to CVC and (ii) $6.7 million of outstanding subordinated
debt of ACP to ACP Holdings and NFC Castings, Inc. was contributed to the
capital of ACP.

REGISTRATION RIGHTS AGREEMENT

     The Company entered into a registration rights agreement (the "Registration
Rights Agreement") with the Investor Group and the Management Investors.
Pursuant to the terms of the Registration Rights Agreement, certain holders of
the Company's Common Stock have the right to require the Company, at the
Company's sole cost and expense and subject to certain limitations, to register
under the Securities Act of 1933, as amended, or list on any recognized stock
exchange all or part of the Common Stock beneficially owned by such holders (the
"Registrable Securities"). All such holders will be entitled to participate in
all registrations by the Company or other holders, subject to certain
limitations. In connection with all such registrations, the Company agreed to
indemnify all beneficial owners of Registrable Securities against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
and other applicable state or foreign securities laws. Registrations pursuant to
the Registration Rights Agreement will be made, if applicable, on the
appropriate registration form and may be underwritten registrations.




                                       36
<PAGE>   37




EMPLOYMENT AGREEMENTS

     The Company, ACP, ACP Holdings and ACP Products, L.L.C. entered into an
executive employment and consulting agreement with James K. Hildebrand dated as
of September 15, 1998. Such agreement provided for (I) an initial term of
employment until September 30, 2001 after which, barring termination by the
Company under certain circumstances (including gross negligence, willful
misconduct and commission of certain crimes), Mr. Hildebrand will serve as a
consultant to the Company for a period of two years with automatic renewal,
subject to earlier termination notice by either party, for successive one year
periods up to an additional three years; (ii) a minimum base salary of $500,000
and a bonus to be calculated based on achieved EBITDA performance so long as Mr.
Hildebrand is employed by the Company; (iii) severance benefits; (iv)
non-competition, non-solicitation and confidentiality agreements; (v) an option
to purchase certain common membership units of ACP Products L.L.C.; and (vi)
other terms and conditions of Mr. Hildebrand's employment including health
benefits. Mr. Hildebrand resigned his position in May, 2000. At that time, the
Company recorded severance benefits payable to Mr. Hildebrand under the terms of
the above agreement.

     In connection with the Company's acquisition of all of the capital stock of
Dalton, Dalton entered into an employment agreement with K.L. Davidson dated as
of September 8, 1998 to serve as President of Dalton. Such agreement provides
for (I) an initial one year term which shall be renewed automatically, subject
to earlier termination notice by either party, for successive one year terms
until Mr. Davidson attains the age of 65; (ii) a minimum base salary and bonus
following the end of each fiscal year so long as Dalton employs Mr. Davidson;
(iii) severance benefits; (iv) non-solicitation, non-compete and confidentiality
agreements; and (v) other terms and conditions of Mr. Davidson's employment. On
June 30, 1999, Mr. Davidson elected to retire as President of Dalton under the
terms of the above employment agreement.



                                       37
<PAGE>   38



Part IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
<TABLE>
<CAPTION>
                                                                                        Page
<S>                                                                                     <C>
(a)  (1) Consolidated Financial Statements of Neenah Foundry Company


            Report of Ernst & Young LLP, Independent Auditors                            45

            Consolidated Balance Sheets                                                  46

            Consolidated Statements of  Operations                                       48

            Consolidated Statements of Changes in Stockholder's Equity                   49

            Consolidated Statements of Cash Flows                                        50

            Notes to Consolidated Financial Statements                                   52

(2)      Financial Statements Schedules

            Report of Ernst & Young LLP, Independent Auditors                            82

            Schedule II - Valuation and Qualifying Accounts of Neenah Foundry Company    83

</TABLE>

Schedules I, III, IV, and V are omitted since they are not applicable or not
required under the rules of Regulation S-X.

(b) Reports on Form 8-K.

            The Company did not file any reports on Form 8-K during the
quarter ended September 30, 2000.

(c) Exhibits

            See Exhibit Index.

                                       38
<PAGE>   39




SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Neenah,
State of Wisconsin, on December 22, 2000.


                                          NEENAH FOUNDRY  COMPANY


                                          (Registrant)

                                                 /s/Gary W. LaChey
                                          ----------------------------------
                                                    Gary W. LaChey
                                          Corporate Vice President - Finance


                                          (Principal Financial and  Principal
                                                 Accounting  Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below on December 22, 2000, by the following persons on behalf
of the registrant and in the capacities indicated.

     /s/William M. Barrett                          /s/ Brenton F. Halsey
------------------------------------         -----------------------------------
        William M. Barrett                             Brenton F. Halsey
          President and                                     Director
    Chief Executive Officer
 (Principal Executive Officer)

     /s/ David F. Thomas                             /s/ Gary W. LaChey
------------------------------------         -----------------------------------
        David F. Thomas                                 Gary W. LaChey
          Director                           Corporate Vice President - Finance
                                             (Principal Financial and  Principal
                                                    Accounting  Officer)
     /s/ John D. Weber
------------------------------------
         John D. Weber
           Director




                                       39
<PAGE>   40



                                  EXHIBIT INDEX
   EXHIBITS

     2.1       Agreement and Plan of Reorganization, dated November 20, 1996, by
               and among NFC Castings, Inc., NC Merger Company and Neenah
               Corporation. **

     2.2       First Amendment to Agreement and Plan of Reorganization, dated as
               of January 13, 1997, by and among NFC Castings, Inc., NC Merger
               Company and Neenah Corporation. **

     2.3       Second Amendment to Agreement and Plan of Reorganization, dated
               as of February 21, 1997, by and among NFC Castings, Inc., NC
               Merger Company and Neenah Corporation. **

     2.4       Third Amendment to Agreement and Plan of Reorganization, dated as
               of April 3, 1997, by and among NFC Castings, Inc., NC Merger
               Company and Neenah Corporation. **

     2.5       Merger Agreement, made as of July 1,1997, by and between Neenah
               Corporation and Neenah Foundry Company. **

     2.6       Stock Purchase Agreement for the acquisition of Deeter Foundry,
               Inc. dated as of March 26, 1998 by and among Neenah Foundry
               Company and the Selling Shareholders of Deeter Foundry, Inc.
               (incorporated by reference to the Company's Form 10-Q for the
               period ended March 31, 1998 filed on May 14, 1998.)

     2.7       Stock Purchase Agreement for the acquisition of Mercer dated as
               of April 3, 1998 by and among Neenah Foundry Company, Mercer
               Forge Corporation and the Selling Shareholders of Mercer
               (incorporated by reference to the Company's Form 8-K filed on
               April 14, 1998.)

     2.8       Stock Purchase Agreement for the acquisition of Dalton dated as
               of August 7, 1998 by and among Neenah Foundry Company, Dalton
               Corporation and the Dalton Corporation Employee Stock Ownership
               Plan and Trust (incorporated by reference to the Company's Form
               8-K filed on September 21, 1998.)

     2.9       Stock Purchase Agreement dated as of December 3, 1998 among
               Niemin Porter & Co. d/b/a Cast Alloys, Inc., the Sellers as
               defined therein and Neenah Foundry Company. ****

     2.10      First Amendment to the Stock Purchase Agreement dated December
               30, 1998 among Niemin Porter & Co. d/b/a Cast Alloys, Inc., the
               Sellers as defined therein and Neenah Foundry Company. ****

     3.1       Restated Articles of Incorporation of Neenah Foundry Company. **

     3.2       By-laws of Neenah Foundry Company. **

     3.3       (Intentionally omitted.)

     3.4       (Intentionally omitted.)

     3.5       Restated Articles of Incorporation of Hartley Controls
               Corporation. **

     3.6       By-laws of Hartley Controls Corporation. **

     3.7       Restated Articles of Incorporation of Neenah Transport, Inc.**

     3.8       By-laws of Neenah Transport, Inc. **

     4.1       Indenture dated as of April 30, 1997 among NC Merger Company and
               United States Trust Company of New York. **

     4.2       Purchase Agreement dated as of April 23, 1997 among NC Merger
               Company, Chase Securities Inc. and Morgan Stanley & Co.
               Incorporated. **

     4.3       Exchange and Registration Rights Agreement dated as of April 30,
               1997 among Neenah Corporation, Neenah Foundry Company, Hartley
               Controls Corporation and Neenah Transport, Inc. and Chase
               Securities, Inc.**

     4.4       First Supplemental Indenture, dated as of April 30, 1997 among
               Neenah Corporation, Neenah Foundry Company, Neenah Transport,
               Inc. and Hartley Controls Corporation and United States Trust
               Company of New York. **

     4.5       Letter Agreement, dated as of April 30, 1997 among Neenah
               Corporation, Neenah Foundry Company, Hartley Controls Corporation
               and Neenah Transport, Inc. and Chase Securities Inc. and Morgan
               Stanley & Co. Incorporated. **

     4.6       Form of Global Note relating to the Indenture dated as of April
               23, 1997. **


                                       40
<PAGE>   41
   4.7       Indenture dated as of July 1, 1997 among Neenah Corporation, Neenah
             Foundry Company, Neenah Transport, Inc., Hartley Controls
             Corporation and United States Trust Company of New York. **
   4.8       Purchase Agreement dated as of June 26, 1997 among Neenah
             Corporation, Neenah Foundry Company, Hartley Controls Corporation,
             Neenah Transport, Inc. and Chase Securities Inc. **
   4.9       Exchange and Registration Rights Agreement dated as of July 1, 1997
             by and between Neenah Corporation, Neenah Foundry Company, Hartley
             Controls Corporation, Neenah Transport, Inc. and Chase Securities,
             Inc. **
   4.10      Form of Global Note related to the Indenture dated as of July 1,
             1997. **
   4.11      Indenture dated as of November 24, 1998 among Neenah Foundry
             Company, Neenah Transport, Inc., Hartley Controls Corporation, the
             Guarantors and United States Trust Company of New York. ****
   10.1      Master Lease Agreement between Neenah Foundry Company and Bank One
             Leasing Corporation dated December 14, 1992. **
   10.2      Agreement between Neenah Foundry Company and Rockwell International
             Corporation effective April 1, 1995. **
   10.3      Letter Agreement between Neenah Foundry Company and Eaton
             Corporation dated April 4, 1996.**
   10.4      (Intentionally omitted).
   10.5      1999-2001 Collective Bargaining Agreement between Neenah Foundry
             Company and Local 121B Glass, Molders, Pottery, Plastics and Allied
             Workers International Union AFL-CIO-CLC. *****
   10.6      1998-2000 Collective Bargaining Agreement between Neenah Foundry
             Company and The Independent Patternmakers Union of Neenah,
             Wisconsin. ***
   10.7      Credit Agreement dated as of April 30, 1997 as Amended and Restated
             as of September 12, 1997, as of April 3, 1998, and as of September
             8, 1998 by and among Neenah Foundry Company, NFC Castings, Inc.,
             the Chase Manhattan Bank as Administrative Agent, Chase Securities,
             Inc. as Arranger and the other Lenders from time to time party
             thereto (incorporated by reference to the Company's Form 8-K filed
             on September 21, 1998.)
   10.8      Employment Agreement dated September 9, 1994 between the Neenah
             Corporation, Neenah Foundry Company, Harley Controls Corporation,
             Neenah Transport, Inc. and James P. Keating, Jr.**
   10.9      Consulting Agreement dated September 9, 1994 between the Neenah
             Foundry Company and the Guarantors and James P. Keating, Jr. **
   10.10     First Amendment to Employment Agreement, dated September 9, 1994,
             between Neenah Foundry Company, Neenah Corporation, Hartley
             Controls Corporation and James P. Keating, Jr. **
   10.11     Pledge Agreement dated as of April 30, 1997, among NC Merger
             Company, a Wisconsin Corporation, NFC Castings, Inc., a Delaware
             Corporation. **
   10.12     Subsidiary Guarantee Agreement dated as of April 30, 1997, among
             each of the subsidiaries listed of NC Merger Company, a Wisconsin
             corporation, and The Chase Manhattan Bank, a New York banking
             corporation, as collateral agent for the secured parties. **
   10.13     Parent Guarantee Agreement dated as of April 30, 1997, between NFC
             Castings, Inc., a Delaware corporation and The Chase Manhattan
             Bank, a New York banking corporation, as collateral agent for the
             secured parties. **
   10.14     Security Agreement dated as of April 30, 1997, among NC Merger
             Company, a Wisconsin corporation, each subsidiary of the borrower
             and The Chase Manhattan Bank, a New York banking corporation, as
             collateral agent for the secured parties. **
   10.15     Form of Mortgage. **




                                       41
<PAGE>   42
   10.16     Amendment No. 1, Consent and Waiver, dated as of November 18, 1998,
             to the Credit Agreement dated as of April 30, 1997 as Amended and
             Restated as of September 12, 1997, as of April 3, 1998, and as of
             September 8, 1998 by and among Neenah Foundry Company, NFC
             Castings, Inc., the Lenders from time to time party thereto, and
             the Chase Manhattan Bank. ***
   10.17     Cash Collateral Account Agreement dated as of November 24, 1998,
             between Neenah Foundry Company and the Chase Manhattan Bank. ***
   10.18     Executive Employment and Consulting Agreement dated September 15,
             1998 by and among Neenah Foundry Co., Advanced Cast Products, Inc.,
             ACP Holding Co., ACP Products, LLC and James K. Hildebrand.***
   10.19     Dalton Corporation, KLDavidson Employment Agreement dated September
             8, 1998. ***
   10.20     Purchase Agreement dated November 19, 1998 among Neenah Foundry
             Company. Neenah Transport, Inc., Hartley Controls Corporation, the
             Guarantors and the Initial Purchasers. ****
   10.21     Exchange and Registration Rights Agreement dated November 24, 1998
             among Neenah Foundry Company, Neenah Transport, Inc., Hartley
             Controls Corporation, the Guarantors and the Initial Purchasers.
             ****
   21.1      Subsidiaries of the Registrant. *
   27.1      Financial Data Schedule. *

   ----
   **  Incorporated by reference to the Company's Form S-4 (Registration No.
       333-28751) which became effective August 29, 1997.
  ***  Incorporated by reference to the Company's Form 10-K (Registration No.
       332-28751) which was filed December 23, 1998.
 ****  Incorporated by reference to the Company's Form S-4 (Registration No.
       333-72455) which became effective May 13, 1999.
*****  Incorporated by reference to the Company's Form 10-K (Registration No.
       333-28751) which was filed December 28, 1999.

























                                       42
<PAGE>   43
                                CONSOLIDATED FINANCIAL
                                STATEMENTS

                                NEENAH FOUNDRY COMPANY

                                Years ended September 30, 2000,
                                1999 and 1998



























                                       43
<PAGE>   44
                             Neenah Foundry Company

                        Consolidated Financial Statements

                  Years ended September 30, 2000, 1999 and 1998




                                    CONTENTS
<TABLE>
<S>                                                                                                      <C>
Report of Independent Auditors...........................................................................1

Consolidated Balance Sheets..............................................................................2
Consolidated Statements of Operations....................................................................4
Consolidated Statements of Changes in Stockholder's Equity...............................................5
Consolidated Statements of Cash Flows....................................................................6
Notes to Consolidated Financial Statements...............................................................8
</TABLE>































                                       44
<PAGE>   45
                         Report of Independent Auditors


Board of Directors
Neenah Foundry Company

We have audited the accompanying consolidated balance sheets of Neenah Foundry
Company (the Company) as of September 30, 2000 and 1999, and the related
consolidated statements of operations, changes in stockholder's equity and cash
flows for each of the three years in the period ended September 30, 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 auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of the
Company at September 30, 2000 and 1999, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
September 30, 2000, in conformity with accounting principles generally accepted
in the United States.

                                        Ernst & Young LLP


November 3, 2000




                                       45
<PAGE>   46
                             Neenah Foundry Company

                           Consolidated Balance Sheets
               (In Thousands, Except Share and per Share Amounts)

<TABLE>
<CAPTION>
                                                                                   SEPTEMBER 30
                                                                               2000             1999
                                                                         ----------------------------------
<S>                                                                      <C>                  <C>
ASSETS
Current assets:
   Cash and cash equivalents                                                $  19,478         $ 17,368
   Accounts receivable, less allowance for doubtful
     accounts of $1,001 in 2000 and $1,020 in 1999                             72,873           77,696
   Inventories                                                                 65,119           56,387
   Refundable income taxes                                                        167                -
   Deferred income taxes                                                        2,748            3,534
   Other current assets                                                         6,131            5,223
                                                                         ----------------------------------
Total current assets                                                          166,516          160,208




Property, plant and equipment:
   Land                                                                         6,456            5,647
   Buildings and improvements                                                  31,992           24,653
   Machinery and equipment                                                    224,252          181,078
   Patterns                                                                    27,458           26,950
   Construction in progress                                                     5,404           16,917
                                                                         ----------------------------------
                                                                              295,562          255,245
   Less accumulated depreciation                                               67,323           46,441
                                                                         ----------------------------------
                                                                              228,239          208,804



Deferred financing costs, net of accumulated amortization
   of $4,484 in 2000 and $2,781 in 1999                                         8,748           10,451
Identifiable intangible assets, net of accumulated
   amortization of $16,834 in 2000 and $10,700 in 1999                         62,018           62,852
Goodwill, net of accumulated amortization of $17,067 in
   2000 and $11,560 in 1999                                                   191,557          190,469
Other assets                                                                    9,140            8,918
                                                                         ----------------------------------
                                                                              271,463          272,690
                                                                         ----------------------------------
                                                                             $666,218         $641,702
                                                                         ==================================
</TABLE>



                                       46
<PAGE>   47
<TABLE>
<CAPTION>
                                                                                SEPTEMBER 30
                                                                           2000            1999
                                                                      ---------------------------------
<S>                                                                   <C>               <C>
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
   Accounts payable                                                    $  31,172        $  31,151
   Income taxes payable                                                        -            1,129
   Accrued wages and employee benefits                                    16,170           14,560
   Accrued interest                                                       13,881           13,678
   Other accrued liabilities                                               5,782           10,394
   Current portion of long-term debt                                      11,280            5,065
   Current portion of capital lease obligations                            2,151              269
                                                                      ---------------------------------
Total current liabilities                                                 80,436           76,246

Long-term debt                                                           438,327          422,942
Capital lease obligations                                                 10,143              945
Deferred income taxes                                                     66,046           64,237
Postretirement benefit obligations                                         6,118            5,641
Other liabilities                                                          6,630            7,941
                                                                      ---------------------------------
Total liabilities                                                        607,700          577,952

Commitments and contingencies

Stockholder's equity:
   Preferred stock, par value $100 per share; authorized
     3,000 shares; no shares issued or outstanding                             -                -
   Common stock, Class A (voting), par value $100 per
     share; authorized 1,000 shares; issued and outstanding,
     1,000 shares                                                            100              100
   Common stock, Class B (nonvoting), par value $100 per
     share; authorized 10,000 shares; no shares issued or
     outstanding                                                               -                -
   Capital in excess of par value                                         51,317           51,317
   Retained earnings                                                       7,190           12,333
   Accumulated other comprehensive loss                                      (89)               -
                                                                      ---------------------------------
Total stockholder's equity                                                58,518           63,750
                                                                      ---------------------------------
                                                                       $ 666,218        $ 641,702
                                                                      =================================
</TABLE>


                                       47
<PAGE>   48
                             Neenah Foundry Company

                      Consolidated Statements of Operations
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                            YEAR ENDED SEPTEMBER 30
                                                2000                 1999                 1998
                                       ---------------------------------------------------------------
<S>                                    <C>                        <C>                  <C>
Net sales                                    $549,656             $530,354             $303,090
Cost of sales                                 454,813              434,722              224,548
                                       ---------------------------------------------------------------
Gross profit                                   94,843               95,632               78,542

Selling, general and administrative
  expenses                                     39,176               34,061               21,435
Amortization expense                           11,641               11,696                7,727
Restructuring charge                                -                6,713                    -
Loss on disposal of equipment                     104                  789                   38
                                       ---------------------------------------------------------------
Operating income                               43,922               42,373               49,342

Other income (expense):
   Interest expense                           (48,760)             (43,803)             (28,096)
   Interest income                                978                1,402                  888
                                       ---------------------------------------------------------------
Income (loss) from continuing
   operations before income taxes
   and extraordinary item                      (3,860)                 (28)              22,134
Provision for income taxes                      1,448                1,982               10,650
                                       ---------------------------------------------------------------
Income (loss) from continuing
   operations before extraordinary
   item                                        (5,308)              (2,010)              11,484
Income from discontinued
   operations net of income taxes of
   $152 in 2000, $82 in 1999 and
   $272 in 1998                                   165                  118                  397
Extraordinary item, net of income
   tax benefit $260 in 1998                         -                    -                 (392)
                                       ---------------------------------------------------------------
Net income (loss)                            $ (5,143)            $ (1,892)            $ 11,489
                                       ===============================================================
</TABLE>



See accompanying notes.

                                       48
<PAGE>   49
                             Neenah Foundry Company

           Consolidated Statements of Changes in Stockholder's Equity
                                 (In Thousands)


See accompanying notes.

<TABLE>
<CAPTION>

                                                                        Common Stock
                                                                 ----------------------------
                                                       Preferred                                 Capital in Excess     Retained
                                                         Stock        Class A        Class B       of Par Value        Earnings
                                                     ------------- ------------- -------------- ------------------  -------------
<S>                                                  <C>           <C>           <C>            <C>                 <C>
Balance at September 30, 1997                         $   --        $    100         $  --          $ 44,571         $  2,736
   Additional capital contributions                       --              --            --            10,596               --
   Components of comprehensive income:
     Net income                                           --              --            --                --           11,489
     Pension liability adjustment, net of tax
       effect of $1,048                                   --              --            --                --               --

   Total comprehensive income
                                                     -------------  ------------- -------------   -------------     -------------
Balance at September 30, 1998                             --             100            --            55,167           14,225
   Return of fiscal 1998 capital contribution             --              --            --            (3,850)              --
   Components of comprehensive loss:
     Net loss                                             --              --            --                --           (1,892)
     Pension liability adjustment, net of tax
       effect of $1,048                                   --              --            --                --               --


   Total comprehensive loss
                                                     -------------  ------------- -------------   -------------     -------------
Balance at September 30, 1999                             --             100            --            51,317           12,333
   Components of comprehensive loss:
     Net loss                                             --              --            --              --             (5,143)
     Pension liability adjustment, net of tax
       effect of $60                                      --              --            --              --                 --


   Total comprehensive loss
                                                     -------------  ------------- -------------   -------------     -------------
Balance at September 30, 2000                         $   --        $    100         $  --          $ 51,317         $  7,190
                                                     =============  ============= =============   =============     =============
</TABLE>




<TABLE>
<CAPTION>
                                                      Accumulated
                                                         Other
                                                     Comprehensive
                                                         Loss           Total
                                                     -------------  -------------

<S>                                                  <C>            <C>
Balance at September 30, 1997                         $     --      $   47,407
   Additional capital contributions                         --          10,596
   Components of comprehensive income:
     Net income                                             --          11,489
     Pension liability adjustment, net of tax
       effect of $1,048                                 (1,570)         (1,570)
                                                                    -------------
   Total comprehensive income                                            9,919
                                                     -------------  -------------
Balance at September 30, 1998                           (1,570)         67,922
   Return of fiscal 1998 capital contribution               --          (3,850)
   Components of comprehensive loss:
     Net loss                                               --          (1,892)
     Pension liability adjustment, net of tax
       effect of $1,048                                  1,570           1,570
                                                     -------------  -------------

   Total comprehensive loss                                               (322)
                                                                    -------------
Balance at September 30, 1999                               --          63,750
   Components of comprehensive loss:
     Net loss                                               --          (5,143)
     Pension liability adjustment, net of tax
       effect of $60                                       (89)            (89)
                                                                    -------------
   Total comprehensive loss                                             (5,232)
                                                     -------------  -------------
Balance at September 30, 2000                         $    (89)     $   58,518
                                                     =============  =============
</TABLE>




                                       49
<PAGE>   50
                             Neenah Foundry Company

                      Consolidated Statements of Cash Flows
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                    YEAR ENDED SEPTEMBER 30
                                                                2000         1999         1998
                                                           ----------------------------------------
<S>                                                        <C>           <C>          <C>
OPERATING ACTIVITIES
Net income (loss)                                           $  (5,143)   $  (1,892)   $  11,489
Adjustments to reconcile net income (loss) to net cash
   provided by operating activities:
     Extraordinary item                                            --           --          652
     Provision for obsolete inventory                           2,500           --           --
     Provision for impairment of assets                            --        6,030           --
     Depreciation                                              28,112       23,990       11,927
     Amortization of identifiable intangible assets
       and goodwill                                            11,641       11,696        7,727
     Amortization of deferred financing costs and
       premium on notes                                         1,082        1,011          713
     Loss on disposal of property, plant and
       equipment                                                  104          789           38
     Deferred income taxes                                       (358)      (8,248)      (2,437)
     Other                                                         --           --           41
     Changes in operating assets and liabilities:
       Accounts receivable                                      8,558       (2,977)      (3,926)
       Inventories                                             (7,759)      (1,028)         812
       Other current assets                                      (378)         684         (715)
       Accounts payable                                        (3,842)      (5,217)        (158)
       Income taxes                                            (1,183)       1,504       (5,050)
       Accrued liabilities                                     (3,924)       4,452        4,198
       Postretirement benefit obligations                         477          421          341
       Other liabilities                                         (405)        (110)      (1,416)
                                                           ----------------------------------------
Net cash provided by operating activities                      29,482       31,105       24,236

INVESTING ACTIVITIES
Acquisition of businesses, net of cash acquired               (29,502)     (40,824)    (169,109)
Purchase of property, plant and equipment                     (19,268)     (41,643)     (13,117)
Proceeds from sale of property, plant and equipment             2,381           --           --
Other                                                            (936)        (780)          58
                                                           ----------------------------------------
Net cash used in investing activities                         (47,325)     (83,247)    (182,168)
</TABLE>






                                       50
<PAGE>   51

                             Neenah Foundry Company

                Consolidated Statements of Cash Flows (continued)
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                     YEAR ENDED SEPTEMBER 30
                                                              2000             1999            1998
                                                         -------------------------------------------------
<S>                                                      <C>                 <C>             <C>
FINANCING ACTIVITIES
Proceeds from long-term debt                                $29,750          $ 90,405        $175,987
Payments on long-term debt and capital lease
  obligations                                                (9,797)          (33,607)        (15,753)
Return of capital contribution                                    -            (3,850)              -
Debt issuance costs                                               -            (3,236)         (2,850)
                                                         -------------------------------------------------
Net cash provided by financing activities                    19,953            49,712         157,384
                                                         -------------------------------------------------

Increase (decrease) in cash and cash equivalents              2,110            (2,430)           (548)
Cash and cash equivalents at beginning of period             17,368            19,798          20,346
                                                         -------------------------------------------------
Cash and cash equivalents at end of period                  $19,478          $ 17,368        $ 19,798
                                                         =================================================

Supplemental disclosures of cash flow information:
    Cash paid for:
     Interest                                               $47,475          $ 38,961        $ 25,994
     Income taxes                                             3,141             8,656          16,340
</TABLE>














                                       51
<PAGE>   52
                             Neenah Foundry Company

                   Notes to Consolidated Financial Statements

                               September 30, 2000
                                 (In Thousands)


1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Neenah Foundry Company (Neenah), and together with its subsidiaries (the
Company) manufactures gray and ductile iron castings for sale to industrial and
municipal customers. Industrial castings are custom-engineered and are produced
for customers in several industries, including the medium and heavy-duty truck
components, farm equipment, heating, ventilation and air-conditioning
industries. Municipal castings include manhole covers and frames, storm sewer
frames and grates, trench drain systems, tree grates and specialty castings for
a variety of applications and are sold principally to state and local government
entities, utility companies and contractors. The Company's sales generally are
unsecured.

Neenah has the following subsidiaries, all of which are wholly owned: Neenah
Transport, Inc. (Transport); Hartley Controls Corporation (Hartley)-see Note 12;
Deeter Foundry, Inc. (Deeter); Mercer Forge Corporation and subsidiaries
(Mercer); Dalton Corporation and subsidiaries (Dalton); Advanced Cast Products,
Inc. (ACP); Cast Alloys, Inc. and subsidiaries (Cast Alloys); and Gregg
Industries, Inc. (Gregg). Transport is a common and contract carrier licensed to
operate in the continental United States. The majority of Transport's revenues
are derived from transport services provided to the Company. Hartley designs and
manufactures customized sand control systems for the foundry industry. Deeter
manufactures gray iron castings for the municipal market and special application
construction castings which are used in waste treatment plants, airports,
telephone and electrical construction projects. Mercer manufactures forged
components for use in transportation, railroad, mining and heavy industrial
applications and microalloy forgings for use by original equipment manufacturers
and industrial end users. Dalton manufactures gray iron castings for
refrigeration systems, air conditioners, heavy equipment, engines, gear boxes,
stationary transmissions, heavy duty truck transmissions and other automotive
parts. ACP manufactures ductile and malleable iron castings for use in various
industrial segments, including heavy truck, construction equipment, railroad,
mining and automotive. Cast Alloys manufactures investment-cast titanium and
stainless steel golf club heads for the golf industry. Gregg manufacturers gray
and ductile iron castings for industrial and commercial use.








                                       52
<PAGE>   53
                             Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)


1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Neenah and its
wholly owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.

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 amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents. Cash equivalents,
consisting entirely of Euro-Dollar investments, totaled $15,000 and $15,500 at
September 30, 2000 and 1999, respectively. The cost of these investments
approximates fair value at September 30, 2000 and 1999.

INVENTORIES

Inventories are stated at the lower of cost or market. The cost of inventories
for Neenah and Dalton is determined on the last-in, first-out (LIFO) method for
substantially all inventories except supplies, for which cost is determined on
the first-in, first-out (FIFO) method. The cost of inventories for Deeter,
Mercer, Cast Alloys, ACP and Gregg is determined on the FIFO method. LIFO
inventories comprise 42% and 45% of total inventories at September 30, 2000 and
1999, respectively.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost. Depreciation for financial
reporting purposes is provided over the estimated useful lives of the respective
assets, using the straight-line method.






                                       53
<PAGE>   54
                             Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)


1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

DEFERRED FINANCING COSTS

Costs incurred to obtain long-term financing are amortized using the interest
method over the term of the related debt.

IDENTIFIABLE INTANGIBLE ASSETS

Identifiable intangible assets are amortized on a straight-line basis over the
estimated useful lives of 5 to 40 years.

GOODWILL

Goodwill is amortized on a straight-line basis over 15 to 40 years.

IMPAIRMENT OF LONG-LIVED ASSETS

Property, plant and equipment, identifiable intangible assets and goodwill are
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. If the sum of the expected
undiscounted cash flows is less than the carrying value of the related asset or
group of assets, a loss is recognized for the difference between the fair value
and carrying value of the asset or group of assets. Such analyses necessarily
involve significant judgment.

REVENUE RECOGNITION

The Company recognizes revenue when each of the following four criteria are met:
1) a sales arrangement exists; 2) products have been shipped and title
transferred; 3) the price of the product is determinable; and 4) collectibility
is reasonably assured.

ADVERTISING COSTS

Advertising costs are expensed as incurred, and amounted to $636, $854 and $662
for the years ended September 30, 2000, 1999 and 1998.







                                       54
<PAGE>   55
                             Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)


1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INCOME TAXES

Deferred income taxes are provided for temporary differences between the
financial reporting and income tax basis of the Company's assets and liabilities
and are measured using currently enacted tax rates and laws.

FINANCIAL INSTRUMENTS

The Company has a number of financial instruments, none of which are held for
trading purposes. The following presents the carrying amounts and estimated fair
values of such instruments:
<TABLE>
<CAPTION>
                                   SEPTEMBER 30, 2000           SEPTEMBER 30, 1999
                              ----------------------------------------------------------
                                Carrying         Fair         Carrying         Fair
                                 Amount          Value         Amount         Value
                              -------------- -------------- -------------- -------------
<S>                           <C>            <C>            <C>            <C>
Cash and cash equivalents       $ 19,478       $ 19,478       $ 17,368       $ 17,368
Accounts receivable               72,873         72,873         77,696         77,696
Accounts payable                  31,172         31,172         31,151         31,151
Long-term debt                   449,607        380,656        428,007        406,857
Capital lease obligations         12,294         12,294          1,214          1,214
</TABLE>

The fair value of the Senior Subordinated Notes is based on quoted market
prices.

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform to the current year
presentation.

PENDING ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," which was
amended by SFAS No. 137. Provisions of these standards are required to be
adopted in years beginning after June 15, 2000. Because of the Company's minimal
use of derivatives, management does not anticipate that the adoption of SFAS No.
133 will have a significant effect on the results of operations or on the
financial position of the Company.




                                       55
<PAGE>   56
                             Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)


2. ACQUISITIONS

On March 30, 1998, Neenah purchased Deeter, a manufacturer of gray iron
castings, for $20,759 in cash (including direct costs of $313) and a $3,850 note
issued by ACP Holding Company payable to the selling shareholders of Deeter
which was accounted for as a contribution to the capital of Neenah in fiscal
1998. During fiscal 1999, Neenah settled the note on behalf of ACP Holding
Company which was accounted for as a return of capital.

On April 3, 1998, Neenah purchased Mercer, a manufacturer of forged components,
for $47,420 (including direct costs of $525 and net of $154 of acquired cash).
The acquisition of Mercer was financed through borrowings under the Tranche B
term loan.

On September 8, 1998, Neenah purchased Dalton, a manufacturer of gray iron
castings, for $100,930 (including direct costs of $601 and net of $1,679 of
acquired cash). The acquisition of Dalton was financed through borrowings under
the Tranche B term loan and the Acquisition Loan Facility.

On December 31, 1998, Neenah purchased Cast Alloys, a manufacturer of
investment-cast titanium and stainless steel golf club heads, for $40,824 in
cash (including direct costs of $1,206, and net of $488 of acquired cash). The
acquisition of Cast Alloys was financed by the issuance of the Company's 11-1/8%
Series F Senior Subordinated Notes.

On November 30, 1999, the Company purchased Gregg, a manufacturer of gray and
ductile iron castings, for $23,002 (including direct costs of $485 and net of
$403 of acquired cash). Additional purchase consideration of $6,500 was paid in
April 2000 based on Gregg's operating results for the calendar year ended
December 31, 1999. An additional purchase consideration could be payable based
on the operating results of Gregg for the calendar year ended December 31, 2000.
The acquisition of Gregg was financed through borrowings under the Company's
Acquisition Loan Facility.

The acquisitions of Deeter, Mercer, Dalton, Cast Alloys and Gregg have been
accounted for using the purchase method of accounting and, accordingly, the
purchase price has been allocated on the basis of fair values to the underlying
assets acquired and liabilities assumed. The excess of the cost of acquisition
over the fair value of the net tangible and identifiable intangible assets
acquired has been allocated to goodwill. The operating results of Deeter,
Mercer, Dalton, Cast Alloys and Gregg are included in the consolidated
statements of operations since the date of their respective acquisition.





                                       56
<PAGE>   57
                             Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)

2. ACQUISITIONS (CONTINUED)

On September 8, 1998, the capital stock of ACP was contributed to Neenah by ACP
Holding Company, the sole shareholder of ACP. ACP is a manufacturer of ductile
and malleable iron castings. In connection with the merger, Neenah assumed
$14,613 of indebtedness of ACP which was subsequently refinanced through
borrowings under the Tranche A term loan. In addition, senior subordinated notes
totaling $6,746 due by ACP to its shareholder were converted into the equity of
ACP by its shareholder. The acquisition of ACP was accounted for in a manner
similar to a pooling of interests because Neenah and ACP were under common
control.

Pro forma unaudited consolidated operating results of the Company, assuming Cast
Alloys and Gregg had been acquired as of October 1, 1999 and 1998, are
summarized below:
<TABLE>
<CAPTION>
                                                                     YEAR ENDED SEPTEMBER 30
                                                                    2000                1999
                                                              ---------------------------------------
<S>                                                           <C>                     <C>
Net sales                                                         $555,434            $581,889
Net income (loss)                                                   (5,266)             (4,266)
</TABLE>

These pro forma results have been prepared for informational purposes only and
include certain adjustments to depreciation expense related to acquired plant
and equipment, amortization expense arising from goodwill and identifiable
intangible assets, interest expense on debt incurred to finance the acquisition,
and the estimated related income tax effects of all such adjustments. The pro
forma results do not purport to be indicative of the results of operations which
would have resulted had the business combinations occurred on October 1, 1999
and 1998, or of the future results of operations of the consolidated entities.












                                       57
<PAGE>   58
                             Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)


3. INVENTORIES

Inventories consist of the following as of September 30:
<TABLE>
<CAPTION>
                                                                          2000              1999
                                                                  ------------------------------------
<S>                                                               <C>                    <C>
  Raw materials                                                        $10,333           $  9,702
  Work in process and finished goods                                    43,946             37,654
  Supplies                                                              10,840              9,031
                                                                  ------------------------------------
                                                                       $65,119            $56,387
                                                                  ====================================
</TABLE>

If the FIFO method of inventory valuation had been used on all components,
inventories would have been approximately $549 higher than reported at September
30, 2000, and $1,156 lower than reported at September 30, 1999.

4. IDENTIFIABLE INTANGIBLE ASSETS

Identifiable intangible assets consist of the following as of September 30:
<TABLE>
<CAPTION>
                                                                         2000              1999
                                                                  ------------------------------------
<S>                                                               <C>                    <C>
  Customer lists                                                       $35,041           $33,941
  Trade names                                                           27,053            24,353
  Assembled work force                                                  10,342             8,842
  Facilities in place                                                    2,982             2,982
  Other                                                                  3,434             3,434
                                                                  ------------------------------------
                                                                        78,852            73,552
  Less accumulated amortization                                         16,834            10,700
                                                                  ------------------------------------
                                                                       $62,018           $62,852
                                                                  ====================================
</TABLE>








                                       58
<PAGE>   59
                             Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)

5. LONG-TERM DEBT

Long-term debt consists of the following as of September 30:
<TABLE>
<CAPTION>
                                                                              2000            1999
                                                                         --------------- ---------------
<S>                                                                      <C>             <C>
11 1/8% Series B Senior Subordinated Notes                                  $150,000        $150,000
11 1/8% Series D Senior Subordinated Notes, including
   unamortized premium of $1,732 in 2000 and $1,995 in
   1999                                                                       46,732          46,995
11 1/8% Series F Senior Subordinated Notes, including
   unamortized premium of $2,358 in 2000 and $2,717 in
   1999                                                                       89,358          89,717
Term Loan Facilities                                                         135,747         140,747
Acquisition Loan Facility                                                     27,292               -
Other                                                                            478             548
                                                                         --------------- ---------------
                                                                             449,607         428,007
Less current portion                                                          11,280           5,065
                                                                         --------------- ---------------
                                                                            $438,327        $422,942
                                                                         =============== ===============
</TABLE>

The Series B, Series D and Series F Senior Subordinated Notes (collectively, the
Notes) are unsecured and mature on May 1, 2007. Interest is payable semiannually
on May 1 and November 1. The Notes are fully, unconditionally, jointly and
severally guaranteed by all subsidiaries. The Notes are subordinated to all
existing and future senior indebtedness of the Company but rank equally in right
of payment with any future senior subordinated indebtedness of the Company. The
Notes contain covenants which restrict the Company from incurring additional
indebtedness and prohibit dividend payments, stock redemptions and certain other
transactions.

The Company has a Credit Agreement with a bank which provides Term Loan
Facilities, an Acquisition Loan Facility and a Revolving Credit Facility.











                                       59
<PAGE>   60
                             Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)


5. LONG-TERM DEBT (CONTINUED)

The Term Loan Facilities consist of two tranches of term loans. The Tranche A
term loans outstanding at September 30, 2000 and 1999, total $13 million and $17
million, respectively, and mature on September 30, 2003. The Tranche B term
loans outstanding at September 30, 2000 and 1999, total $123 million and $124
million, respectively, and mature on September 30, 2005. Installments of the
Tranche A term loans are due in aggregate principal amounts of $1,000 per
quarter until September 30, 2002, and $1,250 per quarter from December 31, 2002
through September 30, 2003. Installments on $53 million of the Tranche B term
loans are due in aggregate principal amounts of $250 per quarter until September
30, 2003, and $6,250 per quarter from December 31, 2003 through September 30,
2005. Installments on $70 million of the Tranche B term loans are due in
aggregate principal amounts of $8,750 per quarter commencing on December 31,
2003, and continuing through September 30, 2005. Interest on the Tranche A and
Tranche B term loans is at LIBOR (6.625% at September 30, 2000) plus 2.50% and
2.75%, respectively.

Borrowings under the Acquisition Loan Facility are due in quarterly installments
equal to 6.25% of the outstanding principal balance through June 30, 2004.
Interest on borrowings under the Acquisition Loan Facility is at LIBOR plus
2.50%.

The Company is entitled to draw amounts under the Revolving Credit Facility up
to $50 million for general corporate purposes, including permitted acquisitions,
as defined. The Revolving Credit Facility includes a $15 million sub-limit for
letters of credit and matures on April 30, 2002. Covenants contained in the
Revolving Credit Facility restrict the payment of dividends, capital
expenditures and certain other transactions and require the Company to maintain
leverage, net worth and interest coverage ratios. No amounts are outstanding
under the Revolving Credit Facility at September 30, 2000 and 1999.

The Company used the proceeds of the Tranche A term loan to repay the bank term
loan, revolving credit note payable and equipment loan totaling $13,631 it
assumed when the capital stock of ACP was contributed to the Company. In
connection with the repayment in full of these obligations during the year ended
September 30, 1998, the Company recorded an extraordinary charge to write off
the unamortized balance of the related deferred financing costs of $652.












                                       60
<PAGE>   61


                            Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)




5. LONG-TERM DEBT (CONTINUED)

Scheduled maturities of long-term debt during fiscal years subsequent to
September 30, 2000, are as follows:

<TABLE>
<S>                                                   <C>

                  2001                                $  11,280
                  2002                                    9,873
                  2003                                    9,753
                  2004                                   72,596
                  2005                                   59,782
                  Thereafter                            282,233
                                                      ---------
                                                      $ 445,517
                                                      =========

</TABLE>

6. COMMITMENTS AND CONTINGENCIES

The Company leases certain plants, warehouse space, machinery and equipment,
office equipment and vehicles under operating leases. Rent expense under these
operating leases for the years ended September 30, 2000, 1999 and 1998 totaled
$3,940, $2,595 and $1,485, respectively.

During the years ended September 30, 2000 and 1999, the Company financed
purchases of property, plant and equipment totaling $13,348 and $1,143,
respectively, by entering into capital leases. The Company did not enter into
any capital leases during the year ended September 30, 1998.

Property, plant and equipment under leases accounted for as capital leases as of
September 30, are as follows:

<TABLE>
<CAPTION>

                                                2000              1999
                                              --------------------------
<S>                                           <C>               <C>
  Machinery and equipment                     $14,308           $ 1,626
  Accumulated depreciation                     (1,729)           (1,006)
                                              -------------------------
                                              $12,579           $   620
                                              =========================

</TABLE>


                                       61

<PAGE>   62

                            Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)


6. COMMITMENTS AND CONTINGENCIES (CONTINUED)

Minimum rental payments due under operating and capital leases for fiscal years
subsequent to September 30, 2000, are as follows:

<TABLE>
<CAPTION>

                                                        Operating         Capital
                                                         Leases           Leases
                                                       ---------------------------
<S>                                                    <C>              <C>
2001                                                   $   2,355        $   3,513
2002                                                       1,360            3,450
2003                                                       1,021            3,387
2004                                                         744            3,175
2005                                                         485            2,339
Thereafter                                                     3              519
                                                       ---------------------------
Total minimum lease payments                           $   5,968           16,383
                                                       ==========

Less amount representing interest                                           4,089
                                                                        ----------
Present value of minimum lease payments                                    12,294
Less current portion                                                        2,151
                                                                        ----------
Capital lease obligations                                               $  10,143
                                                                        ==========
</TABLE>

The Company is partially self-insured for workers compensation claims. An
accrued liability is recorded for claims incurred but not yet paid or reported
and is based on current and historical claim information. The accrued liability
may ultimately be settled for an amount different than the recorded amount.
Adjustments of the accrued liability are recorded in the period in which they
become known.

Approximately 45% of the Company's work force is covered by collective
bargaining agreements. None of the current agreements are scheduled to expire
during fiscal 2001.

As of September 30, 2000, the Company had outstanding letters of credit of $350,
which secure certain workers compensation and other obligations. The outstanding
letters of credit reduce the availability under the Revolving Credit Facility.



                                       62


<PAGE>   63

                            Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)


7. RESTRUCTURING CHARGE

During fiscal 1999, the Company recorded a restructuring charge of $6,713 to
close one of their manufacturing facilities. Impairment and abandonment of
assets at this facility that will no longer be used represented $6,030 of the
restructuring charge. No amounts were disbursed in the year ended September 30,
1999. For the years ended September 30, 2000 and 1999, and from September 8,
1998, the date of acquisition, through September 30, 1998, net sales related to
this manufacturing facility were $3,689, $17,213 and $1,831, respectively, and
the operating loss related to this manufacturing facility was $724, $10,071 and
$361, respectively, including the restructuring charge of $6,713 in 1999.

The following is a breakdown of activity during the year ended September 30,
2000, of each component of the restructuring charge requiring the use of cash:

<TABLE>
<CAPTION>

                                                     BALANCE AT                          BALANCE AT
                                                    SEPTEMBER 30           CASH         SEPTEMBER 30
                                                       1999              PAYMENTS          2000
                                                  ---------------------------------------------------

<S>                                               <C>                    <C>            <C>
Employee severance costs                              $328                 $328            $ --
Lease commitments and contractual obligations          130                  130              --
Other exit costs, primarily facility closure
   expenses                                            225                  225              --
                                                 ----------------------------------------------------
                                                      $683                 $683            $ --
                                                 ====================================================
</TABLE>

8. INCOME TAXES

The provision (benefit) for income taxes consists of the following:

<TABLE>
<CAPTION>

                                                                   YEAR ENDED SEPTEMBER 30
                                                          2000              1999               1998
                                                   ---------------------------------------------------
<S>                                                     <C>                <C>               <C>
Current:
   Federal                                              $1,804             $ 8,615           $11,126
   State                                                   154               1,697             2,233
                                                   ---------------------------------------------------
                                                         1,958              10,312            13,359
Deferred                                                  (358)             (8,248)           (2,437)
                                                   ---------------------------------------------------
                                                        $1,600             $ 2,064           $10,922
                                                   ===================================================
</TABLE>





                                       63
<PAGE>   64


                            Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)


8. INCOME TAXES (CONTINUED)

Income tax expense is included in the accompanying consolidated statements of
earnings as follows:

<TABLE>
<CAPTION>

                                                                  YEAR ENDED SEPTEMBER 30
                                                        2000                1999             1998
                                                   ----------------------------------------------------

<S>                                                    <C>                <C>               <C>
Continuing operations                                  $1,448             $1,982            $10,650
Discontinued operations                                   152                 82                272
                                                   ----------------------------------------------------
                                                       $1,600             $2,064            $10,922
                                                   ====================================================
</TABLE>

The provision for income taxes differs from the amount computed by applying the
federal statutory rate of 35%, 34% and 35% as of September 30, 2000, 1999 and
1998, respectively, to income before income taxes and extraordinary item as
follows:

<TABLE>
<CAPTION>

                                                                       YEAR ENDED SEPTEMBER 30
                                                               2000             1999            1998
                                                         ----------------------------------------------
<S>                                                        <C>              <C>             <C>
Provision at statutory rate                                $(1,240)         $     59        $  7,981
State income taxes, net of federal tax benefit                 452               161           1,148
Amortization of goodwill                                     1,927             1,799           1,389
Additional provision recorded in connection
   with pending state examination                              405                --              --
Other                                                           56                45             404
                                                          ---------------------------------------------
Provision for income taxes                                $  1,600          $  2,064        $ 10,922
                                                          =============================================
</TABLE>




                                       64

<PAGE>   65


                            Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)


8. INCOME TAXES (CONTINUED)

Deferred income tax assets and liabilities consist of the following as of
September 30:

<TABLE>
<CAPTION>


                                                                            2000              1999
                                                                        --------------------------------
<S>                                                                     <C>                <C>
Deferred income tax liabilities:
   Book basis of assets in excess of tax basis:
     Inventories                                                        $  (2,788)         $  (2,879)
     Property, plant and equipment                                        (45,319)           (43,396)
     Identifiable intangible assets                                       (24,807)           (25,226)
   Other                                                                     (662)              (926)
                                                                        --------------------------------
                                                                          (73,576)           (72,427)
Deferred income tax assets:
   Employee benefit plans                                                   4,366              5,898
   Accrued vacation                                                         2,430              2,278
   Other accrued liabilities                                                2,575              2,784
   Restructuring reserve                                                       --                344
   State net operating loss carryforwards                                     431                377
   Other                                                                      907                420
   Valuation allowance                                                       (431)              (377)
                                                                        --------------------------------
                                                                           10,278             11,724
                                                                        --------------------------------
Net deferred income tax liability                                       $ (63,298)         $ (60,703)
                                                                        ================================

Included in the consolidated balance sheet as:
   Current deferred income tax asset                                    $   2,748          $   3,534
   Noncurrent deferred income tax liability                               (66,046)           (64,237)
                                                                        --------------------------------
                                                                        $ (63,298)         $ (60,703)
                                                                        ================================

</TABLE>

As of September 30, 2000, Cast Alloys has state net operating loss (NOL)
carryforwards for income tax purposes of $4,870 which expire in September 2004
and 2005. A valuation allowance has been provided against the deferred tax asset
related to the state NOL carryforwards.



                                       65
<PAGE>   66




                            Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)



9. EMPLOYEE BENEFIT PLANS

DEFINED-BENEFIT PENSION PLANS AND POSTRETIREMENT BENEFITS

The Company sponsors five defined-benefit pension plans covering the majority of
its hourly employees. Retirement benefits under the pension plans are based on
years of service and defined-benefit rates. The Company funds the pension plans
based on actuarially determined cost methods allowable under Internal Revenue
Service regulations. Plan assets consist primarily of mutual funds.

The Company also sponsors unfunded defined-benefit postretirement health care
plans covering substantially all salaried and hourly employees at Neenah and
Hartley and their dependents. For Hartley and salaried employees at Neenah,
benefits are provided from the date of retirement for the duration of the
employee's life, while benefits for hourly employees at Neenah are provided from
retirement to age 65. Retirees' contributions to the plans are based on years of
service and age at retirement. The Company funds benefits as incurred.






                                       66
<PAGE>   67


                            Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)



9. EMPLOYEE BENEFIT PLANS (CONTINUED)

The following table summarizes the funded status of the pension plans and
postretirement benefit plans and the amounts recognized in the consolidated
balance sheet at September 30, 2000 and 1999:

<TABLE>
<CAPTION>

                                                          PENSION                    POSTRETIREMENT
                                                          BENEFITS                      BENEFITS
                                                ---------------------------------------------------------
                                                     2000           1999           2000          1999
                                                ---------------------------------------------------------
<S>                                               <C>            <C>             <C>           <C>
Change in benefit obligation:
   Benefit obligation, October 1 of
     previous year                                $ 38,206       $ 36,759        $ 6,502       $ 6,114
     Service cost                                    1,383          1,263            206           202
     Interest cost                                   2,768          2,533            476           419
     Amendments                                         --          1,710             --            --
     Actuarial gains                                   (71)        (2,280)          (242)           --
     Benefits paid                                  (1,886)        (1,779)          (250)         (233)
                                                ---------------------------------------------------------

   Benefit obligation, September 30               $ 40,400       $ 38,206        $ 6,692       $ 6,502
                                                =========================================================

Change in plan assets:
   Fair value of plan assets, October 1 of
     previous year                                $ 36,718       $ 33,299        $    --       $    --
     Actual return on plan assets                    4,713          4,132             --            --
     Company contributions                           2,577          1,066            250           233
     Benefits paid                                  (1,886)        (1,779)          (250)         (233)
                                                ---------------------------------------------------------
   Fair value of plan assets, September 30        $ 42,122       $ 36,718        $    --       $    --
                                                =========================================================

Funded status of the plans:
   Benefit obligation less than (in excess) of
     plan assets                                  $  1,722       $ (1,488)       $(6,692)      $(6,502)
   Unrecognized prior service cost                   1,884          2,002            671           716
   Unrecognized net (gain) loss                     (3,350)        (1,321)           (97)          145
                                                ---------------------------------------------------------
                                                  $    256       $   (807)       $(6,118)      $(5,641)
                                                =========================================================

Amounts recognized in the consolidated
  balance sheet at September 30:
     Accrued benefit liability                    $ (1,739)      $ (3,221)       $(6,118)      $(5,641)
     Prepaid pension                                 1,726          1,239             --            --
     Intangible asset                                  120          1,175             --            --
     Deferred income tax asset                          60             --             --            --
     Accumulated other comprehensive loss               89             --             --            --
                                                -----------------------------------------------------------
                                                  $    256       $   (807)       $(6,118)      $(5,641)
                                                ===========================================================

</TABLE>


                                       67
<PAGE>   68


                            Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)


9. EMPLOYEE BENEFIT PLANS (CONTINUED)

Amounts applicable to the Company's pension plans with accumulated benefit
obligations and projected benefit obligations in excess of plan assets:


<TABLE>
<CAPTION>

                                                                                  2000           1999
                                                                             ----------------------------
<S>                                                                            <C>             <C>
Projected benefit obligation                                                   $11,588         $36,810
Accumulated benefit obligation                                                  11,588          36,810
Fair value of plan assets                                                       10,883          35,176
</TABLE>

Components of net periodic pension cost for the years ended September 30, 2000,
1999 and 1998, respectively, are as follows:

<TABLE>
<CAPTION>

                                                PENSION BENEFITS                POSTRETIREMENT BENEFITS
                                       -----------------------------------   ------------------------------
                                          2000        1999        1998         2000       1999      1998
                                       -----------------------------------   ------------------------------
<S>                                     <C>         <C>         <C>           <C>       <C>        <C>
Service cost                            $ 1,383     $ 1,263     $    749      $ 206     $ 202      $ 152
Interest cost                             2,768       2,533        1,716        476       419        366
Expected return on plan assets           (2,755)     (2,488)      (1,403)        --        --         --
Amortization of prior service cost          117          22         (591)        45        45         --
Recognized net actuarial loss                 1          10           --         --        --         --
                                        ----------------------------------    -----------------------------

Net periodic benefit cost               $ 1,514     $ 1,340     $    471      $ 727     $ 666      $ 518
                                        ==================================    =============================

Assumptions as of September 30:
     Discount rate                      7.25% to    7.25% to    6.75% to
                                         7.75%       7.75%      7.25%          7.75%      7.0%       7.0%

     Expected long-term rate of
       return                           7.50% to    7.50% to    7.50% to
                                          9.50%       9.50%      9.50%           --        --         --

</TABLE>

For measurement purposes, the healthcare cost trend rate was assumed to be 7.5%
decreasing gradually to 4.5% in 2010 and then remaining at that level
thereafter. The healthcare cost trend rate assumption has a significant effect
on the amounts reported. A one percentage point change in the healthcare cost
trend rate would have the following effect:

<TABLE>
<CAPTION>

                                                                 1% Increase     1% Decrease
                                                               -------------------------------


<S>                                                                <C>           <C>
   Effect on total of service and interest cost                    $  130         $ (102)
   Effect on postretirement benefit obligation                      1,133           (909)

</TABLE>




                                       68
<PAGE>   69



                            Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)



9. EMPLOYEE BENEFIT PLANS (CONTINUED)

DEFINED-CONTRIBUTION RETIREMENT PLANS

The Company sponsors various defined-contribution retirement plans (the Plans)
covering substantially all salaried and certain hourly employees. The Plans
allow participants to make 401(k) contributions in amounts ranging from 1% to
15% of their compensation. The Company matches between 35% and 50% of the
participants' contributions, as defined. The Company may make additional
voluntary contributions to the Plans as determined annually by the Board of
Directors. Total Company contributions amounted to $1,828, $1,759 and $994 for
the years ended September 30, 2000, 1999 and 1998, respectively.

OTHER EMPLOYEE BENEFITS

The Company provides unfunded supplemental retirement benefits to certain active
and retired employees at Dalton. At September 30, 2000, the present value of the
current and long-term portion of these supplemental retirement obligations
totaled $118 and $3,024 respectively.

Certain of Dalton's hourly employees are covered by a multi-employer,
defined-benefit pension plan pursuant to a collective bargaining agreement. The
Company's expense for the years ended September 30, 2000 and 1999, was $567 and
$567, respectively, and the expense and from September 8, 1998, the date of
acquisition, through September 30, 1998, was $53.

The Company is one of the sponsors of a noncontributory, multiemployer,
defined-benefit pension plan covering substantially all of the union employees
at Mercer pursuant to a collective bargaining agreement. The Company's expense
for the year ended September 30, 2000 and 1999, was $159 and $166 and the
expense from April 3, 1998, the date of acquisition, through September 30, 1998,
was $107.

10. SEGMENT INFORMATION

The Company has two reportable segments, Castings and Forgings. The Castings
segment manufactures and sells iron castings for the industrial and municipal
markets, while the Forgings segment manufactures forged components for the
industrial market.

The Other segments include machining operations and freight hauling.



                                       69
<PAGE>   70

                            Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)


10. SEGMENT INFORMATION (CONTINUED)

The Company evaluates performance and allocates resources based on the operating
income before depreciation, amortization of goodwill and intangibles and
restructuring charges of each segment. The accounting policies of the reportable
segments are the same as those described in the summary of significant
accounting policies. Intersegment sales and transfers are recorded at cost plus
a share of operating profit.

<TABLE>
<CAPTION>

                                                                      YEAR ENDED SEPTEMBER 30
                                                             2000              1999            1998
                                                        ------------------------------------------------
<S>                                                       <C>               <C>             <C>
Revenues from external customers:
   Castings                                               $ 502,664         $ 481,209       $ 267,517
   Forgings                                                  36,779            39,493          25,135
   Other                                                     28,147            27,692          14,874
   Elimination of intersegment revenues                     (17,934)          (18,040)         (4,436)
                                                        ------------------------------------------------
Total revenues                                            $ 549,656         $ 530,354       $ 303,090
                                                        ================================================

Income (loss) from continuing operations
   before extraordinary item:
     Castings                                             $ (16,679)        $ (12,414)      $  13,793
     Forgings                                                (3,716)           (2,650)            822
     Other                                                      575               637             635
     Elimination of intersegment income (loss)               14,578            12,465          (3,695)
                                                        ------------------------------------------------
Income (loss) from continuing operations                 $   (5,242)        $  (1,962)      $  11,555
                                                        ================================================

Assets:
   Castings                                              $  832,256         $ 792,939       $ 698,638
   Forgings                                                  57,933            57,321          65,104
   Other                                                     19,654            19,127          16,962
   Elimination of intersegment assets                      (243,625)         (227,685)       (196,395)
                                                        ------------------------------------------------
Total assets                                             $  666,218         $ 641,702       $ 584,309
                                                        ================================================
</TABLE>



                                       70


<PAGE>   71

                            Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)



10. SEGMENT INFORMATION (CONTINUED)

<TABLE>
<CAPTION>


                                                  Castings        Forgings         Other          Total
                                               -------------------------------------------------------------
<S>                                              <C>             <C>             <C>             <C>
Year ended September 30, 2000:
   Interest expense                              $43,089         $ 4,816         $   855         $48,760
   Interest income                                   967              --              11             978
   Depreciation and amortization expense          34,454           3,357           1,942          39,753
   Expenditures for long-lived assets             17,387             793           1,088          19,268

Year ended September 30, 1999:
   Interest expense                               38,849          4,388              586          43,803
   Interest income                                 1,303             33               66           1,402
   Depreciation and amortization expense          30,420          3,277            1,989          35,686
   Restructuring charge                            6,713             --               --           6,713
   Expenditures for long-lived assets             39,725            855            1,513          41,643

Year ended September 30, 1998:
   Interest expense                               27,785              4              307          28,096
   Interest income                                   883             --                5             888
   Depreciation and amortization expense          16,344          2,450              860          19,654
   Expenditures for long-lived assets             12,573             58              486          13,117

</TABLE>

GEOGRAPHIC INFORMATION

<TABLE>
<CAPTION>
                                                                                         Long-Lived
                                                                           Net Sales      Assets(1)
                                                                       ------------------------------
<S>                                                                       <C>             <C>
Year ended September 30, 2000:
   United States                                                          $ 536,099       $225,244
   Foreign countries                                                         13,557          2,995
                                                                       ------------------------------
Total                                                                     $ 549,656       $228,239
                                                                       ==============================

Year ended September 30, 1999:
   United States                                                          $ 513,237       $206,432
   Foreign countries                                                         17,117          2,372
                                                                       ------------------------------
Total                                                                     $ 530,354       $208,804
                                                                       ==============================

Year ended September 30, 1998:
   United States                                                          $ 292,713       $180,537
   Foreign countries                                                         10,377             --
                                                                       ------------------------------
Total                                                                     $ 303,090       $180,537
                                                                       ==============================
</TABLE>

(1) Represents tangible long-lived assets only



                                       71
<PAGE>   72


                            Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)


11. GUARANTOR SUBSIDIARIES

The following tables present condensed consolidating financial information for
fiscal 2000, 1999 and 1998 for: (a) the Company and (b) on a combined basis, the
guarantors of the Senior Subordinated Notes, which include all of the wholly
owned subsidiaries of the Company (Subsidiary Guarantors). Separate financial
statements of the Subsidiary Guarantors are not presented because the guarantors
are jointly, severally and unconditionally liable under the guarantees, and the
Company believes separate financial statements and other disclosures regarding
the Subsidiary Guarantors are not material to investors.


                                       72

<PAGE>   73

                            Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)


11. GUARANTOR SUBSIDIARIES (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 2000

<TABLE>
<CAPTION>

                                                          Subsidiary
                                         Company          Guarantors       Eliminations    Consolidated
                                     ----------------------------------------------------------------------
<S>                                  <C>                 <C>               <C>             <C>
Net sales                            $  191,138          $ 364,712           $(6,194)      $  549,656
Cost of sales                           132,061            328,946            (6,194)         454,813
                                     ----------------------------------------------------------------------
Gross profit                             59,077             35,766                --           94,843

Selling, general and
  administrative expense                 15,014             24,162                --           39,176
Amortization expense                      4,916              6,725                --           11,641
(Gain) loss on disposal of
  equipment                                 298               (194)               --              104
                                     ----------------------------------------------------------------------
Operating income                         38,849              5,073                --           43,922

Other income (expense):
   Interest expense                     (22,003)           (26,757)               --          (48,760)
   Interest income                          764                214                --              978
                                     ----------------------------------------------------------------------

Income (loss) from continuing
  operations before income taxes
  and equity in earnings of
  subsidiaries                          17,610             (21,470)               --           (3,860)
Provision (credit) for income taxes      8,335              (6,887)               --            1,448
                                     ----------------------------------------------------------------------
                                         9,275             (14,583)               --           (5,308)
Equity in earnings of subsidiaries     (14,418)                 --            14,418               --
                                     ----------------------------------------------------------------------
Loss from continuing operations         (5,143)            (14,583)           14,418           (5,308)
Income from discontinued
  operations, net of income taxes           --                 165                --              165
                                     ----------------------------------------------------------------------
Net loss                             $  (5,143)          $ (14,418)          $14,418       $   (5,143)
                                     ======================================================================
</TABLE>



                                       73


<PAGE>   74


                            Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)


11. GUARANTOR SUBSIDIARIES (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1999

<TABLE>
<CAPTION>

                                                          Subsidiary
                                         Company          Guarantors       Eliminations     Consolidated
                                     ----------------------------------------------------------------------

<S>                                  <C>                <C>                <C>              <C>
Net sales                            $   197,911        $  339,569         $ (7,126)        $  530,354
Cost of sales                            134,578           307,270           (7,126)           434,722
                                     ----------------------------------------------------------------------
Gross profit                              63,333            32,299               --             95,632

Selling, general and
  administrative expenses                 16,297            17,764               --             34,061
Amortization expense                       4,918             6,778               --             11,696
Restructuring charge                          --             6,713               --              6,713
Loss on disposal of equipment                709                80               --                789
                                     ----------------------------------------------------------------------
Operating income                          41,409               964               --             42,373

Other income (expense):
Interest expense                         (22,727)          (21,076)              --            (43,803)
Interest income                            1,121               281               --              1,402
                                     ----------------------------------------------------------------------

Income (loss) from continuing
  operations before income taxes
  and equity in earnings of
  subsidiaries                            19,803           (19,831)              --                (28)
Provision (credit) for income taxes        8,566            (6,584)              --              1,982
                                     ----------------------------------------------------------------------
                                          11,237           (13,247)              --             (2,010)
Equity in earnings of subsidiaries       (13,129)               --           13,129                 --
                                     ----------------------------------------------------------------------
Loss from continuing operations           (1,892)          (13,247)          13,129             (2,010)
Income from discontinued
  operations, net of income taxes             --               118               --                118
                                     ----------------------------------------------------------------------
Net loss                             $    (1,892)       $  (13,129)        $ 13,129         $   (1,892)
                                     ======================================================================


</TABLE>


                                       74
<PAGE>   75


                            Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)



11. GUARANTOR SUBSIDIARIES (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1998

<TABLE>
<CAPTION>

                                                          Subsidiary
                                         Company          Guarantors       Eliminations     Consolidated
                                     ----------------------------------------------------------------------
<S>                                     <C>               <C>             <C>               <C>
Net sales                               $194,779          $112,746          $(4,435)          $303,090
Cost of sales                            135,583            93,400           (4,435)           224,548
                                     ----------------------------------------------------------------------
Gross profit                              59,196            19,346               --             78,542

Selling, general and
  administrative expenses                 13,590             7,845               --             21,435
Amortization expense                       4,918             2,809               --              7,727
Loss on disposal of equipment                 --                38               --                 38
                                     ----------------------------------------------------------------------
Operating income                          40,688             8,654               --             49,342

Other income (expense):
Interest expense                         (25,636)           (2,460)              --            (28,096)
Interest income                              865                23               --                888
                                     ----------------------------------------------------------------------

Income from continuing
  operations before income
  taxes, equity in earnings of
  subsidiaries and extraordinary
  item                                    15,917             6,217               --             22,134
Provision for income taxes                 7,784             2,866               --             10,650
                                     ----------------------------------------------------------------------
                                           8,133             3,351               --             11,484
Equity in earnings of
  subsidiaries                             3,356                --           (3,356)                --
                                     ----------------------------------------------------------------------
Income from continuing
  operations before
  extraordinary item                      11,489             3,351           (3,356)            11,484
Income from discontinued
  operations, net of income
  taxes                                       --               397               --                397
Extraordinary charge, net of
  income tax benefit                          --              (392)              --               (392)
                                     ----------------------------------------------------------------------
Net income                              $ 11,489          $  3,356          $(3,356)          $ 11,489
                                     ======================================================================
</TABLE>




                                       75
<PAGE>   76






                             Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)


11. GUARANTOR SUBSIDIARIES (CONTINUED)

CONDENSED CONSOLIDATING BALANCE SHEET
SEPTEMBER 30, 2000

<TABLE>
<CAPTION>

                                                          Subsidiary
                                            Company       Guarantors      Eliminations     Consolidated
                                         ------------------------------------------------------------------
<S>                                       <C>             <C>             <C>               <C>
ASSETS
Current assets:
   Cash and cash equivalents              $  16,982       $    2,496      $      --         $   19,478
   Accounts receivable, net                  29,270           43,603             --             72,873
   Inventories                               22,036           43,083             --             65,119
   Refundable income taxes                      347             (180)            --                167
   Deferred income taxes                       (885)           3,633             --              2,748
   Other current assets                       1,391            4,740             --              6,131
                                        -------------------------------------------------------------------
Total current assets                         69,141           97,375             --            166,516

Investments in and advances to
   subsidiaries                             278,429          (32,318)      (246,111)                --
 Property, plant and equipment, net          91,509          136,730             --            228,239
 Deferred financing costs,
   identifiable intangible assets and
   goodwill, net                            139,109          123,214             --            262,323
 Other assets                                 3,831            5,309             --              9,140
                                        -------------------------------------------------------------------
                                        $   582,019       $  330,310      $(246,111)          $666,218
                                        ===================================================================


LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
   Accounts payable                     $     7,667        $  23,505      $      --         $   31,172
   Accrued wages and employee benefits        6,172            9,998             --             16,170
   Accrued interest                          13,876                5             --             13,881
   Other accrued liabilities                  1,445            4,337             --              5,782
   Current portion of long-term debt         11,280               --             --             11,280
   Current portion of capital lease
   obligations                                   --            2,151             --              2,151

                                        -------------------------------------------------------------------
Total current liabilities                    40,440           39,996             --             80,436
Long-term debt                              438,095              232             --            438,327
Capital lease obligations                        --           10,143             --             10,143
Deferred income taxes                        36,868           29,178             --             66,046
Postretirement benefit obligations            5,724              394             --              6,118
Other liabilities                             2,374            4,256             --              6,630
Stockholder's equity                         58,518          246,111       (246,111)            58,518
                                        -------------------------------------------------------------------
                                        $   582,019       $  330,310      $(246,111)        $  666,218
                                        ===================================================================

</TABLE>
                                       76

<PAGE>   77
                             Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)



11. GUARANTOR SUBSIDIARIES (CONTINUED)

CONDENSED CONSOLIDATING BALANCE SHEET
SEPTEMBER 30, 1999

<TABLE>
<CAPTION>


                                                          Subsidiary
                                           Company        Guarantors      Eliminations     Consolidated
                                        ----------------------------------------------------------------
<S>                                      <C>              <C>             <C>             <C>
ASSETS
Current assets:
   Cash and cash equivalents             $  15,852        $  1,516         $      --       $  17,368
   Accounts receivable, net                 32,150          45,576               (30)         77,696
   Inventories                              21,609          34,778                --          56,387
   Deferred income taxes                     2,010           1,524                --           3,534
   Other current assets                        876           4,347                --           5,223
                                       -----------------------------------------------------------------
Total current assets                        72,497          87,741               (30)        160,208

Investments in and advances to
   subsidiaries                            255,367         (24,747)         (230,620)             --
 Property, plant and equipment, net         95,292         113,512                --         208,804
 Deferred financing costs, identifiable
   intangible assets and goodwill, net     145,730         118,042                --         263,772
 Other assets                                4,430           4,488                --           8,918
                                       -----------------------------------------------------------------
                                         $ 573,316        $299,036         $(230,650)      $ 641,702
                                       =================================================================

LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
   Accounts payable                      $   8,670        $ 22,511         $     (30)      $  31,151
   Income taxes payable                      1,368            (239)               --           1,129
   Accrued wages and employee
     benefit                                 6,025           8,535                --          14,560
   Accrued interest                         13,665              13                --          13,678
   Other accrued liabilities                 3,494           6,900                --          10,394
   Current portion of long-term debt         5,065              --                --           5,065
   Current portion of capital lease
     obligations                                --             269                --             269
                                       -----------------------------------------------------------------
Total current liabilities                   38,287          37,989               (30)         76,246
Long-term debt                             422,709             233                --         422,942
Capital lease obligations                       --             945                --             945
Deferred income taxes                       40,093          24,144                --          64,237
Postretirement benefit obligations           5,199             442                --           5,641
Other liabilities                            3,278           4,663                --           7,941
Stockholder's equity                        63,750         230,620          (230,620)         63,750
                                       -----------------------------------------------------------------
                                          $573,316        $299,036         $(230,650)      $ 641,702
                                       =================================================================
</TABLE>


                                       77
<PAGE>   78
                             Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)



11. GUARANTOR SUBSIDIARIES (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
YEAR ENDED SEPTEMBER 30, 2000


<TABLE>
<CAPTION>


                                                          Subsidiary
                                          Company         Guarantors      Eliminations     Consolidated
                                      ---------------------------------------------------------------------

<S>                                      <C>              <C>             <C>              <C>
  OPERATING ACTIVITIES
  Net loss                               $  (5,143)       $(14,418)         $14,418         $  (5,143)
  Noncash adjustments                       14,490          28,591               --            43,081
  Changes in operating assets and
    liabilities                             (1,946)         (6,510)              --            (8,456)
                                      ---------------------------------------------------------------------
  Net cash provided by operating
    activities                               7,401           7,663           14,418            29,482

  INVESTING ACTIVITIES
  Investments in and advances to
    subsidiaries                           (23,061)         37,479          (14,418)               --
  Acquisition of business                       --         (29,502)              --           (29,502)
  Purchase of property, plant and
    equipment                               (5,644)        (13,624)              --           (19,268)
  Other                                        212           1,233               --             1,445
                                      ---------------------------------------------------------------------
  Net cash used in investing
    activities                             (28,493)         (4,414)         (14,418)          (47,325)

  FINANCING ACTIVITIES
  Proceeds from long-term debt              29,750              --               --            29,750
  Payments on long-term debt and
    capital lease obligations               (7,528)         (2,269)              --            (9,797)
                                      ---------------------------------------------------------------------
  Net cash provided by (used in)
    financing activities                    22,222          (2,269)              --            19,953
                                      ---------------------------------------------------------------------

  Increase in cash and cash
    equivalents                              1,130             980               --             2,110
  Cash and cash equivalents at
    beginning of year                       15,852           1,516               --            17,368
                                      ---------------------------------------------------------------------
  Cash and cash equivalents at end
    of year                              $  16,982        $  2,496          $    --         $  19,478
                                      =====================================================================

</TABLE>



                                       78
<PAGE>   79
                             Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)


11. GUARANTOR SUBSIDIARIES (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
YEAR ENDED SEPTEMBER 30, 1999

<TABLE>
<CAPTION>


                                                      Subsidiary
                                        Company       Guarantors  Eliminations   Consolidated
                                      --------------------------------------------------------
<S>                                   <C>            <C>          <C>           <C>
OPERATING ACTIVITIES
Net loss                              $ (1,892)      $(13,129)      $ 13,129       $ (1,892)
Noncash adjustments                     11,177         24,091           --           35,268
Changes in operating assets and
  liabilities                            4,535         (6,806)          --           (2,271)
                                      --------------------------------------------------------
Net cash provided by operating
  activities                            13,820          4,156         13,129         31,105

INVESTING ACTIVITIES
Investments in and advances to
  subsidiaries                         (57,178)        70,307        (13,129)          --
Acquisition of business                   --          (40,824)          --          (40,824)
Purchase of  property, plant and
  equipment                             (7,162)       (34,481)          --          (41,643)
Other                                     (746)           (34)          --             (780)
                                      --------------------------------------------------------
Net cash used in investing
  activities                           (65,086)        (5,032)       (13,129)       (83,247)

FINANCING ACTIVITIES
Proceeds from long-term debt            90,405           --             --           90,405
Payments on long-term debt and
  capital lease obligations            (33,320)          (287)          --          (33,607)
Return of capital contribution          (3,850)          --             --           (3,850)
Debt issuance costs                     (3,236)          --             --           (3,236)
                                      --------------------------------------------------------
Net cash provided by (used in)
  financing activities                  49,999           (287)          --           49,712
                                      --------------------------------------------------------

Decrease in cash and cash
  equivalents                           (1,267)        (1,163)          --           (2,430)
Cash and cash equivalents at
  beginning of year                     17,119          2,679           --           19,798
                                      --------------------------------------------------------
Cash and cash equivalents at end
  of year                             $ 15,852       $  1,516       $   --         $ 17,368
                                      ========================================================

</TABLE>


                                       79
<PAGE>   80


                             Neenah Foundry Company

             Notes to Consolidated Financial Statements (continued)
                                 (In Thousands)



11. GUARANTOR SUBSIDIARIES (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
YEAR ENDED SEPTEMBER 30, 1998


<TABLE>
<CAPTION>
                                                     Subsidiary
                                        Company      Guarantors    Eliminations    Consolidated
                                      ----------------------------------------------------------

<S>                                   <C>           <C>            <C>            <C>
OPERATING ACTIVITIES
Net income                            $  11,489       $   3,356       $  (3,356)      $  11,489
Noncash adjustments                      12,025           6,636            --            18,661
Changes in operating assets and
  liabilities                            (6,365)            451            --            (5,914)
                                      ----------------------------------------------------------
Net cash provided by
  operating activities                   17,149          10,443          (3,356)         24,236

INVESTING ACTIVITIES
Investments in and advances to
  subsidiaries                         (186,498)        183,142           3,356            --
Acquisition of businesses                  --          (169,109)           --          (169,109)
Purchase of property, plant and
  equipment                              (4,972)         (8,145)           --           (13,117)
Other                                        58            --              --                58
                                      ----------------------------------------------------------
Net cash provided by (used in)
  investing activities                 (191,412)          5,888           3,356        (182,168)

FINANCING ACTIVITIES
Proceeds from long-term debt            174,000           1,987            --           175,987
Payments on long-term debt and
  capital lease obligations                 (77)        (15,676)           --           (15,753)
Debt issuance costs                      (2,850)           --              --            (2,850)
                                      ----------------------------------------------------------
Net cash provided by (used in)
  financing activities                  171,073         (13,689)           --           157,384
                                      ----------------------------------------------------------

Increase (decrease) in cash and
  cash equivalents                       (3,190)          2,642            --              (548)
Cash and cash equivalents at
  beginning of year                      20,309              37            --            20,346
                                      ----------------------------------------------------------
Cash and cash equivalents at end
  of year                             $  17,119       $   2,679       $    --         $  19,798
                                      ==========================================================

</TABLE>





                                       80


<PAGE>   81

                             NEENAH FOUNDRY COMPANY


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 (IN THOUSANDS)



12. SUBSEQUENT EVENT

On October 2, 2000, the Company sold all of the issued and outstanding shares of
common stock of Hartley for a cash purchase price of $5,500, subject to
adjustment as defined in the Stock Purchase Agreement. Hartley designs and
manufactures customized sand control systems. The Company expects the
disposition of Hartley will result in a gain which will be recognized in the
period in which the gain is realized. In accordance with the provisions of
Accounting Principles Board Opinion No. 30, the results of operations of Hartley
have been reported separately as discontinued operations in the statement of
operations for fiscal 2000. Prior period financial statements have been restated
to conform to the current year presentation. Revenues for Hartley for the years
ended September 30, 2000, 1999 and 1998, were $5,514, $5,619 and $5,703,
respectively.

13. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>


                                                           YEAR ENDED SEPTEMBER 30, 2000
                                         -------------------------------------------------------------------
                                           1st Quarter      2nd Quarter       3rd Quarter      4th Quarter
                                         -------------------------------------------------------------------
<S>                                      <C>              <C>               <C>               <C>
Net sales                                $126,850         $142,738          $144,798          $135,270
Gross profit                               20,793           24,571            26,461            23,018
Net income (loss)                          (2,591)            (910)               38            (1,680)

</TABLE>


<TABLE>
<CAPTION>

                                                           YEAR ENDED SEPTEMBER 30, 2000
                                         -------------------------------------------------------------------
                                           1st Quarter      2nd Quarter       3rd Quarter      4th Quarter
                                         -------------------------------------------------------------------
<S>                                      <C>              <C>               <C>               <C>
Net sales                                $115,264         $136,943          $140,361          $137,786
Gross profit                               21,772           20,587            26,670            26,603
Net income (loss)                            (359)          (1,493)            1,838            (1,878)

</TABLE>




                                       81
<PAGE>   82


                Report of Ernst & Young LLP, Independent Auditors

We have audited the consolidated financial statements of Neenah Foundry Company
as of September 30, 2000, 1999 and 1998, and have issued our report thereon
dated November 3, 2000 (included elsewhere in this Annual Report on Form 10-K).
Our audits also included the financial statement schedule listed in the index at
Item 14(a). This schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.


Milwaukee, Wisconsin                                         ERNST & YOUNG LLP
November 3, 2000


                                       82

<PAGE>   83




                                                                     Schedule II

                             NEENAH FOUNDRY COMPANY

                        VALUATION AND QUALIFYING ACCOUNTS
                 Years ended September 30, 2000, 1999, and 1998.
                             (Dollars in Thousands)


<TABLE>
<CAPTION>

                               BALANCE AT      PURCHASE        ADDITIONS
                                BEGINNING     ACCOUNTING      CHARGED TO                          BALANCE AT
         DESCRIPTION            OF PERIOD     ADJUSTMENTS       EXPENSE         DEDUCTIONS      END OF PERIOD
----------------------------------------------------------------------------------------------------------------
<S>                            <C>            <C>             <C>               <C>             <C>
Allowance for doubtful
accounts receivable:

  1998                              $   491       $   325          $ 180         $   143 (A)       $  853
                                    =======       =======          =====         =======           ======

  1999                              $   853       $    90          $ 266         $   189 (A)       $1,020
                                    =======       =======          =====         =======           ======

  2000                              $ 1,020       $   130          $ 242         $   391 (A)       $1,001
                                    =======       =======          =====         =======           ======
</TABLE>

    (A) Uncollectible accounts written off, net of recoveries

Reserve for obsolete
inventory:
<TABLE>

<S>                             <C>           <C>           <C>              <C>               <C>
  1998                              $     -       $   500       $    -           $     -           $  500
                                    =======       =======       ======           =======           ======

  1999                              $   500       $     -       $  186           $     -           $  686
                                    =======       =======       ======           =======           ======

  2000                              $   686       $     -       $2,300           $     -           $2,986
                                    =======       =======       ======           =======           ======

</TABLE>


                                       83