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                    U. S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB


(X)  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 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 0-18707


                                TBM HOLDINGS INC.
        (Exact Name of Small Business Issuer as Specified in Its Charter)

            FLORIDA                                       59-2824411
      (State or Other                          (IRS Employer Identification No.)
Jurisdiction of Incorporation)

                                 136 MAIN STREET
                           WESTPORT, CONNECTICUT 06880
                     (Address of Principal Executive Office)

                                 (203) 227-6140
                (Issuer's Telephone Number, Including Area Code)

                               __________________

                              Securities registered
                    under Section 12(b) of the Exchange Act:

                                      None

                              Securities registered
                    under Section 12(g) of the Exchange Act:

                                      None



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     Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports); and (2)
has been subject to such filing requirements for the past 90 days.

                                [ X ] Yes [ ] No

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB | |.*

     * Not applicable. The registrant does not have a class of equity
       securities registered pursuant to Section 12 of the Securities
       Exchange Act of 1934, as amended, and accordingly, its officers and
       directors are not subject to the reporting requirements referred to in
       Item 405 of Regulation S-B.

     For the fiscal year ended December 30, 2000, the issuer had revenues of
$38,586,000.

     The aggregate market value of the issuer's common stock, par value $.001
per share, held by non-affiliates of the registrant (assuming for this purpose
that all officers, directors and holders of more than 10% of the Company's
outstanding common stock are affiliates), computed by reference to the average
bid and asked prices of such stock as of March 28, 2001, was $12,831,504.

     The number of shares outstanding of the issuer's Common Stock, $.001 par
value per share, as of March 28, 2001, was 5,595,089.

     Transitional Small Business Disclosure Format (check one): [ ] Yes [ X ] No




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                                     PART I

Item 1. Description of Business.


Prior History

     TBM Holdings Inc. (the "Company") was incorporated in Florida in 1987 under
the name Specialty Retail Group, Inc. As of January 31, 1997, Specialty Retail
Group, Inc. had sold or discontinued all business operations. On January 31,
1997, Specialty Retail Group, Inc.'s subsidiary filed a petition for relief
under Chapter 11 of the United States Bankruptcy Code. In May 1998, a
reorganization plan in the Chapter 11 proceeding was approved by the bankruptcy
court. Under the terms of the reorganization plan, Specialty Retail Group, Inc.
was released from all claims of the subsidiary and its creditors and settled its
liability as a guarantor of the store lease to which the subsidiary was a party.
The subsidiary was subsequently dissolved. Thereafter, and until June 15, 1999,
Specialty Retail Group, Inc.'s only operations constituted maintaining a
business office and complying with its reporting obligations as a publicly-owned
company.

1999 Private Placement

     On June 15, 1999, the Company completed a private placement of restricted
shares of the Company's Common Stock (the "1999 Private Placement"), in which
the Company received aggregate gross proceeds of $12,730,000.

     Immediately prior to the closing of the 1999 Private Placement, the Company
effected a one-for-412.92 reverse stock split of the Company's Common Stock for
stockholders of record as of June 15, 1999, which resulted in the stockholders
and certain creditors of the Company immediately prior to the 1999 Private
Placement retaining stock or, in the case of the creditors, receiving options,
with an aggregate value of approximately $300,000 at the time the 1999 Private
Placement was consummated. The reverse stock split reduced the number of
outstanding shares of Common Stock from 9,084,238 to 22,000 shares.

     In connection with the 1999 Private Placement, the Company elected a new
board of directors and changed its name from Specialty Retail Group, Inc. to TBM
Holdings Inc. Prior to the 1999 Private Placement, Specialty Retail Group,
Inc.'s majority stockholder was Seymour Zises; in the 1999 Private Placement,
control of Specialty Retail Group, Inc. changed from Mr. Zises to the investors
in the 1999 Private Placement, who owned approximately 99% of the outstanding
capital stock of the Company after consummation of the 1999 Private Placement.
The Company had approximately 230 shareholders of record immediately prior to
the 1999 Private Placement and approximately 335 shareholders of record
immediately after the 1999 Private Placement.




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Objective

     The Company's objective was to use the proceeds of the 1999 Private
Placement to acquire one or more underperforming manufacturing companies and
thereafter to improve their operating performance and profitability through
implementation of the Toyota Production System using the Kaizen Growth Strategy.

Acquisitions

     On February 23, 2000, the Company acquired its first operating company,
Long Reach, Inc. ("Long Reach"), through a merger transaction with a
wholly-owned subsidiary of the Company. Long Reach manufactures material
handling equipment, including masts, integrals and attachments for forklift
trucks, and pallet trucks, stackers and scissor lifts. Long Reach, a
wholly-owned subsidiary of the Company, is a Delaware corporation organized on
January 5, 2000.

     On May 16, 2000, the Company closed a strategic add-on acquisition pursuant
to which Long Reach purchased all of the outstanding capital stock of Lee
Engineering Company, Inc. ("Lee Engineering") from its parent corporation. Lee
Engineering's name was subsequently changed to Presto Lifts, Inc. ("Presto
Lifts"). Presto Lifts manufactures material handling and ergonomic work
positioning equipment, including scissor lifts and stackers. Presto Lifts, a
wholly-owned subsidiary of Long Reach, is a Rhode Island corporation organized
in 1977.

     On November 10, 2000, a wholly-owned subsidiary of the Company, an Ontario
corporation organized in October 2000, purchased the assets of Blue Giant
Limited, a subsidiary of CLARK Material Handling Company ("Clark"), and certain
intellectual property from another Clark subsidiary. The Company's wholly-owned
subsidiary, now named Blue Giant Equipment Corporation ("Blue Giant"), is a
manufacturer of material handling equipment, including dock equipment such as
hydraulic and mechanical dock levelers, truck restraints, door seals and
portable dock lifts, and Class 3 lift trucks such as powered pallet trucks,
stackers and counterweight lift trucks.

Toyota Production System and Kaizen Growth Strategy

     In accordance with its objective, the Company is currently implementing the
Toyota Production System utilizing the Kaizen Growth Strategy at Long Reach and
Presto Lifts. The Company plans to introduce the Toyota Production System
utilizing the Kaizen Growth Strategy at Blue Giant during 2001.

     Toyota Production System. The Toyota Motor Corporation developed the Toyota
Production System over 50 years ago. The goal of the Toyota Production System is
to maintain a continuous flow of products manufactured to meet customer demand;
it operates by pacing all


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operations to the rate of customer orders. This is achieved by manufacturing the
required product in the quantity ordered and delivering it at the right time.
The Company is not affiliated with the Toyota Motor Corporation.

     The Toyota Production System is supported by several components:

     o Just-in-Time Production - Just-in-Time, the realization of demand-drive
production flow, allows factories to be more responsive to changes in demand.
Demand-drive production involves producing a product on demand, at the time it
is ordered. Just-in-Time involves producing the right product, in the right
quantities, at the right time with the minimum material, labor, equipment and
space. In a Just-in-Time system of producing with minimum inventories,
production starts upon receipt of an order, inputs are delivered according to
need, and output is shipped as soon as production is completed.

     o Total Quality Management - Total Quality Management is a quality control
technique that detects defects so defective parts do not pass to the next
operation. Total Quality Management also frees the worker from simply tending
machines and provides the opportunity for multi-tasking and problem solving by
line workers.

     The Toyota Production System, often called Just-in-Time manufacturing or
Lean Production, has been applied worldwide by many industries, including
manufacturers of automotive and motorcycle equipment and parts, heating,
ventilation and air conditioning, machine tools, medical equipment, and electric
and electro-mechanical equipment.

     Kaizen Growth Strategy. Kaizen, the Japanese word for "continuous
improvement," is a process developed by the Toyota Motor Corporation. As
implemented by TBM Consulting Group, Inc. (see "-- TBM Consulting Group, Inc."
below), the Kaizen Growth Strategy is a long-term strategy for growth in market
share and profitability achieved through improving product quality and being
more responsive to customer needs with minimal investment in fixed assets. The
Kaizen Growth Strategy is based on the premise that companies should be able to
reduce costs, improve margins and improve cash flow by increasing labor
productivity and asset utilization, and that shorter lead time and improved
product quality should enable companies to meet customer demand more
effectively, increasing sales and market share and achieving higher
profitability.

     Kaizen Breakthrough. Kaizen Breakthrough is a hands-on, shop-floor based
process that teaches participants how to rapidly convert the manufacturing
operation to the Just-in-Time system. Kaizen Breakthrough is a team-based
process that allows workers to participate in the improvement process. Kaizen
Breakthrough projects typically target improvements in key business and
manufacturing processes, including reductions in floor space and lead time, and
improvements in worker productivity and product quality.




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     TBM Consulting Group, Inc. Anand Sharma, the Chairman of the Board of the
Company and Long Reach, founded TBM Consulting Group, Inc. in 1991. Mr. Sharma
and William A. Schwartz, President and Chief Executive Officer and a director of
the Company and a director of Long Reach, are officers and directors of TBM
Consulting Group, Inc. TBM Consulting Group, Inc.'s exclusive focus is to
provide manufacturing companies with consulting services to assist them in
implementing the Toyota Production System utilizing the Kaizen Growth Strategy.
Since its formation in 1991, TBM Consulting Group, Inc. has provided these
services to more than 250 manufacturing companies around the world. In 1995, one
of TBM Consulting Group, Inc.'s clients, Johnson & Johnson Medical, Inc., won
the Shingo Prize for Excellence in Manufacturing awarded by Utah State
University. TBM Consulting Group, Inc. provides shop floor Kaizen consulting and
management services (including provision of interim management personnel) to the
Company on a priority basis pursuant to a Consulting and Management Services
Agreement with the Company. See "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS." TBM Consulting Group, Inc. is not a subsidiary of the Company.

     Implementation. In accordance with the strategy developed by TBM Consulting
Group, Inc., the Company's implementation of the Toyota Production System using
the Kaizen Growth Strategy is comprised of several initial steps, which are
currently being implemented at Long Reach and Presto Lifts:

     o The Company installs a senior management team and seeks to rebuild
existing management capability and establish a high performance culture at newly
acquired companies. Management also conducts an organizational assessment and
makes appropriate additions to fill key operational roles, either from
professionals who are consultants employed by TBM Consulting Group, Inc. or from
recruiting efforts conducted by management.

     o Management adopts a time-based strategy, a philosophy and strategy
designed to reduce operational lead time for products and eliminate systemic
causes of waste. "Waste" is defined as an activity or motion which takes time
and costs money, but does not add value. Elimination of waste is targeted by use
of formal systems, such as Just-in-Time, as well as by redesigning workflows,
streamlining production processes, rationalizing operations or relocating
machinery and rebuilding workstations to avoid extra motion by workers. The
ultimate goal of the time-based strategy is to significantly reduce the time
from customer order to product shipment.

     o The Company conducts a comprehensive business assessment of its
operations, examining key business systems, product line profitability, customer
profitability and business processes. Management's immediate goal is to
establish integrity and reliability in key business systems, such as sales
forecasting, material planning, factory scheduling, financial reporting and cash
flow management.

     o During year one, in consultation with TBM Consulting Group, Inc., the
Company begins to implement the Toyota Production System using the Kaizen Growth
Strategy, a process




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which continues over a three-to-five year time period. Once the business is
staffed, stabilized and directed toward specific goals, senior management will
implement a strategic growth plan and continue, over the three-to-five year
period, to implement the Toyota Production System utilizing the Kaizen Growth
Strategy.

     The Company is in the process of implementing the Toyota Production System
utilizing the Kaizen Growth Strategy and integrating and reorganizing the
operations of Long Reach and Presto Lifts. Several new managers have been
recruited at each location. Comprehensive business assessments have been
conducted to identify operational weaknesses. With the help of TBM Consulting
Group, Inc., Kaizen activities seeking to improve manufacturing processes have
commenced in the factories with the goal of eliminating waste in manufacturing
and creating production cells. Production cells combining welding and assembly
have been created for all major product lines at both companies. The Company has
consolidated its operations by closing Long Reach's Little Rock plant. Forklift
attachment production has been moved to the Long Reach plant in Houston, Texas,
and Rol-Lift production of pallet trucks, scissors and stackers has been moved
to the Presto Lifts plant in Pawtucket, Rhode Island. All production in Little
Rock was completed by December 29, 2000. See "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" for a description of
restructuring costs incurred in connection with the closing of the Little Rock
facility. During 2001, the Company plans to introduce the Toyota Production
System utilizing the Kaizen Growth Strategy at Blue Giant.

Principal Products and Markets

     The Company manufactures material handling equipment, including masts,
integrals and attachments for forklift trucks under the Long Reach(R) and
Brudi(R) brand names; pallet trucks, scissor lifts and stackers under the
Presto(R), Regal(R) and Rol-Lift(R) brand names; and dock equipment and Class 3
lift trucks under the Blue Giant(R) brand name.

     The Company has five main product lines: (i) heavy duty masts and integrals
for rider forklifts manufactured under the Brudi(R) brand name; (ii) forklift
attachments, including paper roll clamps, carton clamps and push pulls, and mast
attachments such as side shifters, fork positioners and other custom engineered
material handling attachments manufactured under the Long Reach(R) and Brudi(R)
brand names; (iii) material lifting products, including pallet trucks, manual
and powered stackers and scissor-lift devices, manufactured by Presto Lifts
under the Rol-Lift(R), Presto(R) and Regal(R) brand names; (iv) dock equipment,
including hydraulic and mechanical dock levelers, truck restraints, door seals
and portable dock lifts under the Blue Giant(R) brand name; and (v) Class 3 lift
trucks, including powered pallet trucks, stackers and counterweight lift trucks
under the Blue Giant(R) brand name.

     Masts and integrals are components mounted on the front of a lift truck to
provide lifting capability for the vehicle. These products provide the lifting
capability and material platform for




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lift trucks sold into a wide variety of industrial applications, including
manufacturing, distribution, warehousing and transportation.

     Forklift attachments are designed to increase the scope and efficiency of
materials handling applications normally performed by industrial forklifts; they
clamp, lift, rotate, push, pull, tilt and sideshift a variety of loads, such as
appliances, paper rolls, baled materials, drums, lumber, power poles and tissue
and paper products. Attachments are generally used by manufacturers or
distributors with special handling applications such as paper mills, appliance
factories, forging operations, chemical companies, steel mills, large
warehousing operations, consumer products and bottling plants.

     Heavy duty masts and integrals and forklift attachments are currently
manufactured by Long Reach at its Houston, Texas facility and at a facility in
Adelaide, Australia owned by Long Reach's subsidiary, Brudi Pacific Pty Ltd
("Brudi Pacific"). These products are sold through original equipment forklift
manufacturers and forklift dealers.

     Material lifting products are used as material handling devices and
ergonomic aids in the workplace. Stackers are often used as work positioners for
assembly lines. Scissor lifts help elevate material to the point of use for
manufacturing associates in assembly and fabrication jobs. The products are used
extensively in the automotive industry as well as other high-volume assembly
environments. Distribution warehouses, printers and light manufacturing
facilities are other key users of these products. Material lifting products are
currently manufactured by Presto Lifts at its facility in Pawtucket, Rhode
Island. Blue Giant also produces a line of lift tables and stackers under the
Blue Giant(R) name in Brampton, Ontario.

     Dock equipment provides a means by which forklifts can load a truck or
trailer in a distribution center, warehouse or factory loading dock. Dock
levelers provide a temporary bridge from the back of a trailer to a loading dock
across which a forklift can drive to load a truck. These products are used in
commercial buildings that have loading docks and are involved with the receipt
and shipping of products or materials.

     Class 3 lift trucks are typically used in distribution centers or
warehouses to move pallet loads of products or materials into storage or out of
storage. The various lift truck configurations can be used to transport, lift,
put away or retrieve material to and from storage locations or shelves, onto
trailers for shipment or into a factory for use in production.

     Dock equipment and Class 3 lift trucks are manufactured by Blue Giant at
its Brampton, Ontario facility. These products are sold through authorized Blue
Giant equipment dealers throughout the United States and Canada.

     The Company provides after-market service functions that sell replacement
parts for equipment it manufactures. These parts are used to replace parts that
wear out as well as for




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repairs. Sale of replacement parts constituted approximately 19% of the
Company's revenues for the fiscal year ended December 30, 2000.

Customers and Suppliers

     Masts and integrals manufactured by Long Reach are sold to original
equipment manufacturer (OEM) forklift manufacturers and forklift dealers.
Forklift attachments are sold to forklift dealers. These dealers order specialty
attachments for arrival concurrent with forklift delivery and assemble the
attachment to make delivery to the industrial customer.

     Presto Lifts sells to material handling equipment dealers. Presto Lifts
sells to these dealers through sales representatives and through a dedicated
direct sales force. In addition, these products are distributed through
industrial equipment catalogs including W.W. Grainger, Inc., McMaster-Carr
Supply Company, Global Industrial Equipment and C&H Industrial Tool & Supply,
Inc. Products sold through industrial equipment catalogs are sold directly to
industrial supply companies for distribution to end users.

     Blue Giant sells dock equipment in the United States and Canada through a
network of authorized Blue Giant dock dealers who work with end users to replace
or install dock equipment in commercial buildings. Blue Giant has a dedicated
sales force that markets and sells dock equipment to these dealers. In addition,
Blue Giant sells direct to end users in the greater Toronto area through an
in-house dealership. This dealership services this territory with salesmen and
servicemen in fully-equipped vans who provide installation, repair and
maintenance of the dock equipment.

     Blue Giant sells Class 3 lift trucks in the United States and Canada
through a network of authorized Blue Giant lift truck dealers. Blue Giant
maintains a dedicated sales force that markets and sells lift trucks to these
dealers. Currently the Company maintains over 200 Blue Giant lift truck dealers
in North America.

     Replacement parts are sold to authorized dealers of the Company's
equipment.

     Raw materials used in the Company's manufacturing operations are readily
available, and the Company is not dependent on a single supplier or only a few
suppliers of proprietary products and is not dependent on any one customer.

Competition

     The markets in which the Company operates are highly competitive. Both
domestically and internationally, the Company faces competition from a number of
different manufacturers in each of its product lines, some of which have greater
financial and other resources than the Company.





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     The Company, however, believes that existing domestic and foreign
competition for mast and integral products is limited. Manufacture of these
products is expensive due to the heavy equipment and tooling involved in the
manufacturing process, making effective market entry difficult for new
suppliers. Due to weight and cubic volume, which increases the cost and time
necessary to ship this type of equipment, the Company believes that foreign
competitors without a United States manufacturing presence are at a disadvantage
competing in the United States market.

     The attachment markets are supplied domestically by several smaller
regional and niche market suppliers along with a single large competitor which
enjoys a dominant market share. Import competition from foreign suppliers
exists; however, the Company believes that long lead-times, transportation costs
and service/parts availability weakens their effectiveness as a major supplier.
Current lead times for Long Reach attachments is four to eight weeks for
standard units and eight to ten weeks for engineered products, which the Company
believes is average for the industry.

     Competition for material lifting products, produced under the Rol-Lift(R),
Presto(R) and Regal(R) brand names, comes from a broad range of small and
mid-sized competitors. Additionally, the market for pallet trucks is highly
competitive, with numerous domestic competitors and significant foreign
competition from manufacturers in Canada, China and India.

     The dock equipment market is highly competitive, with several large and
medium sized competitors. Several dock equipment companies sell direct to end
users and contractors while others, like Blue Giant, utilize dealer
organizations.

     Competition in the lift truck market comes from major lift truck
manufacturers, such as Hyster Yale Materials Handling Inc., Yale Industrial
Products Inc., Crown Equipment Corporation, Toyota Industrial Equipment, The
Raymond Corporation and CLARK Material Handling Company, and several niche
manufacturers such as Big Joe California, Inc. However, Blue Giant has had long
standing relationships with its dealers, several in excess of 25 years, which
the Company believes helps Blue Giant to maintain a competitive position in the
marketplace.

     While there exists competition for spare parts from several generic third
party parts suppliers, the Company believes customers generally prefer to
purchase OEM spare parts from the original equipment manufacturer. However, the
market for spare parts is highly dependant on price and parts availability. The
Company maintains spare parts inventories and has a 48-hour service commitment
to supply current spare parts to dealers and/or end users.

Facilities; Employees

     Long Reach's headquarters, administrative offices and manufacturing
facility are located in Houston, Texas. The office includes sales, marketing,
customer service, order entry, finance and administration,




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human resources, engineering, production control, purchasing and manufacturing
management. Long Reach's manufacturing facility in Little Rock, Arkansas was
closed in 2000. Operations at this facility were consolidated into the Company's
other manufacturing facilities. Forklift attachment production has been moved to
the Long Reach plant in Houston, Texas, and Rol-Lift production of pallet
trucks, scissors and stackers has been moved to the Presto Lifts plant in
Pawtucket, Rhode Island. All production in Little Rock was completed by December
29, 2000.

     Presto Lifts' headquarters, administrative offices and manufacturing
facility are located in Pawtucket, Rhode Island. The office includes customer
service, order entry, finance and administration, human resources, engineering,
production control, purchasing and manufacturing management.

     Brudi Pacific's headquarters, administrative offices and manufacturing
facility is located in Adelaide, Australia. The office includes sales,
marketing, customer service, order entry, finance and administration,
engineering, production control, purchasing and manufacturing.

     Blue Giant's headquarters, administrative offices and manufacturing
facility are located in Brampton, Ontario. The office includes sales, customer
service, order entry, finance and administration, human resources, engineering,
production control, purchasing and manufacturing management.

     As of December 30, 2000, the Company had approximately 500 employees, all
of whom were employed full-time. Presto Lifts' hourly employees, which
represented approximately 20% of the Company's total employees as of December
30, 2000, are represented by the Teamsters Union under a collective bargaining
agreement which expires on January 31, 2004.

Government Regulations

     As part of its ongoing responsibilities as a United States manufacturing
entity, the Company must comply with proper safety and working conditions under
regulations governed by the Occupational Safety and Health Administration
(OSHA), which conducts audits and inspections of the Company's locations.





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Environmental Laws

     The Company has a responsibility to have proper permits and comply with
federal Environmental Protection Agency and local and state environmental laws,
including but not limited to air emissions permits, stormwater discharge
permits, Material Safety Data Sheet (MSDS) labeling and education, Spill
Prevention, Control and Countermeasures (SPCC) Plans, above ground and
underground storage tank registrations, and underground injection well permits.
The Company makes periodic routine filings as required with various
environmental agencies.

Intellectual Property

     The Company holds trademarks, both in the United States and abroad,
covering its Long Reach(R), Brudi(R), Rol-Lift(R), Presto(R), Regal(R) and Blue
Giant(R) names and the names of a variety of its products. Long Reach, Brudi
Pacific and Blue Giant also have patents covering attachments to forklift trucks
and/or other products they manufacture. The Company does not believe that the
loss of any one of its patents, or the expiration of any of its current patents,
would have a material adverse effect on its business or results of operations.

Follow-on Acquisitions

     The Company intends to continue to pursue follow-on acquisitions in the
material handling equipment industry. However, no assurance of success with
respect to the Company's efforts to identify and acquire any additional
manufacturing companies can be made.

Subsequent Developments

     Issuance of Preferred Stock. Pursuant to the Series B Preferred Stock
Purchase Agreement among the Company, J.H. Whitney III, L.P., J.H. Whitney IV,
L.P. and Whitney Strategic Partners III, L.P., each an existing stockholder of
the Company (collectively, the "Whitney Entities"), and LEG Partners III SBIC,
L.P., an existing stockholder of the Company, and a related entity, LEG Partners
Debenture SBIC, L.P. (collectively, the "LEG Entities"), dated as of March 16,
2001 (the "Stock Purchase Agreement"), the Company issued and sold an aggregate
of 944,508 shares of a newly-created series of preferred stock, the 10% Series B
Cumulative Convertible Preferred Stock, $.001 par value per share (the "Series B
Preferred Stock"), at a purchase price of approximately $3.18 per share, for
aggregate proceeds to the Company of $3,000,000 (the "Preferred Stock
Investment"). The Whitney Entities purchased an aggregate of 472,254 shares of
Series B Preferred Stock, and the LEG Entities purchased an aggregate of 472,254
shares of Series B Preferred Stock. Prior to the Preferred Stock Investment, the
Whitney Entities, on the one hand, and LEG Partners III SBIC, L.P. and its
affiliates, on the other hand, were beneficial owners of more than five percent
of the Company's Common Stock. The proceeds of the Preferred Stock Investment
were needed for working capital and general business purposes of the Company and
its subsidiaries.




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     Series B Preferred Stock and Series C Preferred Stock. In connection with
the Preferred Stock Investment, the Company's Board of Directors created two new
series of preferred stock, the Series B Preferred Stock and the 10% Series C
Cumulative Redeemable Preferred Stock, $.001 par value per share (the "Series C
Preferred Stock"). The designation, powers, preferences and rights of the Series
B Preferred Stock and the Series C Preferred Stock are set forth in the Articles
of Amendment of 10% Series B Cumulative Convertible Preferred Stock and 10%
Series C Cumulative Redeemable Preferred Stock of the Company, filed on March
15, 2001, with the Secretary of State of Florida (the "Articles of Amendment").
The Board of Directors authorized 1,000,000 shares of each of the Series B
Preferred Stock and the Series C Preferred Stock. Other than the 944,508 shares
of Series B Preferred Stock issued in connection with the Preferred Stock
Investment, no other shares of preferred stock of the Company are outstanding.

     Each share of Series B Preferred Stock is convertible into a Conversion
Unit which is initially comprised of one share of the Company's Common Stock and
one share of Series C Preferred Stock. The number of shares of Common Stock into
which each share of Series B Preferred Stock is convertible is subject to
adjustment pursuant to antidilution provisions contained in the Articles of
Amendment. Subject to certain exceptions, the antidilution rights provide
generally that the number of shares of Common Stock included within the
Conversion Unit into which the Series B Preferred Stock converts will be
increased if the Company (i) declares a dividend on its Common Stock payable in
shares of the Company's capital stock, subdivides its outstanding Common Stock,
combines its outstanding Common Stock into a smaller number of shares or issues
shares of the Company's capital stock in a reclassification of Common Stock, or
(ii) issues any shares, or rights to purchase shares, of its Common Stock for a
per share price lower than the then current conversion price for the Series B
Preferred Stock (which initially is approximately $3.18, subject to antidilution
adjustment) or the then current market price of the Company's Common Stock, as
determined in accordance with the Articles of Amendment.

     Each share of Series B Preferred Stock entitles the holder thereof to vote
on all matters voted on by holders of Common Stock on an as-if-converted basis,
such that the holder has the right to cast that number of votes per share as is
equal to the number of shares of Common Stock that such holder would be entitled
to vote assuming that the Series B Preferred Stock had been converted into a
Conversion Unit. Dividends payable on the Series B Preferred Stock accrue and
accumulate (whether or not declared) and compound quarterly at an annual rate
equal to 10% and are payable in cash if declared by a majority of members of the
Company's Board of Directors other than the members designated by the Whitney
Entities or the LEG Entities, as described below. In the event of any
liquidation, dissolution or winding up of the Company, before distribution or
payment to holders of Common Stock or of any other capital stock ranking in any
such event junior to the Series B Preferred Stock and Series C Preferred Stock,
the holders of shares of Series B Preferred Stock shall be entitled to be paid
an amount equal to the amount that the holders of shares of Series B Preferred
Stock would be entitled to receive in connection with such liquidation,
dissolution or winding up if all of the holders of Series B Preferred Stock had


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converted their shares into Conversion Units immediately prior to any record
date or payment in connection therewith.

     Except as described in the next paragraph or as required under applicable
law, the Series C Preferred Stock does not have voting rights. Dividends payable
on the Series C Preferred Stock accrue and accumulate (whether or not declared)
and compound quarterly at an annual rate equal to 10% and are payable in cash if
declared by a majority of members of the Company's Board of Directors other than
the members designated by the Whitney Entities or the LEG Entities. The Series C
Preferred Stock has a liquidation preference that provides generally that in the
event of a liquidation, dissolution or winding up of the Company, before any
distribution or payment to holders of Common Stock or any other capital stock of
the Company ranking in any such event junior to the Series C Preferred Stock,
the holders of Series C Preferred Stock shall be entitled to be paid a
liquidation preference equal to approximately $3.18 per share, plus an amount
equal to all unpaid accrued or accumulated dividends (whether or not declared)
to the final date of distribution or the mandatory redemption date, as set forth
below. The Company is required to redeem the shares of Series C Preferred Stock
for a purchase price equal to such liquidation preference on the earlier of (i)
March 1, 2008, and (ii) the date of closing of a Qualified Public Offering or an
Organic Transaction. A "Qualified Public Offering" is defined as a public
offering (i) with net cash proceeds to the Company of at least equal to
$20,000,000, (ii) the registration statement for which provides for the
redemption of the Series C Preferred Stock as a use of proceeds, and (iii)
having a purchase price per share of Common Stock at least three times the
liquidation preference of the Series C Preferred Stock as determined in
accordance with the Articles of Amendment. An "Organic Transaction" is defined
as (x) the sale, lease, exchange, transfer or other disposition (including,
without limitation, by merger, consolidation or otherwise) of assets
constituting all or substantially all of the assets of the Company and its
subsidiaries, taken as a whole, (y) any merger, consolidation or other business
combination, refinancing or recapitalization that results in the holders of the
issued and outstanding voting securities of the Company immediately prior to
such transaction beneficially owning or controlling less than a majority of the
voting securities of the continuing or surviving entity immediately following
such transaction, and/or (z) any person or persons acting together or which
would constitute a "group" for the purposes of Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), together or with any
affiliates thereof (other than any of the Whitney Entities or the LEG Entities
and their respective affiliates), beneficially owning or controlling, directly
or indirectly, at least 50% of the total voting power of all classes of capital
stock entitled to vote generally in the election of directors of the Company.

     The Articles of Amendment provide that the Company or its subsidiaries
cannot take the following actions without the approval of the holders of at
least 75% of all issued and outstanding shares of Series B Preferred Stock and
Series C Preferred Stock voting together as a single class: (i) an Organic
Transaction; (ii) the adoption of an amendment, restatement or modification of
the Company's Articles of Incorporation, Bylaws or other governance documents
which could adversely affect the rights of the holders of the Series B Preferred
Stock or Series C Preferred Stock; (iii) the declaration or payment of any
dividend or making of any distribution on




                                       12
<PAGE>   15

or with respect to the Common Stock or any other capital stock other than Series
B Preferred Stock or Series C Preferred Stock; (iv) except as otherwise
permitted under the Articles of Amendment, the purchase, redemption or
retirement of any shares of capital stock or other equity securities (or any
securities convertible or exchangeable into such securities); (v) the
authorization, creation or issuance of any shares of capital stock or other
securities which could adversely affect, or are ranked prior to or are pari
passu with, Series B Preferred Stock or Series C Preferred Stock (other than
shares of Series B Preferred Stock or Series C Preferred Stock issued in
accordance with dividends or distributions as described in clause (iii) above);
(vi) the incurrence of senior indebtedness (as defined in the Articles of
Amendment) of more than an aggregate outstanding principal amount of $1,000,000;
and the incurrence of any other indebtedness (as defined in the Articles of
Amendment) other than senior indebtedness and other than trade payables incurred
in the ordinary course of business; (vii) the amendment, restatement or
modification of the terms of, or documentation relating to, indebtedness of the
Company or any subsidiary in the aggregate principal amount of greater than
$250,000 (other than trade payables incurred in the ordinary course of
business), or consent to any of the foregoing; (viii) the engagement by the
Company or any subsidiary in any business other than the business in which the
Company or its subsidiaries are currently engaged; (ix) a voluntary dissolution,
liquidation or winding up of the Company; (x) the entering into any transaction
or agreement with, or making any payment to, any affiliate of the Company or any
subsidiary; amending or terminating any existing agreement with any affiliate of
the Company or any subsidiary; purchasing from or providing to an affiliate of
the Company or any subsidiary any selling, general management or administrative
services; directly or indirectly making any sales to or purchases from an
affiliate of the Company or any subsidiary; or increasing the compensation being
paid to an affiliate of the Company or any subsidiary; (xi) the sale of any
assets or business of the Company or any subsidiary or the acquisition of any
capital stock of another entity, assets or business having a value in excess of
$1,000,000, or $2,500,000 in the aggregate in any 12-month period; (xii) the
settlement of any litigation involving a claim in excess of $250,000; (xiii) the
hiring or termination of the Company's Chief Executive Officer; (xiv) capital
expenditures of the Company and its subsidiaries in excess of the amount
provided in the Company's annual budget; and (xv) approval of an annual budget
of the Company and its subsidiaries. As a result of this provision, the consent
of 75% of the holders of the Series B Preferred Stock and the Series C Preferred
Stock, currently the Whitney Entities and the LEG Entities, will be required for
the Company to effect any significant transaction as described above.

     The preceding description of the Preferred Stock Investment, the Series B
Preferred Stock and Series C Preferred Stock is a summary of certain of the
provisions of, and is qualified in its entirety by, the Preferred Stock Purchase
Agreement, dated as of March 16, 2001, among the Company, the Whitney Entities
and the LEG Entities, and the Articles of Amendment, a copy of each of which has
been filed as an exhibit to this Annual Report on Form 10-KSB.

     Agreements. In connection with the Preferred Stock Investment, the Company
entered into the following agreements:



                                       13
<PAGE>   16

     Stockholders Agreement. The Company, the Whitney Entities, the LEG
Entities, Colt Capital, LLC ("Colt Capital"), which prior to the Preferred Stock
Investment was the beneficial owner of more than five percent of the Company's
Common Stock, and TBM Capital II, LLC, another stockholder of the Company of
whom Messrs. Sharma and Schwartz, officers and directors of the Company, are
managing members, entered into a Stockholders Agreement, dated as of March 16,
2001 (the "Stockholders Agreement"). The Stockholders Agreement includes a
voting agreement and certain restrictions on the sale of Company stock.

     Pursuant to the Stockholders Agreement, the stockholder parties have agreed
to vote for three nominees to the Company's Board of Directors designated by the
Whitney Entities (the "Whitney Nominees") and one nominee to the Board of
Directors designated by the LEG Entities (the "LEG Nominee"). As a consequence,
the Company has increased the size of its Board of Directors to eight members.
The Whitney Entities have indicated their intention to designate three Whitney
Nominees to the Board of Directors, two of whom are existing members of the
Board, Messrs. Dawson and Stone, at the Company's next Annual Meeting of
Stockholders scheduled to occur on May 4, 2001. The Stockholders Agreement also
requires the stockholder parties, upon the request of the Whitney Entities, to
vote to increase the size of the Company's Board of Directors to nine members
and to vote for a fourth Whitney Nominee to the Board of Directors designated by
the Whitney Entities. In the aggregate, the stockholder parties to the
Stockholders Agreement own a majority of the Company's outstanding voting
securities, and accordingly, pursuant to the voting agreement contained in the
Stockholders Agreement, the election of the Whitney Nominees and any LEG Nominee
to the Board of Directors will be assured.

     At any time and from time to time that the Whitney Entities or the LEG
Entities (as the case may be) do not have the maximum number of directors
serving on the Board of Directors that either such party is entitled to
designate pursuant to the Stockholders Agreement, the Whitney Entities or the
LEG Entities (as the case may be) shall be entitled to call a special meeting of
the stockholder parties to the Stockholders Agreement for the purpose of
electing the designee of the Whitney Entities or the LEG Entities (as the case
may be) to the Board of Directors and, if necessary, the removal of any
directors. If prior to such special meeting all seats on the Board of Directors
are filled, the Whitney Entities and the LEG Entities shall mutually select a
director to resign. If such director fails to voluntarily resign, all
stockholder parties to the Stockholders Agreement have agreed to vote in favor
of the removal of such director.

     Under the Stockholders Agreement, subject to certain exceptions described
therein, the Company has granted preemptive rights to the Whitney Entities, the
LEG Entities and Colt Capital that allows them the first opportunity to purchase
any shares of or other interests in capital stock of the Company, prior to sale
of such shares or interests by the Company, on the same terms and conditions.
Additionally, the Whitney Entities, the LEG Entities and Colt Capital have been
granted the right to purchase an aggregate of 5% of the shares or equity
equivalents being offered in a Qualified Public Offering. The stockholder
parties have also




                                       14
<PAGE>   17

granted each other certain rights of first refusal, co-sale rights,
"bring-along" rights and "tag-along" rights.

     Registration Rights Agreement. The Company entered into a Registration
Rights Agreement, dated as of March 16, 2001, with the Whitney Entities, the LEG
Entities, other entities affiliated with the LEG Entities, and Colt Capital (the
"Registration Rights Agreement"), pursuant to which the Company granted certain
registration rights to the Whitney Entities, the LEG Entities and Colt Capital.
The Registration Rights Agreement provides for three types of registration
rights: (i) "demand rights," where stockholders can require the Company to
register their shares, (ii) "S-3 rights," which is a short-form registration
statement available under certain circumstances, and (iii) "piggy-back rights,"
which entitle the holders to include their shares in a primary or secondary
registered public offering of the Company's stock. In connection with the
Registration Rights Agreement, the Whitney Entities and the LEG Entities have
demand rights commencing January 1, 2002, and they may exercise these rights on
a total of two occasions. The Whitney Entities and the LEG Entities have
unlimited S-3 rights and, along with Colt Capital, unlimited piggy-back rights.
Colt Capital is entitled to include its shares of Company stock on a pro rata
basis with the Whitney Entities and the LEG Entities in connection with a demand
or S-3 registration initiated by the Whitney Entities or the LEG Entities. The
Company is required to bear all registration expenses, including the cost of
independent legal counsel for the selling stockholders and other expenses in
connection with these registrations. The Company also provides indemnification
to such selling stockholders. The Registration Rights Agreement contains other
provisions typical of such agreements.

     Professional Services Agreement. The Company entered a Professional
Services Agreement, dated as of March 16, 2001, with JHW III Management Co., LLC
("JHW") and Golub Associates, LLC ("Golub"), affiliates of the Whitney Entities
and the LEG Entities, respectively (the "Professional Services Agreement").
Under this Agreement, JHW and Golub provide services relating to corporate
strategy, budgeting and forecasts, budgeting of future corporate investments,
acquisition and divestiture strategies and debt and equity financings. The
Professional Services Agreement provides for the payment of an annual fee of
$150,000 and an aggregate transaction fee equal to 1% of the value of certain
transactions, such as a merger, restructuring, or debt or equity financing, to
be split equally between JHW and Golub as payment for their services.

     Termination of Consulting Agreements. The Company terminated (i) its
Consulting Agreement with Colt Services, Inc. and (ii) its Consulting Agreement
with TBM Consulting Group, Inc. and Colt Services, Inc., each dated as of June
17, 1999. See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" for a description
of these agreements.

     Agreement-in-Principle to Amend Consulting and Management Services
Agreement with TBM Consulting Group, Inc. The Company is a party to a Consulting
and Management Services Agreement with TBM Consulting Group, Inc., dated as of
June 17, 1999. See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" for a
description of this agreement. In




                                       15
<PAGE>   18

connection with the Preferred Stock Investment, the Company and TBM Consulting
Group, Inc. have agreed in principle to amend the Consulting and Management
Services Agreement. Pursuant to the agreement-in-principle, TBM Consulting
Group, Inc.'s fees under the consulting agreement will be payable as follows:
(i) one-third in cash; (ii) one-third in Series B Preferred Stock, provided that
the value of such Series B Preferred Stock does not exceed $150,000 without the
consent of the Whitney Entities and the LEG Entities; and (iii) one-third
deferred until March 16, 2002, at which time the deferred fees will be paid in
cash or will continue to be deferred based on a consideration of the Company's
liquidity. The agreement-in-principle also requires Mr. Sharma, the Company's
Chairman of the Board of Directors, to spend two full days at the Company during
each calendar month during the 12 months ending March 16, 2002, and one full day
at the Company during each calendar month for one year thereafter, in each case
at no additional cost to the Company. The parties are in the process of
negotiating a definitive agreement to amend the Consulting and Management
Services Agreement.

     Amendment of Certain Agreements with the LEG Entities. The Company and its
subsidiary, Long Reach, Inc., entered into an Omnibus Amendment, dated as of
March 15, 2001, with Golub Associates, Inc., as agent for holders of certain
subordinated notes (the "Omnibus Amendment"), pursuant to which the parties
amended certain agreements related to the acquisition of Long Reach, Inc. See
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" for a description of the merger
agreement pursuant to which the Company acquired Long Reach, Inc. (the "Long
Reach Merger Agreement").

     Pursuant to the Omnibus Amendment, the Company and Long Reach released the
former Long Reach shareholders and certain subordinated noteholders (which
include certain LEG Entities or their affiliates) from any potential claims that
the Company or Long Reach may have against the LEG Entities arising under the
indemnification provisions contained in the Long Reach Merger Agreement, except
as to certain specified matters and claims that may arise from breaches of
certain representations and warranties contained the Long Reach Merger
Agreement, including those (i) related to authorization to consummate the
merger, capitalization of Long Reach, ownership of and title to the equity
acquired in the merger, taxes or ERISA, (ii) for any claims based on unperformed
covenants or fraud, or (iii) for breach of the environmental representation,
subject to increased thresholds of liability.

     Also pursuant to the Omnibus Amendment, Long Reach agreed to increase the
interest rate payable on certain subordinated notes held by affiliates of the
LEG Entities. See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" for a
description of the subordinated notes held by affiliates of the LEG Entities.
The interest rates on these notes were amended to bear interest at a rate of 10%
per annum from January 1, 2001 through February 23, 2004, and thereafter at the
greater of (i) the rate of interest charged to Long Reach under its credit
agreement with its lender plus 2% or (ii) 10%.

     The preceding description of the agreements entered into in connection with
the Preferred Stock Investment is a summary of certain provisions of, and is
qualified in its entirety by, the



                                       16
<PAGE>   19

Stockholders Agreement, the Registration Rights Agreement, the Professional
Services Agreement and the Omnibus Amendment, a copy of each of which has been
filed as an exhibit to this Annual Report on Form 10-KSB.

Item 2. Description of Property.

     The Company's headquarters is located at 136 Main Street, Westport,
Connecticut 06880. The Company occupies office space under a lease which expires
on February 28, 2004.

     Long Reach operates a 160,000 square foot manufacturing facility in
Houston, Texas. Long Reach owns the Houston facility, which is subject to a
mortgage in favor of its lender and a second mortgage in favor of certain
subordinated noteholders. Long Reach's manufacturing facility in Little Rock,
Arkansas, was closed on December 29, 2000; Long Reach's lease of these premises
has been terminated effective March 13, 2001. See "DESCRIPTION OF BUSINESS -
Facilities; Employees."

     Presto Lifts operates a 47,600 square foot manufacturing facility in
Pawtucket, Rhode Island. This facility is leased by Presto Lifts. The lease
expires on December 31, 2003.

     Brudi Pacific operates a 15,400 square foot manufacturing facility in
Adelaide, Australia. Brudi Pacific owns this facility, which is subject to a
mortgage in favor of the entity that provides credit card and payroll financing
to Brudi Pacific.

     Blue Giant operates a 85,000 square foot manufacturing facility in
Brampton, Ontario. Blue Giant owns the Brampton facility, which is subject to a
mortgage in favor of its lender.

Item 3. Legal Proceedings.

     Blue Giant has been served with a statement of claim dated March 15, 2001,
in an action brought by Daniel G. Marshall Engineering Corporation ("DGM")
pending in the Ontario Superior Court of Justice. The complaint alleges that DGM
entered into a contract with Blue Giant for professional engineering services in
August 1995 and a collateral proposal to redesign certain lift trucks in August
1996. The prior owner of Blue Giant's assets, and not Blue Giant, was the party
to these contracts. DGM claims that Blue Giant no longer has the authority to
use the designs created by DGM or the right to transfer the designs to Blue
Giant's parent company. DGM is claiming damages for breach of contract, breach
of confidential information and unjust enrichment in the aggregate amount of
$2,500,000, satisfaction of outstanding amounts due under the contracts of
approximately $9,800, or, in the alternative, an injunction against Blue Giant
to prevent it from using DGM's designs in the manufacture of forklifts. The
Company is currently evaluating this action and believes that the claims are
without merit; however, the ultimate outcome of this matter cannot currently be
predicted.

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

     None.








                                       17
<PAGE>   20

                                     PART II

Item 5. Market for Common Equity and Related Stockholder Matters.

     The Company's Common Stock is quoted on the over-the-counter ("OTC")
Bulletin Board maintained by the National Association of Securities Dealers,
Inc. under the symbol "TBMH". The following table sets forth the high and low
bid information on the OTC Bulletin Board, as reported by the OTC Bulletin Board
and adjusted for a one-for-412.92 reverse stock split of the Company's Common
Stock for stockholders of record as of June 15, 1999, for the periods indicated:

<TABLE>
<CAPTION>
Period                                                               High                           Low
------                                                              ------                         ------
<S>                                                                 <C>                            <C>

January 1, 1999 - March 31, 1999                                     10.32                          4.96
April 1, 1999 - June 15, 1999                                        10.32                          8.26
June 16, 1999 - June 30, 1999                                         7.00                          7.00
July 1, 1999 - September 30, 1999                                    10.00                          6.00
October 1, 1999 - January 1, 2000                                     6.00                          6.00
January 2, 2000 - April 1, 2000                                       6.00                          6.00
April 2, 2000 - July 1, 2000                                          6.00                          6.00
July 2, 2000 - September 30, 2000                                     6.00                          5.00
October 1, 2000 - December 30, 2000                                   5.50                          5.00
</TABLE>

     These quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission and may not represent actual transactions. Actual prices
may vary.

     As of March 26, 2001, there were approximately 379 holders of record of the
Company's Common Stock.

     The Company has not paid cash dividends on its Common Stock during the last
two fiscal years and does not anticipate paying any dividends in the foreseeable
future. The Company's charter prohibits the Company from declaring or paying any
dividend or making any distribution on or with respect to its Common Stock or
any other capital stock (other than the Series B Preferred Stock and Series C
Preferred Stock) without the approval of at least 75% of all issued and
outstanding shares of Series B Preferred Stock and Series C Preferred Stock
voting together as a class. As a Florida corporation, the Company is prohibited
from making a dividend or other distribution to its stockholders if, after
giving effect to such distribution, (i) the corporation would not be able to pay
its debts as they become due in the usual course of business, or (ii) the
corporation's total assets would be less than the sum of its total liabilities
plus the amount that would be needed, if the corporation were to be dissolved at
the time of the distribution, to satisfy the preferential rights upon
dissolution of stockholders whose preferential rights are superior to those
receiving the distribution.




                                       18
<PAGE>   21

     On November 10, 2000, the Company issued and sold an aggregate of 923,077
restricted shares of Common Stock to existing stockholders at $6.50 per share,
for aggregate proceeds to the Company of approximately $6,000,000. J.H. Whitney
III, L.P. purchased 901,357 shares and Whitney Strategic Partners III, L.P.
purchased 21,720 shares of Common Stock. On November 17, 2000, the Company
issued and sold 153,846 restricted shares of Common Stock to an existing
stockholder, LEG Partners III SBIC, L.P., at $6.50 per share, for aggregate
proceeds to the Company of approximately $1,000,000. These shares were sold in
reliance on the exemption provided by Section 4(2) of the Securities Act.

     On March 16, 2001, the Company issued and sold an aggregate of 944,508
shares of Series B Preferred Stock at approximately $3.18 per share, for
aggregate proceeds to the Company of $3,000,000. J.H. Whitney III, L.P.
purchased 276,685 shares, J.H. Whitney IV, L.P. purchased 188,902 shares,
Whitney Strategic Partners III, L.P. purchased 6,667 shares, LEG Partners III
SBIC, L.P. purchased 157,418 shares and LEG Partners Debenture SBIC, L.P.
purchased 314,836 shares of Series B Preferred Stock. These shares were sold in
reliance on the exemption provided by Section 4(2) of the Securities Act. See
"DESCRIPTION OF BUSINESS - Subsequent Developments."

Item 6. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

     The following discussion is intended to assist in the understanding of the
Company's financial position and results of operations for the year ended
December 30, 2000 and the fifty-two weeks ended January 1, 2000. This discussion
should be read in conjunction with consolidated financial statements and notes
thereto included elsewhere herein.

     The dollar amounts reported in this Item are reported in thousands.

1999 Private Placement

     On June 15, 1999, the Company completed the 1999 Private Placement in which
it raised $12,730 from investors. Upon the closing of the 1999 Private
Placement, the Company changed its name from Specialty Retail Group, Inc. to TBM
Holdings Inc. The Company planned to use the proceeds of the 1999 Private
Placement to purchase one or more operating companies within a manufacturing
industry. The Company intended to implement the Toyota Production System using
the Kaizen Growth Strategy to improve the results of these underperforming
companies once acquired. During the period from January 31, 1997 though the 1999
Private Placement, and from the 1999 Private Placement through the acquisition
of its first operating company on February 23, 2000, the Company had no
operating business.




                                       19
<PAGE>   22

Acquisitions

     On February 23, 2000, the Company completed the acquisition of Long Reach
through the merger of Long Reach into a wholly-owned subsidiary of the Company.
In operation since 1930, Long Reach is a manufacturer of hydraulic material
stackers and industrial lift tables. This acquisition was the result of a
lengthy search process culminating in the selection of the material handling
equipment industry as the target industry for the Company's implementation of
the Toyota Production System utilizing the Kaizen Growth Strategy.

     On May 16, 2000, the Company completed the acquisition of Lee Engineering
from United Dominion Industries, Inc. Since 1944, Lee Engineering has been
manufacturing material handling equipment including pallet stackers, scissor
lifts and dock lifts under the Presto Lifts(R)and Regal(R) brand names.
Subsequent to this acquisition, the Company changed the name of the acquired
company to Presto Lifts, Inc. Presto Lifts is a wholly-owned subsidiary of Long
Reach.

     On November 10, 2000, the Company completed the acquisition of the assets
and certain liabilities of Blue Giant Limited from CLARK Material Handling
Company and certain intangible assets of another Clark subsidiary. Subsequent to
the acquisition, the Company changed the name of the acquired company to Blue
Giant Equipment Corporation. Blue Giant is a manufacturer of Class 3 lift
trucks, lift tables and dock equipment. Blue Giant is a wholly-owned subsidiary
of the Company.

     The Company is structured as a holding company, whose primary assets are
the ownership of stock of its subsidiaries. The Company believes that its
structure as a holding company helps to facilitate any future acquisitions and,
if necessary, will facilitate the disposition of entities acquired. The Company
also believes that its holding company structure serves to insulate the assets
of each entity from liabilities of the other entities.

Consolidation of Operations; Implementation of Toyota Production System and
Kaizen Growth Strategy

     In 2000, the Company began implementing the Toyota Production System
utilizing the Kaizen Growth Strategy at Long Reach and Presto Lifts. The Company
has conducted comprehensive business assessments, new managers have been
recruited and Kaizen activities seeking to improve manufacturing processes have
commenced. Production cells combining welding and assembly have been created for
all major product lines at both companies. The Company's goal is to reduce
product costs by improving manufacturing methods and processes to improve
productivity. As this process continues, the Company expects Long Reach and
Presto Lifts to have marginally profitable or unprofitable results through the
end of fiscal 2001.

     Also in 2000, the Company consolidated its operations in Little Rock,
Arkansas into its manufacturing locations in Houston, Texas and Pawtucket, Rhode
Island. Forklift attachment production was moved to the Long Reach plant in
Houston, Texas, and Rol-Lift production of




                                       20
<PAGE>   23

pallet trucks, scissors and stackers was moved to the Presto Lifts plant in
Pawtucket, Rhode Island. All production in Little Rock was completed by December
29, 2000, and the lease for this facility was terminated effective March 13,
2001.

     The total restructuring cost for 2000 associated with closing the Little
Rock plant and consolidating operations into Long Reach and Presto Lifts was
approximately $746. Of this amount, approximately $639 represents one-time
expenses for severance and related benefits. These restructuring expenses have
been recorded as one-time restructuring expenses during the fourth quarter of
2000 and have reduced earnings for that period. As of December 30, 2000, $350
(including $268 involuntary termination benefits) of these expenses had been
paid. The remaining accrual at December 30, 2000 of $396 has been substantially
paid by March 30, 2001. A loss on impaired assets of $515 was recorded to
write-down equipment to fair value based on proceeds received from the
disposition of such equipment in a February 2001 auction.

     During 2001, the Company plans to continue its implementation of the Toyota
Production System utilizing the Kaizen Growth Strategy at Long Reach and Presto
Lifts and plans to introduce the Toyota Production System utilizing the Kaizen
Growth Strategy at Blue Giant. During the next twelve months of operations,
management plans to focus on improving manufacturing operations in order to seek
to improve profitability. With the help of TBM Consulting Group, Inc., which is
providing Kaizen consulting services to the Company pursuant to a Consulting and
Management Services Agreement (see "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS"), the Company will conduct monthly Kaizen workshops (group
improvement activities) during which manufacturing processes will be evaluated
and will be sought to be improved using principles and methods taken from the
Toyota Production System. These activities will seek to eliminate waste, reduce
manufacturing lead-time, improve throughput, and improve worker productivity.
The Company believes that over time the activities described above will result
in improved manufacturing efficiency and will reduce operating costs without
significant capital investment. Based on the experience of TBM Consulting Group,
Inc., the Company believes that implementation of the Toyota Production System
utilizing the Kaizen Growth Strategy is a three-to-five year process; however,
there can be no assurance that the Company will be successful in implementing
the Toyota Production System within this time period or at all or, if
implemented, that the operating performance or profitability of the Company will
be improved.

Results Of Operations

     Operating results through February 23, 2000, the date of the acquisition of
Long Reach, reflect interest income generated through the investment of the
proceeds of the 1999 Private Placement in short-term government securities.
Operating expenses during such period were costs associated with search
activities required to identify a manufacturing company acquisition, maintaining
a business office and complying with the Company's reporting obligations as a
public company.





                                       21
<PAGE>   24

     Results for the year ended December 30, 2000, include the operating results
of Long Reach for the period February 24, 2000 through December 30, 2000, the
operating results of Presto Lifts for the period May 16, 2000 through December
30, 2000, and the operating results Blue Giant for the period November 11, 2000
through December 30, 2000, consolidated with the expenses incurred by the
Company associated with maintaining a business office and complying with its
reporting obligations as a public company.

     The Company generated net sales of $38,586 and a net loss of $9,120 for the
year ended December 30, 2000, compared with no sales and net income of $39 for
the comparable period in 1999. For the year ended December 30, 2000, gross
profit represented 12.6% of net sales, and selling, general and administrative
expenses represented 30.8% of net sales. During the fifty-two weeks ended
January 1, 2000, the Company had no ongoing operations and, accordingly, no
sales. The net income for the fifty-two weeks ended January 1, 2000 reflected
the cost of maintaining a business office and the cost of compliance with the
Company's reporting obligations as a public company, offset by investment
income. In addition, the Company reported $15 income from discontinued
operations during the period.

     During the year ended December 30, 2000, the increase in net sales, cost of
sales and selling, general and administrative expenses over the corresponding
period of the prior year is the result of the Company's acquisitions of Long
Reach on February 23, 2000, Presto Lifts on May 16, 2000 and Blue Giant on
November 10, 2000.

     Interest expense for the year ended December 30, 2000 was $1,123. This
reflects the interest expense for the period of February 24, 2000 through
December 30, 2000 under Long Reach's revolving line of credit and term loan,
each as amended, and the interest expense for the period of November 11, 2000
through December 30, 2000 under Blue Giant's revolving line credit and term
loans. Other income, net was $345 for the year ended December 30, 2000, as
compared to $470 for the prior year. This represents income from investment of
excess cash on hand.

     During the fourth quarter of 2000 and in the early part of the first
quarter of 2001, the Company has experienced incoming new order bookings rates
that are lower than expected. Bookings are lower than expectation by 5% to 20%
in each of the Company's operating subsidiaries. The Company believes that the
lower-than-expected bookings are a result of both uncertainty in the overall
business economy and the resulting reduction in capital spending for machinery
and equipment by manufacturing and distribution companies and the fact that it
has taken Long Reach longer than the Company expected to restore customer
confidence in its




                                       22
<PAGE>   25

manufacturing capabilities. If booking rates remain lower than expected in 2001,
the Company anticipates that this could have an adverse effect on its operating
results and financial performance. Such effect could affect carrying values of
certain assets such as goodwill.

Liquidity and Capital Resources

     Net cash used in operating activities was $7,918 for the year ended
December 30, 2000, compared with $111 for the fifty-two weeks ended January 1,
2000. This change reflects the net loss for the year ended December 30, 2000 of
$9,120 ($6,986 net of non-cash expenses), combined with the negative changes in
working capital components for such period of $932 following the consolidation
of the Company with Long Reach on February 23, 2000, Presto Lifts on May 16,
2000 and Blue Giant on November 10, 2000.

     Net cash used in investing activities was $19,978 for the year ended
December 30, 2000, compared with $4 for the prior year. This reflects primarily
the acquisition of Long Reach on February 23, 2000, the acquisition of Presto
Lifts on May 16, 2000 and the acquisition of Blue Giant on November 10, 2000.

     Net cash provided by financing activities was $17,678 for the year ended
December 30, 2000, as compared to $12,177 for the prior year. Net cash provided
by financing activities for the year ended December 30, 2000 reflects primarily
the issuance of Common Stock of $15,001 and a net increase in borrowings of
$2,674 under Long Reach's revolving credit agreement during the period. Net cash
provided by financing activities for the fifty-two weeks ended January 1, 2000
reflects the issuance of Common Stock of $12,177, in connection with the 1999
Private Placement.

     At December 30, 2000, the Company owed $11,304 under its revolving credit
facilities. Long-term debt outstanding at December 30, 2000 consisted of $4,398
notes payable to banks and $3,000 of notes payable to stockholders.

     Cash received from the issuance of Common Stock was $15,001 and $12,177 for
the year ended December 30, 2000 and the fifty-two weeks ended January 1, 2000,
respectively. Issuance of Common Stock for the year ended December 30, 2000
reflects (i) the Company's private placement of 916,667 shares of its Common
Stock at $6.00 per share and the exercise of a first call option pursuant to
which a stockholder purchased 500,000 shares of Common Stock at an exercise
price of $5.00 per share, each on February 23, 2000, (ii) the Company's private
placement of 923,077 shares of Common Stock at $6.50 per share on November 10,
2000 and (iii) the Company's private placement of 153,846 shares of Common Stock
at $6.50 per share on November 17, 2000. In the year ended December 30, 2000,
the Company also issued 500,000 shares of its Common Stock, valued at $6.00 per
share, in connection with its acquisition of Long Reach on February 23, 2000.
Issuance of Common Stock of $12,177 for the fifty-two weeks ended January 1,
2000 reflects the 1999 Private Placement.







                                       23
<PAGE>   26

     Capital expenditures for property, plant and equipment totaled $527 for the
year ended December 30, 2000.

     In connection with its acquisition of Long Reach, the Company assumed (and
subsequently refinanced) Long Reach's indebtedness to its lender in the amount
of $10,921. Long Reach's credit agreement, which includes a revolving credit
loan and a term loan, imposes financial and operating covenants on Long Reach.
Except as specifically permitted under the terms of the credit agreement, Long
Reach is prohibited from borrowing money, guaranteeing loans or permitting liens
to be placed on its assets. Long Reach is restricted in its ability to enter
into certain types of transactions, such as mergers, may not sell a substantial
portion of its assets and, unless specifically permitted by the credit
agreement, may not acquire substantially all of the assets of another party.
Long Reach is prohibited from declaring cash dividends (other than to the
Company in an amount equal to its income tax liability) and, in addition, the
credit agreement requires Long Reach to maintain certain financial ratios,
including a leverage ratio and a minimum fixed charge coverage ratio. Also, Long
Reach must maintain a minimum level of net worth and is limited in the amount of
net losses it can sustain during specified periods.

     At December 30, 2000, the Company was in default on two of its financial
covenants under the Long Reach credit agreement. The Long Reach credit agreement
was amended to cure these defaults, revise certain financial covenants and,
effective April 1, 2001, to advance the due date of the revolving loan from
March 31, 2003 to March 31, 2002 and to increase the rate at which interest
accrues to the bank's prime rate plus 2%. As a result of this amendment, the
Company will be required to refinance its Long Reach debt by March 31, 2002.
There can be no assurance that this refinancing can be accomplished.

     In connection with its acquisition of Blue Giant, the Company assumed and
incurred approximately $5,000 of debt secured by Blue Giant's inventory and
assets. The terms of Blue Giant's debt impose financial and operating covenants
on Blue Giant, including a ratio of total debt to net worth, a ratio of senior
debt to earnings, and limiting capital expenditures and corporate distributions.

     At December 30, 2000, the Company was in default on one of the financial
covenants under the Blue Giant credit agreement. Blue Giant's lender amended the
Blue Giant credit agreement to revise this financial covenant and waive this
default.

     The holding company expects to generate sufficient cash to meet its
obligations during fiscal 2001 through management fees allocated to each
operating division and interest paid on intercompany subordinated debt. The
holding company does not expect to fund its obligations during fiscal 2001 from
dividends paid by its subsidiaries. The ability of the Company's subsidiaries,
Long Reach and Blue Giant, to pay dividends to the Company is restricted by
their credit agreements, by law and by the Company's charter, as amended by the
Articles of Amendment. Long Reach's credit agreement prohibits Long Reach from
declaring cash dividends, other than to the Company in an aggregate amount equal
to the income tax liability of the Company attributable to the separate taxable
income of Long Reach and its subsidiaries. In addition to the restrictions on
dividends under Long Reach's credit agreement, as a Delaware corporation Long
Reach may pay dividends out of its surplus (as defined under Delaware law) or,
if there is no surplus, out of its net profits for the fiscal year in which the
dividend is declared or the preceding fiscal year; dividends may not be declared
and paid out of net profits, however, if the capital of Long Reach (as computed
under Delaware law)




                                       24
<PAGE>   27

is less than the aggregate amount of capital represented by the outstanding
stock of all classes having a preference upon the distribution of assets. Blue
Giant's credit agreements prohibit Blue Giant from making any corporate
distributions, including cash dividends, without the prior written consent of
its lender. In addition, as an Ontario corporation Blue Giant is prohibited from
declaring and paying a dividend if there are reasonable grounds for believing
that (i) Blue Giant is, or after the payment would be, unable to pay its
liabilities as they become due, or (ii) the realizable value of Blue Giant's
assets would, after the payment, be less than the aggregate of its liabilities
and its stated capital of all classes of capital stock. The Articles of
Amendment prohibit the Company's subsidiaries from declaring or paying any
dividend or making any distribution on or with respect to their capital stock
without the approval of the holders of at least 75% of all issued and
outstanding Series B Preferred Stock and Series C Preferred Stock voting as a
class.

     As a result of losses incurred in the year ended December 30, 2000, it was
necessary for the Company to raise additional funds for working capital and
general business purposes of the Company and its subsidiaries during the first
quarter of 2001. On March 16, 2001, the Company effected the Preferred Stock
Investment. See "DESCRIPTION OF BUSINESS - Subsequent Developments."

     The Company believes that the combination of its existing working capital,
including working capital provided by the Preferred Stock Investment (see
"DESCRIPTION OF BUSINESS - Subsequent Developments"), current cash balances and
available borrowing under existing lines of credit will be adequate to meet its
anticipated capital and liquidity requirements with respect to the operations of
the Company for fiscal year 2001. See however "Forward-Looking Statements"
below.

Quantitative And Qualitative Disclosures

     Market Risk. The Company is exposed to market risks. Market risk is the
potential loss arising from adverse changes in market prices and rates. The
Company does not enter into derivative instruments. The Company's market risks
could arise from changes in interest rates and foreign currency exchange rates.

     Interest rate risk. The Company is subject to market risk exposure related
to changes in interest rates. Accordingly, the Company's net income is affected
by changes in interest rates. Assuming the Company's current level of
borrowings, a 100 basis point increase in interest rates under these borrowings
would increase the Company's net loss for the year ended December 30, 2000 by
approximately $157. In the event of an adverse change in interest rates, the
Company could take action to mitigate its exposure; however, due to the
uncertainty of the actions that would be taken and their possible effects, this
analysis assumes no such actions. Furthermore, this analysis does not consider
the effects of the change in the level of overall economic activity that could
exist in such an environment.

     Foreign exchange currency risk. The Company's earnings are affected by
foreign exchange rate fluctuations. As of December 30, 2000, the Company had
foreign operations in Australia and Canada. The translation adjustment during
the year ended December 30, 2000 was




                                       25
<PAGE>   28

a loss of $100, which was recognized in accumulated other comprehensive loss in
the consolidated balance sheet included herein.

Recent Accounting Pronouncements

     Statement of Financial Accounting Standards No. 133. Accounting for
Derivative Instruments and Hedging Activities ("SFAS 133"), as amended by SFAS
No. 137 and SFAS No. 138, was issued by the Financial Accounting Standards Board
in June 1998. SFAS 133 standardizes the accounting for derivative instruments,
including certain derivative instruments embedded in other contracts. Under the
standard, entities are required to carry all derivative instruments in the
statement of financial position at fair value. The Company has adopted SFAS 133
as of January 1, 2001. The Company does not expect the adoption of SFAS 133 will
have a material effect on its financial condition or results of operation
because the Company historically has not entered into derivative instruments nor
does the Company use or intend to use derivative financial instruments or
derivative commodity instruments.

     In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements
("SAB No. 101"). SAB No. 101 summarizes the SEC staff's views in applying
generally accepted accounting principles to selected revenue recognition issues.
The Company has adopted SAB No. 101 effective January 2, 2000, which has not had
a material impact on the Company's consolidated financial position or results of
operation.

FORWARD-LOOKING STATEMENTS

     Statements contained in this Form 10-KSB that are not purely historical are
forward-looking statements and are being provided in reliance upon the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements may be identified, without limitation, by use of the
words "expects," "anticipates," "believes," "estimates," "intends" and similar
expressions. All forward-looking statements are made as of the date hereof and
are based on current management expectations and information available to the
Company as of such date. The Company assumes no obligation to update any
forward-looking statement. It is important to note that actual results could
differ materially from historical results or those contemplated in the
forward-looking statements. Forward-looking statements involve a number of risks
and uncertainties and may include trend information. Readers are cautioned not
to place undue reliance on any such forward-looking statements.






                                       26
<PAGE>   29


Item 7. Financial Statements.


<TABLE>
<S>                                                                                                            <C>
Contents........................................................................................................F-1
Independent auditors' report....................................................................................F-2
Independent auditors' report....................................................................................F-3
Consolidated Balance Sheet at December 30, 2000.................................................................F-4
Consolidated Statements of Operations for the Year ended December 30, 2000
     and the Fifty-two Weeks Ended January 1, 2000..............................................................F-5
Consolidated Statements of Stockholders' Equity and Comprehensive Loss for the Year
     ended December 30, 2000 and the Fifty-two Weeks Ended January 1, 2000......................................F-6
Consolidated Statements of Cash Flows for the Year ended December 30, 2000
     and the Fifty-two Weeks Ended January 1, 2000..............................................................F-7
Notes to Consolidated Financial Statements......................................................................F-8
</TABLE>





                                      F-1
<PAGE>   30

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
TBM Holdings, Inc.
Westport, CT

We have audited the accompanying statements of operations, stockholders' equity
and comprehensive income (loss) and cash flows of TBM Holdings, Inc. for the
fifty-two weeks ended January 1, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

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

In our opinion, the financial statements enumerated above present fairly, in all
material respects, the results of operations, and cash flows of TBM Holdings,
Inc. for the fifty-two weeks ended January 1, 2000 in conformity with generally
accepted accounting principles.

Richard A. Eisner & Company, LLP

New York, New York
February 11, 2000





                                      F-2
<PAGE>   31

                          INDEPENDENT AUDITORS' REPORT


The Board of Directors and Stockholders
TBM Holdings Inc.:


We have audited the accompanying consolidated balance sheet of TBM Holdings
Inc. and subsidiaries as of December 30, 2000 and the related consolidated
statements of operations, stockholders' equity and comprehensive loss, and cash
flows for the year then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United State of America. 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 audit provides a reasonable basis
for our opinion.

In our opinion, the December 30, 2000 consolidated financial statements referred
to above present fairly, in all material respects, the financial position of TBM
Holdings Inc. and subsidiaries as of December 30, 2000, and the results of their
operations and their cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.


                                                    KPMG LLP
Houston, Texas
March 30, 2001





                                      F-3
<PAGE>   32
                        TBM HOLDINGS INC. AND SUBSIDIARIES
                           Consolidated Balance Sheet
                 (In thousands, except share and per share data)
<TABLE>
<CAPTION>
                                                                                December 30,
       ASSETS                                                                      2000
                                                                                ------------
<S>                                                                             <C>
Current assets:
     Cash and cash equivalents                                                    $  1,833
     Accounts receivable, net of allowance for doubtful accounts of
         $340 at December 30, 2000                                                  12,182
     Inventories, net                                                               10,211
     Prepaid expenses and other receivables                                            219
     Deferred taxes, net                                                                33
                                                                                  --------
                     Total current assets                                           24,478
                                                                                  --------
Property, plant and equipment, at cost                                              10,842
     Less accumulated depreciation                                                     594
                                                                                  --------
                     Net property, plant and equipment                              10,248
                                                                                  --------

Goodwill and other intangibles,
     net of accumulated amortization of $469                                        15,085
Other assets                                                                           357
                                                                                  --------
                                                                                  $ 50,168
                                                                                  ========
    LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Trade accounts payable                                                       $  5,877
     Accrued expenses                                                                3,522
     Current portion of revolving credit loans                                       4,057
     Current portion of long-term debt                                                 926
     Bank overdraft payable                                                          1,329
                                                                                  --------
                     Total current liabilities                                      15,711
                                                                                  --------

Revolving credit loans                                                               7,247
Long-term debt, excluding current portion                                            6,472
Other long-term liabilities                                                             21

Stockholders' equity:
     Preferred stock, $.001 par value.  Authorized 15,000,000 shares;
         no shares issued and outstanding                                             --
     Common stock, $.001 par value. Authorized 10,000,000 shares; 5,595,000 and
         2,601,000 shares issued and outstanding at December 30, 2000 and
         January 1, 2000, respectively                                                   6
     Additional paid-in capital                                                     42,262
     Accumulated other comprehensive loss - foreign currency translation
         Adjustments                                                                  (100)
     Accumulated deficit                                                           (21,451)
                                                                                  --------
                    Total stockholders' equity                                      20,717
                                                                                  --------
Commitments and contingencies                                                     $ 50,168
                                                                                  ========
</TABLE>

See accompanying notes to consolidated financial statements.




                                      F-4
<PAGE>   33

                       TBM HOLDINGS INC. AND SUBSIDIARIES
                      Consolidated Statements of Operations
                 (In thousands, except share and per share data)

<TABLE>
<CAPTION>
                                                                               Fifty-two
                                                                Year ended     weeks ended
                                                                December 30,   January 1,
                                                                    2000       2000
                                                               -------------   ----------
<S>                                                            <C>             <C>
Net sales                                                      $    38,586     $     --
                                                               -----------     ----------
Cost of sales                                                       33,728           --
             Gross profit                                            4,858           --
Selling, general and administrative expenses                        11,886            446
Restructuring expenses                                                 746           --
Loss on impaired assets                                                515           --
                                                               -----------     ----------
             Operating loss                                         (8,289)          (446)
Interest expense                                                    (1,123)          --
Other income, net                                                      345            470
                                                               -----------     ----------
             Income (loss) from continuing operations before
                         income tax expense                         (9,067)            24

Income tax expense                                                      53           --
             Income (loss) from continuing operations               (9,120)            24
       Income from discontinued operations                            --               15
                                                               -----------     ----------
             Net income (loss)                                 $    (9,120)    $       39
                                                               ===========     ==========
Basic and diluted income (loss) per share:
       Continuing operations                                   $     (2.09)    $     0.02
       Discontinued operations                                        --             0.01
                                                               -----------     ----------
                                                               $     (2.09)   $      0.03
                                                               ===========     ==========
Weighted average shares outstanding:
       Basic                                                     4,356,340      1,401,000
                                                               ===========     ==========
       Diluted                                                   4,356,340      1,464,000
                                                               ===========     ==========
</TABLE>

See accompanying notes to consolidated financial statements.





                                      F-5
<PAGE>   34





                       TBM HOLDINGS INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity and Comprehensive Income (Loss)
                                 (In thousands)
     Year ended December 30, 2000 and Fifty-two weeks ended January 1, 2000



<TABLE>
<CAPTION>
                                                  Preferred stock              Common stock          Additional
                                              ----------------------       ----------------------     paid-in
                                               Shares       Amount         Shares      Amount         capital
                                              --------   -----------      --------    -----------    -----------
<S>                                           <C>        <C>              <C>         <C>         <C>
Balances at December 31, 1998                   2,394      $      2            22     $   --           $ 11,583
Cancellation of treasury shares
       and return of preferred stock           (2,394)           (2)         --           --               (173)
Contributions to capital                         --            --            --           --                518
Issuance of common stock for cash, net           --            --           2,546            3           10,089
Issuance of common stock warrants                --            --            --           --              2,082
Issuance and exercise of options                 --            --              33         --                165
Comprehensive income -
       Net income                                --            --            --           --                 --
                                              -------      --------       -------     --------          --------
Balances at January 1, 2000                      --            --           2,601            3           24,264
Issuance of common stock for
       acquisition                               --            --             500            1            2,999
Issuance of common stock for cash, net           --            --           2,494            2           14,999
Comprehensive loss:
       Net loss                                  --            --            --           --                 --
       Foreign currency
            Translation adjustments              --            --            --           --                 --
                Total comprehensive loss
                                              -------      --------       -------     --------          --------
Balances at December 30, 2000                    --        $   --           5,595     $      6          $ 42,262
                                              =======      ========       =======     ========          ========
</TABLE>

<TABLE>
<CAPTION>
                                             Accumulated
                                                other
                                             comprehensive  Accumulated   Treasury
                                                loss          deficit      stock         Total
                                            -------------- ------------  ----------   -----------
<S>                                            <C>           <C>           <C>           <C>
Balances at December 31, 1998                  $   --        $(12,370)     $   (175)     $   (960)
Cancellation of treasury shares
       and return of preferred stock               --            --             175          --
Contributions to capital                           --            --            --             518
Issuance of common stock for cash, net             --            --            --          10,092
Issuance of common stock warrants                  --            --            --           2,082
Issuance and exercise of options                   --            --            --             165
Comprehensive income -
       Net income                                  --              39          --              39
                                               --------      --------      --------      --------
Balances at January 1, 2000                        --         (12,331)         --          11,936
Issuance of common stock for
       acquisition                                 --            --            --           3,000
Issuance of common stock for cash, net             --            --            --          15,001
Comprehensive loss:
       Net loss                                    --          (9,120)         --          (9,120)
       Foreign currency
            Translation adjustments                (100)         --            --            (100)
                                                                                         --------
               Total comprehensive loss                                                    (9,220)
                                               --------      --------      --------      --------
Balances at December 30, 2000                  $   (100)     $(21,451)         --        $ 20,717
                                               ========      ========      ========      ========
</TABLE>



See accompanying notes to consolidated financial statements.






                                      F-6
<PAGE>   35

                       TBM HOLDINGS INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                                   Fifty-two
                                                                                    Year ended    weeks ended
                                                                                    December 30,   January 1,
                                                                                    2000              2000
                                                                                    ------------  -----------
<S>                                                                                 <C>           <C>
Cash flows from operating activities:
      Net income (loss)                                                             $ (9,120)     $     39
      Adjustments to reconcile net income (loss) to net cash used in operating
          activities:
             Depreciation                                                                660             1
             Amortization                                                                688          --
             Bad debt expense                                                            215          --
             Loss on impaired assets                                                     515          --
             Loss on sale of assets                                                       56          --
             Gain on satisfaction of legal fees                                         --            (127)
             Changes in assets and liabilities, net of effects of acquisitions:
                 Accounts receivable, net                                             (1,279)         --
                 Inventories                                                           1,706          --
                 Prepaid expenses and other receivables                                  (58)          (10)
                 Other assets                                                           (153)           (3)
                 Trade accounts payable                                                 (667)          (11)
                 Accrued expenses                                                       (481)         --
                                                                                    --------      --------
                             Net cash used in operating activities                    (7,918)         (111)
                                                                                    --------      --------
Cash flows from investing activities:
      Payment for businesses purchased, net of cash acquired                         (19,480)         --
      Capital expenditures for property, plant and equipment, net                       (527)           (4)
      Proceeds from sales of property, plant and equipment                                29          --
                                                                                    --------      --------
                             Net cash used in investing activities                   (19,978)           (4)
                                                                                    --------      --------
Cash flows from financing activities:
      Bank overdraft                                                                     268          --
      Debt issuance costs paid                                                          (208)         --
      Net borrowings under revolving credit loans                                      2,674          --
      Payments on long-term debt                                                         (57)         --
      Proceeds from issuance of common stock and warrants                             15,001        12,177
                                                                                    --------      --------
                             Net cash provided by financing activities                17,678        12,177
                                                                                    --------      --------
                             Effect of foreign currency translation on cash              (13)         --
                                                                                    --------      --------
                             Net increase (decrease) in cash                         (10,231)       12,062
Cash and cash equivalents at beginning of year                                        12,064             2
                                                                                    --------      --------
Cash and cash equivalents at end of year                                            $  1,833      $ 12,064
                                                                                    ========      ========
Supplemental disclosure of cash flow information:
      Cash paid during the year for interest                                        $    978      $   --
                                                                                    ========      ========
      Cash paid during the year for income taxes                                          74          --
Supplemental diclosure of noncash activities:
      Common stock issued for acquisition                                           $  3,000      $   --
      Contribution of amount due to former officer to paid-in capital                   --             518
      Issuance of options in full settlement of certain accounts payable                --             162
                                                                                    ========      ========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-7
<PAGE>   36

                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000

(1)  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     DESCRIPTION OF BUSINESS

     The primary business of TBM Holdings Inc. (the "Company"), through the
     operations of its wholly-owned subsidiaries, Long Reach, Inc. ("Long
     Reach") and Blue Giant Equipment Corporation ("Blue Giant"), and Long
     Reach's subsidiaries, Presto Lifts, Inc. ("Presto") and Long Reach Brudi
     Pacific Pty Ltd, is the manufacturing and marketing of hydraulically
     activated material handling equipment in Houston, Texas; Brampton, Ontario,
     Canada; Pawtucket, Rhode Island; and Adelaide, Australia. The Company
     markets the majority of its products through numerous material-handling
     dealers in the U.S., Canada and other international locations. The
     Company's raw materials are readily available, and the Company is not
     dependent on a single supplier or only a few suppliers of common
     proprietary products and is not dependent on any one customer. The Company
     was formerly known as Specialty Retail Group, Inc. ("Specialty"), a holding
     company that was engaged through its subsidiaries in the operation and
     franchising of retail specialty toy stores. Control of the Company changed
     during June 1999 as a result of a capital infusion into the Company and
     sale of shares constituting 99% of the outstanding shares after such sale.
     As part of the recapitalization, the Company's stock was reverse split 1
     for 412.92. Such reverse split is reflected retroactively throughout these
     financial statements. The only operations of Specialty prior to the change
     in control constituted maintaining a business office and complying with its
     reporting obligations as a publicly owned company.

     PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the accounts of the Company
     and its subsidiaries. All significant intercompany transactions have been
     eliminated in consolidation. Through June 15, 1999, the Company's
     subsidiaries included BBHI and SRG Management Corp. (wholly-owned), neither
     of which had any operations. All operations of Specialty for the fifty-two
     weeks ended January 1, 2000, are reported as results of discontinued
     operations.

     FISCAL YEAR

     In connection with the acquisition of Long Reach Holdings, Inc. (see note
     2), the Company changed its fiscal year to a 52/53 week fiscal year ending
     on the Saturday closest to December 31. Such change has been reflected in
     these financial statements for all periods presented. All references to
     years relate to fiscal years rather than calendar years.



                                                                     (continued)

                                      F-8
<PAGE>   37
                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000

     RECLASSIFICATION

     Certain amounts previously reported in the financial statements have been
     reclassified to conform to the current year presentation.

     USE OF ESTIMATES

     Management of the Company has made a number of estimates and assumptions
     related to the reported amounts of assets and liabilities and the
     disclosure of contingent assets and liabilities to prepare these financial
     statements in conformity with accounting principles generally accepted in
     the United States of America. Actual results could differ from those
     estimates.

     CASH EQUIVALENTS

     Cash equivalents for purposes of reporting cash flows consisted of highly
     liquid debt instruments purchased with an original maturity of three months
     or less. Such accounts are carried at cost plus accrued interest, which
     approximates market.

     INVENTORY

     Inventories are stated at the lower of cost or market. Cost is determined
     using the first-in, first-out (FIFO) method.

     PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment are stated at cost. Equipment under capital
     leases is stated at the present value of minimum lease payments at the
     inception of the lease.

     Depreciation of property, plant and equipment is calculated on the
     straight-line method, based on the estimated useful lives of the various
     assets, as follows:

<TABLE>
<CAPTION>
                                                             LIFE
                                                          -------------
<S>                                                       <C>
              Buildings and improvements                  20 - 30 years
              Machinery and equipment                      3 - 12 years
              Furniture and fixtures                        7 - 8 years
</TABLE>


     Equipment held under capital leases is depreciated on a straight-line basis
     over the shorter of the lease term or estimated useful life of the asset.

     INCOME TAXES

     Deferred tax assets and liabilities are recognized for the estimated future
     tax consequences attributable to differences between the financial
     statement carrying amounts of existing assets and liabilities and their
     respective tax





                                      F-9
<PAGE>   38

                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000

     bases and operating loss and tax credit carryforwards. Deferred tax assets
     and liabilities are measured using enacted tax rates in effect for the year
     in which those temporary differences are expected to be recovered or
     settled. The effect on deferred tax assets and liabilities of a change in
     tax rates is recognized in income in the period that includes the enactment
     date.

     GOODWILL, OTHER INTANGIBLES AND DEBT ISSUANCE COSTS

     Goodwill is amortized on a straight-line basis over 20 years. Other
     intangibles are being amortized on a straight-line basis over five years.
     Debt issuance costs are being amortized over the life of the related debt
     and are included as a component of interest expense.

     IMPAIRMENT OF LONG-LIVED ASSETS

     The Company assesses the recoverability of long-lived assets, including
     goodwill, by determining whether the amortization or depreciation of the
     asset balance over its remaining life can be recovered through undiscounted
     future operating cash flows associated with the asset. The amount of
     impairment, if any, is measured based upon projected discounted future
     operating cash flows using a discount rate reflecting the Company's average
     cost of funds. The assessment of the recoverability of long-lived assets
     will be impacted if estimated future operating cash flows are not achieved.

     REVENUE RECOGNITION AND PRODUCT WARRANTY

     Revenue is recognized at the time the product is shipped and risk of loss
     has passed to the customer. The Company warrants that all manufactured
     equipment will be free from defects in workmanship, material and parts.
     Warranty periods range from six months to one year from the original date
     of purchase, depending on the product. The Company provides for estimated
     product warranty at the time of sale.

     COMPREHENSIVE INCOME (LOSS)

     Statement of Financial Accounting Standards ("SFAS") No. 130 Reporting
     Comprehensive Income, establishes standards for reporting and presentation
     of comprehensive income (loss) and its components. Comprehensive income
     (loss), consisting of net income (loss) and foreign currency translation
     adjustments, is presented in the consolidated statements of stockholders'
     equity and comprehensive income (loss). SFAS No. 130 does not significantly
     affect the financial position or results of operations of the Company.

     FOREIGN CURRENCY GAINS AND LOSSES

     The foreign-owned assets and liabilities of the Company have been
     translated to United States dollars using the exchange rate in effect at
     the balance sheet date. Results of foreign operations have been translated
     using the average




                                      F-10
<PAGE>   39

                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000

     exchange rate during the periods of operation. Resulting translation
     adjustments have been recorded as a component of "Accumulated Other
     Comprehensive Loss" in the Consolidated Statements of Stockholders' Equity
     and Comprehensive Income (Loss). Foreign currency transaction gains and
     losses are included in the Consolidated Statements of Operations as they
     occur.

     FAIR VALUE OF FINANCIAL INSTRUMENTS

     Fair value estimates are made at discrete points in time based upon
     relevant market information. These estimates may be subjective and involve
     uncertainties and matters of significant judgment and therefore cannot be
     determined with precision. The Company believes that the carrying amounts
     of its current assets, current liabilities, revolving credit loans and
     long-term debt approximate the fair value of such items at December 30,
     2000.

     INCOME (LOSS) PER COMMON SHARE

     Basic income (loss) per share is computed by dividing net income (loss) by
     the weighted average number of common shares outstanding during the period.
     Diluted income per share is determined on the assumption that outstanding
     dilutive stock options and other common stock equivalents have been
     exercised and the aggregate proceeds as defined were used to reacquire
     common stock using the average price of such common stock for the period.

     The following table summarizes the calculation of weighted average number
     of common shares and weighted average number of diluted common shares and
     diluted income (loss) per common share:

<TABLE>
<CAPTION>
                                                                     Fifty-two
                                                   Year ended       weeks ended
                                               December 30, 2000  January 1, 2000
                                               -----------------  ---------------
<S>                                            <C>                <C>
     Net income (loss) applicable to
         common stock                             $    (9,120)     $        39

     Weighted average number of common
         shares outstanding                         4,356,340        1,401,000
     Warrants                                            --             63,000
                                                  -----------      -----------
     Weighted average number of
         diluted common shares
         outstanding                                4,356,340        1,464,000
                                                  ===========      ===========

     Basic income (loss) per common share         $     (2.09)     $      0.03
                                                  ===========      ===========

     Diluted income (loss) per common share       $     (2.09)     $      0.03
                                                  ===========      ===========
</TABLE>




                                      F-11
<PAGE>   40


                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000


     For the year ended December 30, 2000, 130,146 and 1,201,175 shares subject
     to stock options and warrants, respectively, were not included in the
     calculation of diluted income (loss) per share, because to do so would have
     been anti-dilutive.

     STOCK-BASED COMPENSATION

     SFAS No. 123, Accounting for Stock-Based Compensation, allows a company to
     adopt a fair value based method of accounting for its stock-based
     compensation plans, or to continue to follow the intrinsic value method of
     accounting prescribed by Accounting Principles Board ("APB") Opinion No. 25
     Accounting for Stock Issued to Employees. The Company has elected to
     continue to follow APB Opinion No. 25. If the Company had adopted SFAS No.
     123, net income (loss), basic income (loss) per share and diluted income
     (loss) per share for the periods presented would have decreased (increased)
     as discussed in note 8.

     NEW ACCOUNTING PRONOUNCEMENTS

     SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities,
     as amended by SFAS No. 137 and SFAS No. 138, was issued in June 1998. SFAS
     No. 133 standardizes the accounting for derivative instruments, including
     certain derivative instruments embedded in other contracts. Under the
     standard, entities are required to carry all derivative instruments in the
     statement of financial position at fair value. The Company has adopted SFAS
     No. 133 beginning December 31, 2000 and does not expect the adoption of
     SFAS No. 133 to have a material effect on its financial condition or
     results of operations.

(2)  ACQUISITIONS

     On February 23, 2000, the Company acquired Long Reach Holdings, Inc. (the
     "Acquired Corporation") in a merger transaction (the "Long Reach Merger")
     pursuant to which the Acquired Corporation merged into Long Reach. The
     aggregate consideration in respect of the acquisition was (1) $1,500 of
     cash, (2) the issuance of 500,000 shares of the Company's Common Stock
     valued at $6.00 per share, (3) Long Reach's issuance of $3,000 of new
     subordinated notes to refinance a portion of existing subordinated notes
     with certain stockholders of the Acquired Corporation and (4) the
     assumption by Long Reach of $10,921 of outstanding bank debt at the date of
     the acquisition. Upon closing, the Company paid down $5,338 of the debt
     assumed. The Long Reach Merger has been accounted for using the purchase
     method of accounting, effective at the date of acquisition.


                                                                     (continued)



                                      F-12
<PAGE>   41

                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000

     On May 16, 2000, the Company, through Long Reach, acquired all of the
     capital stock of Lee Engineering Company, Inc. ("Lee Engineering") for
     $7,466 of cash (the "Lee Engineering Acquisition"). On May 22, 2000, the
     Company changed the name of Lee Engineering to Presto Lifts, Inc. ("Presto
     Lifts"). The Lee Engineering Acquisition has been accounted for using the
     purchase method of accounting, effective at the date of the acquisition.

     On November 10, 2000, the Company, through Blue Giant, acquired
     substantially all of the assets and specific liabilities of Blue Giant
     Limited ("BG Limited") and certain intellectual property of Blue Giant
     Corporation for $8,307 (the "Blue Giant Acquisition"). The Blue Giant
     Acquisition was financed by (1) the Company's issuance of 923,077 shares of
     common stock to existing shareholders at $6.50 per share and (2) Blue
     Giant's obtaining a loan agreement with a bank which advanced $5,190 at
     closing. Also at closing, Blue Giant paid down $2,694 of debt of BG
     Limited. The Blue Giant Acquisition has been accounted for using the
     purchase method of accounting, effective at the date of acquisition.

     The purchase price was allocated to assets purchased and liabilities
     assumed as follows:

<TABLE>
<CAPTION>
                                           Long Reach      Lee Engineering          Blue Giant
                                                Merger       Acquisition           Acquisition
                                           -----------     ----------------       --------------
<S>                                        <C>             <C>                    <C>
     Working capital                        $ (1,606)          $  2,093               $  1,629
     Property and equipment                    6,985                641                  3,351
     Goodwill and other intangibles            7,495              4,732                  3,327
     Other assets                                326                 --                     --
     Long-term debt                           (8,583)                --                     --
     Other long-term liabilities                (117)                --                     --
                                            --------          ---------               --------
     Purchase price                         $  4,500          $   7,466               $  8,307
                                            ========          =========               ========
</TABLE>

     Results for the year ended December 30, 2000 include the operating results
     of Long Reach for the period February 24, 2000 through December 30, 2000,
     the operating results of Presto Lifts for the period May 16, 2000 through
     December 30, 2000 and the operating results of Blue Giant for the period
     November 11, 2000 through December 30, 2000.

     Set forth below is certain unaudited summary pro forma combined financial
     data of the Company for the years ended December 30, 2000 and January 1,
     2000, based upon historical information that has been adjusted to reflect
     the


                                                                     (continued)


                                      F-13
<PAGE>   42

                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000

     Long Reach Merger, the Lee Engineering Acquisition and the Blue Giant
     Acquisition as if such transactions occurred at January 1, 1999. The
     unaudited summary pro forma combined financial data is based upon certain
     assumptions and estimates, and therefore does not purport to be indicative
     of the results that would have been obtained had the transactions been
     completed as of such date or indicative of future results of operations and
     financial position.

               Unaudited Summary Pro Forma Combined Financial Data

<TABLE>
<CAPTION>
                                                    Year ended                 Year ended
                                                 December 30, 2000           January 1, 2000
                                                 -----------------           ---------------
<S>                                                 <C>                        <C>
      Net sales                                     $    70,112                 $  78,088
      Loss from continuing operations                    (9,757)                   (3,412)
      Net loss                                      $    (9,757)                $  (3,397)
                                                    ===========                 =========
      Basic and diluted income (loss) per share:
          From continuing operations                $     (1.87)                $   (1.21)
          From discontinued operations                       --                       .01
                                                    -----------                 ---------
          Net                                       $     (1.87)                $   (1.20)
                                                    ===========                 ==========
      Basic and diluted weighted average
          shares outstanding                          5,221,883                  2,824,000
                                                     ==========                  =========
</TABLE>

(3)  INVENTORIES, NET

     Inventory costs at December 30, 2000 are summarized as follows:

<TABLE>
<CAPTION>
                                        December 30, 2000
                                        -----------------
<S>                                         <C>
        Raw materials                       $  5,878
        Work in process                        1,512
        Finished goods                         2,821
                                            --------
                 Total inventories          $ 10,211
                                            ========
</TABLE>

                                                                     (continued)


                                      F-14
<PAGE>   43
                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000


(4)  PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment costs at December 30, 2000 are summarized as
     follows:

<TABLE>
<CAPTION>
                                 December 30, 2000
                                 -----------------
<S>                                 <C>
     Land                           $   865
     Buildings and improvements       3,462
     Leasehold improvements             282
     Machinery and equipment          5,116
     Furniture and fixtures             749
     Autos & trucks                     368
                                    -------
                                    $10,842
                                    =======
</TABLE>

     Included in property and equipment are assets which were sold in February
     2001 at their carrying values of $129.






                                      F-15
<PAGE>   44
                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000


(5)  LONG-TERM DEBT AND REVOLVING CREDIT LOANS

     Long-term debt at December 30, 2000 is summarized as follows:

<TABLE>
<CAPTION>
                                                                      December 30, 2000
                                                                      -----------------
<S>                                                                   <C>
     Note payable to bank, due in monthly installments of $50 or $60
       beginning January 1, 2001, plus interest at the lender's prime
       rate plus 1.0%, with final payment due March 31, 2003               $2,500
     Note payable to bank, due in monthly installments of $6 beginning
       December 1, 2000, plus interest at the lender's prime rate
       plus 1.0%, with final payment due November 1, 2020                   1,442
     Note payable to bank, due in monthly installments of $11 beginning
        December 1, 2000, plus interest at the lender's prime rate plus
        1.0%, with final payment due May 1, 2004                              456
     Notes payable to stockholders, interest at 0% through December 31,
       2000, 6% beginning January 1, 2001 through February 23, 2004,
       and Senior Debt Rate plus 2% thereafter until maturity on
       February 23, 2005                                                    3,000
     Long Reach credit agreement (see below)                                7,247
     Blue Giant credit agreement (see below)                                4,057
                                                                          -------
                  Total long-term debt                                     18,702
     Less current portion                                                   4,983
                                                                          -------
                  Long-term debt, excluding current portion               $13,719
                                                                          =======
</TABLE>


     In connection with the Long Reach Merger and the Lee Engineering
     Acquisition (see note 2), the Company amended Long Reach's revolving credit
     agreement (the "Long Reach Credit Agreement") and term loan with a bank.
     The Long Reach Credit Agreement includes a revolving credit loan with a
     commitment of $10,000, subject to borrowing base availability and other
     items, and a term loan of $2,500.



                                      F-16
<PAGE>   45
                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000



     Borrowings under the Long Reach Credit Agreement accrue interest at the
     bank's prime rate (9.5% at December 30, 2000) plus 0.25% to 1% under
     differing circumstances. Subject to borrowing base limitations calculated
     on eligible inventory and accounts receivable, the revolving credit loan is
     due and payable on March 31, 2003. Additionally, a one-quarter percent fee
     per annum is paid to the bank for the unused portion of the revolving loan
     commitment. A closing fee of $125 was payable to the bank at the time of
     entering into the Long Reach Credit Agreement in connection with the Long
     Reach Merger. At December 30, 2000, the borrowing base availability for the
     revolving credit loan was determined to be $7,984, of which the Company had
     utilized $7,247.

     The Long Reach Credit Agreement also provides that the term loan be repaid
     in principal installments of $60, payable on the first day of each month
     beginning January 1, 2001, and continuing through and including December 1,
     2001, and $50, payable on the first day of each month beginning January 1,
     2002, and continuing through March 31, 2003. The Company is required to
     meet certain financial covenants as defined in the Long Reach Credit
     Agreement. At December 30, 2000, the Company was in default on two of its
     financial covenants under the Long Reach Credit Agreement. On March 30,
     2001, the bank issued an amendment to the Long Reach Credit Agreement,
     which included a waiver that effectively cured these defaults. In addition,
     the bank revised certain financial covenants, amended the due date of the
     revolving credit loan to March 31, 2002 and amended the rate at which
     interest accrues to the bank's prime rate plus 2%, effective April 1, 2001.
     As a result of this amendment, the Company will be required to refinance
     its Long Reach debt by March 31, 2002. There can be no assurance that this
     refinancing can be accomplished.

     The $3,000 notes payable to stockholders were recorded at a discount at
     acquisition date and interest was imputed at 6% using the interest method
     to reflect an effective interest rate over the life of the notes. On March
     16, 2001 the annual rate of interest on the notes payable to stockholders
     increased from 6% to 10% effective January 1, 2001 (see note 14).

     The notes payable to stockholders and the Long Reach term loan and
     revolving credit loan are secured by liens on substantially all of the
     assets of Long Reach and Presto Lifts. In addition, the Long Reach Credit
     Agreement contains various restrictions, including restrictions relating to
     entering into certain activities, payment of dividends, investments,
     capital leases and purchases and sales of assets, and also requires
     compliance with certain financial ratios and minimum levels of working
     capital.






                                      F-17
<PAGE>   46

                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000


     In connection with the Blue Giant Acquisition (see note 2), Blue Giant
     entered into a credit agreement (the "Blue Giant Credit Agreement") with a
     Canadian bank. The Blue Giant Credit Agreement includes a revolving credit
     loan with a commitment of $4,670, subject to borrowing base availability
     and other items, and term loans of $1,442 and $456, respectively.
     Borrowings under the Blue Giant Credit Agreement accrue interest at the
     bank's prime rate (7.5% at December 30, 2000) plus 0.625% or 1.0% for the
     revolving credit agreement and the term loans, respectively. Subject to
     borrowing base limitations calculated on eligible inventory and accounts
     receivable, the revolving credit loan is reviewed on an annual basis.
     Additionally, a one-quarter percent fee per annum is paid to the bank for
     the unused portion of the revolving loan commitment. In addition, the Blue
     Giant Credit Agreement contains certain financial and operating covenants.
     At December 30, 2000, the borrowing base availability for the revolving
     credit loan was determined to be $4,130, of which Blue Giant had utilized
     $4,057. At December 30, 2000, the Company was in default on one of its
     financial covenants under the Blue Giant Credit Agreement. On March 29,
     2001, the bank issued an amendment to the Blue Giant Credit Agreement,
     which included a waiver that effectively cured these defaults and amended
     certain debt covenants.

     The aggregate maturities of the Company's long-term debt and revolving
     credit loans at December 30, 2000 are as follows:

<TABLE>
<CAPTION>
         Year ending
     ------------------
<S>                                          <C>
     December 29, 2001                       $  4,983
     December 28, 2002                          8,051
     January 3, 2004                            1,383
     January 1, 2005                              132
     December 31, 2005                          3,072
     Thereafter                                 1,081
                                             --------
                                             $ 18,702
                                             ========
</TABLE>

(6)  ASSET IMPAIRMENT AND RESTRUCTURING CHARGES

     On October 2, 2000, the Company announced plans to exit its Little Rock,
     Arkansas facility. Available capacity at its other manufacturing facilities
     eliminated the need for this location. Product line transfers began
     immediately and were completed by December 30, 2000. The lessor was
     notified that the Company elected to terminate its lease and exit the
     facility by March 13, 2001. Certain equipment was disposed of through a
     February 2001 auction. This exit plan resulted in the involuntary
     termination of substantially all of the 82 salaried and hourly employees at
     Little Rock.





                                      F-18
<PAGE>   47
                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000



     Restructuring expenses of $746 were recorded in the fourth quarter of
     fiscal 2000 and are reported separately on the Consolidated Statement of
     Operations. Involuntary termination benefits represented $639 of the total
     restructuring charge. The remaining $107 represented costs incurred to
     manage the closing process and prepare the facility for exit. As of
     December 30, 2000, $350 (including $268 involuntary termination benefits)
     had been paid. The remaining accrual at December 30, 2000 of $396 was
     substantially paid by March 30, 2001.

     Additionally, a $515 loss on impaired assets was recorded to write-down
     certain equipment to fair value. This equipment was disposed of in a
     February 2001 auction.

(7)  STOCKHOLDERS' EQUITY

     Immediately prior to the closing of a private placement on June 15, 1999
     (described below), the former majority stockholder, in his capacity as sole
     director of the Company, authorized, and holders of a majority of the
     voting stock of the Company approved: (i) a 1 for 412.92 reverse stock
     split of the Company's common stock for stockholders of record as of June
     15, 1999, and (ii) the contribution to capital of the Company's treasury
     shares. The reverse stock split reduced the number of outstanding shares
     from 9,084,238 to 22,000 shares. In addition, the Company changed its name
     from Specialty Retail Group, Inc. to TBM Holdings Inc.

     On June 15, 1999, the Company completed a private placement of its common
     stock pursuant to which it issued and sold 2,546,000 shares of common stock
     for $5.00 per share for aggregate gross proceeds to the Company of $12,730.
     Approximately $2,082 of the proceeds were allocated to common stock
     warrants as described below. The offering was made solely to accredited
     investors and the Company paid a placement agent fee of $30 and various
     other costs, see below. In connection with the private placement, the
     Company agreed to offer, with a first call option to one of the investors
     (the "Investor"), additional shares at the private placement price of $5.00
     per share upon the Company's first acquisition of a business. The number of
     shares purchasable was limited to an overall maximum of 1,000,000 shares,
     except that the number of shares available to the Investor was limited to
     that number of shares which would bring said Investor's total holdings of
     Company stock to 25% on a fully diluted basis.

     The private placement was effectuated pursuant to a Stock Purchase and
     Reorganization Agreement (the "Purchase Agreement"). The Purchase Agreement
     was among the Company, the majority stockholder of the Company prior to the
     private placement, and Colt Services, Inc. and TBM




                                      F-19
<PAGE>   48

                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000


     Consulting Group, Inc. (the "Purchasers"). In connection with the Purchase
     Agreement, the Company issued to the Purchasers and their respective
     designees, warrants to purchase an aggregate of 20% (1,143,969 and 658,744
     shares at December 30, 2000 and January 1, 2000, respectively) of the
     Company's common stock at $5.00 per share on a fully diluted basis. The
     Company also paid the Purchasers from the proceeds of the offering an
     aggregate of $300 at closing for consulting services rendered in connection
     with transactions contemplated by the Purchase Agreement, as well as other
     costs of approximately $226, and the Company issued to the former majority
     stockholder and his designee, warrants to purchase an aggregate of 1%
     (57,206 and 32,937 shares at December 30, 2000 and January 1, 2000,
     respectively) of the common stock at $5.00 per share on a fully diluted
     basis. The warrants were recorded at fair value of $2,082 at the grant date
     (691,681 shares at $3.01 per share). The fair value of each warrant was
     determined using the Black-Scholes option valuation model. The key input
     variables used in valuing the warrants were as follows: average risk free
     interest rate based on 10-year Treasury bonds of 6.00%, an estimated option
     term of 2.5 years, no expected dividends on common stock and expected
     volatility of 100.00%.

     During 1999, the former majority stockholder and other related stockholders
     (i) contributed $518 of notes payable and related accrued interest payable
     to them to the capital of the Company and (ii) effected the contribution to
     capital of all of outstanding Preferred Stock held by an affiliate.

     On February 23, 2000, the Company completed a private placement of its
     common stock, $.001 par value per share, pursuant to which it issued and
     sold an aggregate of 916,667 restricted shares to existing shareholders of
     the Company at $6.00 per share, for aggregate proceeds to the Company of
     $5,501. In addition, the Investor exercised its first call option to
     purchase 500,000 restricted shares of common stock at $5.00 per share, for
     aggregate proceeds to the Company of $2,500.

     On November 10, 2000, the Company completed a private placement of its
     common stock, $.001 par value per share, pursuant to which it issued and
     sold an aggregate of 923,077 restricted shares to existing shareholders of
     the Company at $6.50 per share, for aggregate proceeds to the Company of
     $6,000.

     On November 17, 2000, the Company completed a private placement of its
     common stock, $.001 par value per share, pursuant to which it issued and
     sold an aggregate of 153,846 restricted shares to existing shareholders of
     the Company at $6.50 per share, for aggregate proceeds to the Company of
     $1,000.

(8)  STOCK OPTIONS

     In December 1991 and October 1994, the Company established the 1991
     Nonqualified Stock Option Plan and the 1994 Stock Option Plan (the "Plans")
     under which a total of 1,695 and 1,211 shares, respectively, of the
     Company's





                                      F-20
<PAGE>   49

                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000


     common stock could be issued to officers, directors, employees and
     independent contractors of the Company upon the exercise of options granted
     under the Plans. The Plans are administered by a committee appointed by the
     Board of Directors (the "Committee"). The Committee has authority, subject
     to the terms of the Plans to determine the individuals to whom options may
     be granted, the exercise price and the number of shares of common stock
     subject to each option, the time or times during which all or a portion of
     each option may be exercised and certain other provisions of each option.
     As of December 30, 2000, an aggregate of 2,228 shares remain available for
     future grant of options under the Plans.

     Pursuant to the Plans, the exercise price of shares is determined by the
     Committee at the time of grant but may not be less than the lesser of (i)
     the book value per share of common stock as of the end of the fiscal year
     of the Company immediately preceding the date of grant or (ii) 50% of the
     fair market value per share of common stock at the date of grant. The term
     of an option may not exceed 10 years from the date of grant. Unless
     otherwise determined by the Committee, options granted vest and become
     exercisable at a rate of at least 33-1/3% per year from the date of grant.

     In June 1999 and December 2000, the Company established the 1999 Stock
     Option Plan and the 2000 Stock Option Plan (the "New Plans") under which a
     total of 125,000 and 250,000 shares, respectively, of the Company's common
     stock could be issued to officers, directors, employees, and advisors or
     consultants to the Company or any affiliate of the Company upon the
     exercise of options granted under the New Plans. Options granted to date
     under the New Plans are non-qualified and were granted at a price equal to
     the fair market value of the Company's common stock at the date of grant.
     Generally, options granted have a term of ten years from the date of grant,
     and vest in increments of 25%, 35% and 40%, respectively, over a three-year
     period on the yearly anniversary date of the grant. The options become
     immediately exercisable in full in the event a "change in control" (as
     defined by the New Plans) of the Company has occurred. Options granted to
     non-employee directors have a term of ten years and vest immediately at the
     date of grant. During 2000, the Company granted options to employees and
     directors that allow participants to acquire 128,500 shares of common stock
     at an exercise price of $6. As of December 30, 2000, an aggregate of
     246,500 shares of common stock remain available for future grant of options
     under the New Plans.





                                      F-21
<PAGE>   50
                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000


     Non-qualified stock option activity has been as follows:

<TABLE>
<CAPTION>
                                                                 Weighted
                                                                 Average
                                                                 Exercise
                                                   Number of     Price
                                                    Options      Per Option
                                                   ---------    -----------
<S>                                                <C>          <C>
     Options outstanding at December 31, 1998        1,646      $   389.73
     Granted                                        33,000            0.10
     Exercised                                     (33,000)           0.10
                                                   -------

     Options outstanding at January 1, 2000          1,646      $   389.73
     Granted                                       128,500            6.00
     Exercised                                        --           --
                                                  --------      ----------
     Options outstanding at December 30, 2000      130,146      $    10.85
                                                  ========      ==========
</TABLE>


     At December 30, 2000, 5,646 options were exercisable with a weighted
     average exercise price of $117.87 and a weighted average remaining contract
     life of 7.32 years.

     The Company accounts for these plans under APB Opinion 25. Therefore, no
     compensation cost has been recognized for its stock option plans. Had
     compensation cost for the stock options granted subsequent to January 1,
     1995, been based upon the estimated fair value at the grant dates, as
     prescribed by SFAS No. 123, the Company's pro forma net income (loss) and
     basic and diluted net income (loss) per share would have been as follows:

<TABLE>
<CAPTION>
                                               Year ended                Year ended
                                           December 30, 2000           January 1, 2000
                                      ---------------------------      ---------------
                                      As reported       Pro forma        As reported
                                      -----------       ---------        -----------
<S>                                   <C>               <C>               <C>
     Net income (loss)                $  (9,120)        $  (9,504)        $   39
     Earnings (loss) per share
         Basic                            (2.09)            (2.18)          0.03

         Diluted                          (2.09)            (2.18)          0.03
</TABLE>

     Certain of the Company's attorneys who were owed $288 agreed to accept
     options to purchase 33,000 shares of common stock exercisable at $0.10 per
     share as full payment of such amount (the options were effectively valued
     at $4.90 each). As a result, $127 has been recorded as other income in the
     statement of operations.

     The fair value of each option was determined using the Black-Scholes option
     valuation model. The key input variables used in valuing the options were
     as follows: average risk free interest rate based on 10 year Treasury bonds
     of 5.66% in fiscal year 2000 and 6.00% in fiscal year 1999, an estimated
     option term of 10 years for fiscal year 2000 and 0.50 years for fiscal
     1999, no expected dividends on common stock and expected volatility of
     23.52% and




                                      F-22
<PAGE>   51
                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000

     100.00% during the year ended December 30, 2000 and the fifty-two weeks
     ended January 1, 2000, respectively.

(9)  DISCONTINUED OPERATIONS

     Prior to the completion of the Purchase Agreement (see note 7), the only
     operations of the Company related to administration of its subsidiaries and
     the bankruptcy of a former subsidiary, maintaining an office, and
     continuing its filings with the Securities and Exchange Commission. The
     Company incurred minimal expenses during the period from January 1, 1999
     through June 15, 1999 and negotiated with several creditors who accepted
     reduced payments in fulfillment of the Company's prior obligations. As a
     result, the Company recorded income from discontinued operations during the
     fifty-two weeks ended January 1, 2000. The Company dissolved the remaining
     subsidiaries prior to the completion of the Purchase Agreement.

(10) INCOME TAXES

     Income tax expense for the year ended December 30, 2000 and the fifty-two
     weeks ended January 1, 2000 consists of:

<TABLE>
<CAPTION>
                                            Current         Deferred         Total
                                           ----------     -----------      ---------
<S>                                       <C>             <C>              <C>
 Year ended December 30, 2000:
              U.S. Federal                  $       -     $       -        $     -
              State and local                       -             -              -
              Foreign                              53             -             53
                                            ---------     ---------        -------
                                            $      53     $       -        $    53
                                            =========     =========        =======
 Fifty-two weeks ended January 1, 2000:
              U.S. Federal                  $       -     $       -        $     -
              State and local                       -             -              -
              Foreign                               -             -              -
                                            ---------     ---------        -------
                                            $       -     $       -        $     -
                                            =========     =========        =======
</TABLE>


     The reasons for the difference between the amount of tax expense provided
     and the amount of tax benefit computed by applying the federal statutory
     income tax rate of 34% to income before income taxes, were as follows for
     the year ended December 30, 2000 and the fifty-two weeks ended January 1,
     2000:



                                      F-23
<PAGE>   52

                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000

<TABLE>
<CAPTION>
                                                                  Fifty-two
                                                Year ended        weeks ended
                                                December 30,       January 1,
                                                   2000              2000
                                                ------------      -------------
<S>                                             <C>               <C>
     Tax benefit at statutory rate                $(3,083)        $        --
     Non-deductible goodwill amortization             151                  --
     State, local and foreign income taxes             53                  --
     Foreign tax credits                             (132)
     Other, net                                        20                  --
     Change in valuation allowance                  3,044                  --
                                                  -------         -------------
                       Total expense              $    53         $        --
                                                  =======         =============
</TABLE>

     The tax effects of temporary differences that give rise to significant
     portions of the deferred tax assets and deferred tax liabilities at
     December 30, 2000 are presented below:

<TABLE>
<CAPTION>
                                              December 30, 2000
                                              -----------------
<S>                                           <C>

     Deferred tax assets:
       Current portion
         Accounts receivable, due to
           allowance for doubtful accounts         $    81
         Various accruals                              305
         Inventory                                     778
         Deferred compensation                          69
         Other                                           3
                                                   -------
                                                     1,236
       Long-term portion -
         Foreign tax credit carryforward               132
         Net operating loss carryforward             4,291
                                                   -------
             Total deferred tax assets               5,659
                                                   -------
     Deferred tax liabilities -
       Current portion - foreign income                 30
       Long-term portion - differences in the
         carrying value of property, plant
         and equipment                               1,631
                                                   -------
           Total deferred tax liabilities            1,661
                                                   -------
     Sub-total                                       3,998
     Valuation allowance                            (3,998)
     Deferred foreign tax                               33
                                                   -------
     Net deferred tax assets                       $    33
                                                   =======

</TABLE>




                                      F-24
<PAGE>   53
                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000


     The Company has provided a full valuation allowance on the United States
     net deferred tax assets, consisting primarily of a net operating loss
     carryforward, because of uncertainty regarding its realizability. At
     December 30, 2000, the Company had net operating loss carryforwards for
     federal income tax purposes of approximately $12,620 subject to limitations
     as to use, to offset future federal taxable income. The net operating
     losses will expire if unused beginning in the year 2012 through 2020. The
     Company has recorded a valuation allowance for $792 of net operating loss
     carryforwards acquired in the Long Reach Merger, for which subsequently
     recognized benefits will be allocated to reduce goodwill. There was no
     valuation allowance for deferred taxes as of January 1, 2000. The net
     change in the total valuation allowance for the year ended December 30,
     2000 was $3,998.

(11) RELATED PARTY TRANSACTIONS

     On June 17, 1999, the Company entered into a five year Consulting and
     Management Services agreement with one of its stockholders to provide
     consulting and management services to the Company. Such agreement calls for
     the stockholder to make available certain of its employees to perform
     management services for the Company and to receive consulting services on a
     priority level. Consulting expenses incurred for the year ended December
     30, 2000 and the fifty-two weeks ended January 1, 2000 were $370 and $-0-,
     respectively, and are included in selling, general and administrative
     expenses in the accompanying Statements of Operations. As of December 30,
     2000, $46 remained unpaid. The parties have agreed in principle to amend
     this agreement in connection with the Preferred Stock Investment (see note
     14).

     On June 17, 1999, the Company entered into a consulting agreement with one
     of its stockholders to provide various advisory services to the Company.
     Such agreement calls for payments of $150 a year, payable at the
     stockholder's request and upon approval by the Company's Board of
     Directors, in cash or common stock of the Company, to begin following the
     Company's acquisition of a business. Advisory services paid for the year
     ended December 30, 2000 and the fifty-two weeks ended January 1, 2000 were
     $125 and $-0-, respectively, and are included in selling, general and
     administrative expenses in the accompanying Statements of Operations. This
     agreement was terminated on March 16, 2001, in connection with the
     Preferred Stock Investment (see note 14).

     On June 17, 1999, the Company entered into a consulting agreement with two
     of its stockholders to provide consulting services in connection with the
     Company's planned acquisitions. Such agreement calls for the stockholders
     collectively to receive 1% of the enterprise value of any acquisition
     and/or 1% of the amount financed, if any; such payments are not to exceed
     $600 per acquisition and $600 per financing. Such compensation may be paid,
     at the stockholders' request and upon approval by the Company's Board of



                                      F-25
<PAGE>   54
                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000

     Directors, in common stock of the Company and may be increased on a
     transaction-by-transaction basis at the discretion of the Company's Board
     of Directors. Consulting services paid for the year ended December 30,
     2000 and the fifty-two weeks ended January 1, 2000 were $523 and $-0-,
     respectively, and are included in the cost of acquisition of the acquired
     companies. This agreement was terminated on March 16, 2001, in connection
     with the Preferred Stock Investment (see note 14).

(12) CONTINGENCIES AND COMMITMENTS

     The Company is involved in claims and legal actions arising in the ordinary
     course of business. In the opinion of management, the ultimate disposition
     of these matters will not have a material adverse effect on the Company's
     consolidated financial position and results of operations.

     Blue Giant has been served with a statement of claim dated March 15, 2001,
     in an action brought by Daniel G. Marshall Engineering Corporation ("DGM")
     pending in the Ontario Superior Court of Justice. The complaint alleges
     that DGM entered into a contract with Blue Giant for professional
     engineering services in August 1995 and a collateral proposal to redesign
     certain lift trucks in August 1996. The prior owner of Blue Giant's assets,
     and not Blue Giant, was the party to these contracts. DGM claims that Blue
     Giant no longer has the authority to use the designs created by DGM or the
     right to transfer the designs to Blue Giant's parent company. DGM is
     claiming damages for breach of contract, breach of confidential information
     and unjust enrichment in the aggregate amount of $2,500,000, satisfaction
     of outstanding amounts due under the contracts of approximately $9,800, or,
     in the alternative, an injunction against Blue Giant to prevent it from
     using DGM's designs in the manufacture of forklifts. The Company is
     currently evaluating this action. The ultimate outcome of this matter
     cannot currently be predicted.

     The Company leases certain facilities, machinery and equipment under
     operating lease agreements with varying terms and conditions. A summary of
     the future annual minimum lease payments under these leases follows:

<TABLE>
<CAPTION>
                                               Minimum
     Year ending                           annual payments
     -----------                           ---------------
<S>                                            <C>
     December 29, 2001                         $335
     December 28, 2002                          301
     January 3, 2004                            266
     January 1, 2005                             11
     December 31, 2005                            2
     Thereafter                                  --
</TABLE>


     Rent expense was $213 and $13 for the year ended December 30, 2000 and
     the fifty-two weeks ended January 1, 2000, respectively.



                                      F-26
<PAGE>   55

                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000


(13) SEGMENT AND GEOGRAPHICAL DATA

     A summary of net sales and long-lived assets by geographical location
     follows:

<TABLE>
<CAPTION>
                                 December 30, 2000
                                 -----------------
<S>                              <C>
     Long-lived assets:
     United States                    $18,586
     Canada                             6,647
     Australia                            457
                                      -------
       Total long-lived assets        $25,690
                                      =======
</TABLE>

<TABLE>
<CAPTION>
                                      Year ended        Fifty-two weeks ended
                                   -----------------    ---------------------
                                   December 30, 2000      January 1, 2000
                                   -----------------    ---------------------
<S>                                <C>                    <C>
     Net sales:
       United States                    $33,291              $ --
       Canada                             3,346                --
       Australia                          1,949                --
                                        -------              ------
         Total net sales                $38,586              $ --
                                        =======              ======
</TABLE>



(14) SUBSEQUENT EVENTS

     On March 16, 2001, the Company issued 944,508 shares (12% of the Company's
     fully diluted capitalization) of 10% Series B Cumulative Convertible
     Preferred Stock (the "Series B Preferred Stock"). Proceeds of approximately
     $2,875, net of offering costs, will be used for working capital and other
     general corporate purposes (the "Preferred Stock Investment"). Dividends on
     the Series B Preferred Stock are cumulative, compounding quarterly at a
     rate of 10% per annum. Accrued and unpaid dividends are payable in cash or
     additional shares of Series B Preferred Stock, at the Company's option upon
     a liquidity event. All of the Series B Preferred Stock shall be convertible
     at any time at the election of the holder into a unit (a "Conversion Unit")
     consisting of (i) one share of 10% Series C Redeemable Preferred Stock (the
     "Series C Preferred Stock") and (ii) that number of shares of common stock
     determined by dividing an amount equal to approximately $3.18 by an amount
     equal to the adjusted conversion price. All of the Series C




                                      F-27
<PAGE>   56
                       TBM HOLDINGS INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                 (In thousands, except share and per share data)
                      December 30, 2000 and January 1, 2000

     Preferred Stock shall be redeemed on the earlier of (i) a qualified public
     offering, (ii) March 1, 2008 or (iii) a sale, merger or other change of
     control event. In connection with the issuance of the Series B Preferred
     Stock, the annual rate of interest on the Notes Payable to Stockholders
     increased from 6% to 10%, effective January 1, 2001.

     On March 16, 2001, the Company entered into an agreement with certain of
     its stockholders (the "Stockholders Agreement"). The Stockholders Agreement
     includes a voting agreement and certain restrictions on the sale of Company
     stock.

     On March 16, 2001, the Company entered into an agreement with certain of
     its stockholders (the "Registration Rights Agreement"). The Registration
     Rights Agreement grants three types of registration rights to certain
     stockholders; demand rights, S-3 rights and piggy-back rights.

     On March 16, 2001, the Company entered into a consulting agreement with two
     of its stockholders to provide consulting services in connection with the
     Company's (i) corporate strategy; (ii) budgeting of future corporate
     investments; (iii) acquisition and divestiture strategies; and (iv) debt
     and equity financings. Such agreement calls for the stockholders
     collectively to receive 1% investment fee at the time of any merger,
     consolidation, reorganization, restructuring, leveraged buyout, business
     combination, debt or equity financing or any other transaction of the
     Company or its subsidiaries. In addition, the stockholders shall receive an
     annual management fee of $150, payable quarterly in arrears beginning on
     January 1, 2002. The management fee shall begin to accrue as of February 1,
     2001. The Company's obligation to pay the management fee shall terminate
     following the consummation of a qualified public offering.

     On March 16, 2001, the Company terminated two consulting agreements dated
     June 17, 1999 with two of its stockholders as described in note 11. In
     addition, the Company reached an agreement in principle to amend a
     consulting agreement dated June 17, 1999 with one of its stockholders as
     described in note 11. Pursuant to the agreement in principle, the
     stockholder's fees for consulting and management services shall be paid
     one-third in cash, one-third in Series B Preferred Stock and one-third
     shall be deferred a minimum of 12 months, effective March 16, 2001.




                                      F-28
<PAGE>   57


Item 8. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure.

     None.




                                       27
<PAGE>   58

                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        with Section 16(a) of the Exchange Act.

Information Concerning Directors and Executive Officers

     The following table sets forth certain information concerning the directors
and executive officers of the Company and for an executive officer of a
subsidiary.

<TABLE>
<CAPTION>
Name                              Age       Position
----                              ---       --------
<S>                               <C>       <C>
Anand Sharma                      55        Chairman of the Board of Directors
William A. Schwartz               43        President and Chief Executive Officer, Director
Daniel A. Levinson                40        Secretary, Director
Rainer H. Bosselmann              57        Director
Herbert E. Brown                  54        Director
William F. Dawson                 36        Director
Michael R. Stone                  38        Director
William J. Sample                 58        Vice President - Operations
Patrick H. Peyton                 50        Chief Financial Officer and Vice President - Finance
Andrew Morrow                     36        Vice President and General Manager of Blue Giant Equipment
                                            Corporation
</TABLE>

     Anand Sharma was elected Chairman of the Board of Directors of the Company
on June 17, 1999, and has served as a director of the Company since June 15,
1999. Mr. Sharma was Chief Executive Officer of the Company from June 17, 1999
until April 28, 2000. Mr. Sharma has served as a director of Long Reach since
January 5, 2000, and was elected Chairman of the Board of Directors of Long
Reach on January 10, 2000. In 1991, Mr. Sharma founded TBM Consulting Group,
Inc., a consultant to manufacturing companies; he is currently a director of TBM
Consulting Group, Inc. and serves as its President and Chief Executive Officer.

     William A. Schwartz was elected Chief Executive Officer of the Company on
April 28, 2000. Mr. Schwartz has served as President of the Company and as a
director of the Company




                                       28
<PAGE>   59

since June 15, 1999. From June 15, 1999 until his election as Chief Executive
Officer, Mr. Schwartz served as the Company's Chief Operating Officer. Mr.
Schwartz has served as a director of Long Reach since January 5, 2000, and as
Secretary of Long Reach since March 30, 2000. Mr. Schwartz was elected a
director of Blue Giant on November 10, 2000; he has also served as its President
and Chief Executive Officer since November 10, 2000. Mr. Schwartz is Vice
President of Business Development and a director of TBM Consulting Group, Inc.
Mr. Schwartz joined TBM Consulting Group, Inc. in 1991.

     Daniel A. Levinson was elected Secretary of the Company on December 14,
2000, and has served as a director of the Company since June 15, 1999. Mr.
Levinson has also served as a director of Long Reach since January 5, 2000. In
January 1998, Mr. Levinson founded Colt Capital Group, a niche investment firm
specializing in mid-sized growing companies. For the prior ten years Mr.
Levinson was a principal investor with Holding Capital Group, Inc., a management
buyout company. Mr. Levinson is a director of Disc Graphics, Inc. and Arguss
Communications, Inc. (formerly Arguss Holdings, Inc.) and several private
concerns.

     Rainer H. Bosselmann has served as a director of the Company since June 15,
1999. Mr. Bosselmann has also served as a director of Long Reach since January
5, 2000. Mr. Bosselmann has been Chairman and Chief Executive Officer of Arguss
Communications, Inc. since 1996. Prior to assuming his position with Arguss
Communications, Inc., Mr. Bosselmann was President of Jupiter National, Inc., a
business development company.

     Herbert E. Brown was elected a director of the Company on March 10, 2000.
Mr. Brown has also served as a director of Long Reach since March 10, 2000.
Since August 1996, Mr. Brown has served as Chairman and Chief Executive Officer
of Alexander Doll Co., Inc., a private company producing collectible dolls and
figurines. Prior to that he was the Vice President and General Manager of
Johnson & Johnson Medical, Inc.

     William F. Dawson was elected a director of the Company on November 2,
2000. Mr. Dawson has also served as a director of Long Reach since February 16,
2001. In June 2000, Mr. Dawson became a managing director of Whitney & Co., a
private investment firm headquartered in Stamford, Connecticut, where he invests
private equity funds managed by Whitney & Co. For the prior fourteen years, Mr.
Dawson was a managing director of Donaldson Luftkin Jenrette, Inc. ("DLJ"), a
private equity company, where he was responsible for investing private equity
funds managed by DLJ. Until May 2000, Mr. Dawson served as a director of Insilco
Holding Co., Thermadyne Holdings Corporation and WRC Media, Inc.

     Michael R. Stone was elected a director of the Company on December 14,
2000. Mr. Stone has also served as a director of Long Reach since February 16,
2001. Mr. Stone was a director of the Company from June 15, 1999 until his
resignation on March 10, 2000. Mr. Stone is President and Chief Operating
Officer of Whitney & Co., where he is responsible for investments and
operations. Mr. Stone has held these positions since April 1998. From 1989 until
April 1998, Mr. Stone was a managing director of Whitney & Co. Mr. Stone served
as a director of Steel Dynamics, Inc. from June 1994 through August 1997.







                                       29
<PAGE>   60

     The term of each director expires at the Company's next annual
stockholders' meeting in May 2001 and until their respective successors shall
have been duly elected and qualified.

     William J. Sample has served as Chief Executive Officer and President of
Long Reach since March 10, 2000 and March 30, 2000, respectively, and has served
as Vice President-Operations of the Company since June 17, 1999. From April 1998
to February 2000, Mr. Sample served as Senior Management Consultant at TBM
Consulting Group, Inc. From April 1997 to April 1998, Mr. Sample was President
and Chief Executive Officer of Fournier, Inc., which manufactures
ready-to-assemble furniture. From 1996 to 1997, he was Vice President,
Operations of Alexander Doll Co., Inc.; prior to that, Mr. Sample was Vice
President and General Manager, Technical Products, at Pioneer Plastics
Corporation, a manufacturer of laminated products.

     Patrick H. Peyton has served as Chief Financial Officer and Vice
President-Finance of the Company since November 2, 2000. Mr. Peyton has served
as Chief Financial Officer, Vice President-Finance and Treasurer of Long Reach
since March 30, 2000. From September 1999 through March 2000, Mr. Peyton was an
independent consultant. From April 1986 through September 1999, he was Vice
President and Controller of Pioneer Plastics Corporation, working in financial
operations.

     Andrew Morrow has served as Vice President, General Manager and Secretary
of Blue Giant since November 10, 2000. Mr. Morrow was elected a director of Blue
Giant on November 10, 2000. From August 1998 to November 2000, Mr. Morrow served
as General Manager at Blue Giant Limited, a subsidiary of CLARK Material
Handling Company, managing the operations of the business. From November 1997 to
August 1998, Mr. Morrow was Controller of Blue Giant Limited, managing financial
and administrative aspects of the business. Prior to that, he was Controller of
Blue Giant Canada Limited from August 1990 until November 1997.

Board Committees

     Messrs. Bosselmann, Brown and Schwartz serve on the Company's Audit
Committee. Messrs. Sharma, Bosselmann and Brown serve on the Company's
Compensation Committee.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

     The Company does not have a class of equity securities registered pursuant
to Section 12 of the Exchange Act, and accordingly, its officers and directors
are not subject to the reporting requirements of Section 16(a) of the Exchange
Act.




                                       30
<PAGE>   61

Item 10. Executive Compensation.

     The following table sets forth certain information with respect to the
compensation paid by the Company to its Chief Executive Officer, to its former
Chief Executive Officer and to its most highly paid executive officers other
than the Chief Executive Officer for services such officers rendered to the
Company and its subsidiaries in all capacities for each of the last three fiscal
years. For the period January 31, 1997 until June 15, 1999, the Company had sold
or discontinued all business operations; its only operations constituted
maintaining a business office and complying with its reporting obligations as a
publicly-owned company. See "DESCRIPTION OF BUSINESS - Prior History."
Accordingly, no compensation was paid to any executive officer of the Company or
its subsidiaries during the period January 31, 1997 through to June 15, 1999.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>


                                                                                                 Long-Term Compensation
                                                              Annual Compensation                        Awards
                                                           ----------------------------         ------------------------
                                           Fiscal                                                 Number of Securities
Name and Principal Position                 Year            Salary              Bonus              Underlying Options
---------------------------                ----            --------            --------           --------------------
<S>                                        <C>             <C>                 <C>                <C>
William A. Schwartz (1)                     2000           $214,615            $173,750                     -
   President and                            1999           $130,000            $ 20,000
   Chief Executive Officer

Anand Sharma                                2000             (2)                 (2)                        -
   Chairman of the Board;                   1999             (2)                 (2)
   former Chief Executive
   Officer (2)

William J. Sample (3)                       2000           $185,000             $40,000                   5,000
   Vice President - Operations

Patrick H. Peyton (3)                       2000           $ 82,500             $17,500                   5,000
   Chief Financial Officer and
   Vice President - Finance
</TABLE>
---------------------

(1)  Effective April 28, 2000, Mr. Schwartz was elected Chief Executive Officer,
     and re-elected President, of the Company.

(2)  Mr. Sharma served as Chief Executive Officer of the Company from June 17,
     1999 and through April 28, 2000 without compensation. From January 1998
     through June 17, 1999, the Company had no chief executive officer.

(3)  Messrs. Sample and Peyton were first employed by the Company during fiscal
     2000.




                                       31
<PAGE>   62


Director Compensation

     Each of the non-employee members of the Board of Directors receives a
payment of $1.00 per meeting attended, whether in person or by telephone,
together with reimbursement for actual expenses incurred in attending meetings.
In addition, each non-employee director receives $1,000 per "off-site" visit.
Examples of an "off-site" visit are plant visits or acquisition-related meetings
at a target company's offices. The Company paid Colt Services, Inc., of which
Mr. Levinson is President, $517,279 during the fiscal year ended December 30,
2000, pursuant to two consulting agreements to which Colt Services, Inc. and the
Company are party. The Company paid TBM Consulting Group, Inc., of which Messrs.
Sharma and Schwartz are directors and officers, $500,760 during the fiscal year
ended December 30, 2000, pursuant to two consulting agreements to which TBM
Consulting Group, Inc. and the Company are party. See "CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS" for a description of these consulting agreements.

     Pursuant to the TBM Holdings, Inc. 1999 Stock Option Plan, each
non-employee director is granted a non-qualified option to purchase 2,000 shares
of the Company's Common Stock on the date such person first becomes a director
of the Company. Such option is exercisable at any time during its term. The
option exercise price is equal to the fair market value of the shares on the
date the option is granted. In accordance with the 1999 Stock Option Plan, on
April 28, 2000, the Company granted to each of Messrs. Bosselmann and Brown,
non-employee directors of the Company, an option to purchase 2,000 shares of the
Company's Common Stock. The other non-employee directors have waived their
entitlement to receive such options.

Employment Agreements

     The Company is party to an Employment Agreement, dated as of June 17, 1999,
as amended by a First Amendment to Employment Agreement, made as of May 1, 2000,
with William A. Schwartz, pursuant to which Mr. Schwartz serves as the Company's
President and Chief Executive Officer. Under the terms of Mr. Schwartz's
employment agreement, Mr. Schwartz will continue to be an officer and director
of TBM Consulting Group, Inc., and will spend such time as is necessary to
address normal and customary commitments related thereto to the extent that such
activity does not interfere with his full-time commitment to the operations of
the Company. Prior to the acquisition of Long Reach, Mr. Schwartz received
annual compensation in the amount of $130,000 plus ordinary and customary
benefits; following such acquisition on February 23, 2000, and until his
election as Chief Executive Officer on April 28, 2000, Mr. Schwartz's annual
compensation increased to $260,000 plus ordinary and customary benefits.
Effective May 1, 2000, Mr. Schwartz's annual base salary as the Company's
President and Chief Executive Officer is $200,000 plus ordinary and customary
benefits. At the Board's discretion, Mr. Schwartz's compensation and/or time
commitment can be adjusted if the Company's size and business plan do not
justify such salary. Mr. Schwartz's employment agreement contains
confidentiality and non-compete provisions. If Mr. Schwartz terminates his
employment upon a change in control (as defined in the employment agreement) or
if his





                                       32
<PAGE>   63

employment is terminated without cause by the Company, Mr. Schwartz will be
entitled to receive his base salary at the time of termination, plus benefits,
for a period of one year following such termination. Mr. Schwartz's employment
agreement terminates on June 16, 2003.

     Long Reach is party to an employment agreement, dated as of April 3, 2000,
with William J. Sample pursuant to which Mr. Sample serves as Long Reach's
President and Chief Executive Officer. Pursuant to the terms of this employment
agreement, Mr. Sample receives an annual base salary of $200,000 plus benefits.
Mr. Sample received a relocation allowance of $20,000, receives an automobile
allowance of $550 per month and is reimbursed for housing expenses up to $2,500
per month for a period of two years. Mr. Sample's employment agreement contains
confidentiality and non-compete provisions. If Mr. Sample's employment is
terminated without cause by Long Reach, Mr. Sample will be entitled to receive
his base salary at the time of termination, plus specified benefits, for a
period of one year following such termination. Mr. Sample's employment agreement
terminates on April 3, 2004.

Option Grants in Last Fiscal Year

     The following table sets forth information concerning grants of stock
options during the fiscal year ended December 30, 2000, to each of the officers
named in the Summary Compensation Table. The Company did not grant any stock
appreciation rights during the fiscal year ended December 30, 2000, and has no
stock appreciation rights outstanding.

<TABLE>
<CAPTION>
                                           Percent of Total
                            Number of       Options Granted
                            Securities            to
                            Underlying       Employees in        Exercise Price
Name                     Options Granted      Fiscal 2000     (Dollars per Share)      Expiration Date
----                     ---------------   -----------------  -------------------      ---------------
<S>                      <C>               <C>                <C>                     <C>
William J. Sample             5,000              4.02%               $6.00            November 30, 2010
Patrick H. Peyton             5,000              4.02%               $6.00              June 30, 2010
</TABLE>

     The options granted to Messrs. Sample and Peyton are non-qualified stock
options, granted under the Company's 1999 Stock Option Plan, which vest as to
(i) 25% of the shares covered by the option after 12 months of continuous
employment following the date of grant, (ii) an additional 35% of the shares
covered by the option (for a cumulative percentage of 60%) after 24 months of
continuous employment following the date of grant, and (iii) an additional 40%
of the shares covered by the option (for a cumulative percentage of 100%) after
36 months of continuous employment following the date of grant. The options
become immediately exercisable in full in the event a "change of control" (as
defined in the 1999 Stock Option Plan) of the Company has occurred.







                                       33
<PAGE>   64

Fiscal Year End Option Values

     The following table sets forth information concerning the value of
unexercised options on December 30, 2000 for each of the officers named in the
Summary Compensation Table. None of the options reported in the table were
exercisable at fiscal year end. No options were exercised during the fiscal year
ended December 30, 2000.

<TABLE>
<CAPTION>
                                              Number of Securities Underlying
Name                                       Unexercised Options at Fiscal Year End
----                                       --------------------------------------
<S>                                        <C>
William A. Schwartz                                          0
Anand Sharma                                                 0
William J. Sample                                          5,000
Patrick H. Peyton                                          5,000
</TABLE>

Item 11. Security Ownership of Certain Beneficial Owners and Management.

Directors And Executive Officers

     The following table contains information as to shares of each class of the
Company's equity securities for: (i) each director of the Company and each of
the executive officers named in the Summary Compensation Table; and (ii) all
directors and executive officers of the Company as a group.

<TABLE>
<CAPTION>
                                    Name and Address of               Amount and Nature of
       Title of Class              Beneficial Owner (1)               Beneficial Ownership         Percent of Class (2)(3)
       --------------              --------------------               --------------------         -----------------------
<S>                           <C>                                    <C>                           <C>
Common Stock                  William A. Schwartz                               548,227  (4)                   7.96%
Common Stock                  Anand Sharma                                      987,619  (5)                  14.46%
Common Stock                  Daniel A. Levinson                                668,794  (6)                   9.88%
Common Stock                  Rainer H. Bosselmann                                2,000  (7)                   *
Common Stock                  Herbert E. Brown                                    8,000  (8)                   *
Common Stock                  William F. Dawson (9)                           2,711,998 (10)                  41.47%
Series B Preferred Stock                                                        472,254                       50.00%
Common Stock                  Michael R. Stone (9)                            2,711,998 (11)                  41.47%
Series B Preferred Stock                                                        472,254                       50.00%
Common Stock                  William J. Sample                                  33,303 (12)                   *
Common Stock                  Patrick H. Peyton                                       0                        *
Common Stock and              Directors and executive                         4,743,441                       64.36%
Series B Preferred Stock      officers as a group
</TABLE>



                                       34
<PAGE>   65

* Represents less than 1% of the outstanding Common Stock and the Series B
Preferred Stock (assuming the conversion of all outstanding shares of the Series
B Preferred Stock into Common Stock).

(1) Unless otherwise indicated, the address of the beneficial owner is c/o TBM
Holdings Inc., 136 Main Street, Westport, Connecticut 06880.

(2) With respect to ownership of Common Stock, percent of class is based on
6,539,597 shares of the Company's capital stock outstanding, as follows: (i)
5,595,089 shares of the Company's Common Stock outstanding as of March 28, 2001,
and (ii) 944,508 shares of Common Stock into which the Series B Preferred Stock
is convertible, assuming the conversion of all outstanding shares of the Series
B Preferred Stock as of March 28, 2001. As of March 28, 2001, the Series B
Preferred Stock was convertible into a Conversion Unit comprised of one share of
the Company's Common Stock and one share of Series C Preferred Stock. See
"DESCRIPTION OF BUSINESS - Subsequent Developments." In accordance with the
rules of the Securities and Exchange Commission, options or warrants to purchase
shares of Common Stock that are exercisable as of March 28, 2001, or within 60
days thereafter, are deemed to be outstanding and beneficially owned by the
person or group holding such options or warrants for the purpose of computing
the percent ownership of such person or group, but are not deemed to be
outstanding for the purpose of computing the percent ownership of any other
person or group.

(3) With respect to ownership of Series B Preferred Stock, percent of class is
based on 944,508 shares of Series B Preferred Stock outstanding as of March 28,
2001.

(4) Includes 10,000 shares of Common Stock held by Mr. Schwartz as custodian for
two family members, 140,000 shares of Common Stock held by TBM Capital II, LLC,
of which Mr. Schwartz is a managing member, and 6,500 shares of Common Stock
held by TBM Consulting Group, Inc., of which Mr. Schwartz is Vice President of
Business Development and a director. Mr. Schwartz disclaims beneficial ownership
of these shares. Includes 281,727 shares of Common Stock issuable upon exercise
of warrants held by Mr. Schwartz and 70,000 shares of Common Stock issuable upon
exercise of a warrant held by TBM Capital II, LLC. Mr. Schwartz disclaims
beneficial ownership of the warrant held by TBM Capital II, LLC and the shares
issuable thereunder.

(5) Includes 18,000 shares of Common Stock held by Mr. Sharma's wife, 140,000
shares of Common Stock held by TBM Capital II, LLC, of which Mr. Sharma is a
managing member, and 6,500 shares of Common Stock held by TBM Consulting Group,
Inc., of which Mr. Sharma is the President and Chief Executive Officer and a
director. Mr. Sharma disclaims beneficial ownership of these shares. Includes
219,119 shares of Common Stock issuable upon exercise of warrants held by Mr.
Sharma and 70,000 shares of Common Stock issuable upon exercise of a warrant
held by TBM Capital II, LLC. Mr. Sharma disclaims beneficial ownership of the
warrant held by TBM Capital II, LLC and the shares issuable thereunder. Includes
500,000 shares of Common Stock which are subject to a voting agreement
appointing Mr. Sharma to act as proxy thereunder. Mr. Sharma disclaims
beneficial ownership of these shares. See footnote





                                       35
<PAGE>   66

(6) to the table contained under "-- Beneficial Owners of More Than 5% of the
Company's Voting Securities" for a description of the voting agreement.

(6) Includes 40,000 shares of Common Stock owned by Tri-Lev, LLC, a family
investment vehicle of which Mr. Levinson is the manager, and 400,000 shares of
Common Stock held by Colt Capital, LLC, of which Mr. Levinson is a principal.
Mr. Levinson disclaims beneficial ownership of these shares, except to the
extent of his proportionate interest as a member of Colt Capital, LLC and
Tri-Lev, LLC. Includes 17,892 shares of Common Stock issuable upon exercise of a
warrant held by Colt Capital, LLC and 210,902 shares of Common Stock issuable
upon exercise of a warrant held by Colt Capital Partners, LLC, of which Mr.
Levinson is a principal. Mr. Levinson disclaims beneficial ownership of the
warrant held by Colt Capital, LLC, the warrant held by Colt Capital Partners,
LLC and the shares issuable thereunder, except to the extent of his
proportionate interest as a member of Colt Capital, LLC and Colt Capital
Partners, LLC.

(7) Includes 2,000 shares of Common Stock which may be issued upon exercise of
an option awarded to Mr. Bosselmann on April 28, 2000.

(8) Includes 2,000 shares of Common Stock which may be issued upon exercise of
an option awarded to Mr. Brown on April 28, 2000.

(9) Mr. Dawson's and Mr. Stone's address is c/o Whitney & Co., 177 Broad Street,
Stamford, Connecticut 06901.

(10) Includes 1,291,357 shares of Common Stock held by J.H. Whitney III, L.P.,
31,720 shares of Common Stock held by Whitney Strategic Partners, III, L.P. and
916,667 shares of Common Stock held by J.H. Whitney IV, L.P.. Also includes
276,685 shares of the Series B Preferred Stock held by J. H. Whitney III, L.P.,
188,902 shares of Series B Preferred Stock held by J. H. Whitney IV, L.P. and
6,667 shares of Series B Preferred Stock held by Whitney Strategic Partners III,
L.P. Mr. Dawson is a managing director of Whitney & Co., which is an affiliate
of the entities described above. Mr. Dawson disclaims beneficial ownership of
such shares of Common Stock and Series B Preferred Stock, except to the extent
of his proportionate interest in such shares.

(11) Includes 1,291,357 shares of Common Stock held by J.H. Whitney III, L.P.,
31,720 shares of Common Stock held by Whitney Strategic Partners, III, L.P. and
916,667 shares of Common Stock held by J.H. Whitney IV, L.P. Also includes
276,685 shares of the Series B Preferred Stock held by J. H. Whitney III, L.P.,
188,902 shares of Series B Preferred Stock held by J. H. Whitney IV, L.P. and
6,667 shares of Series B Preferred Stock held by Whitney Strategic Partners III,
L.P. Mr. Stone is the President and Chief Operating Officer of Whitney & Co.,
which is an affiliate of the entities described above. Mr. Stone may be deemed
to share voting and dispositive power with respect to such shares. Mr. Stone
disclaims beneficial




                                       36
<PAGE>   67

ownership of such shares of Common Stock and Series B Preferred Stock, except to
the extent of his proportionate interest in such shares.

(12) Includes 31,303 shares of Common Stock issuable upon exercise of warrants
held by Mr. Sample.







                                       37
<PAGE>   68

Beneficial Owners of More Than 5% of the Company's Voting Securities

     The following table contains information as to shares of each class of the
Company's voting securities for any person or group known by the Company to be
the beneficial owner of more than 5% of such voting securities:

<TABLE>
<CAPTION>
                               Name and Address of                         Amount and Nature of      Percent of
Title of Class                 Beneficial Owner                            Beneficial Ownership      Class (1)(2)
--------------                 ----------------                            --------------------      ------------
<S>                            <C>                                         <C>                       <C>
Common Stock                   J.H. Whitney, III, L.P.                               2,711,998 (3)         41.47%
                               Whitney Strategic Partners III, L.P.
                               J.H. Whitney IV, L.P.
                               177 Broad Street
                               Stamford, CT  06901

Series B Preferred Stock       J.H. Whitney, III, L.P.                                 472,254 (4)         50.00%
                               Whitney Strategic Partners III, L.P.
                               J.H. Whitney IV, L.P.
                               177 Broad Street
                               Stamford, CT  06901

Common Stock                   Colt Capital, LLC                                       417,892 (5)          6.37%
                               136 Main Street
                               Westport, CT  06880

Common Stock                   LEG Partners III SBIC, L.P.                           1,579,015 (6)         24.15%
                               LEG Partners II, L.P.
                               LEG Partners SBIC, L.P.
                               LEG Partners, L.P.
                               LEG Partners Debenture SBIC, L.P.
                               555 Madison Avenue, 30th Floor
                               New York, NY  10022

Series B Preferred Stock       LEG Partners III SBIC, L.P.                             472,254 (7)         50.00%
                               LEG Partners Debenture SBIC, L.P.
                               555 Madison Avenue, 30th Floor
                               New York, NY  10022
</TABLE>


(1) Based on 6,539,597 shares of the Company's capital stock outstanding as of
March 28, 2001, as follows: (i) 5,595,089 shares of the Company's Common Stock,
and (ii) 944,508 shares of Series B Preferred Stock, each share of which is
entitled to a number of votes equal to the number of votes possessed by the
shares of Common Stock into which the share of




                                       38
<PAGE>   69

Series B Preferred Stock is convertible, assuming the conversion of all
outstanding shares of the Series B Preferred Stock as of March 28, 2001. As of
March 28, 2001, the Series B Preferred Stock was convertible into a Conversion
Unit comprised of one share of the Company's Common Stock and one share of
Series C Preferred Stock. See "DESCRIPTION OF BUSINESS - Subsequent
Developments." In accordance with the rules of the Securities and Exchange
Commission, options or warrants to purchase shares of Common Stock that are
exercisable as of March 28, 2001, or within 60 days thereafter, are deemed to be
outstanding and beneficially owned by the person holding such options or
warrants for the purpose of computing such person's percent ownership, but are
not deemed to be outstanding for the purpose of computing the percent ownership
of any other person.

(2) With respect to ownership of Series B Preferred Stock, percent of class is
based on 944,508 shares of Series B Preferred Stock outstanding as of March 28,
2001.

(3) Each of the entities disclaims beneficial ownership of all shares of Common
Stock and Series B Preferred Stock other than those held by such entity. See
footnotes (9), (10) and (11) in the preceding table for a description of
beneficial ownership of shares of Common Stock and Series B Preferred Stock by
these entities and the interest of Messrs. Dawson and Stone, directors of the
Company, in such shares.

(4) See footnotes (9), (10) and (11) in the preceding table for a description of
beneficial ownership of shares of Series B Preferred Stock by these entities and
the interest of Messrs. Dawson and Stone, directors of the Company, in such
shares.

(5) See footnote (6) in the preceding table for a description of the interest of
Mr. Levinson, a director of the Company, in Colt Capital, LLC and its managing
member, Colt Capital Partners, LLC. Includes 17,892 shares of Common Stock
issuable upon exercise of a warrant held by Colt Capital, LLC.

(6) Includes 653,846 shares of Common Stock held by LEG Partners III SBIC, L.P.,
217,155 shares of Common Stock held by LEG Partners II, L.P., 233,525 shares of
Common Stock held by LEG Partners SBIC, L.P. and 2,235 shares of Common Stock
held by LEG Partners, L.P. Also includes 157,418 shares of Series B Preferred
Stock held by LEG Partners III SBIC, L.P. and 314,836 shares of Series B
Preferred Stock held by LEG Partners Debenture SBIC, L.P. Each entity disclaims
beneficial ownership of all shares of Common Stock and Series B Preferred Stock
other than those held by such entity. 500,000 of the 653,846 shares of Common
Stock owned by LEG Partners III SBIC, L.P. are subject to a voting agreement
appointing Mr. Sharma or, in the event of his death or incapacity, Mr. Schwartz,
to act as proxy, pursuant to which such shares will be voted in the same manner
and proportion that the shares of Common Stock owned by Colt Capital, LLC, Colt
Services, Inc., TBM Capital II, LLC and Messrs. Sharma and Schwartz are voted.
The voting agreement expires upon the mutual agreement of LEG Partners III SBIC,
L.P. and Messrs. Sharma and Schwartz, or the death or permanent disability of
Messrs. Sharma and Schwartz, and will also terminate as to any of such 500,000
shares of Common Stock sold, transferred or assigned to any person who is not an
affiliate of




                                       39
<PAGE>   70

LEG Partners III SBIC, L.P. or, after giving effect to such sale, transfer or
assignment, the beneficial owner of 10% or more of the Company's Common Stock.

(7) See footnote (6) above for a description of beneficial ownership of shares
of Series B Preferred Stock by these entities.

Item 12. Certain Relationships and Related Transactions.

     Mr. Sharma, the Company's Chairman of the Board, is the President and Chief
Executive Officer and a director of TBM Consulting Group, Inc. Mr. Schwartz, the
Company's President and Chief Executive Officer and a director of the Company,
is the Vice President of Business Development and a director of TBM Consulting
Group, Inc. Mr. Levinson, a director of the Company, is the President of Colt
Services, Inc. In connection with the 1999 Private Placement and related
transactions effected on June 15, 1999, see "DESCRIPTION OF BUSINESS - 1999
Private Placement," the Company issued to TBM Consulting Group, Inc. and Colt
Services, Inc. or their respective designees, warrants to purchase an aggregate
of 20%, or 658,744 shares, of the Company's Common Stock on a fully diluted
basis, at an exercise price of $5.00 per share. Of the warrants issued on June
15, 1999, related parties were issued warrants to purchase the following number
of shares of Common Stock: Colt Capital, LLC (17,892 shares), Colt Services,
Inc. (113,857 shares), TBM Capital II, LLC (70,000 shares), Anand Sharma
(115,280 shares), William A. Schwartz (148,218 shares), William J. Sample
(16,469 shares) and TBM Capital II, LLC (12,343 shares). The remaining warrants
issued on June 15, 1999 were issued to directors or employees of TBM Consulting
Group, Inc. The Company also issued warrants to purchase an aggregate of 1%
(32,937 shares) of Common Stock at $5.00 per share on a fully diluted basis to
the former majority stockholder and his designee, for the majority stockholder's
role in the private placement, including providing assistance with fund raising,
investor relations, transaction structuring and other advice. The number of
shares of Common Stock which can be purchased pursuant to the warrants has been
subsequently adjusted pursuant to the antidilution provisions contained in the
warrants. As of December 30, 2000, the aggregate number of shares of Common
Stock which can be purchased pursuant to the warrants issued on June 15, 1999
was 1,201,175.

     The Company also paid TBM Consulting Group, Inc. and Colt Services, Inc. an
aggregate of $300,000 at closing for consulting services rendered in connection
with the 1999 Private Placement and related transactions. Consulting services
provided in connection with this transaction included fund raising, transaction
structuring, financial analysis, investor relations, investment analysis and due
diligence. Additionally, the Company paid $226,000 to reimburse TBM Consulting
Group, Inc. for costs incurred prior to the transaction, including due diligence
consulting, legal fees, travel and living expenses, rent, interim management
services, accounting fees and office expenses.

     The Company and TBM Consulting Group, Inc. are parties to a Consulting and
Management Services Agreement, dated as of June 17, 1999. Pursuant to the
Consulting and Management Services Agreement, TBM Consulting Group, Inc.
provides regular and customary Kaizen consulting and management services to the
Company on a priority basis. The Company compensates TBM Consulting Group, Inc.
for its services at its standard pricing rates. The agreement has an initial
term of five years and is thereafter renewable on an annual basis. During the
fiscal year ended December 30, 2000, the Company paid TBM Consulting Group, Inc.
$370,000 under this agreement. The Consulting and Management Services Agreement
will




                                       40
<PAGE>   71

be amended in connection with the Preferred Stock Investment. See "DESCRIPTION
OF BUSINESS - Subsequent Developments."

     Pursuant to a Consulting Agreement, dated as of June 17, 1999, between the
Company and Colt Services, Inc., Colt Services, Inc. provided advice to the
Company regarding the implementation of its business plan, including advice as
to strategy and achievement of objectives, senior level staffing, acquisitions
and financings, financial structure, public company issues and related matters.
For its services to the Company following the acquisition of Long Reach, Colt
Services, Inc. received a monthly consulting fee of $12,500. During the fiscal
year ended December 30, 2000, the Company paid Colt Services, Inc. $125,000
under this consulting agreement. This consulting agreement was terminated in
connection with the Preferred Stock Investment. See "DESCRIPTION OF BUSINESS -
Subsequent Developments."

     Pursuant to a Consulting Agreement, dated as of June 17, 1999, among the
Company, TBM Consulting Group, Inc. and Colt Services, Inc., TBM Consulting
Group, Inc. and Colt Services, Inc. provided transaction-related and financing
advice for follow-on acquisitions and implementation of the Company's business
plan. Under the terms of this agreement, for their advice to the Company, TBM
Consulting Group, Inc. and Colt Services, Inc. were entitled to receive, in the
aggregate, a 1% transaction/financing completion fee upon the closing of
specified types of transactions occurring after closing of the Long Reach
merger, including mergers, acquisitions, divestitures or other financings, with
such transaction completion fee capped at $600,000 per transaction or financing.
TBM Consulting Group, Inc. received 25% and Colt Services, Inc. received 75% of
such fee. During the fiscal year ended December 30, 2000, the Company paid TBM
Consulting Group, Inc. $130,760 and Colt Services, Inc. $392,279 in fees under
the terms of this consulting agreement. This consulting agreement was terminated
in connection with the Preferred Stock Investment. See "DESCRIPTION OF BUSINESS
- Subsequent Developments."

     The Company believes these consulting agreements to be competitive with
arrangements which could be secured with unaffiliated third party investment and
consulting firms.

     During fiscal 1999 and 2000, the offices of Colt Services, Inc. were
located within the offices of the Company in Westport, Connecticut. Colt
Services, Inc. paid its pro rata portion of the rent for its office, in the
amount of $6,000 during fiscal 1999 and $17,250 during fiscal 2000, and utilized
Company-paid office personnel and common facilities without reimbursing the
Company. This arrangement terminated in February 2001 when the Company relocated
its offices. See "PROPERTY."

     The Company and William A. Schwartz, the Company's President and Chief
Executive Officer, are parties to an employment agreement. See "EXECUTIVE
COMPENSATION - Employment Agreement" for a description of this employment
agreement.





                                       41
<PAGE>   72

     Blue Giant is party to an employment agreement, dated November 10, 2000,
with Andrew Morrow pursuant to which Mr. Morrow serves as Blue Giant's Vice
President and General Manager and as a director of Blue Giant. Pursuant to the
terms of this employment agreement, Mr. Morrow receives an annual base salary of
Cdn. $140,000 plus benefits. Pursuant to Mr. Morrow's employment agreement, upon
commencement of his employment Mr. Morrow received an option to purchase 5,000
shares of Common Stock. Mr. Morrow's employment agreement contains
confidentiality and non-compete provisions. If Mr. Morrow's employment is
terminated without cause by Blue Giant, Mr. Morrow will be entitled to receive
his base salary at the time of termination, plus specified benefits, for a
period of one year following such termination. Mr. Morrow's employment agreement
terminates on October 30, 2003.

     In connection with the 1999 Private Placement, the Company granted Whitney
& Co. a first call option to purchase up to 1,000,000 shares of Common Stock at
an exercise price of $5.00 per share, subject to a limit of 25% of the
outstanding Common Stock. The option became exercisable upon the closing of the
Long Reach merger on February 23, 2000. On that date, J.H. Whitney IV, L.P.
purchased 500,000 shares of Common Stock pursuant to the exercise of this option
and purchased an additional 416,667 shares of Common Stock at a purchase price
of $6.00 per share, for an aggregate purchase price of $5,000,000. This first
call option granted to Whitney & Co. has expired by its terms. On November 10,
2000, J.H. Whitney III, L.P. and Whitney Strategic Partners III, L.P. purchased
901,357 and 21,720 shares of Common Stock, respectively, at a purchase price of
$6.50 per share, for an aggregate purchase price of approximately $6,000,000.

     LEG Partners SBIC, L.P., LEG Partners, L.P. and LEG Partners II, L.P. were
parties, as selling stockholders, to the Long Reach Merger Agreement. The
Company determined that it would be in its best interests if such entities, as
majority stockholders of Long Reach, were bound by the terms of the Long Reach
Merger Agreement, including its representations and warranties and
indemnification provisions. The general partners of each of the LEG entities
that are parties to the Long Reach Merger Agreement are as follows: Golub GP II
Corporation is the general partner of LEG Partners SBIC, L.P.; LEG GP, L.P. is
the general partner of LEG Partners, L.P.; Golub GP II, LLC is the general
partner of LEG Partners II, L.P. As partial consideration for the Long Reach
merger, the Company paid the LEG entities their pro rata portion of $1,500,000
million paid to selling stockholders of Long Reach. Of the $1,500,000 paid to
the selling stockholders of Long Reach, LEG Partners SBIC, L.P. received
$290,375, LEG Partners, L.P. received $1,568 and LEG Partners II, L.P. received
$278,891. Also on February 23, 2000, in connection with the Long Reach merger,
Long Reach assumed, and the Company guaranteed, the obligations under certain
subordinated notes held by the LEG entities in the principal amount of
$2,854,878. The notes are secured by a second lien on Long Reach's assets and by
a second mortgage on its Houston facility. These notes mature on February 23,
2005. The notes were amended in connection with the Preferred Stock Investment.
See "DESCRIPTION OF BUSINESS - Subsequent Developments." In connection with the
Long Reach merger, Long Reach entered into a lease covering its facility in
Little Rock, Arkansas with LR Real Property, LLC, in which the LEG Entities are
members. The lease rate




                                       42
<PAGE>   73

under this lease was $1.50 for the first eighteen months. The Company has
terminated this lease in connection with the consolidation of its manufacturing
operations in Houston, Texas and Pawtucket, Rhode Island. See "PROPERTY." Also
on February 23, 2000, LEG Partners III SBIC, L.P., an affiliate of the LEG
entities that are parties to the Long Reach Merger Agreement, purchased 500,000
shares of the Company's Common Stock at a purchase price of $6.00 per share, for
an aggregate purchase price of $3,000,000. LEG Partners III SBIC, L.P. is a
party to a voting agreement with Messrs. Sharma and Schwartz appointing Mr.
Sharma or, in the event of his death or incapacity, Mr. Schwartz, to act as
proxy with respect to such 500,000 shares. See footnote (6) to the table
included under the caption "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT - Beneficial Owners of More than 5% of the Company's Voting
Securities," for a description of the voting agreement. On November 17, 2000,
LEG Partners III SBIC, L.P. purchased 153,846 shares of Common Stock at a
purchase price of $6.50 per share, for an aggregate purchase price of
approximately $1,000,000.

     See "DESCRIPTION OF BUSINESS - Subsequent Developments" for a description
of the Preferred Stock Investment effected on March 16, 2001, and certain
agreements entered into by the Company and certain stockholders of the Company
in connection therewith.

     The Company has entered into indemnification agreements with each of its
directors and executive officers, pursuant to which the Company has agreed to
indemnify each of them against losses and expenses to the extent permitted by
law for any breach of duty, neglect, error, misstatement, misleading statement,
omission, or other act done or attempted, or any of the foregoing alleged by any
claimant, or any claim against any of them, in each case incurred by reason of
his service as a director or officer, or both, of the Company or as a director
or officer serving at the Company's request as a director or officer of a
subsidiary (as defined) of the Company and not covered under the Company's or a
subsidiary's bylaws or directors' and officers' insurance policies maintained by
the Company or under a separate indemnification agreement with a subsidiary.
Among other exclusions, the Company shall not indemnify any person with respect
to claims involving (i) receipt of a personal benefit to which the recipient is
not entitled, (ii) the return of profits from the sale of securities as
contemplated by Section 16 of the Exchange Act, or (iii) knowingly fraudulent,
dishonest or willful misconduct.




                                       43
<PAGE>   74

Item 13. Exhibits and Reports on Form 8-K.

(a)  Exhibits

     See "Index of Exhibits."

(b)  Reports on Form 8-K

     During the quarter ended December 30, 2000, the Company filed two Current
     Reports on Form 8-K, described below. Reference is made to such Current
     Reports for a complete description of the disclosures contained therein.

     Current Report on Form 8-K, dated October 19, 2000, filed with the
     Commission on October 26, 2000, containing disclosure under Item 5. Such
     Current Report on Form 8-K reported the execution of an Asset Purchase
     Agreement with Blue Giant Limited and CLARK Material Handling Company,
     pursuant to which the Company agreed to acquire substantially all the
     assets and specified liabilities of Blue Giant Limited.

     Current Report on Form 8-K, dated November 10, 2000, filed with the
     Commission on November 21, 2000, containing disclosure under Item 2 and
     Item 7. Such Current Report on Form 8-K reported the consummation of the
     acquisition of substantially all the assets and specified liabilities of
     Blue Giant Limited and certain intellectual property of Blue Giant
     Corporation.





                                       44
<PAGE>   75


                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Dated:  March 30, 2001                TBM HOLDINGS INC.


                                      By:  /s/    William A. Schwartz
                                         --------------------------------
                                          William A. Schwartz, President
                                          and Chief Executive Officer

     In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.


/s/      William A. Schwartz                                  March 30, 2001
-----------------------------------------------------
William A. Schwartz, President, Chief Executive
Officer and Director (Principal Executive Officer,
Principal Financial Officer and Principal Accounting
Officer)

/s/      Rainer H. Bosselmann                                 March 26, 2001
-----------------------------------------------------
Rainer H. Bosselmann, Director

         .........                                            March __, 2001
-----------------------------------------------------
Herbert E. Brown, Director

/s/      William F. Dawson                                    March 30, 2001
-----------------------------------------------------
William F. Dawson, Director

/s/      Daniel A. Levinson                                   March 30, 2001
-----------------------------------------------------
Daniel A. Levinson, Director

/s/      Anand Sharma                                         March 30, 2001
-----------------------------------------------------
Anand Sharma, Director

/s/      Michael R. Stone                                     March 30, 2001
-----------------------------------------------------
Michael R. Stone, Director



                                       45
<PAGE>   76

                                INDEX OF EXHIBITS

<TABLE>
<CAPTION>

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

<S>             <C>
        2.1     Amended and Restated Agreement and Plan of Merger, dated
                February 4, 2000, among the Company, TBM Acquisition I, Inc.,
                Long Reach Holdings, Inc. and certain shareholders of Long Reach
                Holdings, Inc. (incorporated by reference to Exhibit 99.1 to the
                Company's Current Report on Form 8-K, dated February 4, 2000,
                filed with the Commission on February 15, 2000).


        2.2     Stock Purchase Agreement, dated as of May 16, 2000, among Long
                Reach Holdings, Inc., United Dominion Industries, Inc. and Lee
                Engineering Company, Inc. (incorporated by reference to Exhibit
                2 to the Company's Current Report on Form 8-K, dated May 16,
                2000, filed with the Commission on May 24, 2000).


        2.3     Asset Purchase Agreement, dated October 19, 2000, between
                1445833 Ontario, Inc. and Blue Giant Limited (incorporated by
                reference to Exhibit 2 to the Company's Current Report on Form
                8-K, dated October 19, 2000, filed with the Commission on
                October 26, 2000).


        2.4     Transfer Agreement, dated November 10, 2000, between Blue Giant
                Corporation and Blue Giant Equipment Corporation (incorporated
                by reference to Exhibit 2.2 to the Company's Current Report on
                Form 8-K, dated November 10, 2000, filed with the Commission on
                November 21, 2000).


        3.1     Restated Articles of Incorporation of TBM Holdings Inc., as
                amended.


        3.2     Amended and Restated By-Laws of TBM Holdings Inc. (incorporated
                by reference to Exhibit 3.2 to the Company's Quarterly Report on
                Form 10-QSB for the quarter ended June 30, 1999)


        4.1     Form of Subordinated Promissory Note by TBM Acquisition I, Inc.,
                in favor of each of the subordinated noteholders identified on
                the schedule attached thereto (incorporated by reference to
                Exhibit 4.1 to the Company's Current Report of Form 8-K, dated
                February 23, 2000, filed with the Commission on March 9, 2000).
</TABLE>

<PAGE>   77

<TABLE>

<S>             <C>
        9.1     Voting Agreement, dated as of March 13, 2000, between LEG
                Partners III SBIC, L.P., Anand Sharma and William A. Schwartz
                (incorporated by reference to Exhibit 10 to the Company's
                Quarterly Report on Form 10-QSB for the quarter ended April 1,
                2000).


        10.1    1999 Stock Option Plan (incorporated by reference to Exhibit
                10.1 to the Company's Quarterly Report on Form 10-QSB for the
                quarter ended July 1, 2000).


        10.2    Employment Agreement, dated June 17, 1999, between the Company
                and William A. Schwartz (incorporated by reference to Exhibit
                10.4 to the Company's Quarterly Report on Form 10-QSB for the
                quarter ended June 30, 1999).


        10.3    First Amendment to Employment Agreement, dated as of May 1,
                2000, between TBM Holdings, Inc. and William Schwartz
                (incorporated by reference to Exhibit 10.2 to the Company's
                Quarterly Report on Form 10-QSB for the quarter ended July 2,
                2000).


        10.4    Employment Agreement, dated as of April 3, 2000, between Long
                Reach Holdings, Inc. and William Sample (incorporated by
                reference to Exhibit 10.3 to the Company's Quarterly Report on
                Form 10-QSB for the quarter ended July 1, 2000).


        10.5    Employment Agreement, dated November 8, 2000, between Blue Giant
                Equipment Corporation and Andrew Morrow.


        10.6    Form of Indemnification Agreement between the Company and each
                of its directors and officers.


        10.7    Form of Warrant Agreement between the Company and the holders of
                Warrants (incorporated into this registration statement by
                reference to Exhibit 10.6 to the Company's Quarterly Report on
                Form 10-QSB for the quarter ended June 30, 1999).


        10.8    Guaranty Agreement, dated as of February 23, 2000, by the
                Company in favor of Golub Associates Incorporated, as agent for
                the benefit of the holders of the subordinated notes
                (incorporated by reference to Exhibit 10.1 to the Company's
                Current Report on Form 8-K, dated February 23, 2000, filed with
                the Commission on March 9, 2000).
</TABLE>

<PAGE>   78

<TABLE>

<S>             <C>
        10.9    Lease Agreement, dated February 23, 2000, between TBM
                Acquisition I, Inc. and LR Real Property, LLC (incorporated by
                reference to Exhibit 10.2 to the Company's Current Report on
                Form 8-K, dated February 23, 2000, filed with the Commission on
                March 9, 2000).


        10.10   Amendment One to Loan and Security Agreement, dated February 23,
                2000, between Long Reach Holdings, Inc. and Bank One, Texas,
                N.A. (incorporated by reference to Exhibit 10.4 to the Company's
                Current Report on Form 8-K, dated February 23, 2000, filed with
                the Commission on March 9, 2000).


        10.11   Unlimited Guaranty, dated February 23, 2000, by the Company in
                favor of Bank One, Texas, N.A. (incorporated by reference to
                Exhibit 10.5 to the Company's Current Report on Form 8-K, dated
                February 23, 2000, filed with the Commission on March 9, 2000).


        10.12   Amendment Two to Loan and Security Agreement, dated as of May
                16, 2000, between Long Reach Holdings, Inc. and Bank One, Texas,
                N.A. (incorporated by reference to Exhibit 10 to the Company's
                Current Report on Form 8-K, dated May 16, 2000, filed with the
                Commission on May 24, 2000).


        10.13   Series B Preferred Stock Purchase Agreement, dated as of March
                16, 2001, between TBM Holdings, Inc. and J. H. Whitney IV, L.P.,
                J. H. Whitney III, L.P., Whitney Strategic Partners III, L.P.,
                LEG Partners III SBIC, L.P. and LEG Partners Debenture SBIC,
                L.P.


        10.14   Stockholders Agreement, dated as of March 16, 2001, among TBM
                Holdings Inc. and J. H. Whitney IV, L.P., J. H. Whitney III,
                L.P., Whitney Strategic Partners III, L.P., LEG partners, L.P.,
                LEG Partners II, L.P., LEG Partners SBIC, L.P., LEG Partners III
                SBIC, L.P., LEG Partners Debenture SBIC, L.P., Colt Capital LLC
                and TBM Capital II, LLC.


        10.15   Professional Services Agreement, dated as of March 16, 2001,
                among JHW Management Co., LLC, Golub Associates, LLC and TBM
                Holdings Inc.


        10.16   Registration Rights Agreement, dated as of March 16, 2001, among
                TBM Holdings Inc., J. H. Whitney IV, L.P., J. H. Whitney III,
                L.P., Whitney Strategic Partners III, L.P., LEG partners, L.P.,
                LEG Partners II, L.P., LEG Partners SBIC, L.P., LEG Partners III
                SBIC, L.P., LEG Partners Debenture SBIC, L.P. and Colt Capital
                LLC.
</TABLE>

<PAGE>   79

<TABLE>
<S>             <C>
        10.17   Omnibus Amendment, dated as of March 15, 2001, among TBM
                Holdings, Inc., Long Reach, Inc. and Golub Associates
                Incorporated.

        21      Subsidiaries of the Company.


        23.1    Consent of KPMG LLP.


        23.2    Consent of Richard A. Eisner & Company, LLP.


        99      1994 Stock Option Plan.
</TABLE>