<PAGE>

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-K

(Mark One)

[x]  Annual report under Section 13 or 15(d) of the Securities Exchange Act of
     1934

     For the fiscal year ended December 31, 2003

[ ]  Transition report under Section 13 or 15(d) of the Exchange Act

     For the transition period from ____________ to ____________

                        Commission file number 001-12127

                             EMPIRE RESOURCES, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

             Delaware                                 22-3136782
--------------------------------------------------------------------------------
  (State or Other Jurisdiction of
  Incorporation or Organization)         (I.R.S. Employer Identification No.)

                                One Parker Plaza
                               Fort Lee, NJ 07024
                    (Address of Principal Executive Offices)

                                  201 944-2200
              (Registrant's Telephone Number, Including Area Code)

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

                                                      Name of each exchange on
          Title of each class                              which registered
          -------------------                         ------------------------

 Common Stock, par value $0.01 per share               American Stock Exchange

        Securities registered pursuant to Section 12 (g) of the Act: None

     Check whether the registrant: (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.
Yes [X] No [ ]

     Check if disclosure of delinquent filers in response to Item 405 of
regulation S-K is not 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-K
or any amendment to this Form 10-K. [ ]

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

     The aggregate market value of the voting stock of the registrant held by
non-affiliates as of the last business day of the registrant's most recently
completed second fiscal quarter was approximately $4.1 million. Such market
value was calculated based upon the closing price of the stock on the American
Stock Exchange as of such date and excludes shares held by each officer and
director of the registrant and any person that owns 5% or more of the
registrant's outstanding common stock. This determination of affiliate status is
not necessarily a conclusive determination for all other purposes.

     The number of shares of common stock outstanding as of March 15, 2004, was
9,528,251.

                      DOCUMENTS INCORPORATED BY REFERENCE:

Certain information required in response to Items 10, 11, 12, 13 and 14 of Part
III of this Form 10-K are incorporated by reference from the registrant's
Definitive Proxy Statement for the 2004 Annual Meeting of Shareholders to be
filed with the Commission prior to April 29, 2004 pursuant to Regulation 14A of
the General Rules and Regulations of the Commission.



<PAGE>


                             EMPIRE RESOURCES, INC.
              FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003

                                      INDEX

<TABLE>
<CAPTION>
10-K Part
and Item No.                                                                Page
------------                                                                ----
<S>                                                                          <C>
                                     Part I
Item 1      Business                                                          3

Item 2      Properties                                                        9

Item 3      Legal Proceedings                                                 9

Item 4      Submission of Matters to a Vote of Security Holders               9

                                     Part II

Item 5      Market for Common Equity and Related Stockholder Matters          9

Item 6      Selected Financial Data                                          11

Item 7      Management's Discussion and Analysis of Financial Condition
               and Results of Operation                                      12

Item 7A     Quantitative and Qualitative Disclosures About Market Risk       18

Item 8      Financial Statements and Supplementary Data                      19

Item 9      Changes In and Disagreements With Accountants On Accounting
               and Financial Disclosure                                      19

Item 9A     Controls and Procedures                                          19

                                     Part III

Item 10.    Directors and Executive Officers of the Registrant               19

Item 11.    Executive Compensation                                           20

Item 12.    Security Ownership of Certain Beneficial Owners and
               Management and Related Stockholder Matters                    20

Item 13.    Certain Relationships and Related Transactions                   20

Item 14.    Principal Accountant Fees and Services                           20

                                      Part IV

Item 15.    Exhibits, Financial Statement Schedules, and Reports on
               Form 8-K                                                      20

Signatures                                                                   23
</TABLE>


                                       2



<PAGE>


PART I

ITEM 1.  BUSINESS

           Important Information Regarding Forward Looking Statements

Certain matters discussed under the captions "Business", "Management's
Discussion and Analysis of Financial Condition and Results of Operations",
"Quantitative and Qualitative Disclosures About Market Risk" and elsewhere in
this Annual Report on Form 10-K and the information incorporated by reference in
this report may constitute forward-looking statements for purposes of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended.

You can identify forward-looking statements by the use of the words "believe,"
"expect," "anticipate," "intend," estimate," "assume," "will," "should," and
other expressions which predict or indicate future events or trends and which do
not relate to historical matters. You should not rely on forward-looking
statements, because they involve known and unknown risks, uncertainties and
other factors, some of which are beyond the control of the Company. These risks,
uncertainties and other factors may cause the actual results, performance or
achievements of the Company to be materially different from the anticipated
future results, performance or achievements expressed or implied by the
forward-looking statements.

Some of the factors that might cause these differences include the following:
changes in general, national or regional economic conditions; an act of war or
terrorism that disrupts international shipping; changes in laws, regulations and
tariffs; changes in the size and nature of the Company's competition; the
imposition of anti-dumping duties against on the products imported by the
Company; changes in interest rates, foreign currencies or spot prices of
aluminum; loss of one or more of the Company's principal supplier or key
executives; increased credit risk from customers; failure of the government to
renew the generalized system of preference, which provides preferential tariff
treatment for certain of the Company's imports; failure of the Company to grow
internally or by acquisition and to integrate acquired businesses; failure to
improve operating margins and efficiencies; and changes in the assumptions used
in making such forward-looking statements.

You should carefully review all of these factors, and you should be aware that
there may be other factors that could cause these differences, including, among
others, the factors listed under "Certain Factors Affecting Future Operating
Results," beginning on page [14]. Readers should carefully review the factors
described under "Certain Factors Affecting Future Operating Results" and should
not place undue reliance on our forward-looking statements.

These forward-looking statements were based on information, plans and estimates
at the date of this report, and we do not promise to update any forward-looking
statements to reflect changes in underlying assumptions or factors, new
information, future events or other changes.

Background

     Empire Resources, Inc. (the "Company") was incorporated in the State of
Delaware in 1990 under the name Integrated Technology USA, Inc. ("Integrated").
Until September 17,


                                       3



<PAGE>


1999, the Company was in the business of designing, developing and marketing
products for emerging computer related markets.

     On September 17, 1999, the Company merged with Empire Resources, Inc.
("Empire"), a distributor of value added, semi-finished aluminum products. Since
the merger, the Company has continued the aluminum business of Empire under the
name of Empire Resources, Inc. References to the Company include its'
subsidiaries, consolidated for purposes of the Company's financial statements.

     In conjunction with the merger, Empire Resources Pacific Ltd.
("Empire-Pacific"), then an affiliate of Empire operating in Australia, became a
wholly owned subsidiary of the Company.

     For accounting and other financial reporting purposes, the merger has been
treated as a "reverse acquisition." Under this treatment, the surviving
corporation has been treated as a continuation of Empire, and the merger has
been treated as an issuance of shares by Empire to the stockholders of
Integrated in exchange for Integrated's cash. Accordingly, the accompanying
financial statements are the historical financial statements of Empire and
Empire Resources Pacific Ltd.

     The Company is engaged in the purchase, sale and distribution of
principally nonferrous metals to a diverse customer base located throughout the
United States and in Canada, Australia and New Zealand. The Company sells its
products through its own marketing and sales personnel and through its
independent sales agents located in North America who receive commissions on
sales. Empire-Pacific acts as the Company's sales agent in Australia and New
Zealand. The Company purchases from suppliers located throughout the world;
however, one supplier, Hulett Aluminium Ltd., furnished approximately 55% of the
Company's products in 2003. The Company does not typically purchase inventory
for stock; rather, it places orders with its suppliers based upon orders that it
has received from its customers.

Strategy

     The Company's strategy for growth involves the following key elements:

     Provide Customers with a High Level of Service and Cost Effective, Quality
Products. The Company places great emphasis on providing customers with a high
level of service. In particular, the Company works closely with its customers to
learn the specific requirements of each customer. This enables the Company to
provide each customer with cost-effective, quality materials matching the
customer's particular needs. The Company also provides various ancillary
services to its customers, including (1) arranging for products to be stored in
warehouse facilities for release to the customer on a just-in-time delivery
basis, (2) providing customers with timely information concerning market trends
and product development, and (3) upon request by customers, arranging for
subsequent metal processing or finishing services.

     Expand Volumes and Product Breadth with Existing Suppliers and Customers.
The Company strives to lever its existing long-standing relationships with
suppliers and customers through increased volume with existing product lines and
by adding new product lines that are within the suppliers' range of production
and/or within the customers ranges of usage that are saleable in the Company's
marketing area. The Company believes that by pursuing this strategy


                                       4



<PAGE>


it will increase its volume with its existing suppliers while at the same time
establishing new markets resulting in increased volume and market presence.

     Expand Sources of Supply and Serve as Effective Marketing Channel for
Suppliers. The Company seeks to increase its supply sources by expanding its
relationships with existing suppliers and by seeking new suppliers. The Company
strives to build its supply relationships by serving as an effective marketing
channel for its suppliers. The Company believes if it is able to increase its
supply sources it will be in a position to offer its customers greater
quantities and a wider range of products.

     Acquire Capability to Provide Additional Value Added Services. The Company
may seek to acquire the capability to provide its customers with additional
value-added services (such as various processing, manufacturing, finishing, and
or distribution services). The Company may accomplish this through establishing
joint venture arrangements with existing service providers or by selectively
making acquisitions.

     Provide Increasingly Efficient and Cost-Competitive Handling and Delivery
Services. The Company's warehouse and distribution facility in Baltimore serves
the dual purpose of: (a) providing depot/warehousing capacity for just-in-time
delivery and (b) providing handling capability and inventory control at the
Baltimore port of entry, the Company's most active import location. This
arrangement reduces freight and handling expenses while concurrently increasing
efficiency, and enables the Company to monitor deliveries and serve customers
more effectively. The Company is currently reviewing the possibility of adding
additional facilities in other locations and/or expanding and enhancing its
Baltimore location.

The Industry

     Semi-finished aluminum products are produced by processing primary aluminum
and or aluminum scrap. A product is considered "semi-finished" if it has not yet
been converted into a final end-product. Semi-finished aluminum products include
aluminum sheet, plate and foil, rod, bar and wire, extruded and cast products,
and aluminum powder and paste.

     Although demand for aluminum products in the United States has been
cyclical, over the longer-term demand has continued to increase. The Company
believes that this growth reflects (1) general population and economic growth
and (2) the advantages of aluminum products, including light weight, high degree
of formability, resistance to corrosion and recyclability. However, according to
CRU Monitor, an industry publication, shipments in North America for mill
aluminum products in during 2003 decreased approximately 2% from shipments in
2002.

Products

     During the last three fiscal years Empire Resources has derived
substantially all of its revenues from the sale of semi-finished aluminum
products. Demand for the Company's product is not seasonal.


                                       5



<PAGE>


Sales, Marketing and Services

     The Company endeavors to build its distribution within the aluminum
industry by providing customers with quality products, access to alternative
sources of supply, and comprehensive customer service. The Company offers
customers a full range of services including:

     o    sourcing aluminum products from the appropriate supplier in order to
          meet pricing and delivery requirements;

     o    handling foreign exchange transactions for sales in local currency;

     o    assuming responsibility for the shipment and timely delivery of the
          product to the customer;

     o    assisting customers in identifying materials and matching their
          particular needs;

     o    where necessary, arranging for subsequent metal processing and/or
          finishing services which may be required by the customer;

     o    arranging for materials that have been ordered by a customer (and are
          subject to a firm purchase commitment) be stored at an appropriate
          warehouse for release to the customers on a just-in-time delivery
          basis, and

     o    providing customers with information concerning market trends and
          product development.

     The Company carefully monitors the timing and processing of orders to meet
customers' needs and commits to deliver orders within a time-period mutually
agreed with the customer -- generally within a 30 day window. The Company
maintains constant and ongoing communication with its suppliers in order to
ensure that these delivery dates are met and that customers are apprised of the
delivery status of their orders.

     The Company primarily sells its products through its own marketing and
sales personnel. In addition, the Company sells its products through independent
sales agents located in North America who receive a commission on sales. The
Company's inventory generally represents material that has been ordered by
customers and is in transit or is being held pending delivery to such customers.

Backlog

     At December 31, 2003, the amount of backlog of firm orders was
approximately $53 million, (as compared to $52 million at December 31, 2002)
representing orders received from customers and placed into production with the
Company's suppliers. The Company expects to fill and invoice substantially all
of the orders backlogged at December 31, 2003 by June 30, 2004.

Suppliers

     The Company enjoys exclusive representation arrangements with several
foreign mills; however one supplier, Hulett Aluminium Ltd, furnished
approximately 55% of the Company's product in 2003. See Item 7 beginning on page
12 for information about the Company's


                                       6



<PAGE>


relationship with Hulett. The Company provides important services to its
suppliers in various ways, including:

     o    serving as an integrated marketing, distribution, and service channel
          for export volume;

     o    purchasing manufacturing capacity from suppliers in bulk;

     o    assuming responsibility for transporting the products that it
          purchases;

     o    eliminating foreign currency risks for suppliers; and

     o    ensuring prompt payment to suppliers for materials purchased.

     The Company strives to maintain long-term relationships with its suppliers
and to be a significant distributor for them. By being a significant distributor
for its suppliers, the Company is able to obtain competitive pricing and to
influence quality standards and delivery practices.

     During 2003 the Company continued to work with existing suppliers and
continued to explore other sources to underpin its position in the market.

Customers

     The Company serves approximately 200 customers in diverse industries,
including transportation, automobile, housing, appliances and packaging. In
2003, the top ten customers of the Company represented approximately 36% of its
sales, with one customer accounting for 14% of total sales. These customers
included six full-service distribution centers (i.e., distributors that have the
capacity to provide additional processing services), as well as producers of
various consumer and industrial products.

     The Company's customers are located throughout the United States and Canada
and, to a lesser extent, Australia and New Zealand. The Company's U.S. customer
base is not regional.

     The following table summarizes the Company's revenues for the past three
years by geographic region.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                                       Net Sales (In thousands)
--------------------------------------------------------------------------------
                                                       2003      2002      2001
--------------------------------------------------------------------------------
<S>                                                  <C>       <C>       <C>
United States                                        148,108   127,327   113,915
--------------------------------------------------------------------------------
Canada & Pacific Rim                                  36,308    31,411    29,320
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Total                                                184,416   158,738   143,235
--------------------------------------------------------------------------------
</TABLE>

     The Company insures its accounts receivable against credit risk by
purchasing credit insurance. This insurance is generally subject to a 10%
co-insurance provision with respect to each claim and there are limits on the
amount of credit that the Company's insurance carrier will underwrite with
respect to each customer. The company may decide based on its own judgments to
exceed the limits granted by the credit insurance provider.


                                       7



<PAGE>


Transportation

     The Company arranges for the transportation to customers of the products
that they purchase. When the Company purchases products from an overseas
supplier, it accepts delivery either at the port in the supplier's home country
or at the port of destination. If the Company takes delivery at a foreign port,
it will generally arrange for transportation to the port of destination on
regularly scheduled port-to-port sea-going transportation. Upon delivery of the
products at the destination port, the Company uses trucking and rail services to
deliver the products to its customers.

Competition

     The Company's principal competitors are North American aluminum producers,
including Alcoa Inc. and Alcan Aluminum Limited, which dominate the aluminum
industry in North America. These companies are significantly larger and have
significantly greater financial resources than the Company. The Company also
competes with other importers and agents that act for foreign aluminum
producers. The Company's principal means of competition is customer service,
including providing value-added services to its customers. The Company believes
that agents of foreign mills are generally less capable of serving the needs of
North American customers because these agents are generally captive to a single
foreign source and often lack the flexibility and range of product offerings
that the Company offers its customers.

Employees

     As of December 31, 2003, the Company had approximately 30 employees, all of
whom were full-time employees. The Company also has independent sales
representatives located in the United States. None of these employees are
represented under a collective bargaining agreement.

     Empire-Pacific, a wholly-owned subsidiary of the Company, has eight
employees in Australia.

Available Information

     We maintain a company website at www.empireresources.com. We make copies of
our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K and any amendments to those reports filed with or furnished to the
Securities and Exchange Commission ("SEC") available to investors on or through
our website free of charge as soon as reasonably practicable after we have
electronically filed them with or furnished them to the SEC. The contents of our
website do not constitute a portion of this report.

     The public may read and copy any materials filed by us with the SEC at the
SEC's Public Reference Room, located at 450 Fifth Street, NW, Washington, DC
20549. The public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC
maintains a website at which reports, proxy and information statements and other
information regarding issuers that file electronically with the SEC are a
available. This website may be accessed at http://www.sec.gov.


                                       8



<PAGE>


ITEM 2. DESCRIPTION OF PROPERTIES

     The Company's corporate headquarters are located in Fort Lee, New Jersey,
where the Company leases office space pursuant to a lease expiring in March
2005. The lease provides for a minimum annual rental payment of $225,000.

     The Company leases a warehouse and distribution facility in Baltimore,
Maryland pursuant to a lease expiring in October 2005. The lease provides for
minimum annual rental payments of $205,000 over the term of the lease.
Management believes that the Company's facilities are adequate to meet its
current needs.

ITEM 3. LEGAL PROCEEDINGS

     The Company is party from time to time to ordinary litigation incidental to
its business. The Company does not presently believe that any such litigation
would have a material adverse effect on its results of operation or financial
position.

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

     No matters were submitted to shareholders during the fourth quarter for
their approval.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market for Common Stock

     The Company's common stock trades on the American Stock Exchange ("AMEX")
under the symbol ERS.

     The table below sets forth the high and low sales prices for the common
stock as reported by AMEX for the periods indicated.

<TABLE>
<CAPTION>
                                                    Common Stock
                                    --------------------------------------------
                                          2003                         2002
                                    ---------------     Cash     ---------------
Period                               High      Low    Dividend    High      Low
------                              ------   ------   --------   ------   ------
<S>                                 <C>      <C>        <C>      <C>      <C>
1st Quarter......................   $1.590   $1.050              $1.000   $0.800
2nd Quarter......................   $2.230   $1.090     $0.04    $1.450   $0.800
3rd Quarter......................   $3.240   $2.000     $0.04    $1.300   $0.950
4th Quarter......................   $4.230   $2.470     $0.08    $1.700   $0.950
</TABLE>

     On March 15, 2004, the closing price of the common stock on the American
Stock Exchange was $3.30 and there were 43 holders of record of the Common
Stock, and approximately 1,000 beneficial holders of common stock.

     The Company did not sell any unregistered equity securities in 2003.


                                       9



<PAGE>


Dividends

     On June 19, 2003 the Board of Directors of the Company declared its first
ever dividend on its common stock. In declaring the first dividend in its
history, the Company determined that it was able to return some of its cash to
stockholders without impacting future revenue and earnings growth or restricting
strategic opportunities.

     The Board of Directors declared a cash dividend of $0.04 per share on June
19th, and September 4th. On December 5th the Board of Directors of the Company
declared a regular cash dividend of $0.04 per share and a special dividend of
$.04 per share. The Board of Directors intends to review its dividend policy on
a quarterly basis and a determination by the Board of Directors will be made
subject to profitability and free cash flow and the other requirements of the
business; there can be no assurance that dividends will be paid in the future.

Share Repurchase

     In November 1999, the Board of Directors authorized the Company to
repurchase up to one million shares of its common stock. In December 2000, the
Board of Directors authorized an increase in the share repurchase program from 1
million shares to 1.5 million shares. On June 18, 2002 the Board of Directors
authorized an additional increase in the share repurchase program of 1 million
shares. This brought the total authorized number of shares available under the
repurchase program to 2.5 million. As of December 31, 2003, the Company had
repurchased a total of 2,267,400 shares for an aggregate cost of $2,731,049. The
Company also had acquired 50,000 shares for a cost of $50,000 in connection with
the reverse merger in September 1999.

Equity Compensation Plan Information

     The following table provides information as of December 31, 2003 regarding
shares of common stock of the Company that may be issued under our existing
equity compensation plans, including the Company's 1996 Stock Option Plan (the
"1996 Plan").

<TABLE>
<CAPTION>
                                                        Equity Compensation Plan Information
                                     --------------------------------------------------------------------------
                                     Number of securities to be
                                     issued upon exercise of      Weighted Average      Number of securities
                                     outstanding options as of    exercise price of     remaining available for
Plan category                        December 31, 2003            outstanding options   future issuance
-------------                        --------------------------   -------------------   -----------------------
                                                (a)                        (b)                    (c)
<S>                                           <C>                          <C>                  <C>
Equity compensation plans approved
   by security holders                        555,933                      1.30                 577,000

Equity compensation plans not
   approved by security holders                  -                           -                     -

       Total                                  555,933                      1.30                 577,000
</TABLE>


                                       10



<PAGE>


ITEM 6 SELECTED FINANCIAL DATA

     The following table sets forth for the periods indicated selected
consolidated financial and operating data for the Company. As a result of the
reverse merger completed on September 17, 1999, the Company has been treated as
a continuation of the business of Empire, and accordingly, the accompanying
financial data are the financial data of Empire and Empire Resources Pacific
Ltd., and include the results of operations of Integrated and its subsidiaries
(which have been minimal) only from September 17, 1999. Pro forma net income and
pro forma earnings per share reflect provisions for income taxes as if Empire,
which was taxed as an S corporation until September 17, 1999, had been treated
as a C corporation for all of 1999. The consolidated balance sheet data and
consolidated statement of operations data as of and for the years ended December
31, 2003, 2002, 2001, 2000, and 1999 have been derived from our Consolidated
Financial Statements. The following selected consolidated financial and
operating data are qualified by and should be read in conjunction with our more
detailed Consolidated Financial Statements and notes thereto and the discussion
under "Management's Discussion and Analysis of Financial Condition and Results
of Operations" included in Part II, Items 7 and 8 of this Form 10-K.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------
                                        Years Ended December 31,
------------------------------------------------------------------------------
                               In thousands, except per share information
------------------------------------------------------------------------------
                            2003       2002       2001       2000       1999
------------------------------------------------------------------------------
<S>                       <C>        <C>        <C>        <C>        <C>
Operating Data:
------------------------------------------------------------------------------
Net Sales                 $184,416   $158,738   $143,235   $165,328   $107,112
------------------------------------------------------------------------------
Operating Income          $  6,775   $  4,992   $  4,083   $  5,041   $  4,273
------------------------------------------------------------------------------
Net Income                $  3,544   $  2,370   $  1,296   $  1,041   $  1,309*
------------------------------------------------------------------------------
   Share Data:
------------------------------------------------------------------------------
Weighted average shares
            outstanding
------------------------------------------------------------------------------
                  Basic      9,466     10,049     10,956     11,346      7,328*
------------------------------------------------------------------------------
                Diluted      9,702     10,189     11,091     11,445      7,356*
------------------------------------------------------------------------------
    Earnings Per Share:
------------------------------------------------------------------------------
                  Basic       $.37       $.24       $.12       $.09      $0.18*
------------------------------------------------------------------------------
                Diluted       $.37       $.23       $.12       $.09      $0.18*
------------------------------------------------------------------------------
</TABLE>

*Pro Forma

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Balance Sheet Data:                             As of December 31,
--------------------------------------------------------------------------------
                                   2003      2002      2001      2000      1999
--------------------------------------------------------------------------------
<S>                              <C>       <C>       <C>       <C>       <C>
Total Assets                     $74,502   $54,469   $52,762   $69,110   $46,398
--------------------------------------------------------------------------------
Working Capital                  $14,962   $12,871   $11,823   $10,946   $10,065
--------------------------------------------------------------------------------
Stockholders' Equity             $15,119   $12,922   $11,944   $11,101   $10,176
--------------------------------------------------------------------------------
</TABLE>


                                       11



<PAGE>


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

General

     The Company is a distributor of value added, semi-finished aluminum
products. Consequently, the Company's sales volume has been, and will continue
to be, a function of its ongoing ability to secure quality aluminum products
from its suppliers. While the Company maintains long-term supply relationships
with several foreign mills, one supplier accounted for approximately 55% of the
Company's purchases for the year ended December 31, 2003, and three largest
suppliers accounted for 73% of 2003 purchases.

The Company's ability to succeed during the past year was driven in part by
continued customer satisfaction, supplier and customer loyalty and the ability
to manage the competitive economic environment through the expansion and
upgrading of its service to its suppliers and customers. This includes the
ability to ship material on a just in time basis from both private and public
warehouses, and the establishment of a proprietary on-line service modules for
customers to track their shipments. This bolstered the Company's commitment to
service and customer satisfaction. The Company has also used its excellent
customer relationships to leverage sales per employee. Because the Company has
always engaged in a strategy of developing long term relationships, it has been
able to build sales volume without a similar increase in SG&A. The stable
customer and supplier base has enabled the Company to increase its purchases
from its suppliers and to sell the majority of these quantities to its existing
customer base. While this does expose the Company to concentration risks, it has
provided the foundation of the Company's growth and performance.

Critical Accounting Policies

     The Company's consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America. Certain accounting policies have a significant impact on amounts
reported in the financial statements. A summary of those significant accounting
policies can be found in Note B to the Company's financial statements. The
Company has not adopted any significant new accounting policies during the
period ended December 31, 2003.

Among the significant judgments made by management in the preparation of the
Company's financial statements are the determination of the allowance for
doubtful accounts and accruals for inventory claims.

   Allowance for Doubtful Accounts

     As of December 31, 2003, the Company had $25,914,000 in trade receivables.
Additionally, the Company had recorded an allowance for doubtful accounts of
$191,000. The Company reports accounts receivable, net of an allowance for
doubtful accounts, to represent its estimate of the amount that ultimately will
be realized in cash. The Company reviews the adequacy of its allowance for
doubtful accounts on an ongoing basis, using historical collection trends, aging
of receivables, as well as review of specific accounts, and makes adjustments in
the allowance as it believes necessary. The Company maintains a credit insurance
policy on the


                                       12



<PAGE>


majority but not all of its customers. In general, this policy has a 10%
co-insurance. Changes in economic conditions could have an impact on the
collection of existing receivable balances or future allowance considerations.

Accruals for Inventory Claims

     Generally, the Company's exposure on claims for defective material is small
as the company refers all claims on defects back to the Mill supplying the
material. In the event that the Company does not believe the Mill will honor a
claim, the Company will record an allowance for inventory adjustments.

  Comparison of Fiscal Years Ended December 31, 2003 and 2002 (in thousands)

     Net sales increased $26,000 or 16% during 2003, due to expanded shipments
from the Company's existing supplier base. The Company's ability to increase its
supply was the main factor for its success in 2003. The ability to obtain
additional product from its suppliers is the main factor for its growth in 2003
and is the primary reason for the increase in sales. The Company successfully
placed increased volumes primarily within its existing customer base. The
Company's top ten customers represented 36% of sales in 2003 as compared to 35%
in 2002. Prices of aluminum for most of 2003 were essentially flat.

The Company's net income grew during this same period by 50%. The Company
through long term planning and use of technology did not have to increase SG&A
by the same percentage as its sales increased to serve its customers. This
strategy, while allowing for growth, also exposes the Company to customer
concentration risks.

The Company benefited from the low interest rate environment. Should the
interest rate environment change, the results of the Company could be adversely
affected.

The Company's inventory increased by $14,216 for the year ended December 2003.
The Company's increase in inventory supported its increased sales. In addition,
as the Company's customers became increasingly sensitive to timely shipments the
Company extended its efforts by allowing additional time to stage material in
its private or public warehouses to achieve timely customer deliveries. This
effort increased inventories to ensure customer satisfaction.

  Comparison of Fiscal Years Ended December 31, 2002 and 2001 (in thousands)

     Net sales increased by 10.8% from 2001 to 2002. The Company pursued
additional volumes from its principal suppliers which resulted in the higher
sales volume for the year. Gross profit increased by 18% during the same period.
The Company expanded its value added sales program, which has contributed to the
overall increase in gross margin. In addition, the Company has operated more
efficiently in purchasing and managing freight costs.

     Selling, general and administrative expenses increased by $742 or
approximately 14% as the result of increases in payroll, sales commissions,
severance costs, professional fees and insurance costs.


                                       13



<PAGE>


     Interest expense declined $986 or 49% from $2,032 to $1,046. The decrease
in interest expense is due to continued decreases in the variable rate of
interest on the Company's revolving line of credit. The decline is also due, in
part, to the reduction in the outstanding balance on the Company's line of
credit.

     Net income was $2,370 for 2002 as compared to $1,296 for 2001. The primary
reason for the increase in net income was due to the significant reduction in
interest expense.

Liquidity and Capital Resources (in thousands)

     The Company's cash balance increased by $405 in the year ended December 31,
2003. Net cash of $7,581 was used in operating activities, while $8,167 of net
cash was provided by financing activities. Increase in inventories at year end
was the most significant contributor to the increased use of cash. The increase
in inventories supports the Company's increased volume of shipments.

     The $8,167 of net cash provided by financing activities was primarily the
result of borrowings under the Company's line of credit.

     Empire currently operates under a revolving line of credit, including a
commitment to issue letters of credit, with three commercial banks. The maximum
availability of this facility is $50 million. Borrowings under these lines of
credit are collateralized by security interests in substantially all of Empire's
assets. Under these credit agreements, Empire is required to maintain working
capital and net worth ratios. These facilities expire on June 30, 2006. As of
December 31, 2003, the amount outstanding under the Company's revolving lines of
credit was $38.9 million (including letters of credit of approximately $4.5
million). Management believes that cash from operations, together with funds
available under its credit facility, will be sufficient to fund the cash
requirements relating to the Company's existing operations. Empire may require
additional debt or equity financing in connection with the future expansion of
its operations.

Commitments and Contingencies (in thousands)

<TABLE>
<CAPTION>
                       Less than 1 Year   1-3 Years   4-5 Years   After 5 years
<S>                         <C>               <C>         <C>          <C>
Bank Debt                   34,400             -          -             -

Operating leases               430            227         -             -

Letters of credit            4,500             -          -             -
</TABLE>

     Empire has contingent liabilities in the form of letters of credit to some
of its suppliers.

     CERTAIN FACTORS AFFECTING FUTURE OPERATING RESULTS

The Company is Highly Dependent on a Few Suppliers.

     The Company purchased approximately 55% of its products from one supplier
in 2003 and approximately 73% from its three largest suppliers. As a result, the
termination or limitation


                                       14



<PAGE>


by one or more of the Company's largest suppliers of their relationship with the
Company could have a material adverse effect on the Company's business and
results of operations. In addition, the Company's loss of any one of its other
suppliers (or material default by any such supplier in its obligations to the
Company) due to bankruptcy, financial difficulties, expropriation, social
unrest, destruction, sabotage, strikes, acquisition by a person or entity
unwilling to provide products to the Company, or for any other reason, could
have a material adverse effect on the Company's business.

The Company is Highly Dependent on a Few Significant Customers.

     The Company's sales are highly concentrated to a few customers. In 2003,
36% of the Company's revenues were derived from sales to ten customers. One
major customer accounted for approximately 14% of the Company's consolidated net
sales for the year ended December 31, 2003. As a result, any material reduction
in sales to any of these customers could have a material adverse effect on the
Company's business.

An Act of War or Terrorism Could Disrupt the Company's Supply of Products.

     The Company purchases its aluminum products exclusively from foreign
suppliers. An act of war or terrorism could disrupt international shipping
schedules, cause additional delays in importing the Company's products into the
United States or increase the costs required to do so.

The Company's Supply Sources are Subject to Substantial Risks.

     The Company generally purchases aluminum products from foreign suppliers.
Thus, its operations could be materially and adversely affected by changes in
economic, political and social conditions in the countries where the Company
currently purchases or may in the future purchase such products. Among other
things, changes in laws, regulations, or the interpretation thereof, or
restrictions on currency conversions and exports, could negatively affect the
Company's business. Although the trend in the markets in which the Company
operates for its sourcing has been towards open markets and trade policies and
the fostering of private economic activity, no assurance can be given that the
governments will continue to pursue these policies or that such policies may not
be significantly altered, especially in the event of a change in the leadership,
or as a result of social or political upheaval or unforeseen circumstances
affecting economic, political or social life.

Consolidation of Suppliers may Materially Affect the Company's Operations.

     During the last several years, consolidations have been taking place among
aluminum suppliers. Although the Company has in the past successfully replaced
any suppliers lost as a result of industry consolidations, there can be no
assurance that the Company would be able to replace the volume of production or
the type of products supplied by any of its current vendors, if they were
acquired or their operations terminated or were interrupted.

Changing Aluminum Prices Could Impact the Company's Profit Margins.


                                       15



<PAGE>


     The Company relies on long-term relationships with its suppliers, but
generally has no long-term, fixed-price purchase contracts; it purchases at
prevailing market prices at the time orders are placed, typically with discounts
for quantity purchases. The aluminum industry is highly cyclical, and the prices
that the Company pays for aluminum and the prices it charges will be influenced
by a variety of factors outside of its control, including general economic
conditions (both domestic and international), competition, production levels,
import duties and other trade restrictions, and currency fluctuations. While the
Company hedges metal pricing and foreign currency as it deems appropriate for a
portion of its purchase and sales contracts, there exists the risk of a
counterparty default in fulfilling the hedge contract. Should there be a
counterparty default, the Company could be exposed to losses on the original
hedged contract.

If Suppliers Fail to Provide Products of Sufficient Quality Customer
Relationships and Prices Could be Negatively Affected.

     The Company's relationships with its customers depend, in part, on its
ability to deliver products of the quality specified by those customers. The
Company obtains certifications from its suppliers as to the quality of the
products being supplied. However, if the product is not of the quality certified
or if a supplier fails to deliver products ordered by the Company, the Company
may be forced to buy product of the specified quality from another source to
fulfill the customer's order. While the Company would then be left with a claim
against the supplier for any loss sustained by the Company, the Company may not
be able to successfully prosecute these claims, particularly in foreign
jurisdictions.

The Company is Exposed to Credit Risk from its Customers.

     The Company does not require collateral for customer receivables. The
Company has significant balances owing from customers that operate in cyclical
industries and under leveraged conditions, which may impair the collectability
of these receivables. The Company carries credit insurance with a 10% co-pay
provision and specific limits on each customer's receivables. The Company
sometimes elects to exceed these specific credit limits. The Company's failure
to collect a significant portion of the amount due on its receivables directly
from customers or through insurance claims (or other material default by
customers) could have a material adverse effect on the Company's financial
condition and results of operations. In selected instances the co-pay may be
increased.

Rising Interest Rates may Increase Our Borrowing Costs

     Our borrowings are primarily short-term Libor based loans. If interest
rates rise, our cost of borrowing will increase and lower our profitability.
Higher interest rates may also adversely affect some of the markets for our
products, such as transportation, housing and commercial construction.

Increased Tariffs Could Adversely Affect the Company's Financial Condition.

     During 2003, in excess of 70% of sales of the Company represented sales of
aluminum products from countries that were considered developing countries whose
exports were eligible for preferential tariff treatment upon import into the
United States under the generalized system of preferences (GSP). There can be no
assurance that any of our suppliers will continue to be


                                       16



<PAGE>


eligible for such preferential tariff treatment or that the generalized system
of preference will be renewed after it expires on December 31, 2006. If the
preferential tariff treatment of any of our suppliers that are currently
eligible for such treatment becomes unavailable, then imports from such supplier
may be subjected to a tariff, instead of the duty-free treatment those imports
now enjoy. To the extent these increased costs could not be passed on to its
customers, the Company's profit margins could be negatively affected. This could
result in higher costs to us and have a material adverse effect on our business,
financial condition and results of operations.

Antidumping and Other Duties Could be Imposed on the Company, its Suppliers and
their Products.

     The imposition of an antidumping or other increased duty on any products
imported by the Company could have a material adverse effect on the Company's
financial condition. For example, under United States' law, an antidumping duty
may be imposed on any imports if two conditions are met. First, the Department
of Commerce must decide that the imports are being sold in the United States at
less than fair value. Second, the International Trade Commission (the "ITC")
must determine that the United States' industry is materially injured or
threatened with material injury by reason of the imports. The ITC's
determination of injury involves a two-prong inquiry: first, whether the
industry is materially injured, and second, whether the dumping, not other
factors, caused the injury. The ITC is required to analyze the volume of
imports, the effect of imports on United States prices for like merchandise, and
the effects the imports have on United States producers of like products, taking
into account many factors, including lost sales, market share, profits,
productivity, return on investment, and utilization of production capacity.

     On October 16, 2003, Alcoa, Inc. filed a petition with the Department of
Commerce ("DOC") and the International Trade Commission ("ITC") for the
imposition of anti-dumping duties on imports of certain aluminum rolled plate
from Hulett Aluminium Ltd, the Company's major supplier of aluminum products.
The petition relates to one specific product produced by Hulett - Series 6000
Aluminum Rolled Plate. Hulett produces numerous other products that the Company
presently imports. Hulett announced that it would contest the allegations, which
it believes are flawed. It is expected that the investigation could take up to a
year to complete.

     As part of the investigation, Empire Resources presented data required by
the ITC; a hearing was held and the ITC voted that the investigation should
continue. The second phase of the investigation is conducted by the DOC which
must be completed by Hulett Aluminum. The findings from the DOC are expected in
May or June of 2004. Should the DOC find that there was dumping in the United
States' market, the ITC would begin an injury phase of the investigation to
determine what if any tariffs should be imposed.

     The Company has been assured by Hulett that it will continue to ship the
product, pending the results of the investigation. In the event that Hulett, in
the future, ceases supply of the product and if the Company is unable to secure
an alternative source of supply for the product at comparable volumes and
prices, the Company's future results of operations could be adversely affected.

If the Company Fails to Deliver Products on a Timely Basis, it may Suffer
Losses.


                                       17



<PAGE>


     Interruption of shipping schedules upon which the Company relies for
foreign purchases could result in untimely deliveries to the Company's customers
or cause the Company to purchase the products in the United States at a higher
cost in order to meet delivery schedules. Consequently, the Company's profit
margins could be reduced or it could suffer losses. The Company guarantees its
customers that it will deliver products within the period specified in their
purchase orders. Any interruption of the means of transportation used by the
Company to transport products could cause delays in delivery of products, could
force the Company to buy the products from domestic suppliers at a higher cost
in order to fulfill its commitments, and also could result in the loss of
customers.

The Company Competes with Companies with Captive Sources of Supply.

     Many of the Company's competitors are significantly larger than the Company
and many have captive sources of supply and significantly greater access to
capital and other resources. Thus, if the Company's sources of supply are
interrupted, its competitors could be in a position to capture the Company's
customers.

The Company is Dependent on its Executive Officers.

     The Company is highly dependent on its executive officers, the loss of any
of one of which could have a significant adverse impact on the Company's
business.

The Company is Exposed to Increased Energy Costs.

     To the extent that the Company utilizes both over-the-road and ocean
transportation, the imposition of any additional fuel or bunker surcharges may
adversely affect the Company's results. Should the Company be unable to pass
along any such changes to its customers, the Company's results would be
adversely affected.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     The Company uses financial instruments designated as fair value hedges to
manage its exposure to commodity price risk and foreign currency exchange risk
inherent in its trading activities. It is the Company's policy to hedge such
risks, to the extent practicable. The Company enters into high-grade aluminum
futures contracts to limit its gross margin exposure by hedging the metals
content element of firmly committed purchase and sales commitments. In cases
where the Company enters into fixed price contracts with its supplier and
variable priced sales with its customers the Company will utilize the futures
market to match the terms of the purchase and sale. The Company also enters into
foreign exchange forward contracts to hedge its exposure related to commitments
to purchase or sell non-ferrous metals denominated in international currencies.
In situations where the Company enters into purchase or sales denominated in
foreign currency the foreign exchange market will be utilized to hedge foreign
exchange risk exposure. The Company records "mark-to-market" adjustments on
these futures and forward positions, and on the underlying firm purchase and
sales commitments which they hedge, and reflects the net gains and losses
currently in earnings.


                                       18



<PAGE>


     At December 31, 2003, net unrealized gains on the Company's foreign
exchange forward contracts amounted to approximately $2,176,000 as compared to
$1,067,000 at December 31, 2002 and net unrealized losses on aluminum futures
contracts amounted to approximately $1,613,000 as compared to $133,000 in 2002.
These unrealized amounts were offset by like amounts on the underlying
commitments which were hedged, and are reflected in the accompanying 2003 and
2002 balance sheet in other current assets ($3,129,000), inventory ($563,000)
and accrued expenses ($2,566,000). Unrealized amounts are reflected on the 2002
balance sheet in other current assets ($1,067,000), inventory ($133,000) and
accrued expenses ($1,200,000).

ITEM 8. FINANCIAL STATEMENTS

     Furnished at end of report commencing on page F-1.

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

During the past two years, the Company has not made changes in, and has not had
disagreements with its independent accountant on accounting and financial
disclosures

ITEM 9A. CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the Company's management conducted an evaluation with the
participation of the Company's Chief Executive Officer and Chief Financial
Officer, regarding the effectiveness of the Company's disclosure controls and
procedures, as of the end of the last fiscal year. In designing and evaluating
the Company's disclosure controls and procedures, the Company and its management
recognize that any controls and procedures, no matter how well designed and
operated, can provide only a reasonable assurance of achieving the desired
control objectives, and management necessarily was required to apply its
judgment in evaluating and implementing possible controls and procedures. Based
upon that evaluation, the Chief Executive Officer and the Chief Executive
Officer concluded that they believe the Company's disclosure controls and
procedures are reasonably effective to ensure that information required to be
disclosed by the Company in the reports it files or submits under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms. We intend
to continue to review and document our disclosure controls and procedures,
including our internal controls and procedures for financial reporting, and we
may from time to time make changes to the disclosure controls and procedures to
enhance their effectiveness and to ensure that our systems evolve with our
business.

There was no change in our internal control over financial reporting that
occurred during the period covered by this Annual Report on Form 10-K that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.

                                    PART III


                                       19



<PAGE>


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item is incorporated by reference from the
material responsive to such item in the Company's definitive proxy statement
relating to the 2004 Annual Meeting of Shareholders to be filed with the
Securities and Exchange Commission (the "Commission") prior to April 29, 2004.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference from the
material responsive to such item in the Company's definitive proxy statement
relating to the 2004 Annual Meeting of Shareholders to be filed with the
Commission prior to April 29, 2004.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
     RELATED STOCKHOLDER MATTERS

The information required by this item is incorporated by reference from the
material responsive to such item in the Company's definitive proxy statement
relating to the 2004 Annual Meeting of Shareholders to be filed with the
Commission prior to April 29, 2004.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is incorporated by reference from the
material responsive to such item in the Company's definitive proxy statement
relating to the 2004 Annual Meeting of Shareholders to be filed with the
Commission prior to April 29, 2004.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is incorporated by reference from the
material responsive to such item in the Company's definitive proxy statement
relating to the 2004 Annual Meeting of Shareholders to be filed with the
Commission prior to April 29, 2004.

                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) 1. Index to Financial Statements:

The consolidated financial statements of the Company and report of the Company's
independent public accountants incorporated herein are included in Item 8 of
this Report, as follows:


                                       20



<PAGE>


<TABLE>
<S>                                                                          <C>
Report of Independent Certified Public Accountants                           F-1
Consolidated Balance Sheets                                                  F-2
Consolidated Statements of Income                                            F-3
Consolidated Statements of Changes in Stockholders' Equity                   F-4
Consolidated Statements of Cash Flows                                        F-5
Notes to Consolidated Financial Statements                                   F-6
</TABLE>

2. Financial Statement Schedules:

A statement regarding the computation of per share earnings is attached as
Exhibit 11.1 Other schedules have been omitted because they are not applicable
or are not required under the instructions contained in Regulation S-X or
because the information required to be set forth therein is included in the
consolidated financial statements or notes thereto.

3. Exhibits:

2.1 Agreement and Plan of Merger among the Registrant, Empire Resources Inc.,
Empire Resource Pacific, Ltd., Nathan Kahn and Sandra Kahn, dated as of February
22, 1999 (incorporated by reference to Exhibit 2.1 to the Registrant's Report on
Form 8-K dated March 9, 1999)

3.1 Certificate of Merger of Empire Resources, Inc. into Integrated Technology
USA, Inc. (incorporated by reference from the correspondingly numbered exhibit
in the Company's Annual Report on Form 10-KSB for the year ended December 31,
1999).

3.2 Amended and Restated Certificate of Incorporation of the Registrant
(incorporated by reference from the correspondingly numbered exhibit in the
Company's Registration Statement on Form SB-2 (No. 333-9697).

3.3 Amendment No. 1 to the Amended and Restated Certificate of Incorporation
(incorporated by reference from the correspondingly numbered exhibit in the
Company's Annual Report on Form 10-K for the year ended December 31, 2001).

3.4 Amended and Restated By-Laws of the Registrant (incorporated by reference
from the correspondingly numbered exhibit in the Company's Registration
Statement on Form SB-2 (No. 333-9697).

3.5 Amendment No. 1 to Amended and Restated By-Laws of the Registrant
(incorporated by reference to the correspondingly numbered exhibit in the
Company's Annual Report on Form 10-K for the year ended December 31, 2002).

3.6 Amendment No. 2 to Amended and Restated By-Laws of the Registrant
(incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on
Form 8-K dated May 11, 1997).


                                       21



<PAGE>


10.1 Employment Agreement dated September 15, 1999 entered into by Registrant
with Nathan Kahn (incorporated by reference from the correspondingly numbered
exhibit in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1999).

10.2 Amendment No. 1 to Employment Agreement and Noncompetition Agreement
entered into by Registrant with Nathan Kahn (incorporated by reference from
Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 2002).

10.3 Employment Agreement dated September 15, 1999 entered into by Registrant
with Sandra Kahn (incorporated by reference from the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1999).

10.4 Employment Agreement dated September 15, 1999 entered into by Registrant
with Harvey Wrubel (incorporated by reference from the Company's Annual Report
on Form 10-KSB for the year ended December 31, 1999).

10.5 Restricted Stock Agreement dated September 15, 1999 entered into by
Registrant with Harvey Wrubel (incorporated by reference from the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1999).

10.6 Third Modification and Extension of Lease for office space, dated as of the
17th of February, 2000, to the Lease between 400 Kelby Associates, as Landlord,
and Registrant as Tenant (incorporated by reference from the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1999).

10.7 Registrant's 1996 Stock Option Plan (incorporated by reference from the
Company's Registration Statement on Form SB-2 (No. 333-9697).

10.8 Form of Indemnification Agreement entered into by the Registrant with
executive officers and directors (incorporated by reference from the Company's
Annual Report on Form 10-KSB for the year ended December 31, 2000).

10.9 Credit Facility dated December 21, 2000 between the Registrant and The
Chase Manhattan Bank, as Lead Arranger and Administrative Agent (incorporated by
reference from the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2000).

10.10 Amendment No. 1 to Credit Facility, dated July 16, 2002 between the
Registrant and The Chase Manhattan Bank, as Lead Arranger and Administrative
Agent (incorporated by reference to Exhibit 10.1 from the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2002).

10.11 Amendment No. 2 to Credit Facility, dated May 8, 2003 between the
Registrant and The Chase Manhattan Bank, as Lead Arranger and Administrative
Agent (incorporated by reference from the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 2003).


                                       22



<PAGE>


10.12 Amendment No. 3 to Credit Facility, dated June 19, 2003 between the
Registrant and The Chase Manhattan Bank, as Lead Arranger and Administrative
Agent (incorporated by reference from the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 2003).

10.13 Agreement of Lease for warehouse facility dated September 27, 2000 between
Townsend Properties, Inc. and Registrant (incorporated by reference from the
Company's Annual Report on Form 10-KSB for the year ended December 31, 2000).

11.1 Statement regarding computation of per share earnings.*

21.1 List of subsidiaries of the Registrant.*

31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934.*

31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934.*

32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

* Filed Herewith.

(b) Reports on Form 8-K:

The Company filed a Current Report on Form 8-K on November 10, 2003 relating to
its third quarter results, and comments on Anti-Dumping Investigation of Hulett
Aluminum Ltd.

                                   SIGNATURES

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

Empire Resources, Inc.


By: /s/ Nathan Kahn
    -------------------------------
    Nathan Kahn
    Chief Executive Officer
    March 30, 2004


                                       23



<PAGE>


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the persons on behalf of the Registrant and in the
capacities and on the dates indicated.


/s/ Nathan Kahn
-----------------------------------
Nathan Kahn
Chief Executive Officer and Director (Principal Executive Officer)
March 30, 2004


/s/ Sandra Kahn
-----------------------------------
Sandra Kahn, Chief Financial Officer and Director
(Principal Financial and Principal Accounting Officer)
March 30, 2004


/s/ William Spier
-----------------------------------
William Spier, Director
March 30, 2004


/s/ Jack Bendheim
-----------------------------------
Jack Bendheim, Director
March 30, 2004


/s/ Barry L. Eisenberg
-----------------------------------
Barry L. Eisenberg, Director
March 30, 2004


/s/ Peter G. Howard
-----------------------------------
Peter G. Howard, Director
March 30, 2004




                                       24



<PAGE>

/s/ Nathan Mazurek
-----------------------------------
Nathan Mazurek, Director
March 30, 2004


/s/ Morris J. Smith
-----------------------------------
Morris J. Smith, Director
March 30, 2004


/s/ Harvey Wrubel
-----------------------------------
Harvey Wrubel, Director
March 30, 2004


                                       25



<PAGE>


INDEPENDENT AUDITORS' REPORT

Board of Directors
Empire Resources, Inc.
Fort Lee, New Jersey

We have audited the accompanying consolidated balance sheets of Empire
Resources, Inc. and subsidiaries as of December 31, 2003 and 2002, and the
related consolidated statements of income, changes in stockholders' equity and
cash flows for each of the years in the three-year period ended December 31,
2003. 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 audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States 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 audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Empire
Resources, Inc. and subsidiaries as of December 31, 2003 and 2002, and the
consolidated results of their operations and their cash flows for each of the
years in the three-year period ended December 31, 2003, in conformity with
accounting principles generally accepted in the United States of America.

Eisner LLP

New York, New York
March 5, 2004



<PAGE>


EMPIRE RESOURCES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets
(In thousands except share amounts)

<TABLE>
<CAPTION>
                                                                      December 31,
                                                                   -----------------
                                                                     2003      2002
                                                                   -----------------
<S>                                                                <C>       <C>
ASSETS
Current assets:
   Cash                                                            $ 1,477   $ 1,072
   Trade accounts receivable (less allowance for doubtful
      accounts of $191 and $191 at December 31, 2003 and 2002)      25,723    24,255
   Inventories                                                      42,048    27,832
   Other current assets                                              5,100     1,259
                                                                   -------   -------
      Total current assets                                          74,348    54,418

Furniture and equipment (less accumulated depreciation of
   $396 and $347)                                                      156        24
Deferred financing costs, net                                            0        27
                                                                   -------   -------
                                                                   $74,504   $54,469
                                                                   =======   =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Notes payable - banks                                           $34,400   $25,600
   Trade accounts payable                                           16,895    13,036
   Accrued expenses                                                  7,328     2,911
   Dividends Payable                                                   762         0
                                                                   -------   -------
      Total current liabilities                                     59,386    41,547
                                                                   -------   -------
Commitments and contingencies

Stockholders' equity:
   Common stock $.01 par value, 20,000,000 shares authorized and
      11,749,651 shares issued at December 31, 2003 and 2002           117       117
   Additional paid-in capital                                       10,803    10,727
   Retained earnings                                                 6,848     4,824
   Accumulated other comprehensive income--
      cumulative translation adjustment                                 14        21
   Treasury stock (2,221,400 shares and 2,307,400 shares)           (2,663)   (2,767)
                                                                   -------   -------
      Total stockholders' equity                                    15,119    12,922
                                                                   -------   -------
                                                                   $74,504   $54,469
                                                                   =======   =======
</TABLE>

See notes to consolidated financial statements


                                                                             F-2



<PAGE>


EMPIRE RESOURCES, INC. AND SUBSIDIARES

Consolidated Statements of Income
(In thousands except per share amounts)

<TABLE>
<CAPTION>
                                                      Year Ended December 31,
                                                  ------------------------------
                                                    2003       2002       2001
                                                  ------------------------------
<S>                                               <C>        <C>        <C>
Net sales                                         $184,416   $158,738   $143,235
Cost of goods sold                                 171,222    147,714    133,862
                                                  --------   --------   --------

Gross profit                                        13,194     11,024      9,373
Selling, general and administrative expenses         6,419      6,032      5,290
                                                  --------   --------   --------

Operating income                                     6,775      4,992      4,083
Interest expense                                     1,013      1,046      2,032
                                                  --------   --------   --------

Income before income taxes                           5,762      3,946      2,051
Income taxes                                         2,218      1,576        755
                                                  --------   --------   --------
Net income                                        $  3,544   $  2,370   $  1,296
                                                  ========   ========   ========

Weighted average shares outstanding:
   Basic                                             9,466     10,049     10,956
                                                  ========   ========   ========

   Diluted                                           9,702     10,189     11,091
                                                  ========   ========   ========

Earnings per share:
   Basic                                              $.37       $.24       $.12
                                                  ========   ========   ========

   Diluted                                            $.37       $.23       $.12
                                                  ========   ========   ========
</TABLE>

See notes to consolidated financial statements


                                                                             F-3



<PAGE>


EMPIRE RESOURCES, INC. AND SUBSIDIARES

Consolidated Statements of Changes in Stockholders' Equity
(In thousands)

<TABLE>
<CAPTION>
                                   Common Stock
                                ------------------   Additional
                                Number of             Paid-in     Retained
                                  Shares    Amount    Capital     Earnings
                                ---------   ------   ----------   --------
<S>                               <C>        <C>       <C>         <C>
Balance at December 31, 2000      15,575     $155      $10,510     $1,158

Transfer of restricted
   shares to key employee                                  133

Purchase of treasury stock
   (534 shares)
Net change in cumulative
   translation adjustment

Retirement of common stock        (3,825)     (38)          38
Net income for 2001                                                 1,296
                                 -------     ----      -------     ------
Balance at December 31, 2001      11,750     $117      $10,681     $2,454

Transfer of restricted
   shares to key employee                                   46

Purchase of treasury stock
   (1,127 shares)
Net change in cumulative
   translation adjustment

Net income for 2002                                                 2,370

                                 -------     ----      -------     ------
Balance at December 31, 2002      11,750     $117      $10,727     $4,824
                                 -------     ----      -------     ------
Purchase of treasury stock
   (10 shares)
Stock options exercised                                     21

Tax Benefit from exercise
   of options                                               55

Net change in cumulative
   translation adjustment

Dividends ($.16 per share)                                         (1,520)

Net income for 2003                                                 3,544

                                 -------     ----      -------     ------
Balance at December 31, 2003      11,750     $117      $10,803     $6,848
                                 -------     ----      -------     ------

<CAPTION>
                                   Acumulated Other
                                 Comprehensive Income-
                                Cumulative Translation                    Total Stockholders'   Total Comprehensive
                                      Adjustment         Treasury Stock          Equity                Income
                                ----------------------   --------------   -------------------   -------------------
<S>                                      <C>                <C>                 <C>                    <C>
Balance at December 31, 2000             $  68                ($791)             $11,100

Transfer of restricted
   shares to key employee                                                            133

Purchase of treasury stock                                     (547)                (547)
   (534 shares)
Net change in cumulative
   translation adjustment                  (38)                                      (38)                 (38)

Retirement of common stock
Net income for 2001                                                                1,296                1,296
                                         -----              -------             --------               ------
Balance at December 31, 2001             $  30              ($1,338)             $11,944               $1,258
                                                                                                       ------

Transfer of restricted
shares to key employee                                                                46

Purchase of treasury stock                                   (1,429)              (1,429)
   (1,127 shares)
Net change in cumulative
   translation adjustment                   (9)                                       (9)                  (9)
Net income for 2002                                                                2,370                2,370
                                                                                                       ------
                                                                                                       $2,361
                                         -----              -------             --------               ------
Balance at December 31, 2002             $  21              ($2,767)             $12,922
                                         -----              -------             --------
Purchase of treasury stock
   (10 shares)                                                  (14)                 (14)
Stock options exercised                                         118                  139

Tax Benefit from exercise
   of options                                                                         55

Net change in cumulative
   translation adjustment                   (7)                                       (7)                  (7)

Dividends ($.16 per share)                                                        (1,520)

Net income for 2003
                                                                                   3,544                3,544
                                                                                                       $3,439
                                         -----              -------             --------               ------
Balance at December 31, 2003             $  14              ($2,663)             $15,119
                                         -----              -------             --------
</TABLE>

See notes to consolidated financial statements


                                                                             F-4



<PAGE>


EMPIRE RESOURCES, INC. AND SUBSIDIARES

Consolidated Statements of Cash Flows
(In thousands)

<TABLE>
<CAPTION>
                                                               Year Ended December 31,
                                                            -----------------------------
                                                              2003       2002      2001
                                                            --------   -------   --------
<S>                                                         <C>        <C>       <C>
Cash flows from operating activities:
   Net income                                               $  3,544   $ 2,370   $  1,296
   Adjustments to reconcile net income to net cash
      provided by (used in) operating activities:
      Depreciation and amortization                               76        89         84
      Deferred income taxes                                      (27)       34         63
      Translation adjustment                                      (7)       (9)       (38)
      Transfer of restricted shares to key employee                0        46        133
      Tax benefit from stock options exercised                    55         0          0
      Changes in:
         Trade accounts receivable                            (1,468)   (1,466)    14,616
         Inventories                                         (14,216)      (50)     1,139
         Due from stockholders                                                        286
         Other current assets                                 (3,814)     (370)       148
         Trade accounts payable                                3,859        37     (5,939)
         Accrued expenses                                      4,417     1,792         49
                                                            --------   -------   --------
      Net cash (used in) provided by operating activities     (7,581)    2,473     11,837
                                                            --------   -------   --------
Cash flows used in investing activities:
   Additions to furniture and equipment                         (181)      (19)       (21)
                                                            --------   -------   --------
Cash flows from financing activities:
   Proceeds from (repayments of) notes payable - banks         8,800    (1,100)   (11,300)
   Dividends Paid                                               (758)
   Stock options exercised                                       139
   Cost related to financing                                       0                  (30)
   Purchase of treasury stock                                    (14)   (1,429)      (547)
                                                            --------   -------   --------
      Net cash provided by (used in) financing activities      8,167    (2,529)   (11,877)
                                                            --------   -------   --------
Net increase (decrease) in cash                                  405       (75)       (61)
Cash at beginning of period                                    1,072     1,147      1,208
                                                            --------   -------   --------
Cash at end of period                                       $  1,477   $ 1,072   $  1,147
                                                            ========   =======   ========
Supplemental disclosures of cash flow information:
   Cash paid during the period for:
      Interest                                              $  1,024   $   998   $  2,087
      Income taxes                                          $  2,233   $ 1,396   $  1,033

Non Cash Financing Activities:
   Dividend Declared but not yet paid                       $    762   $     0   $      0
</TABLE>

See notes to consolidated financial statements


                                                                             F-5



<PAGE>


NOTE A - BUSINESS

Empire Resources, Inc ("the Company") is engaged principally in the purchase,
sale and distribution of value added semi finished aluminum products to a
diverse customer base located throughout North America and Australia. The
Company sells its products through its own marketing and sales personnel and
through its independent sales agents located in the U.S. who receive commissions
on sales. The Company purchases from several suppliers located throughout the
world. See B [13]

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

[1]  Principles of consolidation:

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

[2]  Revenue recognition:

     Revenue is recognized when title to the goods passes to the customers.

[3]  Inventories:

     Inventories which consist of purchased semi-finished aluminum products are
     stated at the lower of cost or market. Cost is determined by the
     specific-identification method. Inventory has generally been purchased for
     specific customer orders.

[4]  Furniture and equipment:

     Furniture and equipment are stated at cost. Depreciation of furniture and
     equipment is calculated on the straight-line method over their estimated
     useful lives of three to five years.

[5]  Deferred financing costs:

     Deferred financing costs include fees and costs incurred to obtain long
     term financing and are being amortized over the terms of the respective
     loans. Unamortized deferred financing costs are charged to expense when
     debt is retired before the maturity date.

[6]  Commodity futures and foreign currency hedging activities:

     The Company uses derivative financial instruments designated as fair value
     hedges to manage its exposure to commodity price risk and foreign currency
     exchange risk inherent in its operations. It is the Company's policy to
     hedge such risks, to the extent practicable. The Company enters into
     high-grade aluminum futures contracts to limit its gross margin exposure by
     hedging the metals content element of firmly committed purchase and sales
     commitments. The Company also enters into foreign exchange forward
     contracts to hedge its exposure related to commitments to purchase or sell
     non-ferrous metals denominated in international currencies. The Company
     recognizes in the balance sheet derivative contracts at fair value, as well
     as changes in the fair value of the related hedges firm purchase and sales
     commitments attributable to the hedged risk and reflects any net gains and
     losses currently in earnings (See Note D).

[7]  Foreign currency translation:

     The functional currency of Empire Resources Pacific Ltd., a wholly-owned
     subsidiary which acts as a sales agent in Australia and New Zealand is the
     Australian dollar. Cumulative translation adjustments represent translation
     of Australian dollar amounts into U.S. dollars.

[8]  Income taxes:

The Company follows the asset and liability approach for deferred income taxes.
This method provides that deferred tax assets and liabilities are recorded,
using currently enacted tax rates, based upon the difference between the tax
bases of assets and liabilities and their carrying amounts for financial
statement purposes.


                                                                             F-6



<PAGE>


EMPIRE RESOURCES, INC. AND SUBSIDIARES

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Deferred tax asset valuation allowances are recorded when management does
     not believe that it is more likely than not that the related deferred tax
     assets will be realized.

[9]  Earnings per share:

     Basic earnings per share is computed by dividing net income by the weighted
     average number of common shares outstanding during the year. Diluted
     earnings per share gives effect to all dilutive potential common shares
     outstanding during the year. The dilutive effect of the outstanding stock
     warrants and options was computed using the treasury stock method. For the
     years ended December 31, 2002 and 2001, diluted earnings per share did not
     include the effect of approximately 544,000 and 616,000 options outstanding
     at such dates as their effect would be anti-dilutive.

[10] Stock - based compensation:

     At December 31, 2003, the Company had a stock option plan which is
     described more fully in Note F. The Company accounts for stock-based
     employee compensation under the recognitions and measurement principles of
     Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock
     Issued to Employees", and related interpretations. No stock-based employee
     compensation cost is reflected in net income as all options granted under
     the Plan had an exercise price equal to the market value of the underlying
     common stock on the date of grant. The Company has adopted the
     disclosure-only provisions of Statement of Financial Accounting Standards
     ("SFAS") No. 123, "Accounting for Stock-Based Compensation." The following
     table illustrates the effect on net income and earnings per share if the
     fair value based method had been applied to all awards.

<TABLE>
<CAPTION>
                                                        Year Ended December 31,
                                                            (In thousands)
                                                       ------------------------
                                                        2003     2002     2001
                                                       ------   ------   ------
<S>                                                    <C>      <C>      <C>
Reported net income                                    $3,544   $2,370   $1,296
Stock-based employee compensation determined
   under the fair value based method                       (7)      (5)      (5)
                                                       ------   ------   ------
Pro forma net income                                   $3,537   $2,365   $1,291
                                                       ======   ======   ======
Earnings per share (basic and diluted):
   As reported
      Basic                                              $.37     $.24     $.12
      Diluted                                            $.37     $.23     $.12
   Pro-forma
      Basic                                              $.37     $.24     $.12
      Diluted                                            $.37     $.23     $.12
</TABLE>

The fair value of each option grant on the date of grant is estimated using the
Black-Scholes option-pricing model which included the following assumptions
stated on a weighted average basis:

<TABLE>
<CAPTION>
                                                             2003   2002   2001
                                                             ----   ----   ----
<S>                                                          <C>    <C>    <C>
Dividend yield                                               4.78%     0%     0%
Volatility                                                   0.59   0.40   0.40
Risk free interest rate                                      2.08%  4.23%  3.87%
Expected life in years                                          5      5      5
</TABLE>

The weighted average fair values of options granted during the years ended
December 31, 2003, 2002 and 2001 were $0.67, $0.47 and $0.40, respectively.


                                                                             F-7



<PAGE>


EMPIRE RESOURCES, INC. AND SUBSIDIARES

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

[11] Deferred stock based compensation:

     The expense relating to deferred stock based compensation is based on the
     fair market value of the stock as of the grant date and is amortized over
     the vesting period of three years. This resulted in amortization expense of
     $46,000 and $133,000 for the years ended December 31, 2002 and 2001
     respectively. The amount has been fully amortized as of December 31, 2002.

[12] Use of estimates:

     The preparation of financial statements in accordance with accounting
     principles generally accepted in the United States of America requires
     management to make estimates and assumptions that affect the reported
     amount of assets and liabilities and disclosure of contingent assets and
     liabilities at the date of the financial statements and the reported
     amounts of income and expenses during the reporting period. The principle
     estimate made relates to the allowance for doubtful accounts. Actual
     results could differ from these estimates.

[13] Significant customers and concentration of suppliers:

     One major customer accounted for approximately 14% of the Company's
     consolidated net sales for the year ended December 31, 2003 and 11% for
     year ended December 31, 2002.

     The Company's purchase of nonferrous metal is from a limited number of
     suppliers located throughout the world. One supplier, Hulett Aluminium
     Ltd., accounted for 55% of total purchases during the year ended December
     31, 2003 and four other suppliers accounted for 32% of total purchases.
     Three suppliers accounted for 75%, and 74% of total purchases during the
     years ended December 31, 2002 and 2001, respectively. The Company's loss of
     any of its three largest suppliers or a material default by any such
     supplier in its obligations to the Company would have at least a short-term
     material adverse effect on the Company's business.

     On October 16, 2003, Alcoa, Inc. filed a petition with the Department of
     Commerce ("DOC") and the International Trade Commission ("ITC") for the
     imposition of anti-dumping duties on imports of certain aluminum rolled
     plate from Hulett, the Company's principal supplier. The petition relates
     to one specific product produced by Hulett - Series 6000 Aluminum Rolled
     Plate. Hulett produces numerous other products that the Company presently
     imports. Hulett announced that it will contest the allegations, which it
     believes are flawed. It is expected that the investigation could take up to
     a year to complete.

     The Company is unable to assess the specifics of the allegations against
     Hulett at this time as the key economic data has been redacted from the
     petition. Counsel has advised the Company that, in general, anti-dumping
     duties may only be assessed prospectively. According to counsel, two
     conditions must be met for an anti-dumping duty to be assessed. First, the
     DOC must decide that the product is being sold in the United States at less
     than fair value. Second, the ITC must determine that the United States'
     industry is materially injured or threatened with material injury by reason
     of the imports.

     The Company has been assured by Hulett that it will continue to ship the
     product, pending the results of the investigation. In the event that
     Hulett, in the future, ceases supply of the product and if the Company is
     unable to secure an alternative source of supply for the product at
     comparable volumes and prices, the Company's future results of operations
     could be adversely affected.

NOTE C - FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of notes payable to the banks approximate fair value as of
December 31, 2003 and 2002 because the interest rates on such debt approximate
the market rate for the Company given the appropriate risk factors. Derivative
financial instruments are carried at fair value. (See Note D)


                                                                             F-8



<PAGE>


EMPIRE RESOURCES, INC. AND SUBSIDIARES

NOTE D - DERIVATIVE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

As of January 1, 2001, the Company has adopted Statement of Financial Accounting
Standards (SFAS) No. 133, "Accounting For Derivative Instruments and Hedging
Activities", issued by the Financial Accounting Standards Board. SFAS No. 133
requires the Company to recognize all derivatives in the balance sheet at fair
value. Derivatives that are not hedges must be adjusted to fair value through
earnings. If the derivative is a hedge, depending upon the nature of the hedge,
changes in the fair value of the derivative are either offset against the change
in fair value of the hedged assets, liabilities or firm commitments through
earnings (fair value hedge), or recognized in other comprehensive income until
the hedged item is recognized in earnings (cash flow hedge). The ineffective
portion of a derivative's change in fair value, if any, is immediately
recognized in earnings.

The gains and losses on futures and forward positions as of January 1, 2001
offset the losses and gains at that date on the underlying firm purchase and
sales commitments which they hedged, and accordingly the Company did not record
a transition adjustment as of January 1, 2001, upon the adoption of SFAS No.
133. For periods prior to to January 1, 2001, gains and losses on aluminum
futures contracts and on foreign exchange forward contracts were deferred and
recognized in earnings as the aluminum products were sold. Accordingly, the
adoption of SFAS No. 133 did not have a material effect on the Company's results
of operations for the year ended December 31, 2001.

At December 31, 2003, net unrealized gains on the Company's foreign exchange
forward contracts amounted to approximately $2,176,000 as compared to $1,067,000
at December 31, 2002 and net unrealized losses on aluminum futures contracts
amounted to approximately $1,613,000 as compared to $133,000 in 2002. These
unrealized amounts, which represent the fair value of the derivative contract,
were offset by like amounts for the changes in the fair value of the underlying
commitments which were hedged. Such amounts are reflected in the accompanying
2003 and 2002 balance sheet in other current assets ($3,129,000), inventory
($563,000) and accrued expenses ($2,566,000) and are reflected on the 2002
balance sheet in other current assets ($1,067,000) inventory ($133,000) and
accrued expenses ($1,200,000).

For the years ended December 31, 2003, and 2002 and 2001, hedge ineffectiveness
associated with derivatives designated as fair value hedges was insignificant,
and no fair value hedges were derecognized.

NOTE E - NOTES PAYABLE - BANKS

The Company operates under a $50,000,000 committed credit facility with three
commercial banks. This facility which was renewed on June 19, 2003, expires on
June 30, 2006. Borrowings by the Company under this line of credit are
collateralized by security interests in substantially all its assets. Under the
agreement, Empire is required to maintain working capital and net worth ratios
as defined by the loan agreement. As of December 31, 2003 and 2002 respectively,
the credit utilized under this facility amounted to $38.9 million and $31.6
million (including approximately $4.5 million and $6 million of outstanding
letters of credit). Interest on borrowings is either (i) the federal funds rate,
(ii) the prime rate of JP Morgan Chase or (iii) LIBOR, plus the applicable
margins defined in the loan agreement. At December 31, 2003 and 2002
respectively, the interest rate charged approximated 3.1% and 3.4%,
respectively.

NOTE F - STOCK OPTIONS

The Company's 1996 Stock Option Plan (the "1996 Plan"), as amended, provides for
the granting of options to purchase not more than an aggregate of 1,129,000
shares of common stock. All officers, directors and employees of the Company and
other persons who perform services for the Company are eligible to participate
in the 1996 Plan. Some or all of the options may be "incentive stock options"
within the meaning of the Internal Revenue Code of 1986, as amended.

The 1996 Plan provides that it is to be administered by the Board of Directors,
or by a committee appointed by the Board, which will be responsible for
determining, subject to the provisions of the 1996 Plan, to whom the options are
granted, the number of shares of common stock subject to an option, whether an
option shall be incentive or non-qualified, the exercise price of each option
(which, other than in the case of incentive stock options, may be less than the
fair market value of the shares on the date of grant), the period during which
each option may be exercised and the other terms and conditions of each option.
No options may be granted under the 1996 Plan after July 29, 2006.


                                                                             F-9



<PAGE>


EMPIRE RESOURCES, INC. AND SUBSIDIARES

NOTE F - STOCK OPTIONS (CONTINUED)

The following is a summary of stock option activity for the years ended December
31, 2003, 2002 and 2001:

<TABLE>
<CAPTION>
                                               Number     Exercise price   Weighted Average
                                              of shares     per share       Exercise Price
                                              ---------   --------------   ----------------
<S>                                           <C>         <C>                   <C>
Options outstanding at December 31, 2000      1,307,712    $0.01-$6.00          $2.96

Options granted                                  18,000       $0.98             $0.98

Options forfeited                              (574,779)   $1.64-$6.00          $4.99
                                              ---------
Options outstanding at December 31, 2001        750,933    $0.01-$2.00          $1.36

Options granted                                  18,000       $1.13             $1.13

Options forfeited                               (85,000)   $1.37-$1.50         $1.49
                                              ---------
Options outstanding at December 31, 2002        683,933    $.01-$2.00          $1.33

Options granted                                  18,000       $1.87             $1.87

Options exercised                               (96,000)   $0.98-$1.87          $1.44

Options forfeited                               (50,000)      $1.63             $0.81
                                              ---------
Options outstanding at December 31, 2003        555,933     $.01-$2.00          $1.30
                                              =========
Options exercisable at December 31, 2003        555,933     $.01-$2.00          $1.30
                                              =========
Options available for grant under 1996 Plan
   at December 31, 2003                         577,000
                                              =========
</TABLE>

At December 31, 2003, the weighted average years remaining for outstanding and
exercisable options is 4.5 years.

NOTE G - COMMON STOCK

[1]  Stock repurchase plan:

     In November 1999, the Board of Directors authorized the Company to
     repurchase up to one million shares of its common stock at prices not to
     exceed $1.50 per share. In December 2000, the number of shares authorized
     for repurchase was increased to 1.5 million. In June 2002, the Board of
     Directors increased the number of shares authorized to a total of
     2,500,000. As of December 31, 2003, the Company had repurchased a total of
     2,267,400 shares under the repurchase program for an aggregate cost of
     $2,731,049.

[2]  Retirement of contingent shares issued to Empire stockholders:

     In connection with a merger of the Company in 1999, 3,824,511 of the
     Company's shares were deposited into escrow subject to an earn-out formula
     dependant on the Company achieving a minimum cumulative after-tax net
     income (subject to certain adjustments) of $4.4 million during the two-year
     period commencing April 1, 1999 and ending March 31, 2001. No shares were
     released from escrow in accordance with this formula and all of the
     3,824,511 shares placed in escrow were retired on June 13, 2001.


                                                                            F-10



<PAGE>


EMPIRE RESOURCES, INC. AND SUBSIDIARIES

NOTE H - INCOME TAXES

Income tax expense (benefit) consists of the following:

<TABLE>
<CAPTION>
                                                    Year Ended December 31,
                                              ----------------------------------
                                                 2003         2002        2001
                                              ----------   ----------   --------
<S>                                           <C>          <C>          <C>
Current                                       $2,245,000   $1,542,000   $692,000
Deferred                                      $  (27,000)      34,000     63,000
                                              ----------   ----------   --------
                                              $2,218,000   $1,576,000   $755,000
                                              ==========   ==========   ========
</TABLE>

The U.S. statutory rate of 34% can be reconciled to the effective tax rate as
follows:

<TABLE>
<CAPTION>
                                                    Year Ended December 31,
                                              ----------------------------------
                                                 2003         2002        2001
                                              ----------   ----------   --------
<S>                                           <C>          <C>          <C>
Provision for taxes at statutory rate         $1,959,000   $1,342,000   $697,000
State and local taxes, net of federal tax
benefit                                       $  265,000      154,000     58,000
Permanent differences and other                   (6,000)      80,000
                                              ----------   ----------   --------
                                              $2,218,000   $1,576,000   $755,000
                                              ==========   ==========   ========
</TABLE>

No valuation allowance has been provided for U.S. deferred tax assets of $43,000
and $16,000 at December 31, 2003 and December 31, 2002 respectively, since
management is of the opinion that it is more likely than not that such assets
will be realized. The major temporary difference that gives rise to the deferred
tax asset at December 31, 2003 and 2002 is the allowance for doubtful accounts.
In addition, deferred tax assets and liabilities of equal amounts of
approximately $1,000,000 and $355,000 at December 31, 2003 and 2002,
respectively related to derivative contracts and related hedged commitments.

NOTE I - EMPLOYEE RETIREMENT BENEFITS

Effective November 1, 1999, the Company implemented a salary reduction employee
benefit plan, a qualified plan adopted to conform to Internal Revenue Code
Section 401(k). Employees may contribute up to 15% of their eligible
compensation, and the Company will provide a matching contribution of 50% of
employee contributions limited to 2% of employee compensation. The plan covers
all employees who have attained age 18, and substantially all eligible employees
have elected to participate.

Each employee's pre-tax contributions are immediately vested upon participation
in the plan. The employees' vesting of the Company's matching contribution is
based upon length of service as follows:

<TABLE>
<CAPTION>
Years of service   Vested %
----------------   --------
<S>                  <C>
       1              25%
       2              50%
       3              75%
       4             100%
</TABLE>

Employees who terminate prior to 100% vesting forfeit their non-vested portion
of the Company's matching contribution, and those funds are used to reduce
future matching contributions. Employees in active service on the effective date
of the plan were granted retroactive service credit for the purpose of
determining their vested percentage. Company matching contributions amounted to
$28,000 in 2003, $25,000 in 2002, and $30,000 in 2001.


                                                                            F-11



<PAGE>


EMPIRE RESOURCES, INC. AND SUBSIDIARIES

NOTE J - EARNINGS PER SHARE

The following is the reconciliation of the numerators and denominators of the
basic and diluted earnings per share:

<TABLE>
<CAPTION>
                                                              Year Ended December 31,
                                                      (In thousands except per share amounts)
                                                      ---------------------------------------
                                                              2003      2002      2001
                                                             ------   -------   -------
<S>                                                          <C>      <C>       <C>
Numerator:
   Net Income                                                $3,544   $ 2,370   $ 1,296
Denominator:
   Computation of basic earnings per share:
      Weighted average shares outstanding - basic             9,466    10,049    10,956
   Basic earnings per share                                   $0.37     $0.24     $0.12

   Computation of diluted earnings per share:
      Weighted average shares outstanding - basic             9,466    10,049    10,956
   Potentially dilutive shares:
      Shares issuable upon exercise of
         dilutive options and warrants                          236       140       135
      Weighted average shares outstanding - diluted           9,702    10,189    11,091
   Diluted earnings per share                                 $0.37     $0.23     $0.12
</TABLE>

NOTE K - BUSINESS SEGMENT AND GEOGRAPHIC AREA INFORMATION

The Company operates in one business segment-the purchase, sale and distribution
of non-ferrous metals. Sales to domestic and foreign customers were as follows:

<TABLE>
<CAPTION>
                                                      Year Ended December 31,
                                                          (In thousands)
                                                  ------------------------------
                                                    2003       2002       2001
                                                  --------   --------   --------
<S>                                               <C>        <C>        <C>
United States                                     $148,108   $127,327   $113,915
Canada and Pacific Rim                              36,308     31,411     29,320
                                                  --------   --------   --------
                                                  $184,416   $158,738   $143,235
                                                  ========   ========   ========
</TABLE>


                                                                            F-12



<PAGE>


EMPIRE RESOURCES, INC. AND SUBSIDIARIES

NOTE L - SUMMARY OF QUARTERLY RESULTS (UNAUDITED)

<TABLE>
<CAPTION>
                                                          2003
                                        ----------------------------------------
                                         March      June    September   December
                                           31        30        30          31
                                        -------   -------   ---------   --------
                                         (In thousands except per share amounts)
                                        ----------------------------------------
<S>                                     <C>       <C>        <C>         <C>
Net sales                               $44,937   $46,873    $46,645     $45,961
Gross profit                              3,196     3,317      3,272       3,409
Operating income                          1,674     1,828      1,758       1,515
Net income                                  870       990        887         797
Income per common share-
   Basic and diluted
      Basic                                $.09      $.10       $.09        $.08
      Diluted                              $.09      $.10       $.09        $.08
Weighted average shares outstanding
      Basic                               9,435     9,432      9,469       9,528
      Diluted                             9,541     9,587      9,784       9,839
</TABLE>

<TABLE>
<CAPTION>
                                                          2002
                                        ----------------------------------------
                                         (In thousands except per share amounts)
                                        ----------------------------------------
                                         March      June    September   December
                                           31        30        30          31
                                        -------   -------   ---------   --------
<S>                                     <C>       <C>        <C>         <C>
Net sales                               $40,417   $37,838    $40,567     $39,916
Gross profit                              2,838     2,678      2,804       2,704
Operating income                          1,460     1,289      1,343         836
Net income                                  734       637        658         341
Income per common share-
   Basic and diluted
      Basic                                $.07      $.06       $.07        $.04
      Diluted                              $.07      $.06       $.07        $.04
Weighted average shares outstanding
    Basic                                10,569    10,564      9,676       9,442
    Diluted                              10,699    10,699      9,819       9,588
</TABLE>

NOTE M - COMMITMENTS AND CONTINGENCIES

[1]  Lease:

          The Company leases its office facilities under a lease expiring on
     March 31, 2005, and leases warehouse and distribution facilities under a
     lease expiring on October 31, 2005. The Company also leases equipment and
     vehicles under leases which run through November 2005. The minimum
     non-cancelable scheduled rentals under these leases are as follows:

<TABLE>
<CAPTION>
      Year Ending
     December 31,
     ------------
<S>                 <C>
         2004        430,000
         2005        227,000
                    --------
                    $657,000
                    ========
</TABLE>

     Rent expense for the years ended December 31, 2003, 2002, and 2001 was
     $452,000, $437,000 and $376,000 respectively.


                                                                            F-13


<PAGE>


EMPIRE RESOURCES, INC. AND SUBSIDIARIES

NOTE M - COMMITMENTS AND CONTINGENCIES (CONTINUED)

[2]  Letters of credit:

     Outstanding letters of credit at December 31, 2003 amounting to $4.5
     million expire from January through May of 2004.

[3]  Employment agreements:

     In July 2002, the Company entered into a new two year employment agreement
     with one of its executive officers. The agreement provides that the Company
     may terminate the agreement upon the disability of the executive or for
     cause (as such terms are defined in the agreement).Base salary under this
     agreement is being paid at a rate of $450,000 per annum. The amount may be
     increased, but not decreased, by the Board of Directors. The base salary
     provided for by this agreement is subject to possible upward annual
     adjustments based upon changes in a designated cost of living index.

     In July 2002, the Company also entered into a new employment agreement with
     another officer. The scheduled term of the agreement was until December 31,
     2002 and was extended for a two year period. The base salary is $220,000
     and is subject to possible upward annual adjustments based upon changes in
     a designated cost of living index.

[4]  Purchase commitments:

     Under the terms of some of its supply contracts, the Company may be
     required to purchase certain minimum tonnages over the term of the
     contracts.

NOTE N -ALLOWANCE FOR DOUBTFUL ACCOUNTS

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
                                In thousands
-----------------------------------------------------------------------------------------
                                 Additions
-----------------------------------------------------------------------------------------
        Balance at    Charged to Costs   Charged to   Deductions from   Balance at End of
       Beginning of         And             Other         Reserves            Period
          Period          Expenses        Accounts
-----------------------------------------------------------------------------------------
<S>        <C>              <C>          <C>                <C>                <C>
2003       $191                                                                $191
2002       $189             $2                                                 $191
2001       $202                                             $13                $189
-----------------------------------------------------------------------------------------
</TABLE>


                                                                            F-14