<PAGE>

 ------------------------------------------------------------------------------


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 29, 2001

                        Commission file number 333-37135
              -----------------------------------------------------

                              Omega Cabinets, Ltd.
                  --------------------------------------------
             (Exact name of registrant as specified in its charter)


Delaware                                                   42-1423186

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

                     1205 Peters Drive, Waterloo, Iowa 50703
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

Registrant's telephone number, including area code:   (319) 235-5700

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

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

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

On March 29, 2002 all of the voting stock of Omega Cabinets, Ltd. was held by
Omega Holdings, Inc. ("Holdings"), a Delaware corporation.

As of March 29, 2002 Omega Cabinets, Ltd. had 1,000 shares of Common Stock
issued and outstanding.

                    DOCUMENTS INCORPORATED BY REFERENCE: None

<PAGE>

                                 FORM 10-K INDEX

<TABLE>
<CAPTION>
                                                                                                      Page
                                                                                                      ----
<S>      <C>                                                                                          <C>
Part I ..............................................................................................  3

     Item 1.  Business ..............................................................................  3
     Item 2.  Properties ............................................................................ 11
     Item 3.  Legal Proceedings ..................................................................... 12
     Item 4.  Submission of Matters to a Vote of Security Holders ................................... 12

Part II ............................................................................................. 12

     Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters ................. 12
     Item 6.  Selected Financial Data ............................................................... 13
     Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations . 14

New Accounting Standards ............................................................................ 19

     Item 8.  Financial Statements and Supplementary Data ........................................... 21
     Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure .. 21

Part III ............................................................................................ 22

     Item 10. Directors and Executive Officers of the Registrant .................................... 22
     Item 11. Executive Compensation ................................................................ 24
     Item 12. Security Ownership of Certain Beneficial Owners and Management ........................ 28
     Item 13. Certain Relationships and Related Transactions ........................................ 30

Part IV ............................................................................................. 33

     Item 14. Exhibits, Financial Statements Schedules, and Reports on Form 8-K ..................... 33
</TABLE>

         Reference in this Annual Report on Form 10-K is made to the Omega(R),
HomeCrest(TM), Kitchen Craft(R), and Kitchen Craft (registered in Canada)
trademarks, which are owned by Holdings.

                                       -2-

<PAGE>

                                     Part I

Item 1.  Business.

         Omega Cabinets, Ltd. (the "Company" or "Omega") is a leading
manufacturer of wood and laminate kitchen cabinetry, bathroom vanities and
related accessories. Headquartered in Waterloo, Iowa, the Company produces a
wide array of custom, semi-custom and stock kitchen cabinetry and bathroom
vanities primarily for use in residential remodeling and, to a lesser extent, in
new construction. Omega manufactures its products in state-of-the-art,
highly-integrated facilities under the Omega (custom), Dynasty (semi-custom),
and Embassy (semi-custom) brand names. Omega's HomeCrest division ("HomeCrest")
manufactures its stock cabinets under the HomeCrest and Great Buy Cabinetry
brand names. The Company sells to a broad network of kitchen and bath dealers,
home centers, builders/contractors and independent distributors.

         Kitchen Craft of Canada Ltd., based in Winnipeg, Manitoba, and an
indirect subsidiary of the Company, is the second largest manufacturer of
kitchen cabinetry and laminated countertops in Canada and the largest Canadian
manufacturer of semi-custom kitchen cabinetry. Kitchen Craft is also a leading
competitor in the United States semi-custom cabinet market. In contrast to the
Company, 100% of Kitchen Craft's cabinetry sales are generated by full access or
European style cabinetry products, which differ from framed cabinetry in that
front frames are not used during cabinet construction.

Company History

         Omega was founded in 1977 by Robert J. Bertch. In its early years,
Omega principally manufactured bath vanities. In 1984, Omega began manufacturing
custom kitchen cabinetry under the Omega Custom brand name. In 1990, Omega
introduced a semi-custom kitchen cabinetry line under the Dynasty brand name as
a lower price alternative to the Omega Custom line.

         In June 1994, Code, Hennessy & Simmons, Inc. led a group of private
investors, including the Company's senior management team, in the acquisition of
Omega from its founder. In May 1995, Omega acquired HomeCrest Corporation, a
manufacturer of stock cabinetry under the HomeCrest brand name.

         In April 1997, Omega Holdings, Inc. ("Holdings"), the sole stockholder
of the Company, and Holdings' stockholders entered into a recapitalization
agreement with Omega Merger Corp. ("OMC"), a company formed by affiliates of
Butler Capital Corporation ("BCC"), which provided for a merger of OMC with and
into Holdings, and a recapitalization of Holdings, with Holdings as the
surviving corporation (the "OMC Merger"). Concurrently with the OMC Merger,
which occurred on June 13, 1997, aggregate consideration of approximately $201.9
million was paid to certain selling stockholders of Holdings, including
approximately $89.3

                                       -3-

<PAGE>

million of debt which was repaid in connection therewith. The merger
consideration was subject to a post-closing working capital adjustment of $2.0
million, which was paid by the Company in March 1998.

         On January 29, 1999, the Company consummated the acquisition of Kitchen
Craft of Canada Ltd. ("Kitchen Craft") for approximately $54.3 million.
Concurrently with the acquisition, (i) Mezzanine Lending Associates III, L.P.,
an investment fund affiliated with BCC, ("MLA III"), purchased stock of Holdings
for approximately $13.3 million, (ii) the Company amended and restated its
existing senior credit agreement to provide for an additional term loan of $25.0
million, (iii) the Company entered into a Canadian dollar denominated senior
credit agreement (the "Canadian Senior Credit Agreement") pursuant to which it
borrowed (Cdn) $22.0 million under a term loan and approximately (Cdn) $2.0
million under a revolving loan, and (iv) the existing Kitchen Craft management
received shares of Class B Common Stock of Kitchen Craft with a fair value of
approximately $4.0 million, which are exchangeable on a 1-for-1 basis into
shares of common stock of Holdings.

         In connection with the acquisition of Kitchen Craft, the Company
solicited the consent of the holders of its 10-1/2% Senior Subordinated Notes
due 2007 (the "Notes") to certain amendments to the Indenture dated as of July
24, 1997 (the "Indenture") between the Company, Panther Transport, Inc.,
HomeCrest Corporation and The Chase Manhattan Bank, as trustee. On January 28,
1999, the Company, Panther Transport, Inc. and The Chase Manhattan Bank, as
trustee, entered into the First Supplemental Indenture to effect the amendments
to the Indenture described in the Company's Consent Solicitation Statement dated
January 12, 1999, as supplemented, relating to certain limitations on the
guarantees of the Notes by the Company's subsidiaries, and related matters.

         Immediately following consummation of the acquisition of Kitchen Craft,
the Company, Panther Transport, Inc., Omega Kitchen Craft U.S. Corp., Bulrad
Illinois, Inc., and The Chase Manhattan Bank, as trustee, entered into the
Second Supplement Indenture dated January 29, 1999 pursuant to which each of
Omega Kitchen Craft U.S. Corp. and Bulrad Illinois, Inc. agreed to guarantee the
Company's obligations under the Notes and the Indenture in accordance with the
terms and provisions of the Indenture.

Products

         The Company specializes in manufacturing kitchen cabinetry and bathroom
vanities and accessories. The Company offers its customers one of the most
extensive product lines in the cabinetry industry and believes that it is one of
only three national manufacturers that produces a full line of kitchen cabinetry
for all three market price points: custom, semi-custom and stock. The Company's
cabinetry is distinguished by its high quality materials, superior finishes and
expert construction. The following chart illustrates the Company's fiscal 1999,
2000 and 2001 sales by product line:

                                       -4-

<PAGE>

                              Sales by Product Line
                              (dollars in millions)
<TABLE>
<CAPTION>
     Product                              1999(1)                      2000                        2001
     -------                              ----                         ----                        ----
                                        $        % of Sales        $       % of Sales        $       % of Sales
                                        -        ----------        -       ----------        -       ----------
<S>                                <C>              <C>         <C>           <C>       <C>          <C>
Omega/HomeCrest
---------------

Custom Cabinetry                   $  17.1          9.0%       $ 20.7        10.3%       $  19.2          9.0%

Semi-Custom Cabinetry              $  53.6         28.2%       $ 59.4        29.7%       $  66.7         31.3%

Stock Cabinetry                    $ 102.4         53.9%       $104.0        51.9%       $ 110.5         51.8%

Bath Vanities &  Other             $  17.0          8.9%       $ 16.2         8.1%       $  17.0          7.9%
                                   -------        -----        ------       -----        -------        -----

Total                              $ 190.1        100.0%       $200.3       100.0%       $ 213.4        100.0%
                                   =======        =====        ======       =====        =======        =====

Kitchen Craft
-------------

Semi-Custom Cabinetry              $  50.6         62.3%       $ 68.5        65.9%       $  75.2         67.0%

Stock Cabinetry                    $  18.1         22.2%       $ 20.8        20.0%       $  21.1         18.8%

Countertops & Other                $  12.6         15.5%       $ 14.6        14.1%       $  16.0         14.2%
                                   -------        -----        ------       -----        -------        ======

Total                              $  81.3        100.0%       $103.9       100.0%       $ 112.3        100.0%
                                   =======        =====        ======       =====        =======        ======
</TABLE>

(1) Sales include only eleven months of results for 1999 for Kitchen Craft,
which was acquired on January 29, 1999.

         Custom Cabinetry. The Company manufactures and markets custom kitchen
cabinetry under the Omega Custom brand name. Omega Custom cabinets are
manufactured for each individual customer and are distinguished by their high
quality design, premium materials and superior construction. Omega Custom offers
the consumer the widest choice of cabinetry configurations, door styles and wood
species within the Company's product lines. The Company believes it is one of
the few custom cabinetry manufacturers capable of offering national distribution
as well as an unlimited choice of finishes through its "custom color match"
program.

                                       -5-

<PAGE>

         The Company's custom cabinetry is primarily sold to kitchen and bath
dealers as well as through Home Depot's EXPO Design Centers ("Home Depot's
EXPO") and Sears' The Great Indoors locations.

         Semi-Custom Cabinetry. The Company manufactures and markets semi-custom
kitchen cabinetry under the Dynasty and Embassy brand names. Dimensional
modifications of size are available in both the Dynasty and Embassy lines, but
not to the extent available with the Omega Custom line. Approximately 40% of
Dynasty/Embassy cabinetry sales are produced from maple, with the balance
primarily made up of oak (21%), cherry (20%), pecan (13%) and red birch (6%).
The Dynasty line is sold primarily to kitchen and bath dealers, while the
Embassy line is sold primarily through lumber yards and home centers such as
Home Depot's EXPO and Sears' The Great Indoors. Kitchen Craft manufactures and
markets full access semi-custom cabinetry under the Integra brand name. The
Integra product line is sold primarily through kitchen and bath dealers and
company-owned retail stores located in Canada and the United States.

         Stock Cabinetry. The Company manufactures and markets stock cabinetry
under the HomeCrest and Great Buy Cabinetry brand names. The HomeCrest brand is
sold through HomeCrest's distribution network of dealers, builder/contractors
and independent distributors. In September 1995, the Company launched its Legend
line of stock cabinetry that was developed subsequent to the acquisition of
HomeCrest in order to cross-sell stock cabinetry through the Omega dealer
network. The Legend product line was discontinued effective December 30, 2000.
In 1999, HomeCrest introduced Great Buy Cabinetry targeted toward the builder
channel and discontinued the Affinity full-access line due to introduction of a
full overlay line. Full overlay cabinets have doors and drawer overlays that
cover nearly all of the front frame.

         The Company provides a number of options and option combinations for
its stock cabinetry. These options include dovetailed wood drawers, plywood
cabinetry side material options (instead of furniture board) and premium drawer
slides, which allow for a level of customization even at this lowest price
point. The Company manufactures 54 different stock door styles in six types of
wood -- oak (46%), maple (13%), hickory (10%), ash (3%) and others (10%), as
well as white foil on medium-density fiberboard (18%).

         Kitchen Craft manufactures and markets full access stock kitchen
cabinetry under the Aurora brand name. The Aurora product line is sold primarily
through kitchen and bath dealers and company-owned retail stores located in
Canada and the United States.

         Bathroom Vanities and Accessories. The Company manufactures and markets
bathroom vanities under a variety of brand names, including Designer Classic,
Hallmark, Lancaster, Prairie, Versailles, Monticello, and Omega Custom. The
Company's vanity line has ten different price points covering the market from
value-priced, frameless cabinetry through high-end, furniture quality custom
vanities. The Company's vanity line includes the same materials, construction
and finishes found in the Company's kitchen cabinetry lines. Vanities are sold
to kitchen and bath dealers, home centers and, on a private-label basis, to one
distributor.

                                       -6-

<PAGE>

         Other Products. The Company also manufactures various corner cabinets,
peninsula cabinets, special wall cabinets, medicine cabinets, special use
cabinets, sink bases, appliance cabinets and tall storage cabinets. The Company
also manufactures furniture products, such as bookcases, entertainment centers,
hutches and desks and offers a line of kitchen and bath-related accessory
products.

         Kitchen Craft manufactures laminated countertops which are sold
primarily through company-owned retail stores in Canada as well as installation
service and related products sold solely through these stores.

         The markets for the Company's cabinetry products are cyclical and are
affected by the same economic factors that affect the remodeling and housing
industries in general, including the availability of credit, changes in interest
rates, market demand and general economic conditions, all of which are beyond
the Company's control. Any deterioration in these markets could have a material
adverse effect on the Company's business, financial conditions and results of
operations.

Manufacturing

         General. The Company operates four manufacturing facilities located in
Waterloo, Iowa; Goshen, Indiana; Clinton, Tennessee; and Winnipeg, Manitoba.
Custom and semi-custom kitchen cabinetry and bathroom vanities are manufactured
in Waterloo, and stock cabinetry and vanities are manufactured and assembled in
Goshen. Finished cabinetry frames and flat panel doors for stock cabinetry are
manufactured in Clinton. Full access cabinetry and laminated countertops are
manufactured in Winnipeg.

         The plants are primarily machining, assembly and finishing operations.
Raw materials used by the plants consist of raw, kiln-dried lumber and plywood.
At the Waterloo facility, the lumber is cut and molded in a manner designed to
maximize material usage and minimize waste. At the Goshen facility, dimensioned
lumber and particle board is supplied by third-party vendors and the Waterloo
facility. At the Kitchen Craft facility, dimension lumber and molding are both
produced internally and, to a lesser extent, supplied by third party vendors.
Prior to assembly, plywood and furniture board is laminated and machined.
Panels, shelves, drawers, drawer fronts, floors and back parts are then
assembled. Semi-custom and stock cabinetry are finished (sanded, stained,
varnished and cured) and then assembled. Custom products are finished after
assembly. Hardware is then added, and the final product is inspected, packaged
and prepared for shipment.

         Suppliers and Raw Materials. In 2001, the Company purchased roughly
$114 million of lumber and other raw materials from approximately 60 different
suppliers, the largest of which represented approximately 4% of such purchases.
The Company is not dependent upon any specific supplier for any of its raw
materials or component parts. The Company believes that its sources of supply
are adequate for its needs.

                                       -7-

<PAGE>

         The Company's results of operations are affected significantly by
fluctuations in the market prices of hardwood lumber, which represent
approximately 20% of the total cost of goods sold by the Company. The Company
buys its hardwood supplies at market-based prices from numerous independent
sawmill operators. The cost of hardwood lumber is subject to fluctuation and is
affected by levels of supply as well as development in the timber cutting
industry. Significant increases in the price of lumber would increase the cost
of goods sold. Unless the Company was able to increase the prices of its
products, such price increases could have a materially adverse affect on the
Company's results of operation.

         Transportation/Freight. Panther Transport, Inc. ("Panther"), a
wholly-owned subsidiary of the Company, provides trucking and freight services
to the Company for its Omega product lines. Panther leases 39 tractors and 60
trailers. HomeCrest and Kitchen Craft products are primarily shipped through
contract carriers.

Sales and Marketing - Omega

         The Omega and HomeCrest products are sold on a national basis through
three market channels: independent kitchen and bath dealers, home centers and
home manufacturers. The Company sells products through approximately 1,600
active selling locations with selling locations defined as those locations that
have purchased over $10,000 of product in the past year. In 2001, Omega added
388 new accounts and believes that the addition of new accounts is important to
future sales growth. It has been the Company's experience that new selling
locations generally mature within a 9 to 18-month period.

         In 2001, approximately 91% of Omega's sales were through kitchen and
bath dealers. The Company has established strong relationships with its dealers
through superior customer service, timely delivery, quality products, and
competitive pricing. The Company seeks to establish long-term relationships with
quality dealers and has experienced very low dealer turnover rates, creating
what management believes is a significant competitive advantage within the
industry.

         Net sales to home centers represented 8% of total sales and was
comprised of selling locations at Home Depot's EXPO, Sears' The Great
Indoors, and Menards. In 2000, the Company elected to exit all 146 selling
locations at Home Depot and Eagles that sold mid-priced vanity product in order
to better focus on specialty home centers and independent dealers. The Company
currently sells kitchen and bath cabinetry at 50 Home Depot's EXPO stores and 17
Sears' The Great Indoors stores. Both Home Depot's EXPO and Sears' The Great
Indoors have announced goals to open 150-200 stores over the next five years.

         The Company produces its cabinetry in response to firm orders. By
producing products only to order, the Company reduces its inventory risk by
lowering its work-in progress inventory

                                      -8-

<PAGE>

and improving inventory turns, all of which contribute to the Company's low
overall working capital requirements. The Company generally ships its custom
cabinetry within six weeks of order, its semi-custom cabinetry with four weeks
of order and its stock cabinetry within two weeks of order. The Company believes
it maintains one of the industry's highest on-time and complete order record and
believes that this performance has allowed the Company to increase market share.

         The Company maintains separate sales forces for products produced by
Omega and HomeCrest consisting of 75 independent sales representatives, seven
Company-employed salespersons and approximately 30 customer service
professionals. The sales force assists the Company's dealers with training,
promotion, cabinetry displays and other services. All orders are placed directly
with the Company.

Sales and Marketing - Kitchen Craft

         Kitchen Craft sells it products in Canada and the United States
principally through its network of approximately 500 selling locations and 14
company-owned retail stores. In 2001, dealer locations contributed 78% of sales,
retail stores 20%, and one regional homecenter, Beaver Lumber, contributed 2%.

         Kitchen Craft generates approximately 32% of its sales from the
Canadian market, which is supported by a broad distribution network including
approximately 150 dealers, 12 company-owned retail stores, and 78 Beaver Lumber
locations. The retail stores were created due to the lack of a strong
distribution channel of independent kitchen and bath dealers in Canada.
Management attributes this industry dynamic primarily to the prevalence of
nearly exclusive manufacturer representation by dealers and the lack of
population density in Canada. Kitchen Craft's company-owned stores function in
essentially the same manner and provide substantially equivalent customer
services as independent dealers.

         The United States generates approximately 69% of Kitchen Craft sales
and is supported by approximately 350 dealers and 2 company-owned stores located
in Seattle and Austin. In 1992, the Company aggressively expanded its United
States distribution network and the company-owned stores were created to
overcome initial difficulties in penetrating the independent dealer network.

         Kitchen Craft maintains a U.S. sales force consisting of 22
company-employed salespersons and 2 independent sales representatives. The
sales force assists the Company's dealers with training, promotion, cabinetry
displays and other services.

Employees

         As of December 29, 2001, the Company employed approximately 1,900
people of which 270 were salaried and 1,630 were hourly, none of whom are
covered by a union or collective bargaining agreement. In addition, Kitchen
Craft has approximately 1,600 workers,

                                       -9-

<PAGE>

none of whom are covered by a union or a collective bargaining agreement. 128
of Kitchen Craft's employees work at the 14 company-owned retail stores.

Industry Overview

         The kitchen and bath cabinetry industry consists of three primary price
points: custom, semi-custom and stock. Custom cabinetry is made-to-order and is
offered in an unlimited choice of design and construction styles, wood species,
configurations, finishes and colors. Semi-custom cabinetry is less expensive and
is made-to-order from a more limited set of options than custom cabinetry. Stock
cabinetry is the least expensive price point and offers the fewest number of
styles, wood species and finishes, with choices generally limited to the
standard guidelines established by the manufacturer. Kitchen cabinetry and
bathroom vanities are generally distributed through four separate channels:
kitchen and bath dealers, home centers, builders/contractors and independent
distributors. Management estimates that there are over 10,000 kitchen and bath
dealers in the United States and Canada.

         The kitchen and bath cabinetry industry in the United States and Canada
is highly fragmented. However, management believes that the industry will
continue to consolidate as larger competitors with broader product offerings and
more extensive distribution networks displace smaller, less-capable competitors.

Competition

         The cabinetry industry is mature, competitive, regional and fragmented,
with many smaller companies competing primarily on a local and regional basis.
There are relatively low capital requirements for cabinetry assembly, and
therefore it is relatively easy for small competitors to enter the industry.

         Despite the relatively low barriers to entry facing small potential
industry entrants, ongoing consolidation is occurring due to customer demands
for shorter lead times and product innovation and the need for manufacturers to
invest in automation and technology. Such consolidation is making it more
difficult for smaller companies to compete with larger, more integrated
manufacturers on a cost-effective basis. Management believes that its principal
competitors include only those cabinetry manufacturers with strong dealer
networks and adequate capital supplies to invest in technology and develop the
economies of scale in manufacturing and purchasing required to deliver the
combination of service, product quality and competitive pricing demanded by
customers.

         Key competitive factors in the cabinetry industry include product
quality, breadth of offering, customer service, speed of delivery, value and
price. The cabinetry industry is subject to price competition, especially in the
stock cabinetry price point of the market. The Company believes that it competes
favorably with other manufacturers due to the breadth of its product

                                      -10-

<PAGE>

offerings, its production capacity and its delivery and service. Some of the
Company's competitors, however, are larger and have greater financial resources
than the Company.

Intellectual Property

         Holdings, the Company's sole stockholder, owns the Omega, HomeCrest and
Kitchen Craft trademarks. The Company believes that its trademarks are important
to its business operations and that the expiration or loss of such trademarks
could have a material adverse effect on the Company.

Environmental Matters

         The Company's operations are subject to extensive federal, state and
local laws and regulations relating to the generation, storage, handling,
emission, transportation and discharge of materials into the environment.
Permits are required for certain of the Company's operations, and these permits
are subject to revocation, modification and renewal by issuing authorities.
Governmental authorities have the power to enforce compliance with their
regulations, and violations may result in the payment of fines or the entry of
injunctions, or both. The Company does not believe it will be required under
existing environmental laws and enforcement policies to expend amounts that will
have a material adverse effect on its results of operations or financial
condition. The requirements of such laws and enforcement policies, however, have
generally become stricter in recent years. Accordingly, the Company is unable to
predict the ultimate cost of compliance with environmental laws and enforcement
policies.

Item 2.  Properties.

         The following are the Company's principal manufacturing facilities and
properties:

<TABLE>
<CAPTION>

Location                         Owned/Leased          Products                                    Square Ft.
--------                         ------------          --------                                    ----------
<S>                              <C>                   <C>                                         <C>
Waterloo, Iowa                   Owned                 Custom and semi-custom                      392,000
                                                       cabinetry and vanities

Goshen, Indiana                  Owned                 Stock cabinetry                             500,000

Clinton, Tennessee (1)           Owned                 Finished frames and flat panel              201,000
                                                       doors

Winnipeg, Manitoba               Owned                 Stock and semi-custom cabinetry             565,000

Winnipeg, Manitoba               Leased                Laminated countertops                        30,000
</TABLE>

----------
(1)      The Clinton property is a flexible facility currently utilized for the
         sub-assembly of cabinetry and vanities.


                                      -11-

<PAGE>

         The Company believes that its plants and properties are generally well
maintained and in good operating condition. While the Company maintains adequate
insurance coverage on all of its properties, the loss of any of its facilities
could have an adverse effect on the Company's operations.

Item 3.  Legal Proceedings.

         The Company is a party to various legal actions arising in the ordinary
course of its business. The Company believes that the resolution of these legal
actions will not have a material adverse effect on the Company's financial
position or results of operations.

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

         The Company did not submit any matters during the fourth quarter of the
fiscal year covered by this report to a vote of security holders through the
solicitation of proxies or otherwise.

                                    Part II

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

         As of March 29, 2002 Omega had 10,000 authorized shares of common
stock, par value $.01 per share, of which 1,000 were issued and outstanding and
held by Holdings. There is no established public trading market for Omega common
stock. Omega's ability to pay dividends is limited under the Indenture and its
bank credit facility

                                      -12-

<PAGE>

Item 6.  Selected Financial Data

         Set forth below is selected financial data of the Company. The
Statement of Income and Balance Sheet Data of the Company for the fiscal years
1997 through 2001 have been derived from the Company's audited consolidated
financial statements for those periods. The information presented below should
be read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the consolidated financial statements
and notes thereto included elsewhere in this Annual Report on Form 10-K.
<TABLE>
<CAPTION>
                                                                    Year Ended(1)
                                             -------------------------------------------------------
                                             December 27,   January 2,   January 1,   December 30,   December 29,
                                                1997           1999        2000 (2)      2000           2001
                                             ------------   ----------   ----------   ------------   ------------
                                                 (in thousands, except ratios and statistical data)
<S>                                          <C>          <C>          <C>           <C>           <C>
Statement of Income Data
Net sales                                     $155,899       $169,220     $271,396      $304,207      $325,647
Cost of goods sold                             112,557        121,767      192,430       217,808       231,687
                                              --------       --------     --------      --------      --------
Gross profit                                    43,342         47,453       78,966        86,399        93,960

Selling, general and administrative
 expenses                                       22,171(3)      20,101       33,401        38,076        40,194
Amortization of goodwill                         1,398          1,440        2,468         2,564         2,519
                                              --------       --------     --------      --------      --------
Operating income                                19,773(3)      25,912       43,097        45,759        51,247

Interest expense                                16,313         15,074       17,446        17,343        14,983
Foreign currency transaction loss (gain)            --             --         (969)          791         1,122
                                              --------       --------     --------      --------      --------
                                                 3,460         10,838       26,620        27,625        35,142
Income tax expense                               1,695          4,180       10,516        11,416        14,214
                                              --------       --------     --------      --------      --------
Income before extraordinary item                 1,765          6,658       16,104        16,209        20,928

Extraordinary loss on debt refinancing (4)         947            --           --            --            --
                                              --------       --------     --------      --------      --------
Net income                                         818       $  6,658     $ 16,104      $ 16,209      $ 20,928
                                              ========       ========     ========      ========      ========
Ratio of earnings to fixed charges (5)             1.2x           1.7x         2.5x          2.5x          3.2x

Other Data

EBITDA (6)                                    $ 28,710       $ 29,703     $ 50,374      $ 52,502      $ 61,075
EBITDA margin (6)                                 18.4%          17.6%        18.6%         17.3%         18.8%

Gross margin                                      27.8%          28.0%        29.1%         28.4%         28.9%
Capital expenditures                             3,041          3,932       11,553        11,215        13,130

Depreciation and amortization                    4,067          4,527        7,015         7,893         8,602
Net cash provided (used) by:
  Operating activities                             849         13,220       25,185        25,656        35,615
  Investing activities                          (6,673)        (3,932)     (61,876)      (11,215)      (13,130)
  Financing activities                           5,978         (8,795)      38,334       (13,739)      (21,579)
Ratio of EBITDA to interest expense                1.8x           2.0x         2.9x         3.0x          4.1x
Number of active selling locations
 (at end of year)(7)                             1,503          1,600        2,033         2,269         2,100

Balance Sheet Data (at end of period)

Working capital                               $  1,951       $  5,225     $ 12,831      $ 15,369      $ 16,566
Total assets                                   117,346        114,208      191,451       196,336       202,101
Long-term debt, including current portion      146,120        141,855      173,184       152,548       130,845
Stockholder's equity (deficit)                 (43,152)       (40,309)      (5,860)       16,488        38,286
</TABLE>
(1)      The Company follows a 52/53 week fiscal year. Fiscal 1998 consisted of
         53 weeks and all other periods since fiscal 1997 consisted of 52 weeks.
         The Company has not paid or declared any cash dividends during the
         periods presented and is restricted in paying cash dividends under the
         terms of its borrowing agreements.

(2)      In January 1999, the Company acquired the stock of Kitchen Craft of
         Canada Ltd. in a transaction accounted for as a purchase.

                                      -13-

<PAGE>

(3)      Selling, general and administrative expenses for the year ended
         December 27, 1997 includes non-cash expenses relating to stock option
         and warrant grants of $5,481 (before related income tax benefit of
         $1,972).

(4)      As a result of the 1997 recapitalization and related refinancing, in
         June 1997 the Company wrote off existing unamortized deferred financing
         costs of $1,554, resulting in an extraordinary loss of $947 (net of a
         related income tax benefit of $607).

(5)      For purposes of calculating the ratio, earnings consist of income or
         loss before income taxes plus fixed charges. Fixed charges consist of
         interest expense, amortization of deferred financing costs, and 25% of
         the rent expense from operating leases which management believes is a
         reasonable approximation of the interest factor included in the rent.

(6)      EBITDA margin represents EBITDA as a percentage of net sales. EBITDA
         represents income from operations before interest expense (including
         amortization of deferred financing costs), income taxes, depreciation,
         amortization of goodwill and non-cash stock option and warrant expense.
         Non-cash expense of $5,481, $4, $1,348, $0 and $2,377 relating to stock
         option and warrant grants was incurred in fiscal years 1997, 1998,
         1999, 2000 and 2001 respectively. EBITDA is presented because it is a
         widely accepted financial indicator of a leveraged company's ability to
         service and/or incur indebtedness and because management believes that
         EBITDA is a relevant measure of the Company's ability to generate cash
         without regard to the Company's capital structure or working capital
         needs. EBITDA as presented may not be comparable to similarly titled
         measures used by other companies, depending upon the non-cash charges
         included. When evaluating EBITDA, investors should consider that EBITDA
         (i) should not be considered in isolation but together with other
         factors which may influence operating and investing activities, such as
         changes in operating assets and liabilities and purchase of property
         and equipment, (ii) is not a measure of performance calculated in
         accordance with generally accepted accounting principles, (iii) should
         not be construed as an alternative or substitute for income from
         operations, net income or cash flows from operating activities in
         analyzing the Company's operating performance, financial position or
         cash flows and (iv) should not be used as an indicator of the Company's
         operating performance or as a measure of its liquidity.

(7)      Active selling locations represent customer locations which have
         purchased over ten thousand dollars of product in the prior year and
         includes Kitchen Craft for fiscal 1999 and succeeding years.

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

         The following is management's discussion and analysis of the financial
condition and results of operations of the Company for the fiscal years ended
December 29, 2001, December 30, 2000, and January 1, 2000. This discussion and
analysis should be read in conjunction with, and is qualified in its entirety
by, the Selected Financial Data and the Consolidated Financial Statements of the
Company and the notes thereto included elsewhere in this annual report on Form
10-K.

1999 Kitchen Craft Acquisition

         On January 29, 1999, the Company consummated the acquisition of Kitchen
Craft as further described in the Notes to Consolidated Financial Statements.
The acquisition was accounted for as a purchase, with Kitchen Craft consolidated
with the Company effective from the acquisition date forward. Accordingly, the
Company's results of operations for fiscal 1999 reflect eleven months of Kitchen
Craft results.

Potential Acquisitions

         The Company plans to capitalize on its position as one of the largest
domestic manufacturers of kitchen cabinetry and bathroom vanities by acquiring
other cabinetry

                                      -14-

<PAGE>

companies as the industry consolidates. The Company continues to explore
potential acquisition opportunities and evaluate potential acquisition
candidates on a regular basis. The Company believes that acquiring additional
cabinetry manufacturers will facilitate growth in product line, broaden its
geographic distribution and promote additional operating efficiencies.

Results of Operations

Fiscal 2001 Compared to Fiscal 2000

         Net Sales for the year ended December 29, 2001 ("fiscal 2001") were
$325.6 million compared to $304.2 million for the year ended December 30, 2000
("fiscal 2000"), an increase of 7.0%. The increase was primarily attributable to
strong consumer spending on remodeling projects, robust new housing starts, and
the impact of increasing market share with existing and new customers. Net sales
for Kitchen Craft were $112.3 million in fiscal 2001 compared with $103.9
million in fiscal 2000, an increase of 8.1% driven primarily by the introduction
of new Aurora products and strong U.S. new home construction. Net sales of the
Omega lines (custom and semi-custom cabinetry and bath vanities) were $102.9
million in fiscal 2001 compared to $96.4 million in fiscal 2000, an increase of
6.8% driven primarily by 12.3% semi-custom cabinetry and 4.7% vanity sales
growth resulting primarily from increased market share at existing accounts, new
dealers, and new store openings at Home Depot's EXPO Design Centers and Sears'
The Great Indoors. Partly offsetting this growth, Omega sales to accounts with
discontinued or small accounts declined by $8.5 million compared with fiscal
2000. Custom cabinetry sales declined 4.7% reflecting market weakness for
high-end remodeling projects. Net sales of HomeCrest stock cabinetry, sold under
the HomeCrest and Legend brands, were $110.5 million in fiscal 2001 compared to
$104.0 million in fiscal 2000, an increase of 6.2% driven primarily by strong
new home construction partly offset by $2.6 million related to discontinuing the
lower margin Legend product line.

         Gross Profit for fiscal 2001 was $94.0 million compared to $86.4
million for fiscal 2000, an increase of 8.8%. As a percentage of sales, gross
profit increased to 28.9% in fiscal 2001 compared to 28.4% in fiscal 2000.
Kitchen Craft's gross margin decreased to 32.5% in fiscal 2001 compared to 34.5%
for fiscal 2000 driven primarily by the 200,000 square foot capacity expansion
project completed during December 2001 as well as unfavorable product mix.
Omega's gross margin increased to 31.6% during fiscal 2001 compared to 29.0%
during fiscal 2000 driven by strong factory execution and favorable product mix.
HomeCrest's gross margin increased to 22.6% in fiscal 2001 compared to 21.6% in
fiscal 2000 resulting from strong factory execution partly offset by the impact
of various new product and capital projects.

         Selling, General and Administrative ("SG&A") Expenses for fiscal 2001
were $40.2 million compared to $38.1 million for fiscal 2000, an increase of
5.6%. The increase of $2.1 million is primarily attributable to $2.5 million of
normal division SG&A and $2.4 million of non-cash stock option expense partly
offset by a non-recurring charge of $2.4 million during fiscal 2000 related to
terminated implementation of a new enterprise resource and planning ("ERP")
system. As a percentage of net sales, SG&A expenses were 12.3% in fiscal 2001
compared to 12.5% in fiscal 2000.

                                      -15-

<PAGE>

         Operating Income for fiscal 2001 was $51.2 million compared to $45.8
million for fiscal 2000, an increase of 12.0%. As a percentage of net sales,
operating income increased to 15.7% for fiscal 2001 compared to 15.0% for fiscal
2000. This improvement in operating income was driven primarily by the favorable
impact of capital investments and factory execution at the Omega and HomeCrest
business units.

         Interest Expense for fiscal 2001 was $15.0 million compared to $17.3
million for fiscal 2000, a decrease of 13.6%. This $2.3 million decrease was
primarily due to lower borrowings and average interest rates.

         Income Tax Expense for fiscal 2001 was $14.2 million compared to $11.4
million for fiscal 2000. Fiscal 2001 reflected a normalized tax rate of 40.4%
compared with 41.3% for fiscal 2000.

         Net Income for fiscal 2001 was $20.9 million compared to $16.2 million
for fiscal 2000 primarily attributable to the factors described above. Net
income as a percentage of net sales increased to 6.4% for fiscal 2001 compared
to 5.3% for fiscal 2000.

Fiscal 2000 Compared to Fiscal 1999

         Net Sales for the year ended December 30, 2000 ("fiscal 2000") were
$304.2 million compared to $271.4 million for the year ended January 1, 2000
("fiscal 1999"), an increase of 12.1%. The increase was primarily attributable
to strong consumer spending on remodeling projects, robust new housing starts,
and the impact of increasing market share with existing and new customers. Net
sales for Kitchen Craft were $103.9 million in fiscal 2000 compared with $81.3
million in fiscal 1999, an increase of 27.7% driven primarily by strong U.S.
market sales and the benefit of one additional month during fiscal 2000.
Pro-forma net sales for Kitchen Craft, adjusted as if Kitchen Craft had been
acquired prior to fiscal 1999, increased 19.6% during fiscal 2000 compared with
fiscal 1999. Net sales of the Omega lines (custom and semi-custom cabinetry and
bath vanities) were $96.4 million in fiscal 2000 compared to $87.7 million in
fiscal 1999, an increase of 9.9% driven primarily by 21.0% custom cabinetry
sales growth and 11.0% semi-custom cabinetry sales growth resulting primarily
from increased market share at existing accounts, new dealers, and new store
openings at Home Depot's EXPO Design Centers and Sears' The Great Indoors.
Vanity sales declined 4.5% resulting primarily from pruning selected lower
margin accounts. Net sales of HomeCrest stock cabinetry, sold under the
HomeCrest and Legend brands, were $104.0 million in fiscal 2000 compared to
$102.4 million in fiscal 1999, an increase of 1.6%. HomeCrest's net sales were
unfavorably impacted by discontinued product lines, Affinity and Legend, of $3.9
million and discontinued customers of $3.8 million primarily due to credit
concerns or customer election to exit the cabinetry business. HomeCrest net
sales declines were more than offset by the impact of new product lines and
selling locations.

         Gross Profit for fiscal 2000 was $86.4 million compared to $79.0
million for fiscal 1999, an increase of 9.4%. As a percentage of sales, gross
profit decreased to 28.4% in fiscal 2000 compared to 29.1% in fiscal 1999. Gross
margins for the first six months of 2000 were 27.0%

                                      -16-

<PAGE>

compared with 29.9% for the last six months of 2000. The significant improvement
in gross margins for the last six months of 2000 compared with the first six
months of 2000 was driven primarily by the favorable impact of capital
investments, sales price increases, labor productivity, and lower raw material
costs. For the full year, Kitchen Craft's gross margin decreased to 34.5% in
fiscal 2000 compared to 36.2% for fiscal 1999. Omega's gross margin decreased to
29.0% during fiscal 2000 compared to 29.3% during fiscal 1999. HomeCrest's gross
margin decreased to 21.6% in fiscal 2000 compared to 23.0% in fiscal 1999.

         Selling, General and Administrative ("SG&A") Expenses for fiscal 2000
were $38.1 million compared to $33.4 million for fiscal 1999, an increase of
14.0%. The increase of $4.7 million is primarily attributable to $2.4 million of
non-recurring charge related to terminated implementation of a new enterprise
resource and planning ("ERP") system and $0.9 million related to including an
additional month of financial information for Kitchen Craft during fiscal 2000
compared to fiscal 1999. As a percentage of net sales, SG&A expenses were 12.5%
in fiscal 2000 compared to 12.3% in fiscal 1999. Excluding the ERP charge, 1999
non-cash stock option expense, and adjusted as if Kitchen Craft had been
acquired prior to fiscal 1999, SG&A expenses as a percentage of net sales were
lower at Omega, HomeCrest and Kitchen Craft during fiscal 2000 compared to
fiscal 1999.

         Operating Income for fiscal 2000 was $45.8 million compared to $43.1
million for fiscal 1999, an increase of 6.2%. As a percentage of net sales,
operating income decreased to 15.0% for fiscal 2000 compared to 15.9% for fiscal
1999. Operating margins for the first six months of fiscal 2000 were 12.2%
compared to 17.5% for the second six months of fiscal 2000. This improvement in
operating income was driven primarily by the favorable impact of capital
investments, sales price increases, factory execution, and timing of the ERP
charge.

         Interest Expense for fiscal 2000 was $17.3 million compared to $17.4
million for fiscal 1999, a decrease of 0.6%. This $0.1 million decrease was
primarily due to lower borrowings and was partly offset by higher average
interest rates related to senior debt borrowings.

         Income Tax Expense for fiscal 2000 was $11.4 million compared to $10.5
million for fiscal 1999. Fiscal 2000 reflected a normalized tax rate of 41.3%
compared with 39.5% for fiscal 1999, resulting from a higher tax rate at Kitchen
Craft.

         Net Income for fiscal 2000 was $16.2 million compared to $16.1 million
for fiscal 1999 primarily attributable to the factors described above. Net
income as a percentage of net sales decreased to 5.3% for fiscal 2000 compared
to 5.9% for fiscal 1999.

Liquidity and Capital Resources

         The Company's primary cash needs are working capital, capital
expenditures and debt service. The Company has financed these cash requirements
primarily through internally generated cash flow and funds borrowed under the
Company's credit facilities.

                                      -17-

<PAGE>

         Net cash provided by operating activities for fiscal 2001 was $35.6
million compared to $25.7 million for fiscal 2000. The increase of $10.0 million
was driven by a $5.5 million improvement in operating assets and liabilities and
$4.7 million higher net income.

         The Company used cash in investing activities of $13.1 million for
fiscal 2001 compared to $11.2 million for fiscal 2000, an increase of $1.9.
Capital expenditures for fiscal 2001 were $13.1 million and included
expenditures at Kitchen Craft's Winnipeg, Canada facility related to a 200,000
square foot capacity expansion completed during the first half of fiscal 2001
and new sanding and finishing systems at HomeCrest's Goshen, Indiana facility.

         Cash used in financing activities was $21.6 million for fiscal 2001
compared to $13.7 million cash used for fiscal 2000. The $21.6 million cash used
in financing activities in fiscal 2001 included $19.8 million to reduce
long-term borrowings and $1.8 million of net capital distributions.

         The Company's ability to make scheduled payments of principal of, or to
pay the interest or premium, if any, on, or to refinance, its indebtedness, or
to fund planned capital expenditures will depend on its future performance,
which, to a certain extent, is subject to general economic, financial,
competitive, legislative, regulatory and other factors that are beyond its
control. Based upon the current level of operations, management believes that
cash flow from operations and available cash, together with available borrowings
under its bank loans, will be adequate to meet the Company's anticipated future
requirements for working capital, budgeted capital expenditures and scheduled
payments of principal and interest on its indebtedness for the next several
years. There can be no assurance that the Company's business will generate
sufficient cash flow from operations or that future borrowing will be available
under its bank loans in an amount sufficient to enable the Company to service
its indebtedness or make anticipated capital expenditures.

         At December 29, 2001, the Company's long-term debt consisted of (i) the
$100.0 million of senior subordinated notes; (ii) a U.S. senior credit facility,
consisting of a $25.0 million term note facility (the "U.S. Term Facility") and
a $20.0 million revolving facility (the "U.S. Revolving Facility"); and (iii) a
Canadian senior credit facility, consisting of a (Cdn) $9.3 million term
facility (the "Canadian Term Facility") and a (Cdn) $15.0 million revolving
facility (the "Canadian Revolving Facility").

         As of December 29, 2001, the Company had additional borrowing
availability of $20.0 million under the U.S. Revolving Facility and (Cdn) $15.0
million under the Canadian Revolving Facility. In addition, the Company had cash
of $3.7 million that was available to further reduce long-term debt. The U.S.
Term Facility requires quarterly principal payments that began in April 1999 at
$1.0 million per quarter and increasing at each September anniversary.
Subsequent payments will be approximately $1.1 million and $1.3 million per
quarter during the four quarter periods beginning September 2001 and 2002,
respectively, with $1.6 million payments due the last two quarters in 2003.
Finally, four equal quarterly payments of $3.7 million will occur during 2004
with the term loan fully amortized on December 31, 2004. Additional payments are
also due each year based on 75% of the Company's defined excess cash flow, if
any. In this

                                      -18-

<PAGE>

connection, a mandatory $1.8 million excess cash flow payment was completed
during March 2002. The Canadian Term Facility requires quarterly payments that
began in April 1999 at approximately (Cdn) $0.4 million per quarter and
increasing at each anniversary. Subsequent payments will be approximately (Cdn)
$0.4 million, (Cdn) $0.5 million and (Cdn) $1.3 million per quarter during 2002,
2003, and 2004. Both the U.S. and Canadian Term Facilities mature on December
31, 2004. Revolving Facilities will mature on December 26, 2003 and have no
scheduled interim amortization.

Critical Accounting Policies

The preparation of financial statements requires management to make estimates
and judgments that affect the amounts reported in the financial statements. On
an ongoing basis, management evaluates its estimates, which are based on
historical experience and various other assumptions that are believed to be
reasonable under the circumstances. Actual results may differ from these
estimates under different assumptions or conditions. The Company's significant
accounting policies are described in Note 1 to the consolidated financial
statements.

Management believes the Company's more critical accounting policies relate to
accounts receivable, inventories and goodwill. The Company maintains allowances
for doubtful accounts to reflect the expected uncollectibility of accounts
receivable based on past collection history and specifically identified at-risk
accounts. If the financial condition of customers were to deteriorate,
additional allowances may be required. Since inventories are stated at the lower
of cost or market, the Company maintains reserves for estimated obsolete or
excess inventories. These reserves are based on historical experience, market
conditions and other assumptions and judgment by management. The Company has
significant amounts of goodwill assets. The determination of related estimated
useful lives as well as impairment assessments involve significant judgments.
Changes in strategy, the performance of the underlying businesses or market
conditions could significantly impact these judgments.

Recently Issued Accounting Standards

         In June 2001, the Financial Accounting Standards Bard issued Statement
of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets.
Under the new rules, goodwill will no longer be amortized but will be subject to
annual impairment tests in accordance with the statement. The Company expects to
apply the new rules beginning in the first quarter 2002. Applying the
non-amortization provisions of the statement will result in an increase in
pretax income to the extent of goodwill amortization which is no longer
recorded. The Company's historical goodwill amortization expense was
approximately $2.5 million, $2.6 million and $2.5 million in 2001, 2000 and
1999, respectively. The Company believes the initial adoption of the impairment
provisions will have no material impact on its financial position or results of
operations.

         The Company is required to adopt Emerging Issues Task Force Issue No.
00-14 and Issue No. 00-25 in the first quarter of 2002. These standards provide
guidance on the accounting and income statement classifications for certain sale
incentives provided to customers, as well as various types of consideration
provided to customers in connection with sales or promotion of a manufacturer's
products. The Company has not yet determined what the effect, if any, of
implementing these new rules will have on the earnings or financial position of
the Company.

Inflation

         The costs of the Company's products are subject to inflationary
pressures and commodity price fluctuations. Inflationary pressure and commodity
price increases have been relatively modest over the past five years, except for
hardwood and plywood prices, which rose significantly during fiscal 1999. The
Company has generally been able over time to recover the effects of inflation
and commodity price fluctuations through sales price increases.

Forward Looking Statements

         When used in this annual report on Form 10-K, the words "believes,"
"anticipates" and similar expressions are used to identify forward looking
statements. Such statements are subject to risks and uncertainties which could
cause actual results to differ materially from those projected. The Company
wishes to caution readers that the following important factors and others in
some cases have affected and in the future could affect the Company's actual
results and could cause the Company's results for future periods to differ
materially from those expressed in any forward statements made by the Company:
(i) inability to hire and retain

                                      -19-

<PAGE>

adequately trained employees, (ii) economic conditions in the remodeling and
housing markets, (iii) availability of credit, (iv) increases in interest rates,
(v) cost of lumber and other raw materials, (vi) inability to maintain
state-of-the-art manufacturing facilities, (vii) heightened competition,
including intensification of price and service competition, the entry of new
competitors and the introduction of new products by existing competitors, (viii)
inability to capitalize on opportunities presented by industry consolidation,
(ix) loss or retirement of key executives and (x) inability to grow by
acquisition of additional cabinetry manufactures or to effectively consolidate
operations of businesses acquired.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

         The Company is subject to interest rate market risk in connection with
its long-term debt. These financial instruments are entered into for purposes
other than trading. As of December 29, 2001, the Company's debt instruments
consisted of certain obligations which bear a fixed interest rate and others
which bear interest at variable rates. The following table provides information
about the Company's debt instruments that are sensitive to changes in interest
rates, and presents the principal cash flows and related interest rates by
scheduled maturity dates (in thousands):

                                      Variable Rate (a)        Fixed Rate (b)

  Maturing in:
            2002                               6862                    --
            2003                              6,992                    --
            2004                             16,991                    --
            Thereafter                           --               100,000
                                            -------              --------
  Total                                     $30,845              $100,000
                                            =======              ========

  Fair value at December 29, 2001           $30,845              $104,250(c)


(a)      $10.3 million at LIBOR plus 1.25%, $14.7 million at LIBOR plus 1.50%
         and $5.8 million at Canadian BA rate plus 1.50% (3.91% weighted average
         at December 29, 2001).

(b)      All at 10.5%.

(c)      As of December 29, 2001, fixed rate senior subordinated notes were
         reported to be trading at 104.25% of par, reflecting a fair value of
         $104,250.

         The Company's interest expense is most sensitive to changes in the
general level of U.S. and certain foreign (LIBOR and Canadian BA) interest
rates. In this regard, changes in such interest rates affect the interest paid
on certain of its debt. To manage the impact of fluctuations in interest rates,
the Company continually monitors and may select a variety of rate options on its
variable-rate debt. In addition, the Company has maintained a majority of its
debt borrowings as fixed-rate debt. However, an immediate 10% increase in
interest rates would have an adverse effect on the Company's future operating
results and cash flows.

                                      -20-

<PAGE>

Item 8.  Financial Statements and Supplementary Data.

         The information required by this Item 8 is set forth on pages F-1 to
F-29 of this annual report on Form 10-K and is incorporated herein by reference.

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

         None.



                                      -21-

<PAGE>

                                    PART III


Item 10. Directors and Executive Officers of the Registrant.


         The following table sets forth certain information regarding the
Company's directors and executive officers, including their respective ages, as
of March 1, 2002.

<TABLE>
<CAPTION>
     Name                        Age                         Position
     ----                        ---                         --------
<S>                               <C>       <C>
Mark Buller                       37        President, Chief Executive Officer and Director
                                            President, KitchenCraft

John S. Horton                    41        Senior Vice President, Treasurer, Chief Financial Officer

David Romeo                       42        President, Omega

Carl W. Spencer                   48        Vice-President, Custom Manufacturing, Omega

John A. Goebel, Jr.               58        President, HomeCrest

Michael Hagan                     49        Vice President, Administration, HomeCrest

Thomas Schmidt                    48        Vice President, Marketing, HomeCrest

Douglas J. Conley                 45        Vice President, Manufacturing, HomeCrest

Herbert D. Buller                 60        Chief Executive Officer, Kitchen Craft

Gilbert Butler                    64        Director

Donald E. Cihak                   53        Director
</TABLE>

         Mark Buller has served as President, Chief Executive Officer and
Director of Omega since August 2000 and has served as President of KitchenCraft
since 1996. Mr. Buller has been with Kitchen Craft since 1987 and has held
various leadership positions including Director, Sales and Marketing; General
Manager, U.S. Sales; and General Manager, Company Stores.

         John S. Horton has served as Senior Vice President, Treasurer and Chief
Financial Officer of Omega since November 1998. Mr. Horton has responsibility
for all aspects of accounting, planning and analysis, SEC reporting, treasury
and investor relations. From 1997 to 1998, Mr. Horton was a Vice President at
Allied Signal Engines in various positions including

                                      -22-

<PAGE>

Chief Financial Officer and Productivity. Prior to 1997, Mr. Horton spent 15
years at General Electric, most recently as Chief Financial Officer for several
major business units including the Military and Small Commercial Engines
business and the Gas Turbines business.

         David Romeo has served as President of Omega since January 2000 and
served as Senior Vice President, Operations of Omega from June 1999 to January
2000. From 1981 to 1999, Mr. Romeo was employed at Square D Company, a global
manufacturer of electrical distribution and industrial products, and held
various senior leadership positions including Vice President, Operations, Square
D Company and Vice President and Controller, Schneider North America, Square D
Company's parent.

         Carl W. Spencer has served as Vice President, Manufacturing, Omega
since July 2000. From 1998 to 2000, Mr. Spencer was at Masco Corporation and
held various positions at their StarMark cabinet division including Corporate
Operations Director. Prior to 1998, Mr. Spencer spent 10 years at Fleetwood
Enterprises, a leading manufacturer of recreational vehicles and manufactured
housing, where he held various positions in manufacturing and materials.

         John A. Goebel, Jr. has served as President of HomeCrest since 1995 and
has been with HomeCrest since 1986. He was plant manager at the Clinton facility
from 1986 to 1990, and served as Vice President, Operations at HomeCrest from
1990 to 1995.

         Michael Hagan has served as Vice President, Administration, HomeCrest
since 1991. Mr. Hagan has been with HomeCrest since 1978.

         Thomas Schmidt has served as Vice President, Marketing, HomeCrest since
1991. Mr. Schmidt is responsible for sales and marketing at HomeCrest.

         Douglas J. Conley has served as Vice President, Manufacturing,
HomeCrest since 1995. From May 1991 to May 1995, Mr. Conley served as Vice
President, Human Resources for HomeCrest. Mr. Conley has been with HomeCrest
since 1989.

         Herbert D. Buller, the founder of Kitchen Craft of Canada Ltd.,
previously served as the President and a Director of Kitchen Craft of Canada
Ltd. from 1971 until the acquisition of Kitchen Craft by the Company. Mr. Buller
is currently a Director and the Chief Executive Officer of Kitchen Craft.

         Gilbert Butler became a Director of the Company in June 1997. Since its
formation in 1981, he has been the President of BCC, a private investment firm
providing management advisory services to five investment limited partnerships,
including MLA III, that provide financing for leveraged buyouts, other
acquisitions and business expansions. Mr. Butler is also the managing general
partner of five limited partnerships that serve as the respective general
partners of the five investment limited partnerships. Mr. Butler is a trustee
and member of the investment committee of Corporate Property Investors, a real
estate investment trust.

                                      -23-

<PAGE>

         Donald E. Cihak became a Director of the Company in June 1997. Mr.
Cihak has served as Managing Director of BCC Industrial Services, Inc. ("ISI"),
a management consulting company wholly-owned by certain investment funds managed
by BCC, since September 1993. From April 1990 to September 1993, Mr. Cihak was
the Vice President, Finance and Administration for the Marine Group of Brunswick
Corporation.

         At present, all Directors are elected and serve until a successor is
duly elected and qualified or until the earlier of his death, resignation or
removal. Other than with respect to Herbert D. Buller, who is the father of Mark
Buller, there are no family relationships between any of the Directors or
executive officers of Holdings or the Company. Executive officers of Holdings
and the Company are elected by and serve at the discretion of their respective
boards of directors.

Compensation of Directors

         The Company pays no compensation to its independent directors, and pays
no additional remuneration to its employees or to executives of the Company for
serving as directors.

Item 11. Executive Compensation.

         The following table sets forth information concerning the compensation
for the fiscal years ended December 29, 2001, December 31, 2000 and January 1,
2000 of Mr. Buller, the Chief Executive Officer of the Company and the four
other most highly compensated executive officers of the Company (collectively,
the "Named Executive Officers").

                           SUMMARY COMPENSATION TABLE
                           --------------------------

<TABLE>
<CAPTION>
                                                           Annual Compensation                    Long Term Compensation

                                                                            Other              Securities
                                                                            Annual             Underlying        All Other

                                               Salary        Bonus       Compensation            Options       Compensation

    Name and Principal Position       Year       ($)          ($)            ($)                   (#)              ($)

<S>                                   <C>     <C>            <C>            <C>                   <C>             <C>
Mark Buller                           2001     169,141(1)    98,211          ---(2)                 ---              484(6)(1)
Chief Executive Officer               2000     149,116(1)    31,501(1)       ---(2)               8.87(7)            504(6)
President, Kitchen Craft              1999     108,120(1)    73,772(1)       ---(2)                 ---              ---

John S. Horton
Senior Vice President,                2001     162,000       96,390          ---(2)                 ---           4,502(4)
Treasurer and                         2000     152,000       32,110          ---(2)              110.92(3)        4,519(4)
Chief Financial Officer               1999     140,000       70,000      108,933(5)               18.49(3)        2,100(4)

John A. Goebel, Jr.                   2001     158,500       94,308          ---(2)                 ---           3,451(4)
President, HomeCrest                  2000     155,000       32,744          ---(2)              120.16(3)        3,465(4)
                                      1999     146,000       91,250          ---(2)               83.19(3)        1,472(4)

</TABLE>
                                      -24-

<PAGE>
<TABLE>
                                                           Annual Compensation                    Long Term Compensation


<S>                             <C>         <C>            <C>           <C>                    <C>             <C>

Herbert D. Buller                     2001     125,615(1)                    ---(2)                 ---             645(6)(1)
Chief Executive Officer,              2000     117,489(1)    24,820(1)       ---(2)               8.87(7)           671(6)
Kitchen Craft                         1999     108,120(1)    73,772(1)       ---(2)                 ---             ---

David A. Romeo                        2001     165,000       98,175          ---(2)                 ---           5,250(4)
President, Omega (8)                  2000     155,000       32,744       86,860(9)              62.50(3)         2,850(4)
</TABLE>


(1)      Compensation paid in Canadian dollars has been converted to US dollars
         at the average conversion rate for the fiscal year for which
         compensation is reported. The 2001 average conversion rate used is
         (Cdn) $1.549 to (US) $1.000. The 2000 average conversion rate used is
         (Cdn) $1.4895 to (US) $1.000. The 1999 average conversion rate used is
         (Cdn) $1.4826 to (US) $1.000.

(2)      The perquisites and other benefits paid did not exceed the lesser of
         $50,000 or 10% of the total annual salary and bonus of such Named
         Executive Officer.

(3)      The options represent options to purchase shares of the Common Stock of
         Holdings, at an exercise price per share of $1,000.00.

(4)      Additional compensation amounts refer to amounts matched by the Company
         under the Company's 401(k) Profit Sharing Plan.

(5)      Includes moving and temporary living expenses reimbursed in accordance
         with the terms of Mr. Horton's employment agreement.

(6)      Additional compensation amounts refer to amounts matched by the Company
         under the Company's Registered Retirement Savings Plan.

(7)      The options represent options to purchase shares of Common Stock of
         Holdings, at an exercise price per share of $1,371.87.

(8)      Mr. Romeo joined the Company in June 1999.

(9)      Includes moving and temporary living expenses reimbursed in accordance
         with the terms of Mr. Romeo's employment agreement.

                                      -25-

<PAGE>

Option Exercises and Fiscal Year-End Values

         The following table sets forth information with respect to options
awarded under the Holdings Stock Option Plan, including the number and aggregate
value of unexercised options outstanding on December 29, 2001.

                   AGGREGATED OPTION EXERCISES IN FISCAL 2001
                       AND FISCAL YEAR-END OPTIONS VALUES
                       ----------------------------------

<TABLE>
<CAPTION>
                                                                   Number of Securities               Value of Unexercised
                                                                  Underlying Unexercised             In-The-Money Options At
                        Shares Acquired                         Options At Fiscal Year-End               Fiscal Year-End
Name                      On Exercise       Value Realized      (Exercisable/Unexercisable)        (Exercisable/Unexercisable)
                              (#)                 ($)                       (#)                              ($)(3)

<S>                          <C>                 <C>                   <C>                                  <C>
Mark Buller                   ---                 ---                     8.87/0(2)                          28,987

John S. Horton                ---                 ---                   129.40/0(1)                         422,879

John A. Goebel, Jr.           ---                 ---                   245.01/0(1)                         800,693

Herbert D. Buller             ---                 ---                     8.87/0(2)                          28,987

David Romeo                   ---                 ---                    62.50/0(1)                         204,250
</TABLE>

(1)      Represents options to purchase shares of Common Stock of Holdings at an
         exercise price of $1,000 per share.

(2)      Represents options to purchase shares of Common Stock of Holdings at an
         exercise price of $1,372 per share.

(3)      Value is based on the difference between the option exercise price and
         the fair market value at December 29, 2001. The fair market value of
         the Common Stock of Holdings ($3,268.00 per share) was determined by
         the Board of Directors.

Employment Contracts, Termination of Employment and Change of Control
Arrangements

         Mr. M. Buller is currently employed as Chief Executive Officer of Omega
and President, Kitchen Craft. Mr. Buller's employment agreement expired on
January 29, 2002. Mr. Buller is currently employed at-will on the same terms as
contained in the employment agreement. Under this agreement, Mr. Buller is
entitled to receive a base salary of (CDN) $175,000, subject to annual
increases, and a bonus in accordance with the Company's Bonus Plan. Mr. Buller
is also entitled to receive up to thirty-six months' continued salary and
benefits if he is terminated from Kitchen Craft without cause. Mr. Buller has
agreed not to compete with Kitchen Craft or solicit the customers, suppliers or
employees of Kitchen Craft for a period of two years following the date he
ceases to be employed by Kitchen Craft. Mr. Buller's employment agreement is
governed by Manitoba law.

         Mr. Horton is currently employed as Senior Vice President, Treasurer,
and Chief Financial Officer, Omega pursuant to an agreement dated October 15,
1998. Under this agreement, Mr. Horton is entitled to receive a base salary,
subject to annual increases, and a


                                      -26-

<PAGE>

bonus in accordance with the Company's Executive Bonus Plan for senior
management ( "Bonus Plan "). Mr. Horton also received restricted stock
equivalent to a value of $50,000. All of Mr. Horton's restricted stock vested on
February 26, 2002. In addition, Mr. Horton was permitted to purchase shares of
stock in Holdings with the proceeds of a bank loan for up to 50% of the purchase
price. Mr. Horton is also eligible to receive stock options to be granted over a
five-year period.

         Mr. Goebel is currently employed as President, HomeCrest pursuant to an
agreement dated April 10, 1995, as amended on June 13, 1997. Under this
agreement, Mr. Goebel is entitled to receive a base salary, subject to annual
increases, and a bonus in accordance with the Company's Bonus Plan. Mr. Goebel
is also entitled to receive twelve months' continued salary and benefits if he
is terminated from the Company without cause. Mr. Goebel has the right under a
put agreement dated June 13, 1997 to cause Holdings to repurchase his Common
Stock in the event of his normal retirement from Holdings.

         Mr. H. Buller is currently employed as Chief Executive Officer of
Kitchen Craft. Mr. Buller's employment agreement, effective January 29, 1999,
expired on January 29, 2001. Mr. Buller is currently employed at-will on the
same terms as contained in the employment agreement. Mr. Buller is entitled to
receive a base salary of (CDN) $175,000, subject to annual increases, a bonus in
accordance with the Company's Bonus Plan, and is entitled to the use of a
company vehicle. Mr. Buller is entitled to receive up to twenty-four months'
continued salary and benefits if he is terminated from Kitchen Craft without
cause. In addition, Mr. Buller is entitled to receive a retirement allowance
equal to (CDN) $70,000 upon the termination of his employment by reason of
death, incapacity or other than for cause. Mr. Buller has agreed not to compete
with the Kitchen Craft or solicit the customers, suppliers or employees of
Kitchen Craft for a period of two years following the date he ceases to be
employed by Kitchen Craft. Mr. Buller's employment agreement is governed by
Manitoba law.

         The Named Executive Officers participate in the Bonus Plan whereby they
are eligible to receive a potential bonus of 30-50% of base salary, with the
Chief Executive Officer having a potential bonus of 50% of salary. Payout is on
a sliding scale based on operating profit performance against budget starting at
90% of budget. There is an opportunity to earn up to 125% of the potential bonus
based on achieving 105% of planned operating income performance.

Compensation Committee Interlocks and Insider Participation

         The Company does not have a compensation committee. Instead,
compensation decisions for fiscal 2001 regarding the Company's executive
officers were made by the Board of Directors. Mr. M. Buller, an executive
officer of the Company, has served on the Board of Directors since August 4,
2000. The compensation for Mr. M. Buller for the year ended December 29, 2001
was established pursuant to the terms of his employment agreement.



                                      -27-

<PAGE>

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

         All of Omega's issued and outstanding capital stock is owned by
Holdings. As of March 30, 2001, the outstanding capital stock of Holdings,
including shares deemed to be outstanding pursuant to Rule 13-3(d)(1)
promulgated under the Securities Exchange Act of 1934, consisted of 90,580.21
shares of Common Stock, $.01 par value per share.

         The following table sets forth certain information as of March 1, 2002
regarding the beneficial ownership of (i) each class of voting securities of
Holdings by each person known to Holdings to own more than 5% of any class of
outstanding voting securities of Holdings, and (ii) the equity securities of
Holdings by each Director of Holdings and the Company, each Named Executive
Officer and all of Holdings' and the Company's directors and executive officers
as a group. To the knowledge of Holdings, each such stockholder has sole voting
and investment power as to the shares shown unless otherwise noted. Beneficial
ownership of the securities listed in the table has been determined in
accordance with the applicable rules and regulations promulgated under the
Securities Exchange Act of 1934, as amended. Unless otherwise indicated below,
each entity or person listed below maintains a mailing address of c/o Omega
Cabinets, Ltd., 1205 Peters Drive, Waterloo, Iowa 50703.

         The number of shares beneficially owned by each stockholder is
determined under rules promulgated by the Securities and Exchange Commission.
The information is not necessarily indicative of beneficial ownership for any
other purpose. Under these rules, beneficial ownership includes any shares as to
which the individual or entity has sole or shared voting or investment power and
any shares as to which the individual or entity has the right to acquire
beneficial ownership within 60 days after March 1, 2001 through the exercise of
any stock option, warrant or other right. The inclusion in the following table
of those shares, however, does not constitute an admission that the named
stockholder is a direct or indirect beneficial owner.

                                      -28-

<PAGE>

                                                 Shares Beneficially Owned
                                                        Common Stock
                                                 -------------------------
                                               Number             Percentage
                 Name and Address             of Shares            of Class
                 ----------------             ---------           ----------

Principal Stockholder:

Mezzanine Lending ........................... 74,345.9               82.1
  Associates III, L.P. (1)
 c/o Butler Capital Corporation
767 Fifth Avenue, 6th Floor
New York, New York 10153

Directors and Executive Officers:

Gilbert Butler (2)(3) ....................... 74,345.9               82.1

Donald E. Cihak (3) .........................     ---                ---

Mark Buller (4) .............................  1,325.4                1.5

John S. Horton (5) ..........................    840.3                  *

John A. Goebel, Jr. (6) .....................   1092.1                1.2

Herbert D. Buller (7) .......................  1,794.3                2.0

David Romeo (8) .............................    911.7                1.0

All Directors and executive officers
as a group (10 persons) (9) .................   7453.9                8.2

--------------------------

*        Represents less than one percent.

(1)      Includes warrants to purchase 2,806.3 shares of Common Stock held by
         ISI, a corporation wholly-owned by certain investment funds managed by
         BCC, including MLA III. Does not include shares owned by other
         stockholders that are subject to the Stockholders Agreement. See
         "Certain Relationships and Related Transactions -- Stockholders
         Agreement."

(2)      The shares of Common Stock included in the table represent shares and
         warrants held by MLA III and ISI, respectively. Mr. Butler is the
         Managing General Partner of Mezzanine Lending Management III, L.P.
         ("MLM III "), the general partner of MLA III, and, accordingly, may be
         deemed to beneficially own shares beneficially owned by MLA III. Mr.
         Butler disclaims beneficial ownership of any such shares in which he
         does not have a pecuniary interest.

(3)      The address of Messrs. Butler and Cihak is c/o Butler Capital
         Corporation, 767 Fifth Avenue, 6th Floor, New York, New York 10153.

(4)      The shares of Common Stock included in the table include 600.2 shares
         of Class B Common Stock of Kitchen Craft held by MEB2 Holdings Ltd.,
         which are exchangeable into an equal number of shares of Holdings
         Common Stock in accordance with the terms thereof, and 8.8 shares that
         can be acquired upon the exercise of outstanding options. The shares of
         Class B Common Stock of Kitchen Craft are exchangeable at any time upon
         the request of the holder into shares of Holdings Common Stock and are
         required to be exchanged by the holder upon the request of the Company
         in connection with any merger, sale, disposition or other significant
         transaction affecting Holdings or Kitchen Craft, upon the termination
         of such holder's employment with the Company and its subsidiaries, or,
         at any time after January 29, 2006. Mr. M. Buller disclaims beneficial
         ownership of any such shares in which he does not have a pecuniary
         interest. The shares of Common Stock included in the table also include
         589.5692 shares of Common Stock of Holdings held by MEB2 Holdings Ltd.,
         which are deemed to be beneficially owned by Mr. M. Buller and 135.64
         shares that can be acquired upon the exercise of outstanding options
         granted in February 2002.

                                      -29-

<PAGE>

(5)      The shares of Common Stock included in the table include 240.32 shares
         that can be acquired upon the exercise of outstanding options,
         including options granted in February 2002. The shares of Common Stock
         included in the table also include 300 shares subject to a Stock Pledge
         Agreement between Mr. Horton and the Company. See "Certain
         Relationships and Related Transactions -- Certain Loans to Executive
         Officers."

(6)      The shares of Common Stock included in the table include 323.4 shares
         that are held in the Rabbi Trust. See "Certain Relationships and
         Related Transactions -- Deferred Compensation Plan and Rabbi Trust".
         The shares of Common Stock included in the table also include 365.17
         shares that can be acquired upon the exercise of outstanding options,
         including options granted in February 2002. The shares of Common Stock
         included in the table also include 200.0 shares subject to Stock Pledge
         Agreement between Mr. Goebel and the Company. See "Certain
         Relationships and Related Transactions -- Certain Loans to Executive
         Officers."

(7)      The shares of Common Stock included in the table include 960.3 shares
         of Class B Common Stock of Kitchen Craft held by HEB2 Holdings Ltd.,
         which are exchangeable into an equal number of shares of Holdings
         Common Stock in accordance with the terms thereof, and 8.8 shares that
         can be acquired upon the exercise of outstanding options. The shares of
         Class B Common Stock of Kitchen Craft are exchangeable at any time upon
         the request of the holder into shares of Holdings Common Stock and are
         required to be exchanged by the holder upon the request of the Company
         in connection with any merger, sale, disposition or other significant
         transaction affecting Holdings or Kitchen Craft, upon the termination
         of such holder's employment with the Company and its subsidiaries, or,
         at any time after January 29, 2006. Mr. H. Buller disclaims beneficial
         ownership of any such shares in which he does not have a pecuniary
         interest. The shares of Common Stock included in the table also include
         680.2721 shares of Common Stock of Holdings held by HEB2 Holdings Ltd.,
         which are deemed to be beneficially owned by Mr. H. Buller and 153.78
         shares that can be acquired upon the exercise of outstanding options
         granted in February 2002.

(8)      The shares of Common Stock included in the table include 211.67 shares
         that can be acquired upon the exercise of outstanding options,
         including options granted in February 2002. The shares of Common Stock
         included in the table also include 700 shares subject to a Stock Pledge
         Agreement between Mr. Romeo and the Company. See "Certain Relationships
         and Related Transactions -- Certain Loans to Executive Officers."

(9)      Excludes shares deemed to be beneficially owned by Mr. Butler.

Item 13. Certain Relationships and Related Transactions.

OMC Merger and Related Agreements

         The OMC Merger occurred on June 13, 1997. Concurrently with the OMC
Merger, an aggregate consideration of $201.9 million was paid, subject to
adjustment based on the working capital of Holdings at the closing date. The
merger agreement contains customary representations, warranties, covenants and
indemnification provisions. In connection with the OMC Merger, pursuant to a
Merger Financing Agreement (the "Financing Agreement") with MLA III, MLA III
purchased 61,865 shares of Common Stock of Holdings for $61.9 million and
Holdings issued an 11% junior subordinated note to MLA III (the "Junior
Subordinated Note"). The Junior Subordinated Note was repaid in July 1997 with
proceeds from an offering by the Company under Rule 144A of the Securities Act
of 1933, as amended (the "Act") for $100 million in aggregate principal amount
of 10 1/2% senior subordinated notes. Under the Financing Agreement, the Company
has agreed to indemnify and pay certain expenses of BCC and its affiliates and
their advisors and consultants under certain circumstances.

                                      -30-

<PAGE>

Stockholders Agreement

         In connection with the OMC Merger, MLA III, ISI, management, Bancone &
Company, the successor to the American National Bank and Trust Company of
Chicago, as trustee of the Rabbi Trust, each participant in the Rabbi Trust, and
all of the other stockholders and optionholders of Holdings entered into a
stockholders agreement (the "Stockholders Agreement"), that, among other things,
provides for tag-along rights, drag-along rights, registration rights,
restrictions on the transfer of shares held by parties to the Stockholders
Agreement and certain preemptive rights for certain stockholders including
management. The Stockholders Agreement also provides that the parties thereto
will vote their shares in the same manner as MLA III and ISI in connection with
certain transactions and that MLA III and ISI will be entitled to fix the number
of directors of Holdings. Pursuant to the Stockholders Agreement, MLA III and
ISI will be entitled to designate all of the directors of Holdings except for
one, which will be the chief executive officer.

Management Agreement

         In connection with the OMC Merger, the Company and Holdings entered
into a management agreement ("Management Agreement") with ISI, a management
consulting company wholly owned by investment funds managed by BCC. The
Management Agreement was supplemented by Supplement No. 1 thereto. Pursuant to
the Management Agreement, as amended, the Company and Holdings agree to pay ISI
$425,000 per year plus certain fees and expenses, including legal and accounting
fees and any out-of-pocket expenses incurred by ISI in connection with providing
services to the Company, and to indemnify ISI under certain circumstances. In
addition, ISI received warrants to purchase an aggregate of 2,391.4 shares of
Common Stock of Holdings at an exercise price of $1,000 per share and 414.9
shares of Common Stock of Holdings at an exercise price of $1,371.87 per share.
The warrants expire in 2007 and 2009, respectively.

Deferred Compensation Plan and Rabbi Trust

         In connection with the OMC Merger, Holdings and its subsidiaries
adopted the 1997 Omega Holdings, Inc. Deferred Compensation Plan (the "Plan")
for the purpose of providing the following benefits to those employees of
Holdings and its subsidiaries whose options to purchase shares of Holdings were
canceled as a result of the OMC Merger (the "Plan Participants"). Upon
consummation of OMC Merger, each option to purchase shares of Holdings stock
held by the participants prior to the merger was canceled, and Holdings
established a deferred compensation obligation pursuant to the Plan for the
benefit of each participant. Benefits under the Plan are payable in cash and in
shares of Holdings stock, and are payable to participants upon termination of
employment or, under certain limited circumstances, prior to termination. The
benefits provided by the Plan represent the unsecured obligations of Holdings.

         As contemplated by the Plan and pursuant to the Rabbi Trust Agreement
dated as of June 13, 1997 between Holdings and American National Bank and Trust
Company of Chicago (as

                                      -31-

<PAGE>

predecessor to Bancone & Company), as trustee, Holdings established the Rabbi
Trust to hold approximately 3,224.5 shares of Holdings Common Stock to satisfy
Holdings' obligations as provided in the Plan. In 1998, 1999 and 2000 certain
shares of Holdings were redeemed under terms of the Rabbi Trust Agreement and
the Plan. Currently 1,260.9 shares of Holdings Common Stock are held in the
Plan. The Rabbi Trust maintains separate accounts for each Plan Participant,
which accounts are intended to reflect the obligation of the Company to
distribute cash and shares of Holdings stock to each Plan Participant. The Rabbi
Trust may, at the direction of the Company, make such distributions to satisfy
the obligations of the Company under the Plan. The Plan does not provide for
elective deferrals by Plan Participants.

Management Equity Arrangements

         Holdings adopted a stock option plan for the benefit of employees of
Holdings and its subsidiaries in June 1997. The plan was amended in March 2001
to provide for the award of restricted stock in addition to stock options (as
amended, the "Equity Incentive Plan"). Pursuant to the Equity Incentive Plan,
13,500.00 shares of Holdings Common Stock have been reserved for issuance
pursuant to the plan. The Equity Incentive Plan is administered by the Board of
Directors of Holdings, which has discretionary authority to grant options and
determine the terms and conditions of each award. No awards may be granted under
the Equity Incentive Plan after the completion of ten years from its adoption,
but awards previously granted may extend beyond that date.

         In addition, pursuant to the Stockholders Agreement, certain management
stockholders have the right to cause Holdings to repurchase Holdings Common
Stock held by such management stockholders upon their death or disability. In
addition, Mr. Goebel has entered into a put agreement with Holdings dated as of
June 13, 1997, whereby Mr. Goebel has the right, in addition to his rights under
the Stockholders Agreement, to cause Holdings to repurchase Holdings Common
Stock held by him in the event of normal retirement from Holdings.

Certain Loans to Executive Officers

         In connection with the purchase of shares of Common Stock of Holdings,
Holdings accepted as payment from certain executive officers purchasing such
shares a note bearing interest at the applicable federal rate. In connection
with the purchase of 200.0, 521.0, 700 and 100 shares of Common Stock of
Holdings, respectively, Messrs. Goebel, Horton, Romeo and Spencer received loans
of approximately $274,375, $681,019, $1,209,846 and $210,100 respectively, of
which $274,375, $390,509, $1,209,846 and $145,100, respectively, remained
outstanding at December 29, 2001. The Company has agreed to permit such
executive officers to repay their respective loan obligations with proceeds
received from the sale or other disposition of the Common Stock purchased
therewith. Repayment of each of the loans is secured by a pledge of the Common
Stock purchased by such executive officer.


                                      -32-

<PAGE>

                                    Part IV

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

(a)(1) Financial Statements

     See Index to Financial Statements appearing at page F-1.

(a)(2)  Financial Statement Schedules

     The following Financial Statement Schedule is included at page F-29:

     Schedule II - Valuation and Qualifying Accounts.

     Information required by other schedules called for under Regulation S-X
     is either not applicable or is included in the consolidated financial
     statements or notes thereto.

(a)(3)  Exhibits

2.1      Master Transaction Agreement dated as of January 29, 1999 (Incorporated
         by reference to Exhibit 2.1 to the Current Report on Form 8-K filed
         with the Commission on February 12, 1999).

3.1      Certificate of Incorporation, as amended, of the Registrant*

3.2      By-laws of the Registrant*

4.1      Indenture dated as of July 24, 1997*

4.2      First Supplemental Indenture dated January 28, 1999 (Incorporated by
         reference to Exhibit 99.1 to the Current Report on Form 8-K filed with
         the Commission on February 12, 1999).

4.3      Second Supplemental Indenture dated January 29, 1999 (Incorporated by
         reference to Exhibit 99.2 to the Current Report on Form 8-K filed with
         the Commission on February 12, 1999).

10.1     First Amended and Restated Credit Agreement dated as of January 29
         (Incorporated by reference to Exhibit 4.1 to the Current Report on Form
         8-K filed with the Commission on February 12, 1999).

10.2     Panther Security Agreement dated as of January 29, 1999.=

10.3     Omega Security Agreement dated as of January 29, 1999.=

10.4     Omega Pledge Agreement dated as of January 29, 1999.=

10.5     Collateral Assignment of Trademarks dated as of June 13, 1997.*

10.6     Management Agreement dated June 13, 1997*

10.7     Financing Agreement dated June 13, 1997*

10.8     Deferred Compensation Plan dated June 13, 1997*

10.9     Rabbi Trust Agreement dated June 13, 1997*

10.10    [Intentionally Omitted]

10.11    [Intentionally Omitted]

10.12    Moran Employment Agreement dated September 11, 1995, as amended June
         13, 1997*

10.13    Moran Severance Agreement dated April 24, 1997*

10.14    [Intentionally Omitted]

                                      -33-

<PAGE>


10.15    [Intentionally Omitted]

10.16    Goebel Employment Agreement dated April 10, 1995, as amended June 13,
         1997*

10.17    Goebel Severance Agreement dated April 24, 1997*

10.18    Hagan Employment Agreement dated April 10, 1995*

10.19    Hagan Severance Agreement dated April 24, 1997*

10.20    Schmidt Employment Agreement dated April 10, 1995*

10.21    Schmidt Severance Agreement dated April 24, 1997*

10.22    Deferred Non-Qualified Compensation Agreement dated June 28, 1997*

10.23    Company Bonus Plan*

10.24    Stockholders Agreement dated June 13, 1997*

10.25    Omega Holdings, Inc. Stock Option Plan*

10.26    [Intentionally Omitted]

10.27    Goebel Put Agreement dated June 13, 1997*

10.28    Bulrad Illinois Security Agreement dated as of January 29, 1999.=

10.29    Omega Kitchen Craft Holdings Pledge Agreement dated as of January 29,
         1999.=

10.30    Omega Kitchen Craft U.S. Corp. Pledge Agreement dated as of January 29,
         1999.=

10.31    Bulrad Illinois Guaranty dated as of January 29, 1999.=

10.32    Credit Agreement dated as of January 29, 1999 (Incorporated by
         reference to Exhibit 4.2 to the Current Report on Form 8-K filed with
         the Commission on February 12, 1999).

10.33    3578275 Canada General Security Agreement dated as of January 29,
         1999.=

10.34    Omega Guarantee dated as of January 29, 1999.=

10.35    Kitchen Craft Guarantee dated as of January 29, 1999.=

10.36    Kitchen Craft Security Agreement dated as of January 29, 1999.=

10.37    Supplement No. 1 to the Management Agreement dated January 29, 1999.=

10.38    H. Buller Employment Agreement dated January 29, 1999.=

10.39    M. Buller Employment Agreement dated January 29, 1999.=

10.40    J. Horton Employment Agreement dated October 15, 1998.=

10.41    C. Rae Employment Agreement dated October 22, 1997.=

10.42    Offer and Acceptance Contract dated September 15, 1998 for sale of land
         to Company.=

10.51    E. Lytle Severance Agreement dated May 5, 1999 (Incorporated by
         reference to Exhibit 10.51 to the Quarterly Report on Form 10-Q filed
         with the Commission on November 9, 1999).

10.52    D. Romeo Employment Agreement dated May 27, 1999 (Incorporated by
         reference to Exhibit 10.52 to the Quarterly Report on Form 10-Q file
         with the Commission on November 9, 1999).

10.53    C. Spencer Employment Agreement dated July 10, 2000 (Incorporated by
         reference to Exhibit 10.53 to the Quarterly Report on Form 10-Q filed
         with the Commission on November 8, 2000).

10.54    R. Moran Severance Agreement dated November 3, 2000, as amended.
         (Incorporated by reference to Exhibit 10.54 to the Annual Report on
         Form 10-K filed with the Commission on March 30, 2001).

12.1     Statement regarding computation of ratio of earnings to fixed charges.

21.1     Subsidiaries of the Registrant. (Incorporated by reference to Exhibit
         10.54 to the Annual Report on Form 10-K filed with the Commission on
         March 30, 2001).

                                      -34-

<PAGE>

--------------
*        Incorporated by reference to the similarly numbered exhibit in the
         Company's Registration Statement on Form S-4, No. 333-37135, filed
         October 3, 1997.

=        Incorporated by reference to similarly numbered exhibit in the
         Company's Annual Report on Form 10-K file with the Commission on April
         1, 1999.

(b)  Reports on Form 8-K.

         None

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT.

         No annual report has been sent to security holders covering the
registrant's last fiscal year and no proxy materials have been sent to more than
10 of the registrant's security holders during the registrant's last fiscal
year.

                                      -35-

<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                              OMEGA CABINETS, LTD.



                                              By: /s/ Mark Buller
                                                  ------------------------------
                                                  Name:  Mark Buller
                                                  Title: Chief Executive Officer

                                              Dated: March 29, 2002


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


/s/ Mark Buller         Chief Executive Officer and            March 29, 2002
---------------         Director (Principal Executive
Mark Buller             Officer)


/s/ John S. Horton      Senior Vice President,                 March 29, 2002
------------------      Treasurer, Chief Financial
John S. Horton          Officer (Principal Financial and
                        Accounting Officer)


/s/ Gilbert Butler      Director                               March 29, 2002
------------------
Gilbert Butler


/s/ Donald E. Cihak     Director                               March 29, 2002
---------------------
Donald E. Cihak

                                      -36-

<PAGE>

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                      Page
                                                                                      ----
<S>                                                                                   <C>
Report of Independent Auditors ....................................................    F-2

Consolidated Financial Statements of Omega Cabinets, Ltd.
 Consolidated Balance Sheets as of December 29, 2001 and
  December 30, 2000 ...............................................................    F-3
 Consolidated Statements of Income for the Years Ended
  December 29, 2001, December 30, 2000 and January 1, 2000 ........................    F-5
 Consolidated Statements of Stockholder's Equity (Deficit) for
  the Years Ended December 29, 2001, December 30, 2000 and
  January 1, 2000 .................................................................    F-6
 Consolidated Statements of Cash Flows for the Years Ended
  December 29, 2001, December 30, 2000 and January 1, 2000 ........................    F-8
 Notes to Consolidated Financial Statements .......................................   F-10

Schedule II - Valuation and Qualifying Accounts ...................................   F-29
</TABLE>


<PAGE>

                         Report of Independent Auditors

The Board of Directors
Omega Holdings, Inc.

We have audited the accompanying consolidated balance sheets of Omega Cabinets,
Ltd. (a wholly-owned subsidiary of Omega Holdings, Inc.) as of December 29, 2001
and December 30, 2000, and the related consolidated statements of income,
stockholder's equity (deficit), and cash flows for each of the three years in
the period ended December 29, 2001. Our audits also included the financial
statement schedule listed in Item 14(a). These financial statements and schedule
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and schedule based on our
audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Omega Cabinets,
Ltd. at December 29, 2001 and December 30, 2000, and the consolidated results of
its operations and its cash flows for each of the three years in the period
ended December 29, 2001, in conformity with accounting principles generally
accepted in the United States. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.

                                                               ERNST & YOUNG LLP

Des Moines, Iowa
February 22, 2002

                                                                             F-2

<PAGE>

                              Omega Cabinets, Ltd.

                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                       December 29   December 30
                                                                           2001          2000
                                                                       -------------------------
<S>                                                                    <C>           <C>
Assets (Note 4)
Current assets:
   Cash                                                                $   3,683,764 $  2,982,601
   Income tax receivable                                                           -    1,651,644
   Accounts receivable, less allowance for doubtful
     accounts of $1,401,000 in 2001 and $1,445,000 in 2000                25,760,371   22,921,739
   Inventories (Note 3)                                                   17,212,507   17,605,364
   Prepaid expenses and other                                              2,065,675    1,954,316
   Deferred income taxes (Note 6)                                            846,890      925,105
                                                                       --------------------------
Total current assets                                                      49,569,207   48,040,769

Property, plant, and equipment, at cost:
   Land and improvements                                                   2,455,722    2,315,867
   Buildings                                                              30,646,361   24,864,733
   Machinery and equipment                                                40,497,551   34,268,814
   Construction in progress                                                3,767,408    4,324,040
                                                                       --------------------------
                                                                          77,367,042   65,773,454
   Less accumulated depreciation                                         (19,413,330) (14,926,752)
                                                                       --------------------------
                                                                          57,953,712   50,846,702

Deferred financing costs, less accumulated amortization
   of $4,458,922 in 2001 and $3,323,919 in 2000                            4,776,898    5,947,957
Goodwill, less accumulated amortization of $13,217,970
   in 2001 and $10,861,002 in 2000                                        88,059,577   90,415,806
Other assets                                                               1,741,445    1,084,794
                                                                       --------------------------
Total assets                                                           $ 202,100,839 $196,336,028
                                                                       ==========================
</TABLE>

                                                                             F-3

<PAGE>

                              Omega Cabinets, Ltd.

                     Consolidated Balance Sheets (continued)

<TABLE>
<CAPTION>
                                                                          December 29    December 30
                                                                             2001           2000
                                                                       ------------------------------
<S>                                                                    <C>               <C>
Liabilities and stockholder's equity
Current liabilities:
   Accounts payable                                                    $  13,072,996     $ 10,758,751
   Accrued expenses                                                       10,059,028       10,470,298
   Accrued income taxes                                                    3,008,725                -
   Current portion of long-term debt (Note 4)                              6,862,031       11,442,812
                                                                       ------------------------------
Total current liabilities                                              $  33,002,780       32,671,861

Deferred income taxes (Note 6)                                             6,828,963        6,071,206

Long-term debt, less current portion (Note 4)                            123,982,936      141,104,851

Commitments (Note 5)

Stockholder's equity (Notes 4, 8 and 9):
   Common stock, $.01 par value; 10,000 shares authorized;
     1,000 shares issued and outstanding                                          10               10
   Additional paid-in capital                                             89,203,864       88,446,216
   Less stock notes receivable                                            (2,629,083)      (2,341,000)
   Predecessor basis adjustment                                          (11,031,662)     (11,031,662)
   Accumulated other comprehensive loss - foreign
     currency translation adjustment                                        (149,123)        (549,888)
   Retained earnings (deficit) (Note 2)                                  (37,107,846)     (58,035,566)
                                                                       ------------------------------
Total stockholder's equity                                                38,286,160       16,488,110

                                                                       ------------------------------
Total liabilities and stockholder's equity                             $ 202,100,839     $196,336,028
                                                                       ==============================
</TABLE>

See accompanying notes.

                                                                             F-4

<PAGE>

                              Omega Cabinets, Ltd.

                        Consolidated Statements of Income


<TABLE>
<CAPTION>
                                                                      Year Ended
                                                    December 29       December 30       January 1
                                                        2001             2000              2000
                                                 -------------------------------------------------
<S>                                              <C>                 <C>              <C>
Net sales                                          $325,647,166      $304,207,355     $271,396,048
Cost of goods sold                                  231,687,009       217,807,951      192,429,908
                                                 -------------------------------------------------
Gross profit                                       $93,960,157         86,399,404       78,966,140

Selling, general and administrative
   expenses (Notes 8 and 11)                         40,194,368        38,076,425       33,401,427
Amortization of goodwill                              2,518,786         2,564,377        2,467,886
                                                 -------------------------------------------------
Operating income                                     51,247,003        45,758,602       43,096,827

Interest expense                                     14,983,240        17,342,449       17,445,914
Foreign currency transaction loss (gain)              1,121,866           790,947         (969,188)
                                                 -------------------------------------------------
Income before income taxes                           35,141,897        27,625,206       26,620,101

Income tax expense (Note 6)                          14,214,177        11,415,729       10,515,772
                                                 -------------------------------------------------
Net income                                        $  20,927,720     $  16,209,477    $  16,104,329
                                                 =================================================
</TABLE>

See accompanying notes.

                                                                             F-5

<PAGE>

                              Omega Cabinets, Ltd.

            Consolidated Statements of Stockholder's Equity (Deficit)
<TABLE>
<CAPTION>
                                                                                  Additional
                                                                          Common   Paid-In
                                                                           Stock   Capital
                                                                          --------------------
<S>                                                                      <C>    <C>
Balance at January 2, 1999                                                 $10    $61,072,025
   Common stock issued at parent-level credited to the Company (Note
     9)                                                                      -     20,463,755
   Redemption of common stock and options at parent-level charged to
     the Company                                                             -       (345,061)
   Noncash capital contribution (Note 5)                                     -         60,000
   Stock option expense (Note 8)                                             -      1,347,823
   Comprehensive income (loss):
     Net income for 1999                                                     -              -
     Foreign currency translation adjustment                                 -              -
   Total comprehensive income
                                                                          --------------------
Balance at January 1, 2000                                                  10     82,598,542
   Common stock issued at parent-level credited to the Company (Note
     9)                                                                      -      7,643,758
   Redemption of common stock and options at parent-level charged to
     the Company                                                             -     (1,796,084)
   Payments on stock notes receivable                                        -              -
   Interest accrued on stock notes receivable                                -              -
   Comprehensive income:
     Net income for 2000                                                     -              -
     Foreign currency translation adjustment                                 -              -
   Total comprehensive income
                                                                          --------------------
Balance at December 30, 2000                                                10     88,446,216
   Common stock issued at parent-level credited to the Company (Note
     9)                                                                      -        305,430
   Redemption of common stock and options at parent-level charged to
     the Company                                                             -     (1,925,075)
   Payments on stock notes receivable                                        -              -
   Interest accrued on stock notes receivable                                -              -
   Stock option expense (Note 8)                                             -      2,377,293
   Comprehensive income:
     Net income for 2001                                                     -              -
     Foreign currency translation adjustment                                 -              -
   Total comprehensive income
                                                                          --------------------
Balance at December 29, 2001                                               $10    $89,203,864
                                                                          ====================
</TABLE>

See accompanying notes.

                                                                             F-6

<PAGE>

                              Omega Cabinets, Ltd.

      Consolidated Statements of Stockholder's Equity (Deficit) (continued)


<TABLE>
<CAPTION>
                                         Accumulated
        Stock           Predecessor         Other            Retained
        Notes             Basis         Comprehensive        Earnings
      Receivable        Adjustment      Income (Loss)        (Deficit)             Total
------------------------------------------------------------------------------------------
<S>                    <C>              <C>                <C>                <C>
      $         -        $(11,031,662)     $         -     $(90,349,372)      $(40,308,999)

       (1,862,583)                  -                -                -         18,601,172

                -                   -                -                -           (345,061)
                -                   -                -                -             60,000
                -                   -                -                -          1,347,823

                -                   -                -       16,104,329         16,104,329
                -                   -       (1,319,083)               -         (1,319,083)
                                                                          ----------------
                                                                                14,785,246
------------------------------------------------------------------------------------------
       (1,862,583)        (11,031,662)      (1,319,083)     (74,245,043)        (5,859,819)

       (1,270,960)                  -                -                -          6,372,798

                -                   -                -                -         (1,796,084)
          915,362                   -                -                -            915,362
         (122,819)                  -                -                -           (122,819)

                -                   -                -       16,209,477         16,209,477
                -                   -          769,195                -            769,195
                                                                          ----------------
                                                                                16,978,672
------------------------------------------------------------------------------------------
       (2,341,000)        (11,031,662)        (549,888)     (58,035,566)        16,488,110

         (179,300)                  -                -                -            126,130

                -                   -                -                -         (1,925,075)
           31,530                   -                -                -             31,530
         (140,313)                  -                -                -           (140,313)
                -                   -                -                -          2,377,293

                -                   -                -       20,927,720         20,927,720
                -                   -          400,765                -            400,765
                                                                          ----------------
                                                                                21,328,485
------------------------------------------------------------------------------------------
      $(2,629,083)       $(11,031,662)     $  (149,123)    $(37,107,846)      $ 38,286,160
==========================================================================================
</TABLE>

                                                                             F-7

<PAGE>

                              Omega Cabinets, Ltd.

                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                           Year Ended
                                                          December 29      December 30      January 1
                                                             2001             2000             2000
                                                        --------------------------------------------------
<S>                                                        <C>             <C>               <C>
Operating activities
Net income                                                $ 20,927,720     $ 16,209,477     $ 16,104,329
Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation                                            4,932,117        4,179,046        3,461,165
     Amortization                                            3,669,484        3,713,901        3,553,499
     Noncash interest income on stock notes receivable        (140,313)        (122,819)               -
     Noncash stock option expense                            2,377,293                -        1,347,823
     Loss on write-off of fixed assets                               -        2,359,975                -
     Deferred income taxes                                     835,972        1,815,760        2,190,458
     Changes in operating assets and liabilities, net
       of effect of business acquired in 1999:
         Income tax receivable                               1,651,644         (537,175)        (830,241)
         Accounts receivable                                (3,430,615)      (3,047,060)         594,101
         Inventories                                            78,485          393,354       (1,934,568)
         Prepaid expenses and other                           (162,511)        (443,142)        (405,364)
         Other assets                                         (656,651)        (222,631)        (112,773)
         Accounts payable                                    2,692,015        1,428,939          546,686
         Accrued expenses                                    2,840,295          (71,974)         670,325
                                                        --------------------------------------------------
Net cash provided by operating activities                   35,614,935       25,655,651       25,185,440

Investing activities
Purchases of property, plant, and equipment                (13,130,478)     (11,215,396)     (11,552,570)
Payments for acquisition of business (Note 10)                       -                -      (50,323,500)
                                                        --------------------------------------------------
Net cash used in investing activities                      (13,130,478)     (11,215,396)     (61,876,070)

Financing activities
Proceeds from long-term debt                                11,900,000       23,580,000       46,777,564
Payments for deferred financing costs                                -           (8,053)      (2,813,755)
Payments of long-term debt                                 (31,711,167)     (42,803,361)     (19,901,123)
Capital contributions by parent                                126,130        6,372,798       14,616,172
Payments to parent to redeem common stock and options
   at parent-level                                          (1,925,075)      (1,796,084)        (345,061)
Proceeds from stock notes receivable                            31,530          915,362                -
                                                        --------------------------------------------------
Net cash provided by (used in) financing activities        (21,578,582)     (13,739,338)      38,333,797

Effect of foreign exchange rate changes on cash               (204,712)          47,015          (59,201)
                                                        --------------------------------------------------
Net increase in cash                                           701,163          747,932        1,583,966

Cash at beginning of year                                    2,982,601        2,234,669          650,703
                                                        --------------------------------------------------
Cash at end of year                                       $  3,683,764     $  2,982,601     $  2,234,669
                                                        ==================================================
</TABLE>

                                                                             F-8

<PAGE>

                              Omega Cabinets, Ltd.

                Consolidated Statements of Cash Flows (continued)


<TABLE>
<CAPTION>
                                                                           Year Ended
                                                           December 29     December 30       January 1
                                                              2001             2000            2000
                                                          ---------------------------------------------
<S>                                                      <C>               <C>             <C>
Supplemental disclosures
Interest paid in cash                                      $13,796,408     $16,416,588     $ 15,177,581
Income taxes paid in cash, net of refunds received         $ 9,849,898     $10,098,824     $  6,273,041
Noncash financing activities:
   Noncash capital contribution - parent equity issued
     as partial consideration for business acquired        $         -     $         -     $  3,985,000
   Other noncash capital contributions from parent         $         -     $         -     $     60,000
   Notes receivable issued in exchange for parent stock    $   179,300     $ 1,270,960     $  1,862,583
</TABLE>

See accompanying notes.

                                                                             F-9

<PAGE>

                              Omega Cabinets, Ltd.

                   Notes to Consolidated Financial Statements


                     For the Years Ended December 29, 2001.
                     December 30, 2000 and January 1, 2000



1. Accounting Policies

Description of Business and Basis of Presentation

Omega Cabinets, Ltd. (the Company) manufactures cabinetry and related products
and accessories, including primarily kitchen and bath cabinets. The Company
sells to a broad network of independent dealers, home centers,
builders/contractors, independent distributors and retail stores throughout the
United States and Canada. The Company operates in one business segment for
financial reporting purposes.

The Company is a wholly-owned subsidiary of Omega Holdings, Inc. (Holdings).
Holdings has no operations and its sole asset is its investment in the common
stock of the Company. Holdings' original acquisition cost of acquiring the
Company, including a predecessor basis adjustment, have been "pushed down" and
reflected in the accounts of the Company.

Fiscal Year

The Company follows a 52/53 week fiscal year. All years presented consisted of
52 weeks.

Principles of Consolidation

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

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

                                                                            F-10

<PAGE>


                             Omega Cabinets, Ltd.

             Notes to Consolidated Financial Statements (continued)




1. Accounting Policies (continued)

Accounts Receivable and Concentrations of Credit Risk

The Company's customer base is impacted by the remodeling and housing industries
and, accordingly, may be affected by cyclical trends and general conditions in
those industries. Concentrations of credit risk with respect to trade
receivables are limited due to the number of customers and their geographic
dispersion. The Company performs initial and periodic credit evaluations of its
customers, generally does not require collateral, and maintains allowances for
potential credit losses.

Inventories

The Company states inventories at the lower of cost or market using the
first-in, first-out (FIFO) method.

Property, Plant and Equipment

Depreciation is provided on the straight-line method over the estimated useful
lives of the assets, including 40 years for buildings and five - ten years for
machinery and equipment.

Deferred Financing Costs and Goodwill

Deferred financing costs are amortized over the term of the related loans
ranging primarily from 6 to 10 years. Goodwill, representing the excess of
purchase price over the underlying net assets of businesses acquired, is
amortized on the straight-line method over 40 years. The carrying value of
goodwill is reviewed continually to determine whether any impairment has
occurred. This review takes into consideration the recoverability of the
unamortized amounts based on the estimated undiscounted cash flows of the
related business. To the extent that the estimated undiscounted future cash
flows were less than the carrying value of the related goodwill, an impairment
loss could be measured based upon various methods, including undiscounted cash
flows, discounted cash flows and fair value. Based upon undiscounted cash flows,
no impairment of goodwill was determined to exist and, accordingly, no
measurement was required.

Income Taxes

The Company files consolidated income tax returns in the U. S. with Holdings.
All income taxes allocated to the Company have been computed on a separate
return basis.

                                                                            F-11

<PAGE>

                             Omega Cabinets, Ltd.

             Notes to Consolidated Financial Statements (continued)




1. Accounting Policies (continued)

The Company follows the liability method of accounting for income taxes, under
which deferred income tax assets and liabilities are determined based on the
difference between financial reporting and income tax bases of assets and
liabilities using the enacted marginal tax rates. Deferred income tax expense is
based on the changes in the asset or liability from period to period.

Stockholder's Equity

In connection with a previous acquisition, the former owners of the acquired
business retained a continuing ownership interest in Holdings. Generally
accepted accounting principles require Holdings and the Company to record a
reduction to stockholder's equity representing the cost in excess of the
predecessor basis attributable to the continuing ownership interest.
Accordingly, a predecessor basis adjustment of $11,031,662 has been reflected in
stockholder's equity.

Revenue Recognition

The Company recognizes revenue upon shipment of its products to customers.

Shipping Costs

The Company classifies shipping costs as a component of cost of goods sold in
the consolidated statements of income.

Advertising

The Company expenses advertising costs as incurred. Advertising expense was
approximately $4,574,000 in 2001, $3,815,000 in 2000 and $3,022,000 in 1999.

Fair Value of Financial Instruments

Financial instruments include accounts receivable, accounts payable, and
long-term debt. Management believes the fair value of accounts receivable and
accounts payable approximate their carrying value in the balance sheet as of
each balance sheet date. The fair value of the long-term debt is estimated based
on anticipated interest rates which management believes would currently be
available to the Company for similar issues of

                                                                            F-12

<PAGE>

                             Omega Cabinets, Ltd.

             Notes to Consolidated Financial Statements (continued)




1. Accounting Policies (continued)

debt, taking into account the current credit risk of the Company and other
market factors, and arms-length trades for debt securities which are traded. The
fair value of long-term debt, other than the senior subordinated notes indicated
below, is estimated to approximate the carrying amount as of each balance sheet
date. The estimated fair value of the senior subordinated notes was $104.25
million and $93 million at December 29, 2001 and December 30, 2000,
respectively.

Foreign Operations

The Company has operations in Canada through its wholly-owned subsidiary,
Kitchen Craft of Canada, Ltd. (Kitchen Craft) and, as a result, has foreign
subsidiary financial statements denominated in Canadian dollars. Foreign
currency denominated assets and liabilities are translated using the exchange
rates in effect at the balance sheet date. Results of operations are translated
using the average exchange rates prevailing throughout the year. The effects of
exchange rate fluctuations on translating foreign currency denominated financial
statements into U. S. dollars are accumulated as part of the foreign currency
translation adjustment in stockholder's equity.

Gains and losses from foreign currency transactions are included in net income.

Long-lived assets by country as of December 29, 2001 and December 30, 2000 and
net sales by country for the years ended December 29, 2001, December 30, 2000,
and January 1, 2000 were approximately as follows (in millions):

                                       Net Sales              Long-Lived Assets
                          ------------------------------     ------------------
                               2001      2000      1999        2001        2000
                          ------------------------------     ------------------

   United States            $ 213.4    $ 200.3   $ 190.1     $ 92.9     $  91.0
   Canada                     112.2      103.9      81.3       59.6        57.3
                          ------------------------------     ------------------
                            $325.60    $304.20   $271.40     $152.5     $148.30
                          ==============================     ==================

                                                                            F-13

<PAGE>

                             Omega Cabinets, Ltd.

             Notes to Consolidated Financial Statements (continued)





1. Accounting Policies (continued)

Recently Issued Accounting Standards

In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets.
Under the new rules, goodwill will no longer be amortized but will be subject to
annual impairment tests in accordance with the statement. The Company expects to
apply the new rules beginning in the first quarter of 2002. Applying the
nonamortization provisions of the statement will result in an increase in pretax
income to the extent of goodwill amortization which is no longer recorded. The
Company's historical goodwill amortization expense was approximately $2.5
million, $2.6 million, and $2.5 million in 2001, 2000, and 1999, respectively.
The Company believes the initial adoption of the impairment provisions will have
no material impact on its financial position or results of operations.

The Company is required to adopt Emerging Issues Task Force Issue No. 00-14 and
Issue No. 00-25 in the first quarter of 2002. These standards provide guidance
on the accounting and income statement classification for certain sale
incentives provided to customers, as well as various types of consideration
provided to customers in connection with sales or promotion of a manufacturer's
products. The Company has not yet determined what the effect, if any, of
implementing these new rules will have on the earnings or financial position of
the Company.

2. 1997 Recapitalization

In 1997, certain new investors invested approximately $62 million in the voting
equity stock of Holdings, which in turn was contributed by Holdings into the
Company. These amounts plus the proceeds from new long-term debt were used to
repay all of the Company's then outstanding long-term debt, to repurchase the
majority of Holding's voting equity stock then outstanding, and to pay
transaction fees and expenses. The 1997 merger transactions were accounted for
as a recapitalization and, accordingly, did not impact the historical basis of
the Company's assets or liabilities. All recapitalization transactions of
Holdings have been pushed down and reflected in the accounts of the Company,
resulting in dividends to parent in 1997 and 1998 totaling $111.7 million which
were charged to stockholder's equity.

                                                                            F-14

<PAGE>

                              Omega Cabinets, Ltd.

             Notes to Consolidated Financial Statements (continued)



3. Inventories

Inventories consist of the following:

                                                  December 29      December 30
                                                    2001              2000
                                               ---------------------------------

   Raw materials                                $  7,615,890      $  7,510,552
   Work-in-process                                 6,064,278         6,720,423
   Finished goods                                  3,532,339         3,374,389
                                               ---------------------------------
                                                $ 17,212,507      $ 17,605,364
                                               =================================

4. Long-Term Debt

Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                                December 29       December 30
                                                                                   2001              2000
                                                                              --------------------------------
<S>                                                                           <C>                 <C>
   Senior bank revolving loan, due December 2003, interest at defined
     rate options (5.5% at December 29, 2001)                                   $          -      $    900,000
   Senior Term Loan A, payable in increasing quarterly installments through
     December 2003, interest at LIBOR plus 1.75% (3.81% at
     December 29, 2001)                                                           10,307,666        20,256,651
   Senior Term Loan B, payable in quarterly installments beginning
     March 2004 through December 2004, interest at LIBOR plus 2.0%
     (4.06% at December 29, 2001)                                                 14,738,979        21,147,413
   Senior subordinated notes, due June 2007, interest at 10.50%                  100,000,000       100,000,000
   Canadian senior term loan, payable in increasing quarterly
     installments through December 2004, interest at defined rate
     options (3.68% weighted average at December 29, 2001).                        5,798,322        10,241,016
   Other                                                                                   -             2,583
                                                                              --------------------------------
                                                                                 130,844,967       152,547,663
   Less amounts due within one year                                                6,862,031        11,442,812
                                                                              --------------------------------
   Long-term debt, less current portion                                         $123,982,936      $141,104,851
                                                                              ================================
</TABLE>


The Company has a senior bank credit facility consisting of a revolving facility
of up to $20 million and a term facility including the above Term Loan A and
Term Loan B. Interest on the term and revolving facilities is currently payable
and is determined at the Company's option of either a defined base rate plus a
margin ranging from .25% to 1.75%, or a defined LIBOR plus a margin ranging from
1.25% to 2.75%. The Company

                                                                            F-15

<PAGE>

                              Omega Cabinets, Ltd.

             Notes to Consolidated Financial Statements (continued)




4. Long-Term Debt (continued)

also has a Canadian senior bank credit facility consisting of a total credit
facility of $37 million Canadian dollars ($22 million Canadian dollars under a
term facility and $15 million Canadian dollars under a revolving facility).
There were no outstanding amounts under the Canadian revolving facility at
December 29, 2001 or December 30, 2000. Interest on the Canadian term and
revolving facilities is currently payable and is determined at the Company's
option of either a defined base rate plus a margin ranging 1.50% to 2.75%, or a
defined prime rate plus a margin ranging from .50% to 1.75%. The applicable
margin percentage under both the senior bank credit facility and the Canadian
facility is determined based upon the Company's cash flow leverage ratio. The
Company is required to pay a commitment fee of 0.5% per annum on the unused
amounts of both the senior bank revolving loan and the Canadian revolving
facility. Borrowings under the bank facilities are guaranteed by Holdings and
secured by all of the stock and assets of the Company.

The revolving loan matures in December 2003 and has no scheduled interim
payments. Additional loan payments are also due each year based on 75% of the
Company's defined excess cash flow, if any. These mandatory prepayments will be
applied first to repay the term loans and then to the permanent reduction of the
revolving loans. In addition, the Company is required to make prepayments on the
term and revolving loans under certain other circumstances, including certain
sales of assets or issuance of debt or equity securities. The agreements contain
various restrictive covenants including a restriction on payment of dividends
and requirements to meet certain financial covenants.

Interest on the senior subordinated notes is payable semiannually. The notes
mature in June 2007 and have no scheduled interim payments. The senior
subordinated notes are subordinated in right and payment to the senior bank
loans, and are generally not redeemable at the Company's option prior to June
2002, except in certain circumstances. Beginning in June 2002, the notes may be
redeemed at the Company's option at 105.25% of principal, declining 1.75%
annually to 100% in June 2005. The related indenture agreement contains various
restrictive covenants, including a restriction on payment of dividends. See Note
12 regarding subsidiary guarantees of the senior subordinated notes.

                                                                            F-16

<PAGE>

                              Omega Cabinets, Ltd.

             Notes to Consolidated Financial Statements (continued)




4. Long-Term Debt (continued)

As of December 29, 2001, aggregate future maturities of long-term debt are as
follows:

   2002                                                          $  6,862,031
   2003                                                             6,991,776
   2004                                                            16,991,160
   2005                                                                     -
   2006                                                                     -
   Thereafter                                                     100,000,000
                                                            -----------------
                                                                 $130,844,967
                                                            =================

5. Commitments

The Company leases transportation equipment, facilities and equipment under
noncancelable operating leases with lease terms of 3 to 8 years. The Company
expects that generally leases will be renewed under renewal options or the
leased assets will be replaced in the normal course of business. Total rental
expense under operating leases was $2,558,000 in 2001, $2,546,000 in 2000 and
$2,377,000 in 1999.

Minimum future rental commitments applicable to operating leases at December 29,
2001 are as follows:

   2002                                                          $  1,801,000
   2003                                                             1,447,000
   2004                                                             1,043,000
   2005                                                               717,000
   2006                                                               484,000
                                                            -----------------
                                                                 $  5,492,000
                                                            =================

The Company has a management agreement with an affiliate of the majority
stockholder of Holdings. The agreement presently requires the Company to pay
$425,000 per year for management services provided, plus certain fees and
expenses. Expense under the management agreement was $425,000 in 2001, 2000, and
1999. In addition, in 1999 Holdings issued a fully-exercisable warrant (for the
purchase of Holdings' common

                                                                            F-17

<PAGE>

                              Omega Cabinets, Ltd.

             Notes to Consolidated Financial Statements (continued)





5. Commitments (continued)

stock) to the management company in connection with the management agreement.
Holdings recorded the fair value of the warrant as of the issuance date, and the
related charge and additional paid-in capital of $60,000 was "pushed-down" and
reflected in the financial statements of the Company.

The Company is jointly and severally liable, under a stockholders' agreement of
Holdings, for Holdings' obligation to repurchase its common shares and fully
vested stock options held by management stockholders solely in the event of the
death or disability of such stockholders. The management stockholders include 49
individuals representing a total of approximately 14% of Holdings' fully-diluted
common shares. The aggregate repurchase amount of all stock subject to the
repurchase was approximately $22.6 million at December 29, 2001.

6. Income Taxes

Components of income tax expense are as follows:

<TABLE>
<CAPTION>
                                            2001              2000             1999
                                      ------------------------------------------------
<S>                                   <C>                 <C>              <C>
   Current expense:
     Federal                             $ 4,469,000      $ 1,827,000      $ 2,387,000
     State                                   781,000          322,000          225,000
     Foreign                               8,128,205        7,450,969        5,713,314
                                      ------------------------------------------------
   Total current expense                 $13,378,205        9,599,969        8,325,314

   Deferred expense (benefit):
     Federal                                 711,000        1,409,000        1,258,000
     State                                   197,000          388,000          347,000
     Foreign                                 (72,078)          18,760          585,458
                                      ------------------------------------------------
   Total deferred expense                    835,972        1,815,760        2,190,458
                                      ------------------------------------------------
                                         $14,214,177      $11,415,729      $10,515,772
                                      ================================================
</TABLE>

                                                                            F-18

<PAGE>

                              Omega Cabinets, Ltd.

             Notes to Consolidated Financial Statements (continued)





6. Income Taxes (continued)

A reconciliation of income tax expense with the amount computed by applying the
statutory federal income tax rate to pretax income is as follows:

<TABLE>
<CAPTION>
                                                            2001             2000              1999
                                                     ---------------------------------------------------
<S>                                                  <C>                   <C>              <C>
   Amount based on federal statutory rate                 $11,948,000       $ 9,393,000      $ 9,051,000
   State income taxes, net of federal benefit                 645,000           469,000          378,000
   Effect of foreign taxes                                  1,635,177         1,507,729        1,062,772
   Other                                                      (14,000)           46,000           24,000
                                                     ---------------------------------------------------
   Income tax expense                                     $14,214,177       $11,415,729      $10,515,772
                                                     ===================================================
</TABLE>


Components of the net deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
                                             December 29, 2001                  December 30, 2000
                                     -------------------------------------------------------------------
                                          Current        Noncurrent          Current        Noncurrent
                                     -------------------------------------------------------------------
<S>                                  <C>              <C>                    <C>         <C>
   Deferred tax assets:
     Accruals and reserves                 $805,710       $         -        $844,697        $         -
     Stock options and warrants                   -         1,431,000               -            711,000
     Foreign currency exchange                    -            88,168               -                  -
     Other                                   41,180                 -          80,408                  -
                                     -------------------------------------------------------------------
                                            846,890         1,519,168         925,105            711,000
   Deferred tax liabilities:
     Depreciation                                 -        (4,332,131)              -         (3,902,130)
     Goodwill                                     -        (3,758,000)              -         (2,415,000)
     Deferred financing costs                     -          (258,000)              -           (351,000)
     Foreign currency exchange                    -                 -               -           (114,076)
                                     -------------------------------------------------------------------
                                                  -        (8,348,131)              -         (6,782,206)
                                     -------------------------------------------------------------------
   Net deferred tax asset
     (liability)                           $846,890       $(6,828,963)       $925,105        $(6,071,206)
                                     ===================================================================
</TABLE>

                                                                            F-19

<PAGE>

                              Omega Cabinets, Ltd.

             Notes to Consolidated Financial Statements (continued)

7.   Employee Benefit Plans

The Company has profit-sharing, 401(k) and other benefit plans covering
substantially all full-time U. S. employees and certain foreign employees. Under
certain plans, the Company makes a matching contribution equal to 50% of the
participant's contribution, up to specified maximum amounts. In addition, the
Company may elect to contribute an additional amount to the plan at the
discretion of the Company's Board of Directors. Expense related to the plans was
$857,000 in 2001, $777,000 in 2000 and $719,000 in 1999.

8.   Stock Option Plan

Holdings has an incentive stock option plan pursuant to which key employees may
be granted options to purchase shares of its Class A common stock. Options are
granted at the discretion of the Board of Directors. Holdings accounts for stock
options in accordance with Accounting Principles Board Opinion No. 25.
Compensation expense relating to Holdings' stock option plan which has been
pushed down and reflected in the financial statements of the Company is as
follows: $2,377,000 in 2001, none in 2000 and $1,348,000 in 1999.

Under Statement of Financial Accounting Standards No. 123 (FAS 123), certain pro
forma information is required as if Holdings had accounted for options under the
alternative fair value method of FAS 123. Holdings used a Black-Scholes model to
determine the per share fair value of the options at the grant date. The
following assumptions were used in the valuation:

     Weighted average risk-free interest rate:
       2001                                                  4.21%
       2000                                                  N/A
       1999                                                  6.01%
     Expected dividend yield                                 None
     Expected volatility                                     .001
     Expected life of options                                5 years

                                                                            F-20

<PAGE>


                              Omega Cabinets, Ltd.

             Notes to Consolidated Financial Statements (continued)

8.   Stock Option Plan (continued)

For purposes of pro forma disclosures, the estimated fair value of the options
at the grant date is amortized to expense over the vesting period of the
options. Pro forma option compensation expense is not indicative of what annual
pro forma expense may be in the future. Pro forma net income of the Company,
assuming the alternative FAS 123 method were used, would be $20,674,000 in 2001
and $15,840,000 in 1999. Pro forma net income for 2000 would not differ from
reported net income.

9.   Stockholder's Equity Transactions

In 1999, Holdings issued additional common equity totaling approximately $20.5
million, primarily in connection with the acquisition of Kitchen Craft (see Note
10). The Holdings' equity in turn was contributed to the Company as additional
paid-in capital. The Holdings' 1999 equity also included common stock issued to
certain management stockholders in exchange for notes receivable. Holdings
issued additional common equity totaling approximately $305,000 and $7.6 million
to certain management stockholders for cash and notes receivable in 2001 and
2000, respectively. The stock notes receivable are reported as a reduction to
stockholder's equity.

Other ongoing issuances (redemptions) of Holdings' stock are contributed to
(paid by) the Company and accordingly have been credited (charged) to additional
paid-in capital.

10.  Acquisition

On January 29, 1999, the Company acquired Kitchen Craft for cash consideration
of approximately $48 million plus equity of Holdings with a fair value of
approximately $4 million. The transaction was accounted for as a purchase. The
aggregate purchase price, including fees and expenses of approximately $2.2
million, was allocated based on fair value as follows:

     Current assets                                              $   11,568,000
     Property, plant and equipment                                    8,988,000
     Goodwill                                                        43,946,000
     Current liabilities                                            (10,193,000)
                                                                 --------------
                                                                 $   54,309,000
                                                                 ==============

                                                                            F-21

<PAGE>


                              Omega Cabinets, Ltd.

             Notes to Consolidated Financial Statements (continued)

10.  Acquisition (continued)

The results of operations of Kitchen Craft from the date of purchase are
included in the accompanying consolidated statements of income. Pro forma
amounts for 1999, assuming that the purchase occurred at the beginning of 1999
are approximately as follows:

     Net sales                                                    $ 276,910,000
     Net income                                                      16,480,000

11.  Write-off of Fixed Assets

In June 2000, the Company terminated implementation of a new enterprise resource
and planning (ERP) system. The Company charged approximately $2.4 million to
selling, general and administrative expenses in 2000 related to the terminated
implementation.

12.  Guarantor and Non-Guarantor Subsidiaries

The Company's $100 million senior subordinated notes (Note 4) are fully and
unconditionally guaranteed by Panther Transport, Inc. (Panther), the Company's
only wholly-owned subsidiary prior to 1999. Separate financial statements or
summarized financial information for Panther have not been presented since its
operations are inconsequential and its accounts and transactions represent less
than 1% of each of the consolidated total assets, liabilities, equity, net
sales, operating income, and net income of the Company. Management believes that
the separate financial statements and summarized financial information of
Panther are not material to investors.

Beginning in fiscal 1999, as a result of the Kitchen Craft acquisition the
Company also has two wholly-owned subsidiaries which do not guarantee the senior
subordinated notes. These non-guarantor subsidiaries generally comprise the
Kitchen Craft business. Set forth below are consolidating condensed financial
statements for the periods indicated which separately reflect Kitchen Craft
(amounts in thousands):


                                                                            F-22

<PAGE>


                              Omega Cabinets, Ltd.

             Notes to Consolidated Financial Statements (continued)


12.  Guarantor and Non-Guarantor Subsidiaries (continued)

<TABLE>
<CAPTION>
                                      The Company*   Kitchen Craft    Eliminations    Consolidated
                                    --------------------------------------------------------------

                                    Condensed Consolidating Balance Sheet
                                         December 29, 2001
<S>                                 <C>              <C>              <C>             <C>
Current assets:
  Cash                                $       758       $  2,926      $        -       $    3,684
  Accounts receivable                      16,498          9,262               -           25,760
  Inventories                              12,266          4,947               -           17,213
  Other                                     2,121            792               -            2,913
                                      -----------------------------------------------------------
Total current assets                       31,643         17,927               -           49,570
Property, plant and equipment, net         38,987         18,967               -           57,954
Goodwill, net                              47,635         40,424               -           88,059
Other noncurrent assets                    40,201            231         (33,914)           6,518
                                      -----------------------------------------------------------
Total assets                          $   158,466       $ 77,549      $  (33,914)      $  202,101
                                      ===========================================================

Current liabilities:
  Accounts payable and accrued
    expenses                          $    19,632       $ 12,113      $   (5,604)      $   26,141
  Current portion of long-term debt         5,758          1,104               -            6,862
                                      -----------------------------------------------------------
Total current liabilities                  25,390         13,217          (5,604)          33,003
Long-term debt, less current portion      119,289         19,433         (14,739)         123,983
Other noncurrent liabilities                5,347          1,482               -            6,829
Total stockholder's equity                  8,440         43,417         (13,571)          38,286
                                      -----------------------------------------------------------
Total liabilities and
  stockholder's equity                $   158,466       $ 77,549      $  (33,914)      $  202,101
                                      ===========================================================
</TABLE>

                                                                            F-23

<PAGE>

                              Omega Cabinets, Ltd.

             Notes to Consolidated Financial Statements (continued)




12. Guarantor and Non-Guarantor Subsidiaries (continued)

<TABLE>
<CAPTION>
                                         The Company*    Kitchen Craft    Eliminations   Consolidated
                                       ----------------------------------------------------------------
<S>                                    <C>               <C>              <C>            <C>
                                  Condensed Consolidating Balance Sheet
                                            December 30, 2000

   Current assets:
     Cash                                   $  1,015         $  1,968       $      -         $  2,983
     Accounts receivable                      13,448            9,474              -           22,922
     Inventories                              12,601            5,004              -           17,605
     Other                                     3,323            1,208              -            4,531
                                       ----------------------------------------------------------------
   Total current assets                       30,387           17,654              -           48,041
   Property, plant and equipment, net         35,223           15,624              -           50,847
   Goodwill, net                              49,089           41,326              -           90,415
   Other noncurrent assets                    43,630              365        (36,962)           7,033
                                       ----------------------------------------------------------------
   Total assets                             $158,329         $ 74,969       $(36,962)        $196,336
                                       ================================================================

   Current liabilities:
     Accounts payable and accrued
       expenses                             $ 13,632         $  9,841       $ (2,244)        $ 21,229
     Current portion of long-term debt         9,334            2,109              -           11,443
                                       ----------------------------------------------------------------
   Total current liabilities                  22,966           11,950         (2,244)          32,672
   Long-term debt, less current
     portion                                 132,970           29,282        (21,147)         141,105
   Other noncurrent liabilities                4,521            1,550              -            6,071
   Total stockholder's equity
     (deficit)                                (2,128)          32,187        (13,571)          16,488
                                       ----------------------------------------------------------------
   Total liabilities and
     stockholder's equity (deficit)         $158,329         $ 74,969       $(36,962)        $196,336
                                       ================================================================

<CAPTION>
                                         The Company*    Kitchen Craft    Eliminations   Consolidated
                                       ----------------------------------------------------------------

                                 Condensed Consolidating Statement of Income
                                       Year Ended December 29, 2001
<S>                                    <C>               <C>              <C>            <C>
   Net sales                                $213,393         $112,254       $      -         $325,647
   Cost of goods sold                        155,888           75,799              -          231,687
                                       ----------------------------------------------------------------
   Gross profit                               57,505           36,455              -           93,960

   Selling, general and
     administrative expenses                  28,140           14,573              -           42,713
   Interest expense                           13,108            1,875              -           14,983
   Foreign currency transaction gains              -            1,122              -            1,122
                                       ----------------------------------------------------------------
   Income before income taxes                 16,257           18,885              -           35,142

   Income tax expense                          6,158            8,056              -           14,214
                                       ----------------------------------------------------------------
   Net income                               $ 10,099         $ 10,829       $      -         $ 20,928
                                       ================================================================
</TABLE>

                                                                            F-24

<PAGE>

                              Omega Cabinets, Ltd.

             Notes to Consolidated Financial Statements (continued)




12. Guarantor and Non-Guarantor Subsidiaries (continued)

<TABLE>
<CAPTION>
                                         The Company*    Kitchen Craft    Eliminations    Consolidated
                                       ---------------------------------------------------------------
<S>                                    <C>               <C>              <C>              <C>
                               Condensed Consolidating Statement of Income
                                       Year Ended December 30, 2000

   Net sales                                $ 200,339        $103,868          $  -          $ 304,207
   Cost of goods sold                         149,743          68,065             -            217,808
                                       ---------------------------------------------------------------
   Gross profit                                50,596          35,803             -             86,399

   Selling, general and
     administrative expenses                   26,409          14,231             -             40,640
   Interest expense                            14,098           3,245             -             17,343
   Foreign currency transaction gains               -            (791)            -               (791)
                                       ---------------------------------------------------------------
   Income before income taxes                  10,089          17,536             -             27,625

   Income tax expense                           3,946           7,470             -             11,416
                                       ---------------------------------------------------------------
   Net income                               $   6,143        $ 10,066          $  -          $  16,209
                                       ===============================================================

<CAPTION>
                                           The Company*  Kitchen Craft    Eliminations    Consolidated
                                       ---------------------------------------------------------------
<S>                                    <C>               <C>              <C>              <C>
                                Condensed Consolidating Statement of Income
                                        Year ended January 1, 2000

   Net sales                                $ 190,056        $ 81,340          $  -          $ 271,396
   Cost of goods sold                         140,574          51,856             -            192,430
                                       ---------------------------------------------------------------
   Gross profit                                49,482          29,484             -             78,966

   Selling, general and administrative
     expenses                                  23,927          11,942             -             35,869
   Interest expense                            14,333           3,113             -             17,446
   Foreign currency transaction gains               -            (969)            -               (969)
                                       ---------------------------------------------------------------
   Income before income taxes                  11,222          15,398             -             26,620

   Income tax expense                           4,217           6,299             -             10,516
                                       ---------------------------------------------------------------
   Net income                               $   7,005        $  9,099          $  -          $  16,104
                                       ===============================================================
</TABLE>

                                                                            F-25

<PAGE>

                             Omega Cabinets, Ltd.

             Notes to Consolidated Financial Statements (continued)




12. Guarantor and Non-Guarantor Subsidiaries (continued)

<TABLE>
<CAPTION>
                                         The Company*    Kitchen Craft    Eliminations   Consolidated
                                       ---------------------------------------------------------------
<S>                                    <C>               <C>              <C>            <C>
                             Condensed Consolidating Statement of Cash Flows
                                       Year Ended December 29, 2001

   Operating activities:
     Net cash provided by operating
       activities                            $23,039          $12,576        $  -             $ 35,615
   Investing activities:
     Net cash used in investing
       activities                             (7,319)          (5,811)          -              (13,130)

   Financing activities:
     Proceeds from long-term debt             11,900                -           -               11,900
     Capital contributions, net of
       redemptions                            (1,799)               -           -               (1,799)
     Proceeds from stock notes
       receivable                                 31                -           -                   31
     Intercompany funding                      3,049           (3,049)          -                    -
     Payments of long-term debt              (29,158)          (2,553)          -              (31,711)
                                       ---------------------------------------------------------------
   Net cash used in financing                (15,977)          (5,602)          -              (21,579)
     activities
   Effect of foreign exchange                      -             (205)          -                 (205)
                                       ---------------------------------------------------------------
   Net increase (decrease) in cash              (257)             958           -                  701

   Cash at beginning of period                 1,015            1,968           -                2,983
                                       ---------------------------------------------------------------
   Cash at end of period                     $   758          $ 2,926        $  -             $  3,684
                                       ===============================================================
</TABLE>

                                                                            F-26

<PAGE>

                              Omega Cabinets, Ltd.

             Notes to Consolidated Financial Statements (continued)


12. Guarantor and Non-Guarantor Subsidiaries (continued)

<TABLE>
<CAPTION>
                                                   The Company*    Kitchen Craft    Eliminations   Consolidated
                                                 ----------------------------------------------------------------

                                      Condensed Consolidating Statement of Cash Flows
                                                Year Ended December 30, 2000
 <S>                                           <C>                <C>                <C>               <C>
 Operating activities:
   Net cash provided by operating
     activities                                  $ 15,687           $  9,968           $      -          $ 25,655
 Investing activities:
   Net cash used in investing
     activities                                    (5,659)            (5,556)                 -           (11,215)

 Financing activities:
   Proceeds from long-term debt                    23,580                  -                  -            23,580
   Capital contributions, net of
     redemptions                                    4,577                  -                  -             4,577
   Proceeds from stock notes
     receivable                                       915                  -                  -               915
   Intercompany funding                            (3,051)             3,051                  -                 -
   Payments of long-term debt                     (36,522)            (6,281)                 -           (42,803)
   Payments for deferred financing
     costs                                             (8)                 -                  -                (8)
                                                 ----------------------------------------------------------------
 Net cash used in financing activities            (10,509)            (3,230)                 -           (13,739)
 Effect of foreign exchange                             -                 47                  -                47
                                                 ----------------------------------------------------------------
 Net increase (decrease) in cash                     (481)             1,229                  -               748

 Cash at beginning of period                        1,496                739                  -             2,235
                                                 ----------------------------------------------------------------
 Cash at end of period                           $  1,015           $  1,968           $      -          $  2,983
                                                 ==========================0=====================================
</TABLE>

                                                                            F-27

<PAGE>

                              Omega Cabinets, Ltd.

             Notes to Consolidated Financial Statements (continued)


12. Guarantor and Non-Guarantor Subsidiaries (continued)

<TABLE>
<CAPTION>
                                                       The             Kitchen
                                                     Company*           Craft           Eliminations      Consolidated
                                                    ------------------------------------------------------------------

                                         Condensed Consolidating Statement of Cash Flows
                                                    Year ended January 1, 2000
<S>                                                  <C>                <C>              <C>               <C>
  Operating activities:
    Net cash provided by operating
      activities                                    $ 14,561           $ 10,624           $      -          $ 25,185
  Investing activities:
    Purchases of property, plant and
      equipment                                       (8,705)            (2,847)                 -           (11,552)
    Payments for acquisition of
      business                                          (516)           (49,808)                 -           (50,324)
                                                    ----------------------------------------------------------------
  Net cash used in investing
    activities                                        (9,221)           (52,655)                 -           (61,876)

  Financing activities:
    Proceeds from long-term debt                      32,200             14,578                  -            46,778
    Capital contributions, net of
      redemptions                                     14,271             13,571            (13,571)           14,271
    Intercompany funding                             (33,778)            20,207             13,571                 -
    Payments of long-term debt                       (14,957)            (4,944)                 -           (19,901)
    Payments for deferred financing
      costs                                           (2,231)              (583)                 -            (2,814)
                                                    ----------------------------------------------------------------
  Net cash provided by (used in)
    financing activities                              (4,495)            42,829                  -            38,334
  Effect of foreign exchange                               -                (59)                 -               (59)
                                                    ----------------------------------------------------------------
  Net increase in cash                                   845                739                  -             1,584

  Cash at beginning of period                            651                  -                  -               651
                                                    ----------------------------------------------------------------
  Cash at end of period                             $  1,496           $    739           $      -          $  2,235
                                                    ================================================================
</TABLE>

 *Includes Panther which is inconsequential as described above.

                                                                            F-28

<PAGE>

                              Omega Cabinets, Ltd.

                 Schedule II - Valuation and Qualifying Accounts

<TABLE>
<CAPTION>
                                              Balance at    Charged to
                                             Beginning of   Costs and       Other                      Balance at
          Description                            Year        Expenses     Additions    Deductions      End of Year
-------------------------------------------------------------------------------------------------------------------
<S>                                          <C>            <C>          <C>           <C>             <C>
YEAR ENDED DECEMBER 29, 2001                  $1,445,000      $496,000   $      -       $540,000 (2)    $1,401,000
   Allowance for doubtful accounts

YEAR ENDED DECEMBER 30, 2000
   Allowance for doubtful accounts            $1,796,000      $375,000   $      -       $726,000 (2)    $1,445,000

YEAR ENDED JANUARY 1, 2000
   Allowance for doubtful accounts            $1,489,000      $155,000   $307,000 (1)   $155,000 (2)    $1,796,000
</TABLE>

(1)  Addition from acquisition of Kitchen Craft.

(2)  Uncollectible accounts written off, net of recoveries.

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