##### Table of Contents



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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended September 30, 2000

Commission File Number 0-2762

MAXCO, INC.
(Exact Name of Registrant as Specified in its Charter)

|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Michigan                                                       |  | 38-1792842                             
|                                                               |  |                                        
|(State or other Jurisdiction of
Incorporation or Organization) |  | (I.R.S. Employer
Identification Number)
|                                                              
|                                                              
|                                                              
|                                                              
|1118 Centennial Way
Lansing, Michigan                          |  | 48197                                  
|                                                               |  |                                        
|(Address of principal executive offices)                       |  | (Zip Code)                             

Registrants Telephone Number, including area code: (517) 321-3130

Indicate by check mark whether the registrant (1) has filed all annual,
quarterly and other reports required to be filed by Section 12 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding twelve months and (2) has
been subject to the filing requirements for at least the past 90 days.

Yes       No

Indicate the number of shares outstanding for each of the issuers classes of
common stock, as of the latest practicable date.

|             |  |                                
|------------ |  | -------------------------------
|Class        |  | Outstanding at October 31, 2000
|             |  |                                
|            
|            
|            
|            
|Common Stock |  | 3,101,195 shares               



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1



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TABLE OF CONTENTS



|                                                                                      |                                                            |  |  |  |  |  |  | 
|------------------------------------------------------------------------------------- | ---------------------------------------------------------- |  |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION CONSOLIDATED BALANCE SHEETS                             
|CONSOLIDATED STATEMENTS OF OPERATIONS (Condensed)                                    
|CONSOLIDATED STATEMENTS OF CASH FLOWS (Condensed)                                    
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                           
|MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                                                                      | MATERIAL CHANGES IN FINANCIAL CONDITION                   
|                                                                                      | MATERIAL CHANGES IN RESULTS OF OPERATIONS                 
|                                                                                      | NEW FINANCIAL ACCOUNTING PRONOUNCEMENT                    
|                                                                                      | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|PART II OTHER INFORMATION                                                            
|SIGNATURES                                                                           
|EXHIBIT INDEX                                                                        
|Financial Data Schedule                                                              



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PART I

FINANCIAL INFORMATION

CONSOLIDATED BALANCE SHEETS

Maxco, Inc. and Subsidiaries

|                                           |                                                                                        |  |  |  |  |                |               |         |           |  |          |         |  
|------------------------------------------ | -------------------------------------------------------------------------------------- |  |  |  |  | -------------- | ------------- | ------- | --------- |  | -------- | ------- | -
|                                           |                                                                                        |  |  |  |  |                | September 30, |         | March 31,
|                                           |                                                                                        |  |  |  |  |                | 2000          |         | 2000     
|                                           |                                                                                        |  |  |  |  |                | (Unaudited)   |        
|                                           |                                                                                        |  |  |  |  |                |              
|                                           |                                                                                        |  |  |  |  | (in thousands)
|ASSETS                                    
|                                          
|                                          
|                                          
|                                          
|CURRENT ASSETS                            
|                                          
|                                          
|                                          
|                                          
|                                           | Cash and cash equivalents                                                              |  |  |  |  |                | $             | 1,017   |           |  | $        | 542     |  
|                                          
|                                          
|                                          
|                                          
|                                           | Marketable securities                                                                  |  |  |  |  |                |               |         |           |  |          | 185     |  
|                                          
|                                          
|                                          
|                                          
|                                           | Accounts and notes receivable, less allowance of
$634,000 ($513,000 at March 31, 2000) |  |  |  |  |                |               | 34,208  |           |  |          | 22,098  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Advances to affiliate                                                                  |  |  |  |  |                |               | 3,008   |           |  |          | 3,008   |  
|                                          
|                                          
|                                          
|                                          
|                                           | Inventories  Note 2                                                                   |  |  |  |  |                |               | 7,621   |           |  |          | 8,000   |  
|                                          
|                                          
|                                          
|                                          
|                                           | Investment held for sale  Note 9                                                      |  |  |  |  |                |               |         |           |  |          | 1,121   |  
|                                          
|                                          
|                                          
|                                          
|                                           | Prepaid expenses and other                                                             |  |  |  |  |                |               | 986     |           |  |          | 760     |  
|                                          
|                                          
|                                          
|                                          
|                                           | TOTAL CURRENT ASSETS                                                                   |  |  |  |  |                |               | 46,840  |           |  |          | 35,714  |  
|                                          
|                                          
|                                          
|                                          
|MARKETABLE SECURITIES  LONG TERM  Note 3 |                                                                                        |  |  |  |  |                | 1,745         |         |           |  | 4,240    |        
|                                          
|                                          
|                                          
|                                          
|PROPERTY AND EQUIPMENT                    
|                                          
|                                          
|                                          
|                                          
|                                           | Land                                                                                   |  |  |  |  |                |               | 732     |           |  |          | 732     |  
|                                          
|                                          
|                                          
|                                          
|                                           | Buildings                                                                              |  |  |  |  |                |               | 12,731  |           |  |          | 12,271  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Machinery, equipment, and fixtures                                                     |  |  |  |  |                |               | 49,114  |           |  |          | 41,650  |  
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                        |  |  |  |  |                | 62,577        |         |           |  | 54,653   |        
|                                          
|                                          
|                                          
|                                          
|                                           | Allowances for depreciation                                                            |  |  |  |  |                |               | (17,466 | )         |  |          | (14,893 | )
|                                           |                                                                                        |  |  |  |  |                |               |         |           |  |          |         |  
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                        |  |  |  |  |                | 45,111        |         |           |  | 39,760   |        
|                                          
|                                          
|                                          
|                                          
|OTHER ASSETS                              
|                                          
|                                          
|                                          
|                                          
|                                           | Investments                                                                            |  |  |  |  |                |               | 11,000  |           |  |          | 12,165  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Notes and contracts receivable and other                                               |  |  |  |  |                |               | 5,498   |           |  |          | 4,325   |  
|                                          
|                                          
|                                          
|                                          
|                                           | Intangibles                                                                            |  |  |  |  |                |               | 3,970   |           |  |          | 4,216   |  
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                        |  |  |  |  |                | 20,468        |         |           |  | 20,706   |        
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                        |  |  |  |  |                | $114,164      |         |           |  | $100,420 |        

2



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##### Table of Contents



|                                               |                                              |                                                                                                   |                           |        |                |        |           |        |       |        | 
|---------------------------------------------- | -------------------------------------------- | ------------------------------------------------------------------------------------------------- | ------------------------- | ------ | -------------- | ------ | --------- | ------ | ----- | ------ | 
|                                               |                                              |                                                                                                   |                           |        | September 30,  |        | March 31,
|                                               |                                              |                                                                                                   |                           |        | 2000           |        | 2000     
|                                               |                                              |                                                                                                   |                           |        |                |        |          
|                                               |                                              |                                                                                                   |                           |        | (Unaudited)   
|                                               |                                              |                                                                                                   |                           |        |               
|                                               |                                              |                                                                                                   |                           |        | (in thousands)
|LIABILITIES AND STOCKHOLDERS EQUITY          
|                                              
|                                              
|                                              
|                                              
|CURRENT LIABILITIES                           
|                                              
|                                              
|                                              
|                                              
|                                               | Notes payable                                |                                                                                                   | $                         | 22,286 |                |        | $         | 23,667 |      
|                                              
|                                              
|                                              
|                                              
|                                               | Accounts payable                             |                                                                                                   |                           | 23,138 |                |        |           | 12,989 |      
|                                              
|                                              
|                                              
|                                              
|                                               | Employee compensation                        |                                                                                                   |                           | 2,935  |                |        |           | 3,247  |      
|                                              
|                                              
|                                              
|                                              
|                                               | Taxes, interest, and other liabilities       |                                                                                                   |                           | 1,449  |                |        |           | 381    |      
|                                              
|                                              
|                                              
|                                              
|                                               | Current maturities of long-term obligations  |                                                                                                   |                           | 3,718  |                |        |           | 3,117  |      
|                                               |                                              |                                                                                                   |                           |        |                |        |           |        |      
|                                               |                                              |                                                                                                   | TOTAL CURRENT LIABILITIES |        |                | 53,526 |           |        |       | 43,401 | 
|                                              
|                                              
|                                              
|                                              
|LONG-TERM OBLIGATIONS, less current maturities |                                              |                                                                                                   | 25,235                    |        |                |        | 22,390    |       
|                                              
|                                              
|                                              
|                                              
|DEFERRED INCOME TAXES                          |                                              |                                                                                                   | 2,352                     |        |                |        | 2,319     |       
|                                              
|                                              
|                                              
|                                              
|STOCKHOLDERS EQUITY                          
|                                              
|                                              
|                                              
|                                              
|                                               | Preferred stock:                            
|                                              
|                                              
|                                              
|                                              
|                                               |                                              | Series Three: 10% cumulative redeemable, $60 face
value; 14,784 shares issued and outstanding     |                           |        | 678            |        |           |        | 678   |       
|                                              
|                                              
|                                              
|                                              
|                                               |                                              | Series Four: 10% cumulative redeemable, $51.50 face
value; 46,414 shares issued and outstanding   |                           |        | 2,390          |        |           |        | 2,390 |       
|                                              
|                                              
|                                              
|                                              
|                                               |                                              | Series Five: 10% cumulative redeemable, $120 face
value; 6,648 shares issued and outstanding      |                           |        | 798            |        |           |        | 798   |       
|                                              
|                                              
|                                              
|                                              
|                                               |                                              | Series Six: 10% cumulative callable, $160 face
value; 20,000 shares authorized, issued  none    
|                                               |                                              | Common stock, $1 par value; 10,000,000 shares
authorized, 3,101,195 shares issued and outstanding |                           |        | 3,101          |        |           |        | 3,101 |       
|                                              
|                                              
|                                              
|                                              
|                                               | Net unrealized loss on marketable securities |                                                                                                   |                           | (987   | )              |        |           | (877   | )    
|                                              
|                                              
|                                              
|                                              
|                                               | Retained earnings                            |                                                                                                   |                           | 27,071 |                |        |           | 26,220 |      
|                                               |                                              |                                                                                                   |                           |        |                |        |           |        |      
|                                               |                                              |                                                                                                   | 33,051                    |        |                |        | 32,310    |       
|                                               |                                              |                                                                                                   |                           |        |                |        |           |        |      
|                                               |                                              | $                                                                                                 | 114,164                   |        |                | $      | 100,420   |       
|                                               |                                              |                                                                                                   |                           |        |                |        |           |        |      

See notes to consolidated financial statements

3



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##### Table of Contents






CONSOLIDATED STATEMENTS OF OPERATIONS (Condensed)
Maxco, Inc. and Subsidiaries

|                                                      |                                      |  |                                                   |        |        |   |                                       |      |             |   |        |  | 
|----------------------------------------------------- | ------------------------------------ |  | ------------------------------------------------- | ------ | ------ | - | ------------------------------------- | ---- | ----------- | - | ------ |  | 
|                                                      |                                      |  |                                                   |        |        |   | Three Months Ended September 30,     
|                                                      |                                      |  |                                                   |        |        |  
|                                                      |                                      |  |                                                   |        |        |   | 2000                                  |      | 1999       
|                                                      |                                      |  |                                                   |        |        |   | (Unaudited)                           |      | (Unaudited)
|                                                      |                                      |  |                                                   |        |        |   |                                       |      |            
|                                                      |                                      |  |                                                   |        |        |   | (in thousands, except per share data)
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|Net sales                                             |                                      |  |                                                   |        |        | $ | 49,094                                |      |             | $ | 47,227 | 
|                                                     
|                                                     
|                                                     
|                                                     
|Costs and expenses:                                  
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Cost of sales and operating expenses |  |                                                   |        | 38,008 |   |                                       |      | 36,569      |  
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Selling, general and administrative  |  |                                                   |        | 7,308  |   |                                       |      | 6,982       |  
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Depreciation and amortization        |  |                                                   |        | 1,584  |   |                                       |      | 1,199       |  
|                                                      |                                      |  |                                                   |        |        |   |                                       |      |             |   |        | 
|                                                      |                                      |  |                                                   |        |        |   | 46,900                                |      |             |   | 44,750 | 
|                                                      |                                      |  |                                                   |        |        |   |                                       |      |             |   |        | 
|                                                      |                                      |  | Operating Earnings                                |        |        |   | 2,194                                 |      |             |   | 2,477  | 
|                                                     
|                                                     
|                                                     
|                                                     
|Other income (expense)
Investment and interest income |                                      |  |                                                   | 840    |        |   |                                       | 134  |            
|                                                     
|                                                     
|                                                     
|                                                     
|Interest expense                                      |                                      |  |                                                   | (1,274 | )      |   |                                       | (838 | )          
|                                                      |                                      |  |                                                   |        |        |   |                                       |      |             |   |        | 
|                                                      |                                      |  | Income Before Federal                             |       
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                      |  | Income Taxes and Equity in Earnings of Affiliates |        |        |   | 1,760                                 |      |             |   | 1,773  | 
|                                                     
|                                                     
|                                                     
|                                                     
|Federal income tax expense                            |                                      |  |                                                   | 610    |        |   |                                       | 626  |            
|                                                      |                                      |  |                                                   |        |        |   |                                       |      |             |   |        | 
|                                                      |                                      |  | Income Before Equity in Earnings of Affiliates    |        |        |   | 1,150                                 |      |             |   | 1,147  | 
|                                                     
|                                                     
|                                                     
|                                                     
|Equity in earnings (loss) of affiliates, net of tax   |                                      |  |                                                   | (297   | )      |   |                                       | 130  |            
|                                                      |                                      |  |                                                   |        |        |   |                                       |      |             |   |        | 
|                                                      |                                      |  | Net Income                                        |        |        |   | 853                                   |      |             |   | 1,277  | 
|                                                     
|                                                     
|                                                     
|                                                     
|Less preferred stock dividends                        |                                      |  |                                                   | (102   | )      |   |                                       | (102 | )          
|                                                      |                                      |  |                                                   |        |        |   |                                       |      |             |   |        | 
|                                                      |                                      |  | Net Income Applicable to Common Stock             |        |        | $ | 751                                   |      |             | $ | 1,175  | 
|                                                      |                                      |  |                                                   |        |        |   |                                       |      |             |   |        | 
|Net Income Per Common Share  Basic                   |                                      |  | $                                                 | .24    |        |   | $                                     | .37  |            
|                                                      |                                      |  |                                                   |        |        |   |                                       |      |            
|Net Income Per Common Share  Assuming Dilution       |                                      |  | $                                                 | .24    |        |   | $                                     | .37  |            
|                                                      |                                      |  |                                                   |        |        |   |                                       |      |             |   |        | 

See notes to consolidated financial statements

4



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##### Table of Contents



CONSOLIDATED STATEMENTS OF OPERATIONS (Condensed)
Maxco, Inc. and Subsidiaries

|                                                      |                                      |                                                |                                                                         |        |                                       |        |             |        |       |        | 
|----------------------------------------------------- | ------------------------------------ | ---------------------------------------------- | ----------------------------------------------------------------------- | ------ | ------------------------------------- | ------ | ----------- | ------ | ----- | ------ | 
|                                                      |                                      |                                                |                                                                         |        | Six Months Ended September 30,       
|                                                      |                                      |                                                |                                                                         |        |                                      
|                                                      |                                      |                                                |                                                                         |        | 2000                                  |        | 1999       
|                                                      |                                      |                                                |                                                                         |        |                                       |        |            
|                                                      |                                      |                                                |                                                                         |        | (Unaudited)                           |        | (Unaudited)
|                                                      |                                      |                                                |                                                                         |        |                                       |        |            
|                                                      |                                      |                                                |                                                                         |        | (in thousands, except per share data)
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|Net sales                                             |                                      | $                                              | 97,548                                                                  |        |                                       | $      | 91,203      |       
|                                                     
|                                                     
|                                                     
|                                                     
|Costs and expenses:                                  
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Cost of sales and operating expenses |                                                |                                                                         | 75,922 |                                       |        |             | 70,045 |      
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Selling, general and administrative  |                                                |                                                                         | 14,655 |                                       |        |             | 13,459 |      
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Depreciation and amortization        |                                                |                                                                         | 3,063  |                                       |        |             | 2,368  |      
|                                                      |                                      |                                                |                                                                         |        |                                       |        |             |       
|                                                      |                                      |                                                |                                                                         |        |                                       | 93,640 |             |        |       | 85,872 | 
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                      |                                                | Operating Earnings                                                      |        |                                       | 3,908  |             |        |       | 5,331  | 
|                                                     
|                                                     
|                                                     
|                                                     
|Other income (expense)
Investment and interest income |                                      |                                                | 1,002                                                                   |        |                                       |        | 289         |       
|                                                     
|                                                     
|                                                     
|                                                     
|Interest expense                                      |                                      |                                                | (2,314                                                                  | )      |                                       |        | (1,583      | )     
|                                                      |                                      |                                                |                                                                         |        |                                       |        |             |       
|                                                      |                                      |                                                | Income Before Federal Income Taxes and Equity in Earnings of Affiliates |        |                                       | 2,596  |             |        |       | 4,037  | 
|                                                     
|                                                     
|                                                     
|                                                     
|Federal income tax expense                            |                                      |                                                | 919                                                                     |        |                                       |        | 1,407       |       
|                                                      |                                      |                                                |                                                                         |        |                                       |        |             |       
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                      | Income Before Equity in Earnings of Affiliates |                                                                         |        | 1,677                                 |        |             |        | 2,630 |       
|                                                     
|                                                     
|                                                     
|                                                     
|Equity in earnings (loss) of affiliates, net of tax   |                                      |                                                | (622                                                                    | )      |                                       |        | 555         |       
|                                                      |                                      |                                                |                                                                         |        |                                       |        |             |       
|                                                      |                                      |                                                | Net Income                                                              |        |                                       | 1,055  |             |        |       | 3,185  | 
|                                                     
|                                                     
|                                                     
|                                                     
|Less preferred stock dividends                        |                                      |                                                | (204                                                                    | )      |                                       |        | (204        | )     
|                                                      |                                      |                                                |                                                                         |        |                                       |        |             |       
|                                                      |                                      |                                                | Net Income Applicable to Common Stock                                   |        | $                                     | 851    |             |        | $     | 2,981  | 
|                                                      |                                      |                                                |                                                                         |        |                                       |        |             |       
|Net Income Per Common Share  Basic                   |                                      | $                                              | .27                                                                     |        |                                       | $      | .94         |       
|                                                      |                                      |                                                |                                                                         |        |                                       |        |             |       
|Net Income Per Common Share  Assuming Dilution       |                                      | $                                              | .27                                                                     |        |                                       | $      | .94         |       
|                                                      |                                      |                                                |                                                                         |        |                                       |        |             |       

See notes to consolidated financial statements

5



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##### Table of Contents






CONSOLIDATED STATEMENTS OF CASH FLOWS (Condensed)
Maxco, Inc. and Subsidiaries

|                     |                                                                                   |                                             |                                                  |                                            |       |                                |        |             |        |       |        |  
|-------------------- | --------------------------------------------------------------------------------- | ------------------------------------------- | ------------------------------------------------ | ------------------------------------------ | ----- | ------------------------------ | ------ | ----------- | ------ | ----- | ------ | -
|                     |                                                                                   |                                             |                                                  |                                            |       | Six Months Ended September 30,
|                     |                                                                                   |                                             |                                                  |                                            |      
|                     |                                                                                   |                                             |                                                  |                                            |       | 2000                           |        | 1999       
|                     |                                                                                   |                                             |                                                  |                                            |       | (Unaudited)                    |        | (Unaudited)
|                     |                                                                                   |                                             |                                                  |                                            |       |                                |        |            
|                     |                                                                                   |                                             |                                                  |                                            |       | (in thousands)                
|Operating Activities
|                    
|                    
|                    
|                    
|                     | Net Income                                                                        |                                             | $                                                | 1,055                                      |       |                                | $      | 3,185       |       
|                    
|                    
|                    
|                    
|                     | Adjustments to reconcile net income to net cash provided
by operating activities:
|                    
|                    
|                    
|                    
|                     |                                                                                   | Depreciation and other non-cash items       |                                                  |                                            | 3,344 |                                |        |             | 2,014  |      
|                    
|                    
|                    
|                    
|                     |                                                                                   | Changes in operating assets and liabilities |                                                  |                                            | (975  | )                              |        |             | (4,199 | )    
|                     |                                                                                   |                                             |                                                  |                                            |       |                                |        |             |       
|                     |                                                                                   |                                             |                                                  | Net Cash Provided By Operating Activities  |       |                                | 3,424  |             |        |       | 1,000  |  
|                    
|                    
|                    
|                    
|Investing Activities
|                    
|                    
|                    
|                    
|                     | Purchase of business                                                              |                                             |                                                  |                                            |       |                                |        | (3,103      | )     
|                    
|                    
|                    
|                    
|                     | Sale of investment                                                                |                                             |                                                  | 1,143                                      |      
|                    
|                    
|                    
|                    
|                     | Payment received on note receivable                                               |                                             |                                                  |                                            |       |                                |        | 750         |       
|                    
|                    
|                    
|                    
|                     | Redemption of marketable securities                                               |                                             |                                                  | 2,530                                      |       |                                |        | 8           |       
|                    
|                    
|                    
|                    
|                     | Investment in affiliates                                                          |                                             |                                                  | (272                                       | )     |                                |        | (484        | )     
|                    
|                    
|                    
|                    
|                     | Purchases of property and equipment                                               |                                             |                                                  | (7,942                                     | )     |                                |        | (5,952      | )     
|                    
|                    
|                    
|                    
|                     | Other                                                                             |                                             |                                                  | (268                                       | )     |                                |        | (47         | )     
|                     |                                                                                   |                                             |                                                  |                                            |       |                                |        |             |       
|                     |                                                                                   |                                             |                                                  | Net Cash Used In Investing Activities      |       |                                | (4,809 | )           |        |       | (8,828 | )
|                    
|                    
|                    
|                    
|Financing Activities
|                    
|                    
|                    
|                    
|                     | Proceeds from long-term obligations                                               |                                             |                                                  | 4,994                                      |       |                                |        | 10,689      |       
|                    
|                    
|                    
|                    
|                     | Repayments on long-term obligations and notes payable                             |                                             |                                                  | (1,548                                     | )     |                                |        | (1,944      | )     
|                    
|                    
|                    
|                    
|                     | Repayments on short-term obligation                                               |                                             |                                                  | (1,382                                     | )    
|                    
|                    
|                    
|                    
|                     | Changes in capital stock                                                          |                                             |                                                  |                                            |       |                                |        | (476        | )     
|                    
|                    
|                    
|                    
|                     | Dividends paid on preferred stock                                                 |                                             |                                                  | (204                                       | )     |                                |        | (204        | )     
|                     |                                                                                   |                                             |                                                  |                                            |       |                                |        |             |       
|                     |                                                                                   |                                             |                                                  | Net Cash Provided by Financing Activities  |       |                                | 1,860  |             |        |       | 8,065  |  
|                     |                                                                                   |                                             |                                                  |                                            |       |                                |        |             |       
|                     |                                                                                   |                                             |                                                  | Increase in Cash and Cash Equivalents      |       |                                | 475    |             |        |       | 237    |  
|                    
|                    
|                    
|                    
|                     |                                                                                   |                                             | Cash and Cash Equivalents at Beginning of Period |                                            |       | 542                            |        |             |        | 1,122 |       
|                     |                                                                                   |                                             |                                                  |                                            |       |                                |        |             |       
|                     |                                                                                   |                                             |                                                  | Cash and Cash Equivalents at End of Period |       | $                              | 1,017  |             |        | $     | 1,359  |  
|                     |                                                                                   |                                             |                                                  |                                            |       |                                |        |             |       

See notes to consolidated financial statements

6



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##### Table of Contents






NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Maxco, Inc. and Subsidiaries
September 30, 2000

(Unaudited)

NOTE 1  Basis of Presentation and Significant Accounting Policies



| |  |  | The accompanying unaudited, condensed, consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and notes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation of the results of the interim periods covered have
been included. For further information, refer to the consolidated financial
statements and notes thereto included in Maxcos annual report on Form 10-K
for the year ended March 31, 2000.
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | The results of operations for the interim periods presented are not
necessarily indicative of the results for the full year. Maxcos sales and
operating results have varied substantially from quarter to quarter. Net
sales are typically lower in the third and fourth quarters. The most
significant factors affecting these fluctuations are the seasonal buying
patterns of the Companys customers due to inclement weather and the reduced
number of business days during the holiday season. In addition, the timing of
acquisitions or the occasional sale of corporate investments may cause
substantial fluctuations of operating results from quarter to quarter. Maxco
expects its net sales and operating results to continue to fluctuate from
quarter to quarter.                             
|
| |  |  | Certain other amounts in the consolidated financial statements have been
reclassified to conform to the current presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

NOTE 2  Inventories



| |  |  | The major classes of inventories, at the dates indicated were as follows:
| |  |  | -------------------------------------------------------------------------

|                                    |  |                |       |           |  |   |       | 
|----------------------------------- |  | -------------- | ----- | --------- |  | - | ----- | 
|                                    |  | September 30,  |       | March 31,
|                                    |  | 2000           |       | 2000     
|                                    |  |                |       |          
|                                    |  | (unaudited)   
|                                    |  | (in thousands)
|                                    | 
|Raw materials                       |  | $              | 699   |           |  | $ | 589   | 
|                                   
|                                   
|                                   
|                                   
|Finished goods and
work in progress |  |                | 1,190 |           |  |   | 1,136 | 
|                                   
|                                   
|                                   
|                                   
|Purchased products
for resale       |  |                | 5,732 |           |  |   | 6,275 | 
|                                    |  |                |       |           |  |   |       | 
|                                    |  | $              | 7,621 |           |  | $ | 8,000 | 
|                                    |  |                |       |           |  |   |       | 

NOTE 3  Marketable Securities



| |  |  | The Company classifies its marketable securities as securities available for
sale under FASB 115, Accounting for Certain Investments in Debt and Equity
Securities. Available-for-sale securities are carried at fair value, with the
unrealized gains and losses, net of tax, reported as a separate component of
stockholders equity. Application of this method resulted in an unrealized
loss, net of deferred tax, of approximately $987,000 being reported as part
of stockholders equity at September 30, 2000.
| |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Maxco, Inc. and Subsidiaries

NOTE 4  Investment in Integral Vision, Inc.



| |  |  | The following table summarizes the operating results of Integral Vision, Inc.
(formerly Medar, Inc.), Maxcos 25% owned affiliate:
| |  |  | ----------------------------------------------------------------------------------------------------------------------------------

|                  |  |                    |        |                  |  |                |       |      |  |   |        |   |  |   |       | 
|----------------- |  | ------------------ | ------ | ---------------- |  | -------------- | ----- | ---- |  | - | ------ | - |  | - | ----- | 
|                  |  | Three Months Ended |        | Six Months Ended
|                  |  | September 30,      |        | September 30,   
|                  |  | 2000               |        | 1999             |  | 2000           |       | 1999
|                  |  |                    |        |                  |  |                |       |     
|                  |  |                    |        |                  |  | (in thousands)
|Net Sales         |  | $                  | 1,535  |                  |  | $              | 3,975 |      |  | $ | 3,320  |   |  | $ | 6,384 | 
|                 
|                 
|                 
|                 
|Gross Margin      |  |                    | (65    | )                |  |                | 1,357 |      |  |   | (197   | ) |  |   | 1,192 | 
|                 
|                 
|                 
|                 
|Net Income (Loss) |  |                    | (1,634 | )                |  |                | 1,144 |      |  |   | (3,488 | ) |  |   | 4,694 | 



| |  |  | On June 30, 1999, Integral Vision sold its welding division for cash and
debt. The gain recognized through September 30, 1999 on this transaction was
$6.6 million, of which $1.1 million was recognized by Maxco in the quarter
ended September 30, 1999.
| |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 5  Other Investments



| |  |  | Condensed income statement information for the three and six months ended
September 30, 2000 and 1999 for the equity investees where Maxcos share of
their net income (loss) exceeded 20% of consolidated pre-tax income for the
year ended March 31, 2000 is as follows:
| |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Foresight Solutions, Inc.

|             |  |                    |      |                  |  |                |      |      |  |   |      |   |  |   |      |  
|------------ |  | ------------------ | ---- | ---------------- |  | -------------- | ---- | ---- |  | - | ---- | - |  | - | ---- | -
|             |  | Three Months Ended |      | Six Months Ended
|             |  | September 30,      |      | September 30,   
|             |  | 2000               |      | 1999             |  | 2000           |      | 1999
|             |  |                    |      |                  |  |                |      |     
|             |  |                    |      |                  |  | (in thousands)
|Net Sales    |  | $                  | 191  |                  |  | $              | 447  |      |  | $ | 445  |   |  | $ | 918  |  
|            
|            
|            
|            
|Gross Margin |  |                    | 175  |                  |  |                | 382  |      |  |   | 408  |   |  |   | 746  |  
|            
|            
|            
|            
|Net Loss     |  |                    | (545 | )                |  |                | (162 | )    |  |   | (843 | ) |  |   | (345 | )

Midstate Industrial Services, Inc.

|             |  |                    |       |                  |  |                |       |      |  |   |       |  |  |   |       | 
|------------ |  | ------------------ | ----- | ---------------- |  | -------------- | ----- | ---- |  | - | ----- |  |  | - | ----- | 
|             |  | Three Months Ended |       | Six Months Ended
|             |  | September 30,      |       | September 30,   
|             |  | 2000               |       | 1999             |  | 2000           |       | 1999
|             |  |                    |       |                  |  |                |       |     
|             |  |                    |       |                  |  | (in thousands)
|Net Sales    |  | $                  | 3,879 |                  |  | $              | 2,714 |      |  | $ | 6,363 |  |  | $ | 6,161 | 
|            
|            
|            
|            
|Gross Margin |  |                    | 1,211 |                  |  |                | 990   |      |  |   | 2,253 |  |  |   | 1,967 | 
|            
|            
|            
|            
|Net Income   |  |                    | 295   |                  |  |                | 237   |      |  |   | 524   |  |  |   | 463   | 

8



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Maxco, Inc. and Subsidiaries

NOTE 6  Earnings Per Share



| |  |  | The following table sets forth the computation of basic and diluted earnings
per share:
| |  |  | ---------------------------------------------------------------------------------------

|                                                                                                    |                                           |   |                    |       |                  |   |                                       |       |      |   |       |       |   |   |       |       |  
|--------------------------------------------------------------------------------------------------- | ----------------------------------------- | - | ------------------ | ----- | ---------------- | - | ------------------------------------- | ----- | ---- | - | ----- | ----- | - | - | ----- | ----- | -
|                                                                                                    |                                           |   | Three Months Ended |       | Six Months Ended
|                                                                                                    |                                           |   | September 30,      |       | September 30,   
|                                                                                                    |                                           |   | 2000               |       | 1999             |   | 2000                                  |       | 1999
|                                                                                                    |                                           |   |                    |       |                  |   |                                       |       |     
|                                                                                                    |                                           |   |                    |       |                  |   | (in thousands, except per share data)
|NUMERATOR:                                                                                         
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                    | Net income                                |   | $                  | 853   |                  |   | $                                     | 1,277 |      |   | $     | 1,055 |   |   | $     | 3,185 |  
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                    | Preferred stock dividends                 |   |                    | (102  | )                |   |                                       | (102  | )    |   |       | (204  | ) |   |       | (204  | )
|                                                                                                    |                                           |   |                    |       |                  |   |                                       |       |      |   |       |       |   |   |       |      
|Numerator for basic earning per shareincome
available to common stockholders                       |                                           |   | 751                |       |                  |   | 1,175                                 |       |      |   | 851   |       |   |   | 2,981 |      
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Effect of dilutive securities:                                                                     
|                                                                                                    |                                           |   |                    |       |                  |   |                                       |       |      |   |       |       |   |   |       |      
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Numerator for diluted earnings per shareincome
to common stockholders after assumed conversions    |                                           |   | 751                |       |                  |   | 1,175                                 |       |      |   | 851   |       |   |   | 2,981 |      
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|DENOMINATOR:                                                                                       
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                    | Denominator for basic earnings per share
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                    | Weighted-average shares                   |   |                    | 3,101 |                  |   |                                       | 3,164 |      |   |       | 3,101 |   |   |       | 3,179 |  
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Effect of dilutive securities:                                                                     
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                    | Employee stock options                    |   |                    | 2     |                  |   |                                       | 1     |      |   |       | 4     |   |   |       | 1     |  
|                                                                                                    |                                           |   |                    |       |                  |   |                                       |       |      |   |       |       |   |   |       |      
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Dilutive potential common shares                                                                    |                                           |   | 2                  |       |                  |   | 1                                     |       |      |   | 4     |       |   |   | 1     |      
|                                                                                                    |                                           |   |                    |       |                  |   |                                       |       |      |   |       |       |   |   |       |      
|Denominator for diluted earnings per shareadjusted
weighted-average shares and assumed conversions |                                           |   | 3,103              |       |                  |   | 3,165                                 |       |      |   | 3,105 |       |   |   | 3,180 |      
|                                                                                                    |                                           |   |                    |       |                  |   |                                       |       |      |   |       |       |   |   |       |      
|BASIC EARNINGS PER SHARE                                                                            |                                           | $ | .24                |       |                  | $ | .37                                   |       |      | $ | .27   |       |   | $ | .94   |      
|                                                                                                    |                                           |   |                    |       |                  |   |                                       |       |      |   |       |       |   |   |       |      
|DILUTED EARNINGS PER SHARE                                                                          |                                           | $ | .24                |       |                  | $ | .37                                   |       |      | $ | .27   |       |   | $ | .94   |      
|                                                                                                    |                                           |   |                    |       |                  |   |                                       |       |      |   |       |       |   |   |       |      

NOTE 7  Comprehensive Income



| |  |  | The components of comprehensive income for the three and six months ended
September 30, 2000 and 1999 are as follows:
| |  |  | ---------------------------------------------------------------------------------------------------------------------

|                                                   |  |                    |       |                  |  |                |       |      |  |   |       |   |  |   |       |  
|-------------------------------------------------- |  | ------------------ | ----- | ---------------- |  | -------------- | ----- | ---- |  | - | ----- | - |  | - | ----- | -
|                                                   |  | Three Months Ended |       | Six Months Ended
|                                                   |  | September 30,      |       | September 30,   
|                                                   |  | 2000               |       | 1999             |  | 2000           |       | 1999
|                                                   |  |                    |       |                  |  |                |       |     
|                                                   |  |                    |       |                  |  | (in thousands)
|Net earnings                                       |  | $                  | 853   |                  |  | $              | 1,277 |      |  | $ | 1,055 |   |  | $ | 3,185 |  
|                                                  
|                                                  
|                                                  
|                                                  
|Unrealized gains (losses) on marketable securities |  |                    | 245   |                  |  |                | (12   | )    |  |   | (110  | ) |  |   | (48   | )
|                                                   |  |                    |       |                  |  |                |       |      |  |   |       |   |  |   |      
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |  | $                  | 1,098 |                  |  | $              | 1,265 |      |  | $ | 945   |   |  | $ | 3,137 |  
|                                                   |  |                    |       |                  |  |                |       |      |  |   |       |   |  |   |       |  



| |  |  | The components of accumulated comprehensive income, net of related tax at
September 30, 2000 and March 31, 2000 are as follows:
| |  |  | -------------------------------------------------------------------------------------------------------------------------------

|                                           |  |                |      |           |  |   |      |  
|------------------------------------------ |  | -------------- | ---- | --------- |  | - | ---- | -
|                                           |  | September 30,  |      | March 31,
|                                           |  | 2000           |      | 2000     
|                                           |  |                |      |          
|                                           |  | (in thousands)
|Unrealized losses on marketable securities |  | $              | (987 | )         |  | $ | (877 | )

9



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Maxco, Inc. and Subsidiaries

NOTE 8  INDUSTRY SEGMENT INFORMATION



| |  |  | The following summarizes Maxcos industry segment information:
| |  |  | --------------------------------------------------------------

|                     |                          |  |                           |  |  |   |                |        |           |   |         |        | 
|-------------------- | ------------------------ |  | ------------------------- |  |  | - | -------------- | ------ | --------- | - | ------- | ------ | 
|                     |                          |  |                           |  |  |   | September 30,  |        | March 31,
|                     |                          |  |                           |  |  |   | 2000           |        | 2000     
|                     |                          |  |                           |  |  |   |                |        |          
|                     |                          |  |                           |  |  |   | (in thousands)
|Identifiable assets:
|                    
|                    
|                    
|                    
|                     | Construction supplies    |  |                           |  |  |   | $              | 45,911 |           |   | $       | 32,902 | 
|                    
|                    
|                    
|                    
|                     | Heat treating            |  |                           |  |  |   |                | 33,934 |           |   |         | 30,367 | 
|                    
|                    
|                    
|                    
|                     | Packaging products       |  |                           |  |  |   |                | 6,469  |           |   |         | 6,565  | 
|                    
|                    
|                    
|                    
|                     | Corporate and other      |  |                           |  |  |   |                | 16,850 |           |   |         | 18,421 | 
|                    
|                    
|                    
|                    
|                     | Investments and advances |  |                           |  |  |   |                | 11,000 |           |   |         | 12,165 | 
|                     |                          |  |                           |  |  |   |                |        |           |   |         |       
|                     |                          |  | Total Identifiable Assets |  |  | $ | 114,164        |        |           | $ | 100,420 |       
|                     |                          |  |                           |  |  |   |                |        |           |   |         |       

|                                       |                                             |  |                            |   |       |   |                    |        |                  |   |        |        |       |   |        |        |       |   |        |        |  
|-------------------------------------- | ------------------------------------------- |  | -------------------------- | - | ----- | - | ------------------ | ------ | ---------------- | - | ------ | ------ | ----- | - | ------ | ------ | ----- | - | ------ | ------ | -
|                                       |                                             |  |                            |   |       |   | Three Months Ended |        | Six Months Ended
|                                       |                                             |  |                            |   |       |   |                   
|                                       |                                             |  |                            |   |       |   | September 30,      |        | September 30,   
|                                       |                                             |  |                            |   |       |   |                    |        |                  |   |       
|                                       |                                             |  |                            |   |       |   | 2000               |        | 1999             |   | 2000   |        | 1999 
|                                       |                                             |  |                            |   |       |   |                    |        |                  |   |        |        |      
|Net sales:                            
|                                      
|                                      
|                                      
|                                      
|                                       | Construction supplies                       |  |                            |   |       |   | $                  | 34,773 |                  |   | $      | 33,240 |       |   | $      | 68,664 |       |   | $      | 62,653 |  
|                                      
|                                      
|                                      
|                                      
|                                       | Heat treating                               |  |                            |   |       |   |                    | 10,076 |                  |   |        | 9,702  |       |   |        | 20,437 |       |   |        | 19,786 |  
|                                      
|                                      
|                                      
|                                      
|                                       | Packaging products                          |  |                            |   |       |   |                    | 4,162  |                  |   |        | 4,203  |       |   |        | 8,282  |       |   |        | 8,599  |  
|                                      
|                                      
|                                      
|                                      
|                                       | Corporate and other                         |  |                            |   |       |   |                    | 83     |                  |   |        | 82     |       |   |        | 165    |       |   |        | 165    |  
|                                       |                                             |  |                            |   |       |   |                    |        |                  |   |        |        |       |   |        |        |       |   |        |       
|                                      
|                                      
|                                      
|                                      
|                                       |                                             |  | Total Net Sales            |   |       | $ | 49,094             |        |                  | $ | 47,227 |        |       | $ | 97,548 |        |       | $ | 91,203 |       
|                                       |                                             |  |                            |   |       |   |                    |        |                  |   |        |        |       |   |        |        |       |   |        |       
|Operating earnings (loss):            
|                                      
|                                      
|                                      
|                                      
|                                       | Construction supplies                       |  |                            |   |       |   | $                  | 1,881  |                  |   | $      | 2,421  |       |   | $      | 3,512  |       |   | $      | 4,480  |  
|                                      
|                                      
|                                      
|                                      
|                                       | Heat treating                               |  |                            |   |       |   |                    | 1,125  |                  |   |        | 930    |       |   |        | 2,029  |       |   |        | 2,379  |  
|                                      
|                                      
|                                      
|                                      
|                                       | Packaging products                          |  |                            |   |       |   |                    | 20     |                  |   |        | (26    | )     |   |        | (85    | )     |   |        | (49    | )
|                                      
|                                      
|                                      
|                                      
|                                       | Corporate and other                         |  |                            |   |       |   |                    | (832   | )                |   |        | (848   | )     |   |        | (1,548 | )     |   |        | (1,479 | )
|                                       |                                             |  |                            |   |       |   |                    |        |                  |   |        |        |       |   |        |        |       |   |        |       
|                                      
|                                      
|                                      
|                                      
|                                       |                                             |  | Total Operating Earnings   |   |       | $ | 2,194              |        |                  | $ | 2,477  |        |       | $ | 3,908  |        |       | $ | 5,331  |       
|                                       |                                             |  |                            |   |       |   |                    |        |                  |   |        |        |       |   |        |        |       |   |        |       
|Depreciation and amortization expense:
|                                      
|                                      
|                                      
|                                      
|                                       | Construction supplies                       |  |                            |   |       |   | $                  | 684    |                  |   | $      | 448    |       |   | $      | 1,249  |       |   | $      | 871    |  
|                                      
|                                      
|                                      
|                                      
|                                       | Heat treating                               |  |                            |   |       |   |                    | 604    |                  |   |        | 481    |       |   |        | 1,209  |       |   |        | 963    |  
|                                      
|                                      
|                                      
|                                      
|                                       | Packaging products                          |  |                            |   |       |   |                    | 189    |                  |   |        | 180    |       |   |        | 381    |       |   |        | 354    |  
|                                      
|                                      
|                                      
|                                      
|                                       | Corporate and other                         |  |                            |   |       |   |                    | 107    |                  |   |        | 90     |       |   |        | 224    |       |   |        | 180    |  
|                                       |                                             |  |                            |   |       |   |                    |        |                  |   |        |        |       |   |        |        |       |   |        |       
|                                       | Total Depreciation and Amortization Expense |  |                            | $ | 1,584 |   |                    | $      | 1,199            |   |        | $      | 3,063 |   |        | $      | 2,368 |  
|                                       |                                             |  |                            |   |       |   |                    |        |                  |   |        |        |       |   |        |        |       |   |        |       
|Capital expenditures:                 
|                                      
|                                      
|                                      
|                                      
|                                       | Construction supplies                       |  |                            |   |       |   | $                  | 1,758  |                  |   | $      | 1,412  |       |   | $      | 3,190  |       |   | $      | 2,750  |  
|                                      
|                                      
|                                      
|                                      
|                                       | Heat treating                               |  |                            |   |       |   |                    | 2,100  |                  |   |        | 1,671  |       |   |        | 4,646  |       |   |        | 2,696  |  
|                                      
|                                      
|                                      
|                                      
|                                       | Packaging products                          |  |                            |   |       |   |                    | 52     |                  |   |        | 278    |       |   |        | 105    |       |   |        | 497    |  
|                                      
|                                      
|                                      
|                                      
|                                       | Corporate and other                         |  |                            |   |       |   |                    | 1      |                  |   |        | 2      |       |   |        | 1      |       |   |        | 9      |  
|                                       |                                             |  |                            |   |       |   |                    |        |                  |   |        |        |       |   |        |        |       |   |        |       
|                                       |                                             |  | Total Capital Expenditures |   |       | $ | 3,911              |        |                  | $ | 3,363  |        |       | $ | 7,942  |        |       | $ | 5,952  |       
|                                       |                                             |  |                            |   |       |   |                    |        |                  |   |        |        |       |   |        |        |       |   |        |       

Accounting policies of the business segments are consistent with those
described in the summary of significant accounting policies (see Note 1).

Identifiable assets are those assets that are used in Maxcos operations in
each industry segment. Corporate assets are principally cash, notes
receivable, investments, and corporate office properties.

Maxco has no significant foreign operations, export sales, or inter-segment sales.

10



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Maxco, Inc. and Subsidiaries

NOTE 9  INVESTMENT IN AXSON, S.A.



| |  |  | Maxco had a 7% investment in Axson, S.A. of France (Axson), a manufacturer of
resins and composite materials for advanced applications, which was carried
at cost value. In the fourth quarter of fiscal 2000, the majority
shareholders of Axson began negotiations with Axson management for a
management buyout of the existing shareholders interests. As such, Maxco
adjusted its carrying amount to its estimated realizable value at March 31,
2000, which resulted in a $860,000 charge in the fourth quarter of last year,
for other than temporary impairment on its investment. This transaction was
completed in August 2000.
| |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 10  DEBT



| |  |  | The Company is currently in default on certain financial and other covenants
as required by its $20 million line of credit with a bank. As such the
outstanding balances on the line ($14.6 million at September 30, 2000) and a
term note ($7.5 million at September 30, 2000) have been classified as
current in the accompanying financial statements. These obligations carry
interest rates of 1% over prime. There are ongoing negotiations with the bank
to obtain waivers of default. Management anticipates that the negotiations
will be completed by the end of the fiscal year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | The accompanying financial statements have been prepared on the basis that
the Company will continue as a going concern. The Companys ability to meet
its short term and long term debt service and other obligations (including
compliance with financial covenants) will be dependent upon its future
operating performance and the successful renegotiation of its credit
facilities. These dependencies will be subject to financial, business and
other factors, certain of which are beyond the Companys control, such as
prevailing economic conditions. There can be no assurance that, in the event
the Company were to require additional financing, such additional financing
would be available on satisfactory terms. The Company believes that funds
generated by its operations and funds available under other credit
facilities, will be sufficient to finance short term capital needs, as well
as to fund existing operations for the foreseeable future. However, in the
event that the Company is unable to successfully renegotiate its credit
facilities, the Company has liquid long term equity investments that could be
used to meet its short term and long term debt service requirements and fund
operating cash flows.

NOTE 11  FEDERAL INCOME TAXES



| |  |  | The Companys effective tax rate varied from the statutory rate of 34% due to
certain expenses that are not deductible for tax purposes.
| |  |  | ----------------------------------------------------------------------------------------------------------------------------------------

NOTE 12  SUBSEQUENT EVENT



| |  |  | On November 2, 2000, Maxco signed a letter of intent to sell Ersco
Corporation, its construction supplies unit, to privately held Lofland
Acquisitions, Inc., a Dallas based affiliate of the Lofland Company which
supplies reinforcing steel and concrete construction supplies to contractors,
for a combination of cash and Lofland Acquisitions stock. Approval will
have to be obtained from the Federal Trade Commission and there is no
assurance that the transaction will occur within the proposed time frame, or
at all. The transaction, which is subject to due diligence, the completion
of a definitive agreement, and FTC approval, is expected to close in the next
120 days.
| |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11



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##### Table of Contents






MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Maxco, Inc. and Subsidiaries
September 30, 2000




MATERIAL CHANGES IN FINANCIAL CONDITION

Operating activities generated $3.4 million in cash for the six months.
Individual working capital component levels increased over the March 31, 2000
level, primarily from the increased sales activity by the Companys
construction supplies unit (Ersco) over the traditionally slower fourth quarter
of the prior year.

Cash was used in investing activities during the quarter to purchase additional
equipment for Maxcos heat-treating unit (Atmosphere Annealing), and its
Construction Supplies unit (Ersco).

Cash used in investing activities was partially offset by cash generated from
the sale of marketable securities and from the sale of the Companys 7%
interest in Axson, S.A. of France.

Net proceeds from additional long-term debt were used primarily to fund the
purchase of equipment.

At September 30, 2000, the Company continued to classify one of its lines of
credit and one of its term notes as short term due to the Company being in
default on certain financial and other covenants under its $20 million line of
credit with a bank. These obligations carry interest rates of 1% over prime.
There are ongoing negotiations with the bank to obtain waivers of default.
Management anticipates that these negotiations will be completed by the end of
the fiscal year.

The Companys ability to meet its short term and long term debt service and
other obligations (including compliance with financial covenants) will be
dependent upon its future operating performance and the successful
renegotiation of its credit facilities. These dependencies will be subject to
financial, business and other factors, certain of which are beyond the
Companys control, such as prevailing economic conditions. There can be no
assurance that, in the event the Company were to require additional financing,
such additional financing would be available on satisfactory terms. The Company
believes that funds generated by its operations and funds available under other
credit facilities will be sufficient to finance short term capital needs, as
well as to fund existing operations for the foreseeable future. However, in the
event that the Company is unable to successfully renegotiate its credit
facilities, the Company has liquid long term equity investments that could be
used to meet its short term and long term debt service requirements and fund
operating cash flows.

At September 30, 2000, the 2,240,605 shares of Integral Vision (formerly Medar)
common stock that Maxco owns had an aggregate market value of approximately
$3.1 million ($2.2 million at November 3, 2000). Maxcos investment in Integral
Vision is reflected in Maxcos financial statements under the equity method for
all periods presented as the Company owns greater than 20% of Integral Visions
outstanding stock.

At September 30, 2000, the 249,230 shares of Provant common stock that Maxco
owns had an aggregate market value of approximately $1.7 million ($1.6 million
at November 3, 2000). Maxcos investment in Provant is reflected in Maxcos
financial statements under the cost method as an available-for-sale security as
the Company owns less than 20% of Provants outstanding stock.

12



---



##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Maxco, Inc. and Subsidiaries

On November 2, 2000, Maxco signed a letter of intent to sell Ersco Corporation,
its construction supplies unit, to privately held Lofland Acquisitions, Inc., a
Dallas based affiliate of the Lofland Company which supplies reinforcing steel
and concrete construction supplies to contractors, for a combination of cash
and Lofland Acquisitions stock. Approval will have to be obtained from the
Federal Trade Commission and there is no assurance that the transaction will
occur within the proposed time frame, or at all. The transaction, which is
subject to due diligence, the completion of a definitive agreement, and FTC
approval, is expected to close in the next 120 days.




MATERIAL CHANGES IN RESULTS OF OPERATIONS

Three Months Ended September 30, 2000 Compared to 1999

Net sales increased to $49.1 million compared to $47.2 million in last years
second quarter. Second quarter results reflect operating earnings of $2.2
million compared to $2.5 million for the comparable period in 1999. Net income
was $853,000 or $.24 per share assuming dilution compared to last years $1.3
million or $.37 per share assuming dilution.

Sales and operating earnings for the three months ended September 30, 2000 and
1999 by each of the companys segments were as follows:

|                      |  |                    |        |                    |  |                |       |        |  |   |        |           |  |   |       |  
|--------------------- |  | ------------------ | ------ | ------------------ |  | -------------- | ----- | ------ |  | - | ------ | --------- |  | - | ----- | -
|                      |  | Three Months Ended |        | Three Months Ended
|                      |  | September 30, 2000 |        | September 30, 1999
|                      |  |                    |        |                   
|                      |  |                    |        |                    |  | Operating      |       |        |  |   |        | Operating
|                      |  |                    |        |                    |  | Earnings       |       |        |  |   |        | Earnings 
|                      |  | Sales              |        | (loss)             |  | Sales          |       | (loss)
|                      |  |                    |        |                    |  |                |       |       
|                      |  |                    |        |                    |  | (in thousands)
|Construction supplies |  | $                  | 34,773 |                    |  | $              | 1,881 |        |  | $ | 33,240 |           |  | $ | 2,421 |  
|                     
|                     
|                     
|                     
|Heat treating         |  |                    | 10,077 |                    |  |                | 1,125 |        |  |   | 9,702  |           |  |   | 930   |  
|                     
|                     
|                     
|                     
|Packaging products    |  |                    | 4,162  |                    |  |                | 20    |        |  |   | 4,203  |           |  |   | (26   | )

Higher sales in the current period occurred at Maxcos construction supplies
unit (Ersco) over the comparable 1999 period as a result of a strong general
construction market resulting from an overall stable and growing general
economy, increased availability of federal highway repair dollars, as well as
an increase in form rental revenues. Sales at Atmosphere Annealing increased
primarily due to greater processing capabilities of equipment and facilities
recently placed in service.

Consolidated gross profit (net sales less cost of sales and operating expenses)
increased to $11.1 million or approximately 23% of sales from $10.7 million or
23% of sales. The Companys heat treating unit generated additional gross
profit as efficiency improvements resulting from the completion of certain
major capital projects were realized. The construction supplies unit also
generated additional gross profit in the current period over last year due to
its increased sales level.

13



---



##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Maxco, Inc. and Subsidiaries

Selling, general, and administrative expenses increased to $7.3 million from
$7.0 million. The increase primarily resulted at the construction supplies unit
due to additional wages and other expenses incurred to support the planned
growth of this unit.

Depreciation and amortization expense for the three months ended September 30,
2000 increased as a result of the additional depreciation resulting from the
purchases of property and equipment by Atmosphere and Ersco in the 2000 fiscal
year.

As a result of the above, operating earnings decreased to approximately $2.2
million from $2.5 million in last years comparable period.

Investment and interest income increased for the three month period ended
September 30, 2000 primarily due to the recording of Maxcos share of the
minimum contingent consideration which, during the second quarter, was agreed
to be paid in fiscal 2002 to former shareholders of Strategic Interactive
(Maxcos former 45% owned affiliate sold to Provant, Inc. in October, 1998).
Interest expense increased from the prior year quarter due to additional
long-term borrowings, the proceeds of which were used for investments in the
Companys affiliates and additional purchases of property and equipment.

Equity in earnings of affiliates decreased primarily because of lower net
income at Integral Vision for the current three-month period. On June 30, 1999,
Integral Vision sold its welding controls division for cash and debt. The gain
recognized through September 30, 1999 on this transaction was $6.6 million, of
which $1.1 million was recognized by Maxco in the quarter ended September 30,
1999. Integral Visions net loss for the three months ended September 30, 2000
was $1.6 million compared to a net income of $1.1 million for the three months
ended September 30, 1999.

Six Months Ended September 30, 2000 Compared to 1999

Net sales increased to $97.5 million compared to $91.2 million in last years
comparable six-month period. Results for this period include operating earnings
of $3.9 million compared to $5.3 million for the comparable period in 1999. Net
income was $1.1 million or $.27 per share assuming dilution compared to last
years $3.2 million or $.94 per share assuming dilution.

14



---



##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Maxco, Inc. and Subsidiaries

Sales and operating earnings for the six months ended September 30, 2000 and
1999 by each of the companys segments were as follows:

|                      |  |                    |        |                    |  |                |       |        |  |   |        |           |  |   |       |  
|--------------------- |  | ------------------ | ------ | ------------------ |  | -------------- | ----- | ------ |  | - | ------ | --------- |  | - | ----- | -
|                      |  | Six Months Ended   |        | Six Months Ended  
|                      |  | September 30, 2000 |        | September 30, 1999
|                      |  |                    |        |                   
|                      |  |                    |        |                    |  | Operating      |       |        |  |   |        | Operating
|                      |  |                    |        |                    |  | Earnings       |       |        |  |   |        | Earnings 
|                      |  | Sales              |        | (loss)             |  | Sales          |       | (loss)
|                      |  |                    |        |                    |  |                |       |       
|                      |  |                    |        |                    |  | (in thousands)
|Construction supplies |  | $                  | 68,664 |                    |  | $              | 3,512 |        |  | $ | 62,653 |           |  | $ | 4,480 |  
|                     
|                     
|                     
|                     
|Heat treating         |  |                    | 20,437 |                    |  |                | 2,029 |        |  |   | 19,786 |           |  |   | 2,379 |  
|                     
|                     
|                     
|                     
|Packaging products    |  |                    | 8,282  |                    |  |                | (85   | )      |  |   | 8,599  |           |  |   | (49   | )

Higher sales in the current period occurred at Maxcos construction supplies
unit (Ersco) over the comparable 1999 period as a result of a strong general
construction market resulting from an overall stable and growing general
economy, increased availability of federal highway repair dollars, as well as
an increase in form rental revenues. Sales at Atmosphere Annealing increased in
the current six-month period over the comparable six-month period last year
primarily due to the greater processing capabilities of equipment and
facilities recently placed in service.

Consolidated gross profit (net sales less cost of sales and operating expenses)
increased to $21.6 million or approximately 22% of sales from $21.2 million or
23% of sales. The construction supplies unit generated additional gross profit
in the current period over last year due to its increased sales level. Gross
profit at Atmosphere was comparable to the prior year despite the increase in
the price of natural gas that is used in the heat treating process.

Selling, general, and administrative expenses increased to $14.7 million from
$13.5 million. The increase primarily resulted at the construction supplies
unit due to additional wages and other expenses incurred to support the planned
growth of this unit.

The increase in depreciation expense in 2000 was attributable to depreciation
by Ersco on purchases of rental forms and shoring equipment. Additionally,
depreciation by Atmosphere Annealing also increased as a result of new
equipment including a new coating line, additional furnaces, and facility
improvements placed in service since September of last year.

As a result of the above, operating earnings decreased to approximately $3.9
million from $5.3 million in last years comparable period.

Investment and interest income increased for the six month period ended
September 30, 2000 primarily due to the recording of Maxcos share of the
minimum contingent consideration which, during the second quarter, was agreed
to be paid in fiscal 2002 to former shareholders of Strategic Interactive
(Maxcos former 45% owned affiliate sold to Provant, Inc. in October, 1998).
Interest expense increased from the prior year period due to additional
long-term borrowings, the proceeds of which were used for investments in the
Companys affiliates and additional purchases of property and equipment.

15



---



##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Maxco, Inc. and Subsidiaries

On June 30, 1999, Integral Vision, Inc. (formerly Medar Inc.) sold its welding
division for cash and debt. The gain recognized through September 30, 1999 on
this transaction was $6.6 million. Integral Visions net loss for the six
months ended September 30, 2000 was $3.5 million compared to a net income of
$4.7 million for the six months ended September 30, 1999. The decrease in
Integral Visions net income was the major reason that Maxcos equity in
affiliates, net of tax, decreased $1.2 million from the same period of the
prior year.




NEW FINANCIAL ACCOUNTING PRONOUNCEMENT

In 1998, the Financial Accounting Standards Board issued Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities. Statement 133 is
effective for fiscal years beginning after June 15, 2000. The Company expects
to adopt the new statement effective April 1, 2001. The statement requires the
Company to recognize all derivatives on the balance sheet at fair value. The
Company has not evaluated the potential effect the adoption of this statement
will have on its results of operations or financial condition.

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 (SAB 101), Revenue Recognition in Financial
Statements. SAB 101 provides guidance for revenue recognition under certain
circumstances. The accounting and disclosures prescribed by SAB 101 will be
effective for the fourth quarter of fiscal year 2001. The Company believes
there will be no material impact resulting from the application of SAB 101.




QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Companys variable interest expense is sensitive to changes in the general
level of United States interest rates. Some of the Companys interest expense
is fixed through long-term borrowings to mitigate the impact of such potential
exposure. Additionally, the Company entered into an interest rate swap
agreement based on a notional amount of $5.0 million to manage its exposure to
interest rate changes. The swap involves the exchange of fixed and variable
interest payments without changing the notional principal amount. The Company
had total outstanding variable rate long-term borrowings of $24.7 million at
September 30, 2000. A 1% increase from the prevailing interest rates at
September 30, 2000 on the unhedged variable rate portion of the Companys short
and long-term borrowings would increase interest expense on an annualized basis
by $204,000 based on principal balances at September 30, 2000.

16



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##### Table of Contents






PART II

OTHER INFORMATION

|        |  |                                                                                                                                                                                                                                            
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 1. |  | Legal Proceedings                                                                                                                                                                                                                          
|       
|       
|       
|       
|        |  | None                                                                                                                                                                                                                                       
|       
|       
|       
|       
|Item 2. |  | Changes in Securities                                                                                                                                                                                                                      
|       
|       
|       
|       
|        |  | None                                                                                                                                                                                                                                       
|       
|       
|       
|       
|Item 3. |  | Defaults Upon Senior Securities                                                                                                                                                                                                            
|       
|       
|       
|       
|        |  | The Company is currently in default on certain financial and other
covenants as required by its $20 million line of credit with a
bank.                                                                                                    
|       
|       
|       
|       
|Item 4. |  | Submission of Matters to a Vote of Security Holders                                                                                                                                                                                        
|       
|       
|       
|       
|        |  | The annual meeting of shareholders was held on August 29, 2000. The
matters voted upon were the election of directors and other business
which may come before the meeting (of which there was none). The
results of votes were as follows:
|       
|       
|       
|       
|        |  | Election of directors:                                                                                                                                                                                                                     

|                  |  |     |           |          |  |  |        | 
|----------------- |  | --- | --------- | -------- |  |  | ------ | 
|                  |  | For |           | Withheld
|                  |  |     |           |         
|Max A. Coon       |  |     | 2,968,774 |          |  |  | 27,408 | 
|                 
|                 
|                 
|                 
|Eric L. Cross     |  |     | 3,001,974 |          |  |  | 18,208 | 
|                 
|                 
|                 
|                 
|Charles J. Drake  |  |     | 2,971,729 |          |  |  | 24,453 | 
|                 
|                 
|                 
|                 
|Joel I Ferguson   |  |     | 2,972,429 |          |  |  | 23,753 | 
|                 
|                 
|                 
|                 
|Richard G. Johns  |  |     | 2,980,629 |          |  |  | 15,553 | 
|                 
|                 
|                 
|                 
|Vincent Shunsky   |  |     | 2,980,659 |          |  |  | 15,523 | 
|                 
|                 
|                 
|                 
|J. Michael Warren |  |     | 2,979,674 |          |  |  | 16,508 | 
|                 
|                 
|                 
|                 
|Michael W. Wisti  |  |     | 2,979,674 |          |  |  | 16,508 | 

|          |  |                                                                                                       
|--------- |  | ------------------------------------------------------------------------------------------------------
|Item 5.   |  | Other Information                                                                                     
|         
|         
|         
|         
|          |  | None                                                                                                  
|         
|         
|         
|         
|Item 6(a) |  | Exhibits                                                                                              
|         
|         
|         
|         
|3         |  | Restated Articles of Incorporation are hereby incorporated from Form 10-Q
dated February 13, 1998.    
|         
|         
|         
|         
|3.1       |  | By-laws are hereby incorporated by reference from Form S-4 dated November
4, 1991 (File No. 33-43855).

17



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##### Table of Contents



PART II
OTHER INFORMATION (Continued)

|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.2   |  | Resolution establishing Series Three Preferred Shares is hereby
incorporated by reference from Form S-4 dated November 4, 1991 (File No.
33-43855).                                                                                                                                                                                                                                                                                              
|     
|     
|     
|     
|4.3   |  | Resolution authorizing the redemption of Series Two Preferred Stock and
establishing Series Four Preferred Stock and the terms of the subordinated
notes is hereby incorporated by reference from Form 10-Q dated February 14, 1997.                                                                                                                                                                                                             
|     
|     
|     
|     
|4.4   |  | Resolution establishing Series Five Preferred Shares is hereby
incorporated by reference from Form 10-K dated June 5, 1997.                                                                                                                                                                                                                                                                                                                      
|     
|     
|     
|     
|4.5   |  | Resolution establishing Series Six Preferred Shares is hereby
incorporated by reference from Form 10-K dated June 23, 1999.                                                                                                                                                                                                                                                                                                                      
|     
|     
|     
|     
|10.1  |  | Incentive stock option plan adopted August 15, 1983, including the
amendment (approved by shareholders August 25, 1987) to increase the
authorized shares on which options may be granted by two hundred fifty
thousand (250,000), up to five hundred thousand (500,000) shares of the
common stock of the company is hereby incorporated by reference from the
registrants annual report on Form 10-K for the fiscal year ended March
31, 1988.
|     
|     
|     
|     
|10.9  |  | Asset purchase agreement  Wright Plastic Products, Inc. is hereby
incorporated by reference from registrants Form 10-Q dated November 14,
1996.                                                                                                                                                                                                                                                                                                 
|     
|     
|     
|     
|10.10 |  | Amended and restated loan agreement between Comerica Bank and Maxco,
Inc. dated September 30, 1996 is hereby incorporated by reference from
Form 10-Q dated November 14, 1996.                                                                                                                                                                                                                                                                   
|     
|     
|     
|     
|10.11 |  | Asset purchase agreement for the purchase of Atmosphere Annealing, Inc.
is hereby incorporated by reference from Form 8-K dated January 17, 1997.                                                                                                                                                                                                                                                                                                
|     
|     
|     
|     
|10.12 |  | Asset purchase agreement   Axson North America, Inc. is hereby
incorporated by reference from Form 10-Q dated February 14, 1997.                                                                                                                                                                                                                                                                                                                
|     
|     
|     
|     
|10.13 |  | Loan agreement between Michigan Strategic Fund and Atmosphere Annealing,
Inc. is hereby incorporated by reference from Form 10-Q dated February 13,
1998.                                                                                                                                                                                                                                                                                        
|     
|     
|     
|     
|10.14 |  | Loan agreement between LAM Funding, L.L.C. and borrower including
Guaranty-Maxco, Inc. is hereby incorporated by reference from Form 10-Q
dated February 13, 1998.                                                                                                                                                                                                                                                                               
|     
|     
|     
|     
|10.15 |  | First Amendment to amended and restated loan agreement between Comerica
Bank and Maxco, Inc. dated August 1, 1997, is hereby incorporated by
reference from Form 10-K dated June 24, 1998.                                                                                                                                                                                                                                                       
|     
|     
|     
|     
|10.16 |  | Second amendment to amended and restated loan agreement between Comerica
Bank and Maxco, Inc. dated June 24, 1998 is hereby incorporated by
reference from Form 10-K dated June 24, 1998.                                                                                                                                                                                                                                                        

18



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##### Table of Contents



PART II
OTHER INFORMATION (Continued)

|          |  |                                                                                                                                                                                                   
|--------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.17     |  | Third amendment to amended and restated loan agreement between Comerica
Bank and Maxco, Inc. dated September 24, 1998, is hereby incorporated by
reference from Form 10-Q dated November 12, 1998.
|         
|         
|         
|         
|10.18     |  | Maxco, Inc. 1998 Employee Stock Option Plan is hereby incorporated by
reference from Form 10-Q dated November 12, 1998.                                                                           
|         
|         
|         
|         
|10.19     |  | Fourth amendment to amended and restated loan agreement between Comerica
Bank and Maxco, Inc. dated June 22, 1999, is hereby incorporated by
reference from Form 10-K dated June 23, 1999.        
|         
|         
|         
|         
|10.20     |  | Fifth amendment to amended and restated loan agreement between Comerica
bank and Maxco, Inc. dated September 1, 1999 is hereby incorporated by
reference from Form 10-Q dated November 12, 1999.  
|         
|         
|         
|         
|10.21     |  | Sixth amendment to amended and restated loan agreement between Comerica
Bank and Maxco, Inc. dated July 12, 2000 is hereby incorporated by
reference from Form 10-K dated July 14, 2000.          
|         
|         
|         
|         
|27*       |  | Financial Data Schedule                                                                                                                                                                           
|         
|         
|         
|         
|Item 6(b) |  | Reports on Form 8-K None                                                                                                                                                                          

*Filed herewith

19



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|      |  |  |                   |  |  |                                        
|----- |  |  | ----------------- |  |  | ---------------------------------------
|      |  |  |                   |  |  | MAXCO, INC.                            
|     
|Date: |  |  | November 14, 2000 |  |  | /S/ VINCENT SHUNSKY                    
|      |  |  |                   |  |  | Vincent Shunsky, Vice President-Finance
|      |  |  |                   |  |  | and Treasurer (Principal Financial and 
|      |  |  |                   |  |  | Accounting Officer)                    

20



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##### Table of Contents






Exhibit Index

|        |  |                        
|------- |  | -----------------------
|Exhibit |  | Description            
|       
|       
|       
|       
|27      |  | Financial Data Schedule

21