U. S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-K

               [X] ANNUAL  REPORT  UNDER  SECTION 13 OR 15(D) OF THE  SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

               [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO ______.

                          Commission file number 0-439

                       American Locker Group Incorporated
--------------------------------------------------------------------------------
             (Exact Name of registrant as specified in its charter)

      Delaware                                                    16-0338330
--------------------------------------------------------------------------------
 (State or other jurisdiction of                              (I.R.S. Employer
  incorporation or organization)                             Identification No.)

                608 Allen Street, Jamestown, New York 14701-3966
--------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

(Registrant's telephone number,  including area code) 1-716-664-9600  Securities
registered under Section 12(b) of the Exchange Act:

Title of each class                    Name of each exchange on which registered

        NONE
---------------------------            -----------------------------------------

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

                     Common Stock Par Value $1.00 Per Share
--------------------------------------------------------------------------------
                                (Title of class)

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

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


<PAGE>


         At March 12, 2002, the Registrant had outstanding  2,043,046  shares of
its Common Stock. The aggregate  market value of the  Registrant's  voting stock
held by non-affiliates at this date was approximately $13,997,000,  based on the
closing  price per share of Common  Stock on this date of $11.72 as  reported on
the NASDAQ.  Shares of Common Stock known by the  Registrant to be  beneficially
owned by directors of the  Registrant  and officers of the  Registrant and other
persons reporting beneficial ownership of 5% or more of Common Stock pursuant to
the reporting requirements of Section 16 of the Securities Exchange Act of 1934,
as amended  (the  "Exchange  Act"),  are not  included in the  computation.  The
Registrant,   however,   has  made  no  determination   that  such  persons  are
"affiliates" within the meaning of Rule 12b-2 under the Exchange Act.



                       DOCUMENTS INCORPORATED BY REFERENCE
                       -----------------------------------

         Portions of the definitive Proxy Statement for the Annual Stockholders'
Meeting to be held May 14, 2002, are incorporated by reference into Part III.






                                     - 2 -
<PAGE>



PART I

ITEM 1.  DESCRIPTION OF BUSINESS

American Locker Group  Incorporated  (the "Company") is engaged primarily in the
sale and rental of lockers.  This includes coin,  key-only,  and  electronically
controlled   checking  lockers  and  related  locks  and  plastic  and  aluminum
centralized mail and parcel  distribution  lockers.  The key controlled checking
lockers are sold to the recreational and transportation industries,  bookstores,
military  posts,  law  enforcement  agencies,  libraries  and  for  export.  The
electronically  controlled  lockers  are sold for use as secure  storage  in the
business  environment and the electronically  controlled,  coin operated lockers
are sold for use in  transportation  industry  and other  uses.  The plastic and
aluminum centralized mail and parcel distribution lockers are sold to the United
States  Postal  Service  ("USPS") and to  distributors  and resellers for use in
centralized mail and parcel delivery in new housing and industrial developments,
inside postal lobbies and apartment buildings and for replacement of older style
lockers in existing locations.

The  Company  is  an  engineering,   assembling,   manufacturing  and  marketing
enterprise.

The Company was incorporated on December 15, 1958, as a subsidiary of its former
publicly-owned  parent.  In April 1964, the Company's shares were distributed to
the   stockholders  of  its  former  parent,   and  it  became  a  publicly-held
corporation. From 1965 to 1989, the Company acquired and disposed of a number of
businesses including the disposition of its original voting machine business.

On July 6, 2001, the Company acquired Security Manufacturing  Corporation (SMC).
SMC  manufactures  aluminum  CBUs,  which are sold to the USPS, as well as other
postal unit lockers.  The Company made this  acquisition to increase its product
offerings  to existing  customers,  provide  additional  products to attract new
customers and to increase its share in the postal unit market.

One of the Company's subsidiaries is a party to a Manufacturing  Agreement dated
October 1, 2000 with Signore,  Inc.,  formerly a wholly owned  subsidiary of the
Company, to furnish fabricating,  assembly and shipping services. The Agreement,
which  replaced a similar  agreement  dated  January 1, 1990,  became  effective
October  1, 2000 and is for a term of three  years,  with  options to extend the
agreement  to August  31,  2007.  The  Agreement  provides  that the cost to the
Company for these services be equal to Signore's standard cost divided by 80%.

BUSINESS SEGMENT INFORMATION
----------------------------

The Company,  including its foreign subsidiary, is engaged in one business: sale
and rental of lockers,  including coin,  key-only and electronically  controlled
checking lockers and locks and the sale of plastic and aluminum centralized mail
and parcel distribution lockers.

The  Company has  developed  a range of  products  to support the United  States
Postal  Service  (USPS)  Centralized  Delivery  program.  Outdoor Parcel Lockers
(OPLs) are used by the USPS for  delivery  of parcels.  Since  March  1989,  the
Company has shipped  over 165,000  plastic  OPLs to


                                     - 3 -
<PAGE>



the USPS.  Cluster Box Units (CBUs) are used by the USPS for delivery of letters
and parcels and for the  collection  of outgoing  mail.  In November  1994,  the
Company negotiated a contract to sell Type Three plastic CBUs in quantity to the
United States Postal  Service.  The Company,  including SMC, is approved to ship
Type  One,  Two,  Three and Four  plastic  CBUs,  and Type  Two,  Three and Four
aluminum  CBUs. As of March 13, 2002,  plastic  Cluster Box Units with aggregate
invoice  prices in excess of $140 million have been shipped to the United States
Postal  Service  pursuant  to  the  1994  contract  and  subsequent   contracts.
Components  of these  units  are  made by  outside  vendors  and the  units  are
assembled by the Company's  wholly-owned  subsidiary,  American  Locker Security
Systems,  Inc.  (ALSSI).  The  units  are sold  directly  by ALSSI to the  USPS.
Aluminum CBUs are manufactured by SMC and sold directly to the USPS

The checking  lockers are  fabricated  by Signore,  Inc. and are marketed in the
United  States by ALSSI.  Lockers for the Canadian  market are  manufactured  by
Signore,  Inc. with locks supplied from ALSSI. Lockers are marketed in Canada by
the  Canadian  Locker  Company,   Ltd.  ("Canadian   Locker"),   a  wholly-owned
subsidiary.  These  sales are made  outright,  through  salaried  employees  and
distributors,   to  customers  who  need  storage  facilities  requiring  a  key
controlled lock system in the recreational,  governmental and institutional type
industries. Canadian Locker also owns and operates coin operated lockers in air,
bus and rail terminals and retail  locations in Canada.  ALSSI  manufactures the
lock system,  which is coin or key controlled  and operated,  for use in lockers
sold by ALSSI and Canadian Locker.  ALSSI also provides  nationwide and Canadian
maintenance and repair services with respect to coin operated lockers previously
sold by ALSSI. The Company has developed a coin operated baggage cart system and
is operating the system at one major Canadian  airport,  one major United States
airport and has sold several cart systems for use in U.S. airports.

Additional   information  with  respect  to  business  segment  data,  including
significant  customers,  is  disclosed  in Note 13 of the  financial  statements
included in Item 8 of this Form 10-K.

COMPETITION
-----------

While the Company is not aware of any  reliable  trade  statistics,  it believes
that its subsidiaries,  ALSSI and Canadian Locker are the dominant  suppliers of
key controlled  checking lockers in the United States and Canada.  However,  the
Company faces more active competition from several other manufacturers of locker
products sold to the United States Postal Service and other purchasers.

RAW MATERIALS
-------------

Present  sources of supplies and raw materials  incorporated  into the Company's
metal,  aluminum and plastic  lockers and locks are  generally  considered to be
adequate and are currently available in the market place. The Company's supplier
of  polycarbonate  plastic which is used in the parcel  lockers and CBUs entered
this market in March 1992 and is presently  supplying  this raw  material  which
meets strict specifications  imposed by the United States Postal Service. In the
event the present  supplier  declines to continue to supply this  material,  the
Company would be required to seek an alternate source of supply.


                                     - 4 -
<PAGE>


The Company's  metal coin operated and electronic  lockers are  manufactured  by
Signore,  Inc.  pursuant to the Manufacturing  Agreement,  except for the locks,
which are manufactured by ALSSI.  The Company's  aluminum CBUs and mailboxes are
manufactured  and  sold  by the  Company's  subsidiary,  Security  Manufacturing
Corporation.

PATENTS
-------

The Company owns a number of patents, none of which it considers material to the
conduct of its business.

EMPLOYEES
---------

The  Company  and  its  subsidiaries  actively  employed  198  individuals  on a
full-time  basis as of December 31, 2001, in its  businesses,  45 of whom are in
Canada.   The  Company   considers  its  relations  with  its  employees  to  be
satisfactory. None of the Company's employees are represented by a union.

DEPENDENCE ON MATERIAL CUSTOMER
-------------------------------

During 2001,  2000 and 1999,  one customer,  the United  States Postal  Service,
accounted  for 63.1%,  70.9% and 74.3% of net sales,  respectively.  The loss of
this  customer,  or a  reduction  in its  orders,  could  adversely  affect  the
Company's operations and financial results.

RESEARCH AND DEVELOPMENT
------------------------

The Company engages in research and development  activities  relating to new and
improved  products  as an  incident of its normal  manufacturing  operations  in
conjunction with the continuing  operations.  It expended  $91,000,  $93,000 and
$26,000,  in 2001,  2000  and  1999,  respectively,  for  such  activity  in its
continuing businesses, which does not include new product development costs.

COMPLIANCE WITH ENVIRONMENTAL LAWS AND REGULATIONS
--------------------------------------------------

Based on the  information  available to it, the Company  believes  that it is in
compliance  with  present  federal,  state  and  local  environmental  laws  and
regulations.

In December  1998,  the Company  was named as a  defendant  in a lawsuit  titled
"ROBERTA RAIPORT, ET AL. V. GOWANDA ELECTRONICS CORP. AND AMERICAN LOCKER GROUP,
INC." pending in the State of New York Supreme Court, County of Cattaragus.  The
suit  involves  property  located in  Gowanda,  New York,  which was sold by the
Company to Gowanda  Electronics Corp. prior to 1980. The plaintiffs,  current or
former  property  owners in  Gowanda,  New York,  assert  that  defendants  each
operated machine shops at the site during their respective  periods of ownership
and that as a result  of such  operation,  soil  and  groundwater  contamination
occurred  which  has  adversely   affected  the  plaintiffs  and  the  value  of
plaintiffs'  properties.  The plaintiffs assert a number of causes of action and
seek  compensatory  damages  of  $5,000,000  related to  alleged  diminution  of
property  values,  $3,000,000 for economic losses and "disruption to plaintiffs'
lives,"


                                     - 5 -
<PAGE>


$10,000,000 for "nuisance,  inconveniences and disruption to plaintiffs' lives,"
$25,000,000 in punitive damages,  and $15,000,000 to establish a "trust account"
for monitoring indoor air quality and other remedies." The Company believes that
its  potential  liability  with respect to this site,  if any, is not  material.
Therefore,  based on the information  currently  available,  management does not
believe  the  outcome  of this suit will have a material  adverse  impact on the
Company's  operations  or  financial  condition.  Defense  of this case has been
assumed by the Company's insurance carrier, subject to a reservation of rights.

On July  30,  2001,  the  Company  received  a letter  from  the New York  State
Department of Environmental  Conservation  (the "DEC") advising the Company that
it  is  a   potentially   responsible   party  with  respect  to   environmental
contamination  at the site mentioned above located in Gowanda,  New York,  which
was sold by the Company to Gowanda  Electronics  Corp. prior to 1980. The letter
from the DEC states that a Remedial Investigation and Feasibility Study has been
conducted at the site and a  remediation  plan  selected.  Based on  information
currently  available,  the Company  believes that its potential  liability  with
respect  to current  action by the DEC with  regard to this site will not have a
material  adverse  impact on the Company's  operations  or financial  condition.
Defense of this  matter has been  assumed by the  Company's  insurance  carrier,
subject to a reservation of rights.

GENERAL
-------

Backlog of orders is not  significant  in the  Company's  business as  shipments
usually are made shortly after orders are received.  The Company's  sales do not
have marked seasonal variations.


EXECUTIVE OFFICERS OF THE COMPANY
---------------------------------

                                                                      YEAR FIRST
                                                                        ASSUMED
    NAME                   AGE     OFFICE HELD WITH COMPANY            POSITION
--------------------------------------------------------------------------------

Edward F. Ruttenberg       55        Chairman of the Board and            1998
                                      Chief Executive Officer

Roy J. Glosser             41        President, Chief Operating           1996
                                      Officer and Treasurer

Mr. E.F.  Ruttenberg has been employed in his positions since  September,  1998.
Prior to that  date he served  as Vice  Chairman  of the  Company.  Mr.  Glosser
assumed his position as President  and Chief  Operating  Officer in May 1996 and
became  Treasurer in September  1998.  Prior to that date, Mr. Glosser served as
Vice  President - Operations  of the Company since 1995 and has been employed by
the Company since 1992 in operations and product development.

There  are no  arrangements  or  understandings  pursuant  to  which  any of the
officers were elected as officers, except for an employment contract between the
Company and Roy J. Glosser and an  employment  contract  between the Company and
Edward F.  Ruttenberg.  Except as provided  in



                                     - 6 -
<PAGE>

such employment contracts, all officers hold office for one year and until their
successors are elected and  qualified;  provided,  however,  that any officer is
subject to removal with or without cause, at any time, by a vote of the majority
of the Board of Directors.

There have been no events under any bankruptcy act, no criminal  proceedings and
no  judgments  or  injunctions  material  to the  evaluation  of the ability and
integrity of any executive officer during the past five years.




















                                     - 7 -
<PAGE>



ITEM 2.  DESCRIPTION OF PROPERTY

The location and  approximate  floor space of the  Company's  principal  plants,
warehouses and office facilities are as follows ( * indicates leased facility):
<TABLE>
<CAPTION>


<S>                        <C>                                <C>                   <C>
                                                              APPROXIMATE
                                                              FLOOR SPACE
LOCATION                   SUBSIDIARY                          IN SQ. FT.           USE
--------                   ---------                          -----------          --------

Jamestown, NY              Principal Executive Office           37,000*            Office space/
                           American Locker Company, Inc.                           Assembly and
                           and American Locker Security                            Warehouse
                             Systems, Inc.

Jamestown, NY              American Locker Security             30,200*            Assembly and
                             Systems, Inc.                                         Warehouse

Pittsburgh, PA             Executive Office                        500*            Office space

Ellicottville, NY          American Locker Security             12,800             Lock manufacturing
                             Systems, Inc. - Lock Shop                             service and repair


Toronto,                   Canadian Locker Company, Ltd.         4,000*            Coin-operated
  Ontario                                                                          lockers and locks



Toronto,
  Ontario                  Canadian Locker Company, Ltd.         3,000*            Warehouse

Grapevine, TX              Security Manufacturing Corporation   70,000             Manufacturing
                                                                                   and office
                                                               --------
                                                   TOTAL       157,500
                                                               ========
</TABLE>


The Company  believes that its facilities which are of varying ages and types of
construction and the machinery and equipment utilized in such plants are in good
condition and are adequate for its presently  contemplated needs. All facilities
are leased except for the Ellicottville, New York and Grapevine, Texas facility.
The leases on these  properties  terminate  at various  times from 2002  through
2007.




                                     - 8 -
<PAGE>



ITEM 3.  LEGAL PROCEEDINGS

In September 1998 and subsequent  months, the Company was named as an additional
defendant in 134 cases pending in state court in  Massachusetts.  The plaintiffs
in each case assert that a division of the Company manufactured and furnished to
various shipyards components  containing asbestos during the period from 1948 to
1972 and that injuries  resulted from exposure to such  products.  The assets of
this division were sold by the Company in 1973.  During the process of discovery
in certain of these  actions,  documents  from sources  outside the Company have
been produced which  indicate that the Company  appears to have been included in
the chain of title for certain  wall panels which  contained  asbestos and which
were delivered to the Massachusetts  shipyards.  Defense of these cases has been
assumed by the Company's insurance carrier,  subject to a reservation of rights.
As of March 13, 2002,  settlement  agreements have been entered in 11 cases with
funds authorized and provided by the Company's  insurance carrier.  Further,  52
cases  originally filed in 1995, 1996, 1997 and 1998 against other defendants to
which the Company was joined as an additional  defendant have been terminated as
to the Company without liability to the Company under  Massachusetts  procedural
rules.  Therefore,  the balance of  unresolved  cases  against the Company as of
March 13, 2002 is 71 cases  originally  filed against  other  defendants in 1999
through 2001.  While the Company cannot predict what the ultimate  resolution of
these  cases  may be  because  the  discovery  proceedings  on the cases are not
complete,  based upon the Company's  experience to date with similar  cases,  as
well as the assumption that insurance coverage will continue to be provided with
respect to these cases,  at the present time,  the Company does not believe that
the  outcome  of these  cases  will  have a  significant  adverse  impact on the
Company's operations or financial condition.

See "Item 1.  Business - Compliance with Environmental Laws and Regulations."

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

There were no matters submitted to a vote of the security  holders,  by means of
solicitation of proxies or otherwise, during the fourth quarter of 2001.



                                     - 9 -
<PAGE>



PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's  shares of Common Stock (Par Value $1.00 per share) are not listed
on any exchange,  but are traded on the  over-the-counter  market and quotations
are reported by the National Association of Security Dealers, Inc. through their
Automated  Quotation System (NASDAQ) on the National Market System.  The trading
symbol is ALGI.  The  following  table  shows the range of the low and high sale
prices for each of the calendar quarters indicated.


                                PER COMMON SHARE
                                  MARKET PRICE


                                                         DIVIDEND
     2001                   HIGH         LOW             DECLARED
--------------------------------------------------------------------------------
First Quarter           $   8.125      $ 5.250           $ 0.00
Second Quarter             12.000        6.500             0.00
Third Quarter              13.500        7.000             0.00
Fourth Quarter             18.000        7.950             0.00
                                                         ------
Total                                                    $ 0.00
                                                         ======



                                                         DIVIDEND
     2000                 HIGH            LOW            DECLARED
--------------------------------------------------------------------------------
First Quarter           $ 8.438        $  5.375          $ 0.00
Second Quarter            7.750           5.500            0.00
Third Quarter             6.500           4.750            0.00
Fourth Quarter            6.750           4.250            0.00
                                                         ------
Total                                                    $ 0.00
                                                         ======

As of March 12, 2002, the Company had 1,181 security holders of record.

By agreement with its principal lender,  the Company's ability to declare future
dividends is restricted. See Note 5 to the financial statements included in Item
8 of this Form 10-K.



                                     - 10 -
<PAGE>



ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth selected historical financial data of the Company
as of, and for the years ended December 31, 2001, 2000, 1999, 1998 and 1997. The
financial  data  set  forth  below  should  be  read  in  conjunction  with  the
information under  "Management's  Discussion and Analysis of Financial Condition
and  Results  of  Operations"  included  in Item 7 of  this  Form  10-K  and the
Financial  Statements of the Company and the notes thereto included in Item 8 of
this Form 10-K.

<TABLE>
<CAPTION>
<S>                                               <C>            <C>           <C>           <C>          <C>
                                                  2001           2000          1999          1998         1997
                                                  ----           ----          ----          ----         ----

Sales                                            $39,627,216   $37,662,140   $34,950,104  $45,011,327   $29,295,533

Income before income taxes                         4,939,946     4,840,632     4,395,208    7,103,364     3,454,508

Income taxes                                       1,879,585     1,891,419     1,771,407    2,788,822     1,342,033

Net income                                         3,060,361     2,949,213     2,623,801    4,314,542     2,112,475

Earnings per share - basic (2)                          1.49          1.33          1.11         1.78          0.72

Earnings per share - diluted (2)                        1.47          1.32          1.09         1.70          0.70

Weighted average common shares                     2,053,838     2,214,406     2,363,338    2,420,078     2,909,788
outstanding - basic (2)

Weighted average common shares                     2,083,484     2,230,785     2,402,108    2,542,684     3,000,128
outstanding - diluted (2)

Dividends declared                                      0.00          0.00          0.00         0.00          0.00

Interest expense                                     441,773       140,920       153,861      231,875       181,678

Depreciation and amortization expense                956,430       796,140       630,047      646,379       600,632

Expenditures for property, plant and                 801,009       206,604     1,915,139      536,819       520,358
equipment


YEAR-END POSITION
Total assets                                      29,735,420    15,582,599    15,179,069   13,469,516    11,263,725

Long-term debt, including current portion         11,578,687       333,320     2,034,324      733,333     3,094,000

Stockholders' equity                              14,553,876    11,723,825    10,107,210    9,264,056     4,919,145

Stockholders' equity per share of common                7.12          5.68          4.44         3.82          2.04
stock (1) (2)

Common shares outstanding at year-end (2)          2,043,046     2,062,540     2,277,118    2,422,772     2,405,780

Number of employees                                      198           144           137          135           120

(1) Based on shares outstanding at year-end.

(2)  All  years  presented  have  been  restated  to  reflect  the  impact  of a
four-for-one stock distribution during 1998.

</TABLE>



                                     - 11 -
<PAGE>



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

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company's  discussion and analysis of its financial condition and results of
operations are based upon the Company's consolidated financial statements, which
have been prepared in accordance with accounting  principles  generally accepted
in the United States. The preparation of these financial statements requires the
Company to make estimates and judgments that affect the amounts  reported in the
financial  statements and the  accompanying  notes.  On an on-going  basis,  the
Company evaluates its estimates, including those related to product returns, bad
debts,  inventories,   intangible  assets,  income  taxes,  pensions  and  other
post-retirement  benefits,  and contingencies and litigation.  The Company bases
its estimates on experience and on various other  assumptions  that are believed
to be reasonable  under the  circumstances,  the results of which form the basis
for making  judgments about the carrying  values of assets and liabilities  that
are not readily  apparent  from other  sources.  Actual  results may differ from
these estimates under different assumptions or conditions.

The Company believes the following critical  accounting policies affect its more
significant  judgments and estimates used in the preparation of its consolidated
financial statements.

BAD DEBTS

The Company  maintains  allowances  for doubtful  accounts for estimated  losses
resulting from the inability of its customers to make required payments.  If the
financial condition of the Company's customers were to deteriorate, resulting in
an impairment of their ability to make  payments,  additional  allowances may be
required.

INVENTORY

The  Company  records  reserves  for  estimated   obsolescence  or  unmarketable
inventory  equal  to the  difference  between  the  cost  of  inventory  and the
estimated  market value based upon  assumptions  about future  demand and market
conditions.  If actual market conditions are less favorable than those projected
by management, additional inventory write-downs may be required.

LEGAL MATTERS

The Company is subject to certain legal  proceedings  as discussed in Note 16 of
the consolidated  financial  statements.  Currently the Company does not believe
that these  matters  will have a  material  impact on its  financial  results or
financial  position.  This  conclusion  is  based  primarily  on  the  Company's
insurance  coverage  for these  matters.  It is possible,  however,  that future
results of  operations  for any  particular  quarter or annual  period  could be
materially affected by changes in assumptions or other  circumstances  involving
these legal matters.



                                     - 12 -
<PAGE>

GOODWILL

As described in Note 2 to the consolidated  financial statements the Company has
recorded goodwill in connection with its acquisition in 2001. Beginning in 2002,
the Company is  required  to analyze its  goodwill  for  impairment  issues.  In
assessing  impairment  the Company  must make  assumptions  regarding  estimated
future  cash  flows  and  other  factors  to  determine  the  fair  value of the
respective net assets. If these estimates or their related assumptions change in
the future,  the Company may be required to record an impairment  charge for the
recorded goodwill.

RESULTS OF OPERATIONS - 2001 COMPARED TO 2000

Consolidated  sales in 2001  totaled  $39,627,000,  a 5% increase  from sales of
$37,662,000 in 2000.  Income before income taxes in 2001 increased by $99,000 or
2% to $4,940,000  compared to $4,841,000  in 2000.  Plastic  locker sales to the
United States Postal  Service  (USPS)  totaled  $25,166,000  in 2001 compared to
$26,705,000  in 2000.  Plastic  Cluster  Box Units  (CBUs) to the United  States
Postal  Service (USPS)  decreased 5% to $23,864,000 in 2001 from  $25,226,000 in
2000.  Sales of Plastic  Outdoor Parcel  Lockers (OPLs) were  $1,302,000 in 2001
compared to $1,479,000  in 2000.  The decreases in CBU sales in 2001 compared to
2000 was the result of product mix, as a lower priced CBU was  introduced in mid
2001,  and price  reductions of 3% to 5% that became  effective in April 2001 on
existing CBU models.  CBUs shipped in 2001 were consistent with 2000 levels; OPL
volume  decreased  by  approximately  13% in  2001  versus  2000,  due to  lower
purchases  by the USPS.  Revenues  from the  Company's  other  locker  products,
primarily  the sale and rental of metal,  coin and key-only  and  electronically
controlled lockers,  were $13,382,000 in 2001 compared to $9,871,000 in 2000, an
increase of $3,511,000.  This increase of $3,511,000 consists of $3,136,000 form
the Company's new subsidiary,  Security  Manufacturing  Corporation (SMC), which
was purchased on July 6, 2001. The remaining  increase from 2000 to 2001 relates
to price  increases,  increased  penetration in the shopping center market and a
general  increase in demand across  certain  markets  served.  Revenues from the
luggage cart business for airport  terminals were $1,080,000 in 2001, a decrease
of $6,000  compared to 2000 revenues of  $1,086,000.  This decrease is primarily
due to the growth in the first eight  months of 2001 being offset by declines in
September and the fourth quarter due to lower airline passenger volume.

The Company's  present  contract with the USPS was awarded on April 15, 2001 and
covers  all  four  types of CBUs and the OPL.  The  contract  is for  indefinite
quantities  of CBUs and OPLs.  The contract is for a two-year  term and the USPS
has the  option  to renew  for four  additional  two-year  terms.  The USPS also
awarded indefinite  quantity contracts to two competitors,  including SMC, which
the Company acquired on July 6, 2001; the remaining competitor produces aluminum
CBUs.

The Company believes that the long-term outlook for CBU volume remains favorable
in light of the continued  USPS  commitment to the CBU program and its resulting
operating cost reduction benefits. The USPS decision to discontinue the purchase
of Neighborhood  Delivery and Collection Box Units (NDCBUs) in 1999 has also had
a positive impact on the CBU market.  The CBU is the  modernization of the NDCBU
and is an integral part of the USPS delivery cost reduction  program  identified
as Centralized Delivery. As previously disclosed, total CBU


                                     - 13 -
<PAGE>


demand is  influenced  by a number of  factors  over  which the  Company  has no
control,  including  but not limited to: USPS  budgets,  policies and  financial
performance, domestic new housing starts, postal rate increases, and the weather
as these units are installed  outdoors.  The  Company's  share of the CBU market
increased  in 2001,  in part due to its  acquisition  of SMC,  one of its  prior
competitors.  The Company believes its CBU product line,  including the acquired
line of aluminum CBUs made by the Company's new  subsidiary,  SMC,  continues to
represent the best value when all factors including price, quality of design and
construction, long-term durability and service are considered.

Consolidated  cost of sales as a percentage  of sales was 70.8% in 2001 compared
to 71.8% in 2000. The improvement in 2001 is due to higher margins obtained from
SMC and  other  non-Plastic  products,  and  stable  margins  for  the  Plastics
products.

Selling,  administrative  and general  expenses were $6,689,000  during 2001, an
increase of 11% from  $6,040,000 in 2000. This increase of $649,000 is primarily
due to additional  expenses  from SMC of  approximately  $750,000,  which offset
decreases in selling  expenses from the Company's  existing  products.  Selling,
administrative  and general expenses were 17% and 16% of sales in 2001 and 2000,
respectively.

Interest  income  decreased  by $27,000 in 2001  compared to 2000 as a result of
lower interest rates earned on cash deposits during 2001 versus 2000.

Interest  expense  increased  in  2001  as a  result  of the  Company  incurring
$11,927,000  of new debt in connection  with the  acquisition of SMC and related
real estate on July 6, 2001.


RESULTS OF OPERATIONS - 2000 COMPARED TO 1999

Consolidated  sales in 2000 totaled  $37,662,000,  an 8% increase  from sales of
$34,950,000 in 1999. Income before income taxes in 2000 increased by $446,000 or
10% to $4,841,000 compared to $4,395,000 in 1999. Sales of the Company's plastic
Cluster Box Units (CBUs) and Outdoor  Parcel Lockers (OPLs) to the United States
Postal  Service (USPS)  increased 3% to $26,705,000 in 2000 from  $25,969,000 in
1999. The increase in sales of plastic postal lockers  resulted from an increase
in the  total  number  of CBUs  sold to the  USPS in 2000 as  compared  to 1999.
Revenues from the Company's other locker products, primarily the sale and rental
of metal, coin and key-only and electronically controlled lockers, increased 17%
to $9,871,000 in 2000 from $8,442,000 in 1999. This increase is due, in part, to
the new plastic  coin-operated  locker,  which the Company  introduced  in April
2000, as well as increases in various other locker product lines.  Revenues from
the luggage cart  business for airport  terminals  were  $1,086,000  in 2000, an
increase of  $547,000  or 102%  compared  to 1999  revenues  of  $539,000.  This
increase is the result of a full year of operations at the Detroit  Metropolitan
Airport in 2000 versus three months in 1999.

Consolidated cost of sales as a percentage of sales remained consistent in 2000,
at 71.8% the same  percentage  as 1999.  Operating  efficiencies  obtained  from
higher volume were offset by price concessions on the CBUs.



                                     - 14 -
<PAGE>


Selling, administrative and general expenses of $6,040,000 during 2000 increased
7% from  $5,652,000  in 1999.  This is  primarily  the result of higher  selling
expenses  in 2000 which  corresponds  to the 8%  increase  in sales from 1999 to
2000.  Selling,  administrative  and general  expenses were 16% of sales in both
2000 and 1999.

Interest  income  increased by $103,000 in 2000  compared to 1999 as a result of
higher cash balances during 2000 versus 1999.

Interest  expense  decreased  in 2000 as a  result  of the  Company  paying  its
$1,500,000 term loan during the third quarter of 2000.

LIQUIDITY AND SOURCES OF CAPITAL

The Company's  liquidity is reflected in the ratio of current  assets to current
liabilities or current ratio and its working capital. The current ratio was 3.55
to 1 and 4.39 to 1 at December 31, 2001 and 2000, respectively. Working capital,
or the excess of current assets over current  liabilities  was  $12,309,000  and
$10,706,000 at December 31, 2001 and 2000, respectively. The increase in working
capital  resulted  primarily  from  operations.  In 2001,  cash  generated  from
operations was $2,830,000.

The Company's  policy is to maintain  modern  equipment  and adequate  capacity.
During  2001,  2000  and 1999  the  Company  expended  $801,000,  $207,000,  and
$1,915,000,  respectively,  for capital additions.  Capital  expenditures in all
three years were financed principally from operations.

During  2001,  the  Company   acquired   B.L.L.   Corporation,   d/b/a  Security
Manufacturing  Corporation  (SMC) and  related  real  estate  for  approximately
$12,100,000, excluding cash received. This acquisition was funded with term loan
borrowings of approximately  $11,000,000,  a $960,000 note payable to the former
owners and $140,000 of cash.  These  borrowings  require  principal  payments of
approximately $1,630,000 during 2002.

The Company expects that cash generated from operations in 2002 will be adequate
to fund the needs for working capital,  capital  expenditures and debt payments.
However,   if   necessary,   the  Company  has  a  $3,000,000   revolving   bank
line-of-credit available to assist in satisfying future operating cash needs.

The Company  has  contractual  obligations  at December  31,  2001,  relating to
long-term debt and operating lease  arrangements.  The Company does not have any
significant  purchase  obligations  or  commitments  at December 31,  2001.  The
Company  does not have any  investments  in joint  ventures  or special  purpose
entities,  and does not  guarantee  the debt of any  third  parties.  All of the
Company's  subsidiaries  are 100% owned by the Company  and are  included in its
consolidated  financial  statements.  Total  payments  under  long-term debt and
operating leases are listed below:


                                     - 15 -
<PAGE>



                       LONG-TERM DEBT      OPERATING LEASES             TOTAL
                       --------------      ----------------             -----
2002                     $1,630,000          $  283,000             $  1,913,000
2003                      1,635,000            245,000                 1,880,000
2004                      1,641,000            146,000                 1,787,000
2005                      1,331,000            146,000                 1,477,000
2006                      3,497,000            146,000                 3,643,000
2007                      1,200,000            134,000                 1,334,000
2008                        645,000                  -                   645,000

The increase in 2006 long-term debt repayment is the result of a balloon payment
due on the  Company's  mortgage  payable.  The Company  expects to refinance the
mortgage payable in 2006.

IMPACT OF INFLATION AND CHANGING PRICES

Although  inflation  has been low in recent  years,  it is still a factor in the
economy and the Company  continues to seek ways to mitigate  its impact.  To the
extent  permitted by competition,  the Company passes  increased costs on to its
customers by increasing sales prices over time.  Specifically,  the Company does
have the ability to modify its contract with the USPS regarding  sales prices in
the event of a  significant  price  increase for  materials  subject  however to
competitive  situations.  In respect to its other products,  steel, aluminum and
plastic,  the Company  expects  that any raw  material  price  changes  would be
reflected in adjusted sales prices.

The  Company  intends  to seek  additional  ways to control  the  administrative
overhead necessary to successfully run the business. By controlling these costs,
the Company can  continue to  competitively  price its  products  with other top
quality locker manufacturers and distributors.

The Company has used the LIFO method of  accounting  for its  inventories  since
1974.  This method  matches  current  costs with current  revenues and during an
inflationary  period,  reduces  reported  income but improves cash flow due to a
reduction of taxes based on income.

MARKET RISKS - FOREIGN CURRENCY AND INTEREST RATE RISKS

The Company's  Canadian operation subjects the Company to foreign currency risk,
though it is not  considered a significant  risk since the Canadian  operation's
net assets  represent  less than 10% of the  Company's  aggregate  net assets at
December 31, 2001.  Presently,  management  does not hedge its foreign  currency
risk as it plans  to  indefinitely  reinvest  the  Canadian  net  assets  in the
Canadian operation.

The Company's has fixed  interest  rates on $5,730,000 of its long-term  debt at
December  31,  2001 and  variable  interest  rates based on three month LIBOR on
$5,850,000 of its long term debt at December 31, 2001.  Based upon the Company's
outstanding  long-term  debt subject to variable  interest rates at December 31,
2001,  a 1%  increase  in the LIBOR rate would  result in an annual  increase to
interest expense of approximately $58,500.

EFFECT OF NEW ACCOUNTING PRONOUNCEMENT

The Company has adopted the provision of Statement of  Accounting  Standards No.
142



                                     - 16 -
<PAGE>



Goodwill  and Other  Intangible  Assets  (SFAS 142),  which  prohibits  the
amortization of goodwill  associated with acquisitions made after June 30, 2001.
SFAS 142 also  requires an  impairment  test on goodwill be  performed  at least
annually  beginning in 2002. The Company will perform the impairment test during
2002,  the test is expected to be based on cash flow and  earnings  projections,
and is not expected to result in an impairment charge. Since the Company did not
have any goodwill  recorded prior to the SMC acquisition,  the provision of SFAS
142 requiring  companies to stop amortizing  goodwill will have no impact on the
ongoing  operating  results of the Company or the  comparability of such results
with prior periods.

In August 2001, the Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  No.  144,  Accounting  for the  Impairment  or
Disposal of  Long-Lived  Assets (SFAS 144).  SFAS 144  supercedes  SFAS No. 121,
Accounting for the Impairment of Long-Lived  Assets and for Long-Lived Assets to
be Disposed  Of, but retains its  fundamental  provisions  for  recognition  and
measurement of the impairment of long-lived assets to be held and used and those
to be disposed of by sale.  The Company  must adopt this  standard in 2002.  The
Company is evaluating  the effect that this standard will have on its results of
operations and financial condition.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Forward-looking   statements  in  this  report,  including  without  limitation,
statements   relating   to  the   Company's   plans,   strategies,   objectives,
expectations,  intentions  and adequacy of  resources,  are made pursuant to the
Safe Harbor Provisions of the Private Securities  Litigation Reform Act of 1995.
Investors are cautioned that such  forward-looking  statements involve risks and
uncertainties  including  without  limitation the  following:  (i) the Company's
plans,  strategies,  objectives,  expectations,  and  intentions  are subject to
change at any time at the  discretion of the Company,  (ii) the Company's  plans
and results of operations  will be affected by the  Company's  ability to manage
its growth and inventory, and (iii) other risks and uncertainties indicated from
time  to  time  in the  Company's  filings  with  the  Securities  and  Exchange
Commission.



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The  information  required is reported  under  "Impact of Inflation and Changing
Prices" and "Market Risks - Foreign  Currency and Interest Rate Risk" in Item 7.
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations.




                                     - 17 -
<PAGE>



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Auditors


Board of Directors and Stockholders
American Locker Group Incorporated and Subsidiaries


We have audited the accompanying  consolidated balance sheets of American Locker
Group  Incorporated  and  Subsidiaries as of December 31, 2001 and 2000, and the
related consolidated statements of income,  stockholders' equity, and cash flows
for each of the three years in the period ended  December  31, 2001.  Our audits
also  included  the  financial  statement  schedule  listed in the index at Item
14(a).  These financial  statements and schedule are the  responsibility  of the
management of the Company.  Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial position of American Locker
Group  Incorporated  and  Subsidiaries  at December  31, 2001 and 2000,  and the
consolidated  results of their  operations  and their cash flows for each of the
three years in the period ended December 31, 2001, in conformity with accounting
principles  generally  accepted in the United States.  Also in our opinion,  the
related financial statement  schedule,  when considered in relation to the basic
financial  statements taken as a whole,  present fairly in all material respects
the information set forth therein.




/s/Ernst & Young LLP

Buffalo, New York
February 20, 2002



                                     - 18 -
<PAGE>






               American Locker Group Incorporated and Subsidiaries

                           Consolidated Balance Sheets


<TABLE>
<CAPTION>
<S>                                                                      <C>
                                                                                 DECEMBER 31
                                                                          2001                 2000
                                                                   -----------------------------------------

ASSETS
Current assets:
     Cash and cash equivalents                                             $ 4,579,034          $ 3,696,359
     Accounts and notes receivable, less allowance
        for doubtful accounts of $249,000 in 2001
        and $324,000 in 2000                                                 5,042,685            4,633,422
     Inventories                                                             6,813,511            4,818,348
     Prepaid expenses                                                          125,805               45,209
     Deferred income taxes                                                     570,731              668,769
                                                                   -----------------------------------------
Total current assets                                                        17,131,766           13,862,107


Property, plant and equipment:
     Land                                                                      500,500                  500
     Buildings                                                               3,441,616              389,959
     Machinery and equipment                                                11,771,099           10,378,983
                                                                   -----------------------------------------
                                                                            15,713,215           10,769,442
     Less allowance for depreciation                                       (9,879,825)          (9,048,950)
                                                                   -----------------------------------------
                                                                             5,833,390            1,720,492

Deferred income taxes                                                           73,393                    -
Goodwill                                                                     6,405,204                    -
Other assets                                                                   291,667                    -



                                                                   -----------------------------------------
Total assets                                                               $29,735,420         $ 15,582,599
                                                                   =========================================



</TABLE>


                                     - 19 -
<PAGE>








<TABLE>
<CAPTION>
<S>                                                                               <C>


                                                                                        DECEMBER 31
                                                                                  2001               2000
                                                                           ---------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
     Accounts payable                                                             $ 1,348,396        $  1,513,203
     Commissions, salaries, wages and taxes thereon                                   555,326             323,769
     Other accrued expenses                                                           895,274             659,852
     Federal, state and foreign income taxes payable                                  393,781             458,825
     Current portion of long-term debt                                              1,630,000             200,000
                                                                           ---------------------------------------
Total current liabilities                                                           4,822,777           3,155,649

Long-term liabilities:
     Long-term debt                                                                 9,948,687             133,320
     Pension and other benefits                                                       410,080             470,375
     Deferred income taxes                                                                  -              99,430
                                                                           ---------------------------------------
                                                                                   10,358,767             703,125

Stockholders' equity:
     Common stock, $1 par value:
       Authorized shares - 4,000,000
         Issued shares - 2,504,526 in 2001, 2,511,550 in 2000
         Outstanding shares - 2,043,046 in 2001,
          2,062,540 in 2000                                                         2,504,526           2,511,550
     Other capital                                                                    496,708             565,331
     Retained earnings                                                             15,610,362          12,550,001
     Treasury stock at cost (461,480 shares in 2001
        449,010 in 2000)                                                          (3,816,533)         (3,717,603)
     Accumulated other comprehensive income (loss)                                  (241,187)           (185,454)
                                                                           ---------------------------------------
Total stockholders' equity                                                         14,553,876          11,723,825
                                                                           ---------------------------------------

Total liabilities and stockholders' equity                                        $29,735,420        $ 15,582,599
                                                                           =======================================


See accompanying notes.


</TABLE>


                                     - 20 -
<PAGE>




               American Locker Group Incorporated and Subsidiaries

                        Consolidated Statements of Income

<TABLE>
<CAPTION>
<S>                                                   <C>                          <C>                  <C>

                                                                          YEAR ENDED DECEMBER 31
                                                              2001                 2000                 1999
                                                       --------------------------------------------------------------

Net sales                                                      $39,627,216         $ 37,662,140         $ 34,950,104
Cost of products sold                                           28,061,281           27,025,940           25,099,003
                                                       --------------------------------------------------------------
                                                                11,565,935           10,636,200            9,851,101
Selling, administrative and general expenses                     6,688,676            6,039,584            5,652,262
                                                       --------------------------------------------------------------
                                                                 4,877,259            4,596,616            4,198,839

Interest income                                                    163,497              190,486                      96,057
Other income - net                                                 340,963              194,450              254,173
Interest expense                                                 (441,773)            (140,920)            (153,861)
                                                       --------------------------------------------------------------
Income before income taxes                                       4,939,946            4,840,632            4,395,208
Income taxes                                                     1,879,585            1,891,419            1,771,407
                                                       --------------------------------------------------------------
Net income                                                     $ 3,060,361         $  2,949,213          $ 2,623,801
                                                       ==============================================================





Earnings per share of common stock:
     Basic                                                           $1.49                $1.33                $1.11
                                                       ==============================================================
     Diluted                                                         $1.47                $1.32                $1.09
                                                       ==============================================================

Dividends per share of common stock:                                 $0.00                $0.00                $0.00
                                                       ==============================================================


See accompanying notes.


</TABLE>


                                     - 21 -
<PAGE>






               American Locker Group Incorporated and Subsidiaries

                 Consolidated Statements of Stockholders' Equity

<TABLE>
<CAPTION>
<S>                                     <C>          <C>          <C>              <C>          <C>
                                                                                                ACCUMULATED
                                                                                                   OTHER                  TOTAL
                                        COMMON       OTHER       RETAINED         TREASURY     COMPREHENSIVE         STOCKHOLDERS'
                                        STOCK       CAPITAL      EARNINGS          STOCK       INCOME (LOSS)            EQUITY
                                       -------------------------------------------------------------------------------------------

Balance at January 1, 1999             $ 2,422,772  $ 74,867     $ 6,976,987    $        -       $(210,570)           $ 9,264,056
Comprehensive income:
     Net income                                  -        -       2,623,801              -               -              2,623,801
     Other comprehensive income:
       Foreign currency  translation             -        -               -              -          47,735                 47,735
                                                                                                                      ------------
Total comprehensive income                                                                                              2,671,536
Common stock issued (76,000 shares)         76,000   (21,375)             -              -               -                 54,265
Tax benefit of exercised stock options           -   485,000              -              -               -                485,000
Common stock purchased for treasury
  (221,650 shares)                               -         -              -     (2,367,966)              -             (2,367,966)
Common stock purchased and retired
   (4 shares)                                   (4)      (37)             -              -               -                    (41)
                                       -------------------------------------------------------------------------------------------
Balance at December 31, 1999             2,498,767   538,455      9,600,788     (2,367,966)       (162,835)             10,107,210

Comprehensive income:
     Net income                                  -         -      2,949,213              -               -              2,949,213
     Other comprehensive income:
     Foreign currency translation                -         -              -              -         (22,619)               (22,619)
                                                                                                                      ------------
Total comprehensive income                                                                                              2,926,594
Common stock issued (13,400 shares)         13,400     3,012              -              -               -                 16,412
Tax benefit of exercised stock options           -    27,000              -              -               -                 27,000
Common stock purchased for treasury
  (227,360 shares)                               -         -              -     (1,349,637)              -             (1,349,637)
Common stock purchased and retired
  (618 shares)                                (618)   (3,136)             -              -               -                 (3,754)
                                       -------------------------------------------------------------------------------------------
Balance at December 31, 2000             2,511,550    565,331    12,550,001     (3,717,603)       (185,454)            11,723,825

Comprehensive income:
     Net income                                  -          -     3,060,361              -               -              3,060,361
     Other comprehensive income
       Foreign currency transaction              -          -             -              -         (55,733)               (55,733)
                                                                                                                      ------------
Total comprehensive income                                                                                              3,004,628
Common stock purchased for treasury
  (12,470 shares)                                -          -             -        (98,930)              -                (98,930)
Common stock purchased and retired
  7,024 shares)                             (7,024)   (68,623)            -              -               -                (75,647)
                                       -------------------------------------------------------------------------------------------
                                        $2,504,526   $496,708   $15,610,362    $(3,816,533)     $ (241,187)          $ 14,553,876
                                       ===========================================================================================
See accompanying notes.

</TABLE>


                                     - 22 -
<PAGE>




               American Locker Group Incorporated and Subsidiaries
                      Consolidated Statements of Cash Flows


<TABLE>
<CAPTION>
<S>                                                              <C>                      <C>             <C>

                                                                                YEAR ENDED DECEMBER 31
                                                                        2001              2000            1999
                                                                  ---------------------------------------------------
OPERATING ACTIVITIES
Net income                                                              $ 3,060,361      $ 2,949,213     $ 2,623,801
Adjustments to reconcile net income to net cash
     provided by operating activities:
       Depreciation and amortization                                        956,430          796,140         630,047
       Deferred income taxes (credits)                                     (93,678)              469          69,314
       Changes in assets and liabilities:
         Accounts and notes receivable                                      281,462        (826,958)         263,872
         Inventories                                                      (601,363)          154,780       1,338,862
         Prepaid expenses                                                  (52,698)           80,251          25,805
         Accounts payable and accrued expenses                            (423,235)          173,656       (493,590)
         Income taxes                                                     (236,924)          436,393         451,491
         Pension and other benefits                                        (60,295)         (192,511)         84,863
                                                                  ---------------------------------------------------
Net cash provided by operating activities                                 2,830,060        3,571,433       4,994,465

INVESTING ACTIVITIES
Purchase of business and related real estate, net of cash              (12,084,711)                -               -
acquired
Purchase of property, plant and equipment                                 (801,009)        (206,604)     (1,915,139)
Payment for other assets                                                  (100,000)                -               -
Proceeds from sale of property, plant and equipment                               -           87,378               -
                                                                  ---------------------------------------------------
Net cash used in investing activities                                  (12,985,720)        (119,226)     (1,915,139)

FINANCING ACTIVITIES
Long-term debt borrowings                                                11,926,682                -       1,500,000
Long-term debt payments                                                   (681,315)       (1,700,004)       (200,000)
Common stock issued                                                               -           16,412          54,625
Common stock purchased for treasury                                        (98,930)      (1,349,637)     (2,367,966)
Common stock purchased and retired                                         (75,647)          (3,754)            (41)
                                                                  ---------------------------------------------------
Net cash provided by (used in) financing activities                      11,070,790      (3,036,983)     (1,013,382)
Effect of exchange rate changes on cash                                    (32,455)          (4,848)          32,032
                                                                  ---------------------------------------------------
Net increase in cash                                                        882,675          410,376       2,097,976
Cash and cash equivalents at beginning of year                            3,696,359        3,285,983       1,188,007
                                                                  ---------------------------------------------------
Cash and cash equivalents at end of year                                $ 4,579,034      $ 3,696,359     $ 3,285,983
                                                                  ===================================================

Supplemental cash flow information: Cash paid during the year for:
        Interest                                                         $  325,351       $  151,749      $  143,032
                                                                  ===================================================
        Income taxes                                                    $ 2,215,000      $ 1,455,026     $ 1,250,602
                                                                  ===================================================
See accompanying notes.


</TABLE>


                                     - 23 -
<PAGE>



Notes to Consolidated Financial Statements
American Locker Group Incorporated and Subsidiaries
December 31, 2001

1. BASIS OF PRESENTATION

CONSOLIDATION AND BUSINESS DESCRIPTION

The consolidated  financial  statements  include the accounts of American Locker
Group  Incorporated  and  its  subsidiaries  (The  Company),  all of  which  are
wholly-owned.  Intercompany  accounts and  transactions  have been eliminated in
consolidation. The Company is primarily engaged in one business, sale and rental
of lockers. This includes coin, key-only and electronically  controlled checking
lockers and locks and sale of plastic and aluminum  centralized  mail and parcel
distribution lockers. The Company sells to customers throughout North America as
well as internationally.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

Cash includes currency on hand and demand deposits with financial  institutions.
The Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.

INVENTORIES

Inventories  are  valued  principally  at the  lower  of  cost or  market,  cost
determined by the last-in,  first-out method (LIFO) for approximately 80% of the
Company's  inventories at December 31, 2001 (100% at December 31, 2000). For the
remaining  inventories,  cost is determined  by the  first-in,  first out method
(FIFO).

PROPERTIES AND DEPRECIATION

Property,  plant and equipment are stated at cost.  Depreciation  is computed by
the straight-line and declining-balance methods for financial reporting purposes
and by accelerated  methods for income tax purposes.  Estimated useful lives for
financial  reporting  purposes are 30 years for  buildings and 3 to 12 years for
machinery and equipment.

Long-lived  assets,  including  intangible  assets,  are reviewed for impairment
whenever events or changes in  circumstances  indicate that the carrying amounts
of those assets may not be recoverable. The Company uses undiscounted cash flows
to determine  whether  impairment  exists and measures any impairment loss using
discounted cash flows.




                                     - 24 -
<PAGE>


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

GOODWILL AND OTHER INTANGIBLE ASSETS

The Company has adopted the provision of Statement of  Accounting  Standards No.
142  Goodwill  and Other  Intangible  Assets  (SFAS 142),  which  prohibits  the
amortization of goodwill  associated with acquisitions made after June 30, 2001.
The Company has recorded approximately $6,405,000 of goodwill in connection with
its acquisition of B.L.L. Corporation;  d/b/a Security Manufacturing Corporation
(SMC) on July 6, 2001.  SFAS 142 also requires an impairment test on goodwill be
performed  at least  annually  beginning  in 2002.  The Company will perform the
impairment  test  during the first  quarter of 2002,  the test is expected to be
based on cash flow and earnings projections, and is not expected to result in an
impairment charge. Since the Company did not have any goodwill recorded prior to
the SMC  acquisition,  the  provision  of SFAS 142  requiring  companies to stop
amortizing  goodwill will have no impact on the ongoing operating results of the
Company or the comparability of such results with prior periods.

Other intangible assets consist of a covenant  not-to-compete in connection with
the SMC  acquisition.  This asset is being amortized over the three-year term of
the agreement.  The agreement is recorded at $291,667 at December 31, 2001 which
consists of its original value of $350,000 less $58,333 of amortization  charged
to expense in 2001.

REVENUE RECOGNITION

Revenue is recognized at the point of passage of title,  which is at the time of
shipment to the customer.  Less than five percent of the Company's revenues were
derived from sales to  distributors  during 2001,  2000 and 1999. No distributor
stocks  a  material  amount  of  inventory  of  the  Company's  products  and no
distributor has the right to return.

SHIPPING AND HANDLING COSTS

Shipping  and  handling  costs are  expensed  as  incurred  and are  included in
selling,  administrative  and general expenses in the accompanying  consolidated
statements  of income.  These costs were  approximately  $276,000,  $185,000 and
$190,000 during 2001, 2000 and 1999, respectively.

ADVERTISING EXPENSE

The cost of advertising is expensed as incurred.  The Company incurred $215,000,
$274,000  and  $332,000  in  advertising  costs  during  2001,  2000  and  1999,
respectively.

INCOME TAXES

The Company  accounts for income taxes using the liability  method in accordance
with Statement of Financial  Accounting Standards No. 109, Accounting for Income
Taxes (SFAS 109).



                                     - 25 -
<PAGE>


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

EARNINGS PER SHARE

The Company reports earnings per share in accordance with Statement of Financial
Accounting  Standards  No. 128,  Earnings  per Share (SFAS 128).  Under SFAS 128
basic earnings per share excludes any dilutive effects of stock options, whereas
diluted  earnings per share assumes  exercise of stock  options,  when dilutive,
resulting in an increase in outstanding shares.

FOREIGN CURRENCY

The assets and liabilities of the Company's  Canadian  subsidiary are translated
to U.S.  dollars  at  current  exchange  rates.  Income  statement  amounts  are
translated  using the average  exchange rate for the year.  The gains and losses
resulting  from the  changes  in  exchange  rates  from  year to year  have been
reported in other  comprehensive  income. The effect on the statements of income
of transaction gains and losses is insignificant for all years presented.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The  carrying  amounts  of  cash  and  cash  equivalents,   accounts  and  notes
receivable, accounts payable, and accrued liabilities approximate fair value due
to the short-term maturities of these assets and liabilities.  The fair value of
the  Company's  long-term  debt has been  estimated  using cash flow methods and
applying  current  interest  rates for similar term  instruments in place of the
actual  fixed  interest  rates.  Based on these  calculations  the fair value of
long-term  debt  is   approximately   $11,730,000  and  the  carrying  value  is
$11,578,687 at December 31, 2001.

STOCK-BASED COMPENSATION

The  Company   accounts  for  stock  options   granted  under  its   stock-based
compensation  plan in  accordance  with the  intrinsic  value  based  method  of
accounting  as  prescribed  by  Accounting  Principles  Board  Opinion  No.  25,
Accounting  for Stock Issued to Employees  (APB 25), as allowed under  Financial
Accounting  Standards No. 123,  Accounting for  Stock-Based  Compensation  (SFAS
123). Accordingly,  no compensation cost for stock options is recognized because
the  number of  options  granted  is fixed and the  exercise  price of the stock
options  equals  the  market  price of the  underlying  stock on the date of the
grant.

COMPREHENSIVE INCOME

Comprehensive  income consists of net income and foreign  currency  translations
and is reported in the consolidated statements of stockholders' equity.

USE OF ESTIMATES

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



                                     - 26 -
<PAGE>



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RECENT ACCOUNTING PRONOUNCEMENTS

In August 2001, the Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  No.  144,  Accounting  for the  Impairment  or
Disposal of  Long-Lived  Assets (SFAS 144).  SFAS 144  supercedes  SFAS No. 121,
Accounting for the Impairment of Long-Lived  Assets and for Long-Lived Assets to
be Disposed  Of, but retains its  fundamental  provisions  for  recognition  and
measurement of the impairment of long-lived assets to be held and used and those
to be disposed of by sale.  The Company  must adopt this  standard in 2002.  The
Company is evaluating  the effect that this standard will have on its results of
operations and financial condition.

3. ACQUISITION

On July 6, 2001, the Company purchased 100% of the outstanding  capital stock of
B.L.L. Corporation,  d/b/a Security Manufacturing Corporation (SMC), a privately
held Texas  corporation,  for $9,100,000.  SMC is engaged in the manufacture and
sale of postal unit lockers.  The Company made this  acquisition to increase its
product offerings to existing customers,  provide additional products to attract
new customers  and to increase its share in the postal unit market.  The Company
incurred transaction related costs of approximately  $210,000. Of the $9,100,000
purchase  price,  $8,140,000  was paid at closing and  $960,000 is payable  over
three years.  The Company also purchased  related real estate (Real Estate) from
the owners of SMC for cash  consideration  of $3,500,000.  The purchase price of
the stock  and the  related  real  estate  was  funded  with  cash on hand,  the
three-year  note  payable  of  $960,000  described  above  and the  proceeds  of
additional  term loan  borrowings  of  approximately  $11,000,000.  Goodwill  of
approximately  $6,400,000 has been recorded in connection with the  acquisition.
This goodwill is not deductible for tax purposes.  The operating  results of SMC
have been included in the  accompanying  consolidated  statements of income from
the July 6,  2001  acquisition  date.  The  assets  and  liabilities  of SMC are
included in the accompanying consolidated balance sheet at December 31, 2001.

Below is an unaudited condensed listing of the assets and liabilities of SMC and
Real Estate on the acquisition date, July 6, 2001.

                                                                     (UNAUDITED)
     Accounts receivable                                         $       706,000
     Inventories                                                       1,162,000
     Other current assets                                                779,000
     Long-lived assets                                                 4,433,000
     Current liabilities                                                 642,000
     Long-term liabilities                                               179,000



                                     - 27 -
<PAGE>



3. ACQUISITION (CONTINUED)

The following unaudited pro forma condensed statement of operations is presented
as if the acquisition of SMC and Real Estate had occurred as of January 1, 2000.
The pro  forma  financial  information  is  based  on the  historical  financial
information  of the Company and SMC and the  historical  transactions  regarding
Real Estate and should be read in conjunction  with those  financial  statements
and notes thereto. In management's opinion, all adjustments necessary to reflect
the  effects of these  transactions  have been  made.  The  condensed  pro forma
financial information is not necessarily indicative of the financial position or
results of operations that actually would have occurred if such transactions had
been  consummated on the dates  described,  nor does it purport to represent the
Company's results of operations for future periods.

                                                       YEARS ENDED DECEMBER 31
                                                       2001               2000
                                               ---------------------------------
                                                          (UNAUDITED)
     Total sales                               $    42,540,000   $    44,510,000
     Net income                                      3,086,000         3,329,000
     Earnings per share - basic                $         1.50    $          1.50
     Earnings per share - diluted              $         1.48    $          1.49

The above financial  information does not include  amortization of goodwill that
was  recorded in  connection  with the  acquisition  of SMC.  This is due to the
provisions  of SFAS 142,  which  requires  that  existing  goodwill  and certain
intangible assets no longer be amortized, but tested for impairment.

4. INVENTORIES

Inventories consist of the following:

                                                          DECEMBER 31
                                                    2001               2000
                                               ---------------------------------

     Finished products                         $     1,962,881   $      986,369
     Work-in-process                                 2,373,549        1,541,110
     Raw materials                                   2,898,908        2,888,897
                                               ---------------------------------
                                                     7,235,338        5,416,376
     Less allowance to reduce to LIFO basis           (421,827)        (598,028)
                                               ---------------------------------
                                               $     6,813,511   $     4,818,348
                                               =================================



                                     - 28 -
<PAGE>



5. DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
<S>                                                                             <C>
                                                                                           DECEMBER 31
                                                                                      2001          2000
                                                                                ----------------------------

      Bank note payable through July 6, 2008 at $225,000 quarterly plus interest
        at the 3-month LIBOR rate plus 2% (4.5% at December 31,
        2001)                                                                   $     5,850,000   $        -

      Bank note payable through July 6, 2008 at $25,000 monthly plus
        interest at 8.07%                                                             2,000,000            -

      Mortgage payable to bank through July 2006 at $26,823 monthly
        including interest at 8.04% with payment for remaining balance
        due August 1, 2006                                                            2,768,687            -

      Note payable in annual installments of $320,000 through July 6,
        2004 plus interest at 6.50%                                                     960,000            -

      Note payable to bank, unsecured, payable through August 31, 2002
        at $16,667 per month plus interest at prime plus 0.15%
                                                                                              -      333,320
                                                                                ----------------------------
      Total long-term debt                                                           11,578,687      333,320
      Less current portion                                                            1,630,000      200,000
                                                                                ----------------------------
      Long-term portion                                                         $     9,948,687   $  133,320
                                                                                ============================

</TABLE>

The bank notes are secured by all equipment,  accounts  receivable,  inventories
and general intangibles.  The credit agreement underlying the bank notes payable
requires  compliance with certain  covenants and has restrictions on the payment
of dividends.  The Company was in compliance  with the terms of the agreement in
connection with the notes payable at December 31, 2001.

Based upon the outstanding balances at December 31, 2001, the required principal
payments on long-term obligations for the next five years are as follows:

     2002                                                        $     1,630,000
     2003                                                              1,634,579
     2004                                                              1,641,316
     2005                                                              1,331,438
     2006                                                              3,496,564

The Company has a $3,000,000 unsecured line of credit agreement with a bank with
interest  at the  prime  rate  (4.75%  at  December  31,  2001).  There  were no
borrowings outstanding under the line of credit at December 31, 2001.



                                     - 29 -
<PAGE>



6. OPERATING LEASES

The Company leases several operating facilities and vehicles under noncancelable
operating  leases.  Future  minimum lease  payments  consist of the following at
December 31, 2001:

     2002                                                        $       283,000
     2003                                                                245,000
     2004                                                                146,000
     2005                                                                146,000
     2006                                                                146,000

Rent expense amounted to approximately $296,000,  $313,000 and $322,000 in 2001,
2000 and 1999, respectively.

7. INCOME TAXES

For  financial  reporting  purposes,  income  before  income taxes  includes the
following:

<TABLE>
<CAPTION>
<S>                                                           <C>                  <C>                  <C>
                                                              2001                 2000                 1999
                                                      -------------------------------------------------------------
United States                                         $       4,845,146       $    4,846,963       $    4,286,818
Foreign income (loss)                                            94,800               (6,331)             108,390
                                                      -------------------------------------------------------------
                                                      $       4,939,946       $    4,840,632       $    4,395,208
                                                      =============================================================

</TABLE>

Significant components of the provision for income taxes are as follows:
<TABLE>
<CAPTION>
<S>                                                  <C>                        <C>                    <C>

                                                              2001                 2000                 1999
                                                      ---------------------------------------------------------------
Current:
   Federal                                            $      1,624,225        $   1,601,253        $   1,386,855
   State                                                       304,028              286,924              266,557
   Foreign                                                      45,010                2,773               48,681
                                                      ---------------------------------------------------------------
Total current                                                1,973,263            1,890,950            1,702,093
Deferred:
   Federal                                                     (79,626)                  70               58,917
   State                                                       (14,052)                 399               10,397
                                                      ---------------------------------------------------------------
                                                               (93,678)                 469               69,314
                                                      ---------------------------------------------------------------
                                                      $      1,879,585        $   1,891,419        $   1,771,407
                                                      ===============================================================

</TABLE>

The differences between the federal statutory rate and the effective tax rate as
a percentage of income before taxes are as follows:

<TABLE>
<CAPTION>
<S>                                                             <C>                   <C>               <C>

                                                                      2001             2000              1999
                                                                -----------------------------------------------------
Statutory income tax rate                                              34%              34%               34%
State and foreign income taxes, net of federal benefit
                                                                        4                6                 5
Other permanent differences                                             -               (1)                1
                                                                -----------------------------------------------------
                                                                       38%              39%               40%
                                                                =====================================================


</TABLE>

                                     - 30 -
<PAGE>

7. INCOME TAXES (CONTINUED)

Differences  between accounting rules and tax laws cause differences between the
bases of certain assets and liabilities for financial reporting purposes and tax
purposes.  The  tax  effects  of  these  differences,  to the  extent  they  are
temporary,  are  recorded as deferred  tax assets and  liabilities.  Significant
components of the Company's  deferred tax assets and  liabilities at December 31
are as follows:


<TABLE>
<CAPTION>
<S>                                                                       <C>                       <C>

                                                                                2001               2000
                                                                          --------------------------------------
     Deferred tax liabilities:
        Property, plant and equipment                                       $       125,703   $       136,228
        Prepaid expenses and other                                                  114,904           112,937
                                                                          --------------------------------------
     Total deferred tax liabilities                                                 240,607           249,165

     Deferred tax assets:
        Postretirement benefits                                                      47,292            58,301
        Pension costs                                                               164,967           200,619
        Allowance for doubtful accounts                                              99,558            93,658
        Other assets                                                                 18,669                 -
        Accrued expenses                                                            137,709           120,031
        Other employee benefits                                                      36,024            32,236
        Inventory costs                                                             380,512           313,659
                                                                          --------------------------------------
     Total deferred tax assets                                                      884,731           818,504
                                                                          --------------------------------------
     Net deferred tax assets                                                $       644,124   $       569,339
                                                                          ======================================


     Current deferred tax asset                                             $       570,731   $       668,769
     Long-term deferred tax asset (liability)                                        73,393           (99,430)
                                                                          --------------------------------------
                                                                            $       644,124   $       569,339
                                                                          ======================================
</TABLE>

The Company does not provide  deferred  taxes for amounts that could result from
the remittance of  undistributed  earnings of the Company's  foreign  subsidiary
since it is  generally  the  Company's  intention  to  reinvest  these  earnings
indefinitely.  Undistributed earnings that could be subject to additional income
taxes  if  remitted  was   approximately   $1,100,000   at  December  31,  2001.
Determination  of the amount of unrecognized  deferred U.S. income tax liability
is not practicable because of the complexities  associated with its hypothetical
calculation;  however  unrecognized  foreign tax credits  would be  available to
reduce some portion of the U.S. tax liability.

8. PENSION AND OTHER POSTRETIREMENT BENEFITS

The Company and its  subsidiaries  have a defined  benefit pension plan covering
substantially  all employees.  Benefits for the salaried  employees are based on
specified  percentages of the employees  annual  compensation.  The benefits for
hourly  employees  are based on stated  amounts  for each year of  service.  The
plan's assets are invested in fixed  interest rate group annuity  contracts with
an insurance company.


                                     - 31 -
<PAGE>


8. PENSION AND OTHER POSTRETIREMENT BENEFITS (CONTINUED)

The  following  table sets forth the changes in benefit  obligation,  changes in
plan assets,  the funded  status,  the accrued  benefit cost  recognized  in the
consolidated  balance sheets at December 31, 2001 and 2000, and the net periodic
cost and assumptions.

<TABLE>
<CAPTION>
<S>                                                                       <C>                       <C>
                                                                                    PENSION BENEFITS
                                                                                2001               2000
                                                                          --------------------------------------
     CHANGE IN BENEFIT OBLIGATION
        Benefit obligation at beginning of year                             $     2,430,400   $     2,197,716
        Service cost                                                                182,135           175,072
        Interest cost                                                               172,969           161,880
        Actuarial loss (gain)                                                       132,382            (2,313)
        Benefits paid                                                              (435,810)         (101,955)
                                                                          --------------------------------------
        Benefit obligation at end of year                                         2,482,076         2,430,400
     CHANGE IN PLAN ASSETS
        Fair value of plan assets as beginning of year                            2,193,267         1,853,052
        Actual return on plan assets                                                159,143           144,421
        Employer contribution                                                       196,806           297,749
        Benefits paid                                                              (435,810)         (101,955)
                                                                          --------------------------------------
     Fair value of plan assets at end of year                                     2,113,406         2,193,267
                                                                          --------------------------------------

     Funded status                                                                 (368,670)         (237,133)
     Unrecognized net transition asset                                             (104,892)         (210,933)
     Unrecognized net actuarial loss                                                392,383           271,234
     Unrecognized prior service cost                                                  1,418             1,843
                                                                          --------------------------------------
     Accrued benefit cost                                                   $       (79,761)  $      (174,989)
                                                                          ======================================

                                                                                    PENSION BENEFITS
                                                                                2001               2000
                                                                          --------------------------------------
     COMPONENTS OF NET PERIODIC BENEFIT COST
     Service cost                                                           $       182,135   $       175,072
     Interest cost                                                                  172,969           161,880
     Expected return on plan assets                                                (149,779)         (134,676)
     Amortization of unrecognized net transition asset                             (106,041)         (106,041)
     Net actuarial loss                                                               1,869             4,890
     Amortization of prior service cost                                                 425               425
                                                                          --------------------------------------
     Net periodic benefit cost                                              $       101,578   $       101,550
                                                                          ======================================

                                                                                    PENSION BENEFITS
                                                                                2001               2000
                                                                          --------------------------------------
     WEIGHTED AVERAGE ASSUMPTIONS AS OF DECEMBER 31
     Discount rate                                                              7.25%              7.5%
     Expected return on plan assets                                             7.0%               7.0%
     Rate of compensation increase                                              5.5%               5.5%

</TABLE>



                                     - 32 -
<PAGE>



8. PENSION AND OTHER POSTRETIREMENT BENEFITS (CONTINUED)

The Company also provides a life insurance  benefit for retired former employees
of the Company.  Effective in 2000,  the Company  discontinued  this benefit for
active  employees.  The life insurance benefit is not a funded plan. The Company
pays the benefit upon the death of the retiree.  The Company has fully  recorded
its liability in connection  with this plan. The expense  recorded in connection
with these benefits was approximately $3,000 in each of the years ended December
31, 2000 and 1999 (none in 2001).

Effective  January 1, 1998,  the Company  implemented a  Supplemental  Executive
Retirement  Plan.  The Plan  provides  for a monthly  payment  to the widow of a
former   executive  for  the  remainder  of  her  life.   Based  upon  actuarial
calculations,  the projected liability under the plan is approximately  $333,000
at December 31, 2001 and is recorded as other  accrued  expenses and pension and
other benefits in the consolidated balance sheets.

During  1999,  the  Company  established  a 401(k)  plan for the  benefit of its
full-time employees. Under the plan, employees may contribute a portion of their
salary  up to IRS  limits.  The  Company  matches a  portion  of the  employees'
contribution. The Company recorded expense of approximately $15,000, $15,000 and
$12,000 in connection with its  contribution to the plan during 2001,  2000, and
1999, respectively.

9. CAPITAL STOCK

The Certificate of  Incorporation,  as amended,  authorizes  4,000,000 shares of
common stock and 1,000,000  shares of preferred  stock,  200,000 shares of which
have been designated as Series A Junior Participating Preferred Stock.

10. STOCK OPTIONS

In 1999,  the Company  adopted the  American  Locker  Group  Incorporated  Stock
Incentive Plan, permitting the Company to provide incentive  compensation of the
types  commonly  known as  incentive  stock  options,  stock  options  and stock
appreciation  rights. The price of option shares or appreciation  rights granted
under the plan shall not be less than the fair market  value of common  stock on
the date of grant, and the term of the stock option or appreciation  right shall
not exceed ten years from date of grant.  Upon exercise of a stock  appreciation
right granted in connection  with a stock option,  the optionee shall  surrender
the option  and  receive  payment  from the  Company  of an amount  equal to the
difference  between  the option  price and the fair  market  value of the shares
applicable to the options surrendered on the date of surrender. Such payment may
be  in  shares,   cash  or  both  at  the  discretion  of  the  Company's  Stock
Option-Executive Compensation Committee. Prior to 1999, the Company issued stock
options and stock  appreciation  rights under a 1988 plan. The 1988 plan expired
in 1999, as such no further options can be granted under the 1988 plan.  Options
with respect to 44,000 shares remain outstanding under the 1988 plan.




                                     - 33 -
<PAGE>



10. STOCK OPTIONS (CONTINUED)

At  December  31,  2001  and  2000,  there  were no  stock  appreciation  rights
outstanding.

Pro forma information regarding net income and earnings per share is required by
Statement of Financial  Accounting  Standards No. 123 Accounting for Stock-Based
Compensation (SFAS 123), and has been determined as if the Company had accounted
for its employee stock options under the fair value method of SFAS 123. The fair
value for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted-average assumptions:  risk-free
interest  rates of 6.5% for 2000 and 7.0% for 1999;  dividend  yields of 0.0 for
both years;  volatility  factors of the expected  market price of the  Company's
common stock of .69 for 2000 and .70 for 1999; and a  weighted-average  expected
life of the  option of 5 years for both  years.  The per share fair value of the
options  granted in 2000 and 1999 using these  assumptions  was $4.55 and $4.35,
respectively. No options were granted in 2001 and all previously granted options
were fully vested  prior to 2001.  The pro forma effect on earnings for the year
ended December 31, 2000 is as follows: net income $2,908,000; basic earnings per
share  $1.31,  and diluted  earnings  per share  $1.30.  The pro forma effect on
earnings  for the  year  ended  December  31,  1999 is as  follows:  net  income
$2,456,000;  basic  earnings  per share  $1.04,  and diluted  earnings per share
$1.02.

The  following  table sets forth the  activity  related to the  Company's  stock
options for the years ended December 31:


<TABLE>
<CAPTION>
<S>                                       <C>                           <C>                          <C>

                                            2001                         2000                          1999
                                            ----                         ----                          ----
                                                  Weighted                    Weighted                      Weighted
                                                  Average                      Average                      Average
                                                  Exercise                    Exercise                      Exercise
                                    Options        Price        Options         Price        Options         Price
                                 --------------------------------------------------------------------------------------

Outstanding -  beginning of
  year                               120,600    $     5.41     124,000            $5.11      133,000             $ 1.45
Exercised and
  surrendered                              -             -     (13,400)            1.23      (76,000)               .72

Granted                                    -             -      10,000             7.25       67,000               6.98
                                 ======================================================================================
Outstanding -
  end of year                        120,600    $     5.41     120,600            $5.41      124,000              $5.11
                                 ======================================================================================
Exercisable - end of year
                                     120,600                   120,600                      114,000
                                 ============                 =========                    =========

</TABLE>

The  exercise  prices for options  outstanding  as of December  31, 2001 were as
follows: $2.813 - 44,000 shares, $6.50 - 56,600 shares $7.25 - 10,000 shares and
$8.875 - 10,000 shares. The weighted-average remaining contractual life of those
options is 5.6 years.

At December 31, 2001,  73,000 options remain available for future issuance under
the 1999 plan.



                                     - 34 -
<PAGE>

11. SHAREHOLDER RIGHTS PLAN

In November  1999,  the  Company  adopted a  Shareholder  Rights  Agreement  and
declared  a dividend  distribution  of one Right for each  outstanding  share of
common stock. Under certain conditions,  each right may be exercised to purchase
one one-hundredth of a share of Series A Junior Participating Preferred Stock at
a price of $40  (Purchase  Price),  subject  to  adjustment.  The Right  will be
exercisable  only if a person  or  group  (an  Acquiring  Person)  has  acquired
beneficial  ownership  of 20%  or  more  of the  outstanding  common  stock,  or
following the commencement of a tender or exchange offer for 20% or more of such
outstanding  common stock. The Rights Plan includes certain  exceptions from the
definitions of Acquiring  Person and  beneficial  ownership to take into account
the existing  ownership of common shares by members of one family. If any person
becomes an Acquiring Person, each Right will entitle its holder to receive, upon
exercise  of  the  Right,  such  number  of  common  shares  determined  by  (A)
multiplying the current purchase price by the number of one  one-hundredths of a
preferred  share for which a right is now  exercisable and dividing that product
by (B) 50% of the current market price of the common shares.

In  addition,  if  the  Company  is  acquired  in a  merger  or  other  business
combination  transaction,  each Right will  entitle its holder to receive,  upon
exercise,  that number of the acquiring  Company's common shares having a market
value of twice the exercise price of the Right.  The Company will be entitled to
redeem  the  Rights at $.01 per Right at any time  prior to the  earlier  of the
expiration of the Rights in November  2009 or the time that a person  becomes an
Acquiring  Person.  The Rights do not have voting or dividend rights,  and until
they become exercisable, have no dilutive effect on the Company's earnings.

12. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share for the years ended December 31:

<TABLE>
<CAPTION>
<S>                                                       <C>                           <C>                  <C>

                                                                  2001                   2000                1999
                                                          ---------------------- --------------------- ------------------
Numerator:
   Net income                                               $      3,060,361      $        2,949,213         $ 2,623,801
Denominator:
   Denominator for basic earnings per share - weighted
     average shares outstanding                                    2,053,838               2,214,406           2,363,338

   Effect of dilutive securities:
     Employee stock options                                           29,646                  16,379              38,770
                                                          ---------------------- --------------------- ------------------

   Denominator for diluted earnings per share -
     weighted average shares out- standing and assumed
     conversions                                                   2,083,484               2,230,785           2,402,108
                                                          ====================== ===================== ==================
Basic earnings per share                                    $           1.49      $             1.33         $      1.11
                                                          ====================== ===================== ==================
Diluted earnings per share                                  $           1.47      $             1.32         $      1.09
                                                          ====================== ===================== ==================




</TABLE>

                                     - 35 -
<PAGE>



13. GEOGRAPHIC AND CUSTOMER CONCENTRATION DATA

The Company is primarily  engaged in one  business,  sale and rental of lockers.
This includes coin, key-only and electronically  controlled checking lockers and
related  locks and sale of  plastic  centralized  mail and  parcel  distribution
lockers.  The Company sells to customers in the United States,  Canada and other
foreign locations. Net sales to external customers are as follows:

<TABLE>
<CAPTION>
<S>                                                      <C>                         <C>                 <C>

                                                                 2001                2000                 1999
                                                          -----------------------------------------------------

United States customers                                    $     36,742,001     $    35,215,373    $ 32,596,075
Foreign customers                                                 2,885,215           2,446,767       2,354,029
                                                          ------------------------------------------------------
                                                           $     39,627,216     $    37,662,140    $ 34,950,104
                                                          ======================================================

</TABLE>


Sales to the U.S. Postal Service represented 63.1%, 70.9% and 74.3% of net sales
in 2001, 2000, and 1999, respectively.

At  December  31,  2001 and 2000,  the  Company  had  secured  receivables  from
customers  under time  payment  arrangements  totaling  $366,176  and  $131,635,
respectively.  At December 31, 2001 and 2000,  the Company had  unsecured  trade
receivables   from   governmental   agencies  of  $1,830,000   and   $2,551,000,
respectively,  and from customers  considered to be distributors of $598,000 and
$374,000, respectively.

Other  concentrations  of credit risk with respect to trade accounts  receivable
are  limited  due to the  large  number of  entities  comprising  the  Company's
customer base and their dispersion across many industries. The Company generally
does not require collateral for trade accounts receivable.



                                     - 36 -
<PAGE>



14. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The following is a tabulation of the unaudited  quarterly  results of operations
for the years ended December 31, 2001 and 2000:

<TABLE>
<CAPTION>
<S>                                           <C>                  <C>               <C>                <C>

                                                                               2001
                                              -----------------------------------------------------------------------
                                                                        THREE MONTHS ENDED
                                                  MARCH 31          JUNE 30        SEPTEMBER 30       DECEMBER 31
                                              -----------------------------------------------------------------------
Net sales                                       $   8,116,568     $   9,825,943    $  11,375,429     $  10,309,276
                                              =======================================================================
Gross profit                                        2,412,343         2,791,217        3,098,955         3,263,420
                                              =======================================================================
Net income                                            656,837           883,905          652,492           867,127
                                              =======================================================================
Earnings per share - Basic                                .32               .43              .32               .42
                                              =======================================================================
Earnings per share - Diluted                              .32               .42              .31               .42
                                              =======================================================================

                                                                               2000
                                              -----------------------------------------------------------------------
                                                                        THREE MONTHS ENDED
                                                  MARCH 31          JUNE 30        SEPTEMBER 30       DECEMBER 31
                                              -----------------------------------------------------------------------
Net sales                                       $   7,859,150     $  10,635,913    $   8,413,176     $  10,753,901
                                              =======================================================================
Gross profit                                    $   2,315,608     $   3,113,429    $   2,451,977     $   2,755,186
                                              =======================================================================
Net income                                      $     522,891     $     884,030    $     533,648     $   1,008,644
                                              =======================================================================
Earnings per share - Basic                      $         .23     $         .39    $         .24     $         .49
                                              =======================================================================
Earnings per share - Diluted                    $         .23     $         .39    $         .24     $         .48
                                              =======================================================================
</TABLE>


The  Company's  accounting  practice for interim  periods  provides for possible
accounting  adjustments  in the  fourth  quarter or at year end.  In 2001,  such
adjustments  resulted in increasing fourth quarter pretax income by $330,000 for
inventory costs. In 2000, such adjustments resulted in increasing fourth quarter
pretax income by $23,000 for inventory costs and $99,000 for pension costs,  and
decreasing pretax income by $76,000 for accounts receivable allowances.  In 1999
such adjustments resulted in decreasing fourth quarter pretax income by $216,000
for inventory costs.

Also in the forth quarter of 2000, the Company  reclassified  certain costs that
in  the  previous   three  quarters  of  2000  had  been  reported  as  selling,
administrative  and  general  expenses to cost of sales.  The  reclassification,
which had no impact on net income, was approximately $360,000.



                                     - 37 -
<PAGE>

15. RELATED PARTIES

The Chairman and Chief  Executive  Officer of the Company is a  stockholder  and
director  of Rollform of  Jamestown  Inc.,  a  rollforming  company.  One of the
Company's subsidiaries purchased $215,000,  $152,000, and $218,000 of fabricated
parts from Rollform of Jamestown, Inc. in 2001, 2000, and 1999, respectively, at
prices that the Company believes are at arms length.

16. CONTINGENCIES

In December  1998,  the Company  was named as a  defendant  in a lawsuit  titled
"ROBERTA RAIPORT, ET AL. V. GOWANDA ELECTRONICS CORP. AND AMERICAN LOCKER GROUP,
INC." pending in the State of New York Supreme Court, County of Cattaragus.  The
suit  involves  property  located in  Gowanda,  New York,  which was sold by the
Company to Gowanda  Electronics Corp. prior to 1980. The plaintiffs,  current or
former  property  owners in  Gowanda,  New York,  assert  that  defendants  each
operated machine shops at the site during their respective  periods of ownership
and that as a result  of such  operation,  soil  and  groundwater  contamination
occurred  which  has  adversely   affected  the  plaintiffs  and  the  value  of
plaintiffs'  properties.  The plaintiffs assert a number of causes of action and
seek  compensatory  damages  of  $5,000,000  related to  alleged  diminution  of
property  values,  $3,000,000 for economic losses and "disruption to plaintiffs'
lives," $10,000,000 for "nuisance,  inconveniences and disruption to plaintiffs'
lives,"  $25,000,000 in punitive damages,  and $15,000,000 to establish a "trust
account"  for  monitoring  indoor air quality and other  remedies."  The Company
believes that its potential  liability with respect to this site, if any, is not
material.  Therefore,  based on the information currently available,  management
does not believe the outcome of this suit will have a material adverse impact on
the Company's operations or financial  condition.  Defense of this case has been
assumed by the Company's insurance carrier, subject to a reservation of rights.

On July  30,  2001,  the  Company  received  a letter  from  the New York  State
Department of Environmental  Conservation  (the "DEC") advising the Company that
it  is  a   potentially   responsible   party  with  respect  to   environmental
contamination  at the site mentioned above located in Gowanda,  New York,  which
was sold by the Company to Gowanda  Electronics  Corp. prior to 1980. The letter
from the DEC states that a Remedial Investigation and Feasibility Study has been
conducted at the site and a  remediation  plan  selected.  Based on  information
currently  available,  the Company  believes that its potential  liability  with
respect  to current  action by the DEC with  regard to this site will not have a
material  adverse  impact on the Company's  operations  or financial  condition.
Defense of this  matter has been  assumed by the  Company's  insurance  carrier,
subject to a reservation of rights.




                                     - 38 -
<PAGE>






16. CONTINGENCIES (CONTINUED)

In September 1998 and subsequent  months, the Company was named as an additional
defendant in 134 cases pending in state court in  Massachusetts.  The plaintiffs
in each case assert that a division of the Company manufactured and furnished to
various shipyards components  containing asbestos during the period from 1948 to
1972 and that injuries  resulted from exposure to such  products.  The assets of
this division were sold by the Company in 1973.  During the process of discovery
in certain of these  actions,  documents  from sources  outside the Company have
been produced which  indicate that the Company  appears to have been included in
the chain of title for certain  wall panels which  contained  asbestos and which
were delivered to the Massachusetts  shipyards.  Defense of these cases has been
assumed by the Company's insurance carrier,  subject to a reservation of rights.
As of March 13, 2002,  settlement  agreements have been entered in 11 cases with
funds authorized and provided by the Company's  insurance carrier.  Further,  52
cases  originally filed in 1995, 1996, 1997 and 1998 against other defendants to
which the Company was joined as an additional  defendant have been terminated as
to the Company without liability to the Company under  Massachusetts  procedural
rules.  Therefore,  the balance of  unresolved  cases  against the Company as of
March 13, 2002 is 71 cases  originally  filed against  other  defendants in 1999
through 2001.  While the Company cannot predict what the ultimate  resolution of
these  cases  may be  because  the  discovery  proceedings  on the cases are not
complete,  based upon the Company's  experience to date with similar  cases,  as
well as the assumption that insurance coverage will continue to be provided with
respect to these case,  at the present  time,  the Company does not believe that
the  outcome  of these  cases  will  have a  significant  adverse  impact on the
Company's operations or financial condition.

The Company is involved in other claims and litigation  from time to time in the
normal course of business.  The Company does not believe these matters will have
a significant adverse impact on the Company's operations or financial condition.





                                     - 39 -
<PAGE>



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

There have been no changes in or  disagreements  with  accountants on accounting
and financial disclosures during 2001 or 2000.


PART III

Item 10, 11, 12 and 13 will be contained in American Locker Group Incorporated's
Annual Proxy Statement,  incorporated  herein by reference,  which will be filed
within 120 days after year-end.


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)      The documents filed as part of this report are as follows:

         1.       Financial Statements

         2.       Financial Statement Schedules

         See Index to Financial Statements and Financial Statement Schedules
         All other  consolidated  financial  schedules  are omitted because they
         are inapplicable, not required or the information is included elsewhere
         in the  consolidated financial statements or the notes thereto.

         3.       Exhibits

                  (a)  Exhibits   required   by Item 601 of   Regulation S-K are
                       submitted as a  separate  section  herein     immediately
                       following the "Exhibit Index".

                  (b)  Reports on Form 8-K filed in the fourth quarter of  2001.

                       (i)     None





                                     - 40 -
<PAGE>



                       American Locker Group Incorporated

         Index to Financial Statements and Financial Statement Schedules


The  financial  statements  together  with the report of Ernst & Young LLP dated
February 20, 2002, is included in Item 8 Financial  Statements and Supplementary
Data in the Annual Report on Form 10-K.

Financial Schedules for the years 2001, 2000 and 1999:

         Valuation and Qualifying Accounts





                                     - 41 -
<PAGE>



SCHEDULE II
                       American Locker Group Incorporated

                        VALUATION AND QUALIFYING ACCOUNTS


<TABLE>
<CAPTION>
<S>               <C>                           <C>             <C>           <C>                 <C>

                                                Balance at the   Charged to
                                                Beginning of     Costs and     Write-offs/         Balance at
Year              Description                     Period          Expense      Recoveries         End of Period
---------------------------------------------------------------------------------------------------------------
2001     Allowance for Doubtful Accounts        $324,000        $ 15,000       $(90,000)          $  249,000
2000     Allowance for Doubtful Accounts         222,000         138,000        (36,000)             324,000
1999     Allowance for Doubtful Accounts         216,000          12,000         (6,000)             222,000


</TABLE>


                                     - 42 -
<PAGE>



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


                       AMERICAN LOCKER GROUP INCORPORATED


                               /S/EDWARD F. RUTTENBERG
                       --------------------------------------
                                  Edward F. Ruttenberg
                          Chairman and Chief Executive
                                     Officer

                               /S/WAYNE L. NELSON
                       --------------------------------------
                                  Wayne L. Nelson
                       Principal Accounting Officer and Assistant Secretary

                                 March 21, 2002

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

<TABLE>
<CAPTION>
<S>                                 <C>                                   <C>

SIGNATURE                                      TITLE                          DATE
---------                                      -----                          ----

/s/Edward F. Ruttenberg              Chairman, Chief Executive Officer    March 21, 2002
------------------------------       and Director
Edward F. Ruttenberg

/s/Roy J. Glosser                    President, Chief Operating           March 21, 2002
------------------------------       Officer, Treasurer and Director
Roy J. Glosser

/s/Alan H. Finegold                  Director                             March 21, 2002
------------------------------
Alan H. Finegold

/s/Thomas Lynch, IV                  Director                             March 21, 2002
------------------------------
Thomas Lynch, IV

/s/James E. Ruttenberg               Director                             March 21, 2002
------------------------------
James E. Ruttenberg

/s/Jeffrey C. Swoveland              Director                             March 21, 2002
------------------------------
Jeffrey C. Swoveland

/s/Donald I. Dussing, Jr.            Director                             March 21, 2002
------------------------------
Donald I. Dussing, Jr.

</TABLE>


                                     - 43 -
<PAGE>




                                             EXHIBIT INDEX
<TABLE>
<CAPTION>
<S>                                                                           <C>

                                                                               PRIOR FILING OR SEQUENTIAL
EXHIBIT NO.                                                                    PAGE NO. HEREIN
-----------                                                                    ---------------------------

  3.1                     Certificate of Incorporation of American Locker      Exhibits to Form 10-K for Year
                          Group Incorporated                                   ended December 31, 1980

  3.2                     Amendment to Certificate of Incorporation changing   Form 10-C filed May 6, 1985
                          name of company

  3.3                     Amendment to Certificate of Incorporation limiting   Exhibit to Form 10-K for year ended
                          liability of Directors and Officers                  December 31, 1987

  3.4                     By-laws of American Locker Group Incorporated as     Exhibit to Form 10-K for year ended
                          amended and restated                                 December 31, 1985

  3.5                     Certificate of Designations of Series                Exhibit to Form 10-K for year ended
                          A Junior Participating Preferred Stock               December 31, 1999

  3.6                     Amendment to By-laws of American Locker Group        Exhibit to Form 10-K for year ended
                          Incorporated dated January 15, 1992                  December 31, 1991

  3.7                     Amendment to Bylaws dated March 3, 1999              Exhibit to Form 10-K for year ended
                                                                               December 31, 1998

  3.8                     Amendment to Bylaws dated November 19, 1999          Exhibit to Form 10-K for year ended
                                                                               December 31, 1999
10.1                      American Locker Group Incorporated 1988 Stock        Exhibit to Form 10-K for year ended
                          Incentive Plan                                       December 31, 1988

10.2                      First Amendment dated March 28, 1990 to American     Exhibit to Form 10-K for year ended
                          Locker Group Incorporated  1988 Stock Incentive      December 31, 1989
                          Plan

10.3                      Form of Indemnification Agreement between American   Exhibit to Form 10-K for year ended
                          Locker Group Incorporated  and its directors and     December 31, 1987
                          officers



                                     - 44 -
<PAGE>

10.4                      Corporate Term Loan Agreement between American       Exhibit to Form 10-K for year ended
                          Locker Group Incorporated and Manufacturers and      December 31, 1991
                          Traders Trust Company covering $2,400,000 loan

10.5                      Approved Line of Credit from Manufacturers and       Exhibit to Form 10-K for year ended
                          Traders Trust Company to American Locker Group       December 31, 1990
                          Incorporated in the amount of $1,000,000

10.6                      Amendment Agreement dated May 1, 1994 between        Exhibit to Form 10-KSB for year
                          Manufacturing and Traders Trust Company and          ended December 31, 1994
                          American Locker Group Incorporated [Increase in
                          Term Loan to $1,850,000]

10.7                      Amendment Agreement dated March 12, 1996 between     Exhibit to Form 10-KSB for year
                          Manufacturing and Traders Trust Company and          ended December 31, 1995
                          American Locker Group Incorporated [Increase in
                          Term Loan to $1,800,000]

10.8                      Employment Agreement between American Locker Group   Exhibit to Form 10-GSB for quarter
                          Incorporated and  Roy J. Glosser                     ended June 30, 1996

10.8                      Amendment dated as of March 3, 1999 to Employment    Exhibit to Form 10-KSB for year
                          Agreement between American Locker Group              ended December 31, 1998
                          Incorporated and Roy J. Glosser

10.9                      Manufacturing Agreement dated as of October 1,       Exhibit to Form 10-K for year ended
                          2000 between American Locker Security Systems Inc.   December 31, 2000
                          and Signore, Inc.

10.14                     Contract dated March 27, 1996 between the U.S.       Exhibit to Form 10-QSB for the
                          Postal Service and American Locker Security          quarter ended March 31, 1996
                          Systems, Inc.

10.15                     Modification #MO3 to USPS Contract                   Exhibits to Form 10-QSB for the
                          #072368-96-B-0741 dated April 16, 1997               quarter ended March 31, 1997

10.18                     Amendment dated August 22, 1997 to Corporate Term    Exhibit to Form 10-QSB for the
                          Loan Agreement dated August 30, 1991 between         quarter ended September 30, 1997
                          American Locker Group Incorporated and
                          Manufacturers and Traders Trust Company



                                     - 45 -
<PAGE>

10.19                     Modification M05 to USPS Contract                    Exhibit to Form 10-QSB for the
                          #072368-96-B-0741, dated October 9, 1997, which      quarter ended September 30, 1997
                          replaces steel pedestals with aluminum pedestals
                          for American Locker Outdoor Parcel Lockers

10.20                     Modification M06 to USPS Contract                    Exhibit to Form 10-QSB for the
                          #072368-96-B-0741, dated October 23, 1997            quarter ended September 30, 1997
                          regarding prices and minimum quantities through
                          April 14, 1998

10.20                     Modification M07 to USPS Contract                    Exhibit to Form 10-QSB for quarter
                          #072368-96-B-0741, dated April 14, 1998 regarding    ended March 31, 1998
                          prices and minimum quantities

10.21                     Modification #M010 to USPS Contract                  Exhibit to Form 10-QSB for the
                          #072368-96-B-0741, dated May 6, 1999                 quarter ended March 31, 1999

10.23                     American Locker Group Incorporated 1999 Stock        Exhibit to Form 10-QSB for the
                          Incentive Plan                                       quarter ended June 30, 1999

10.24                     Amendment dated June 9, 1999 between American        Exhibit to Form 10-QSB for the
                          Locker Group Incorporated and Manufacturers and      quarter ended June 30, 1999
                          Traders Trust Company

10.25                     Rights Agreement dated November 19, 1999 between     Exhibit to Form 8-K dated November
                          American Locker Group Incorporated and Chase         18, 1999
                          Mellon Shareholder Services LLC

10.26                     Form of American Locker Group Incorporated           Exhibit to Form 10-QSB for year
                          Supplemental Executive Retirement Benefit Plan       ending December 31, 1998

10.27                     Employment Agreement dated November 19, 1999         Exhibit to Form 10-K for year ended
                          between American Locker Group Incorporated and       December 31, 1999
                          Edward F. Ruttenberg

10.28                     Form of Option Agreement under 1999 Stock            Exhibit to Form 10-K for year ended
                          Incentive Plan                                       December 31, 1999

10.29                     Promissory Note dated July 6, 2001 made by           Exhibit to Form 8-K filed July 12,
                          American Locker Group Incorporated in favor of       2001
                          Janie D'Addio




                                     - 46 -
<PAGE>

10.30                     Amendment Agreement dated as of July 5, 2001         Exhibit to Form 8-K filed July 12,
                          between American Locker Group Incorporated and       2001
                          Manufacturers and Traders Trust Company

10.31                     Deed of Trust Note dated as of July 5, 2001 made     Exhibit to Form 8-K filed July 12,
                          by ALTRECO, Incorporated in favor of M&T Real        2001
                          Estate, Inc.

22.1                      List of Subsidiaries                                 Page ____



</TABLE>


                                     - 47 -
<PAGE>



Exhibit 22.1 List of Subsidiaries

The following  companies are subsidiaries of the Company and are included in the
consolidated financial statements of the Company:

<TABLE>
<CAPTION>
<S>                                                    <C>                                 <C>

                                                                                            Percentage of Voting
NAME                                                  JURISDICTION OF ORGANIZATION          SECURITIES OWNED
----                                                  ----------------------------          ---------------------
American Locker Security Systems, Inc.                Delaware                              100%
American Locker Company, Inc.                         Delaware                              100%
American Locker Company of Canada, Ltd.               Dominion of Canada                    100% (1)
Canadian Locker Company, Ltd.                         Dominion of Canada                    100% (2)
American Locker Security Systems International        Virgin Islands                        100% (1)
Security Manufacturing Corporation                    Delaware                              100%(1)
B.L.L. Corporation                                    Texas                                 100%(1)
ALTRECO, Incorporated                                 Delaware                              100%(1)

(1)      Owned by American Locker Security Systems, Inc.
(2)      Owned by American Locker Company of Canada, Ltd.


</TABLE>



                                     - 48 -