**EXHIBIT13**

 

Made in the U.S.A.

 

2001 ANNUAL REPORT

Minuteman International, Inc.

 

VISION, EXPERTISE AND INSIGHTFULNESS LEAVE PERMANENTMARK ON THE HAKO FAMILY

Dr. h.c. Tyll Necker, late member of the Board of Directors forMinuteman Internationaland CEO of Hako-Werke International GmbH of Bad Oldesloe, Germany, leaves anindelible mark on the Minuteman and Hako family through insightfulness, warmthandimportant contributions to the industry.

 

Dr. h.c. Tyll Necker 1930-2001

 

 

 

Up until his untimely death in March 2001, Dr. Necker was also afounding member ofthe Board of Directors for Minuteman and served the company as a Director sinceJune1980.

Gregory J. Rau, President and Chief Executive Officer of Minuteman,said, “Dr.Necker’s warm personality, his many important contributions and his insightfuladvicewill always be appreciated by everyoneconnected with the Minuteman family.” Rau noted that, “we will respectfully use hisphilosophical and economic tenets to guide usin the years ahead.”

 

21 Year Summary Net Sales

Minuteman’s success is consistently driven by attention to detail,quality, integrity, value,performance, and leadership.  Sales arethe result of an employee and management teamthat recognizes the importance of a unified effort to reach a focused goal andto providethe best floor cleaning equipment and chemicals to meet our specific customerneeds.

 

 

 

 

Minuteman’s steadfast commitments are long-lasting:• Maintaining and developing the most varied product line• Nurturing long-held, stable customer relationships• Continuing to develop innovative cost controls• Targeted marketing and aggressive customer promotions• Unmatched customer service• State-of-the-art technology, research and product development• Insightful leadership

 
| Contents                                                                                                |   |
|---------------------------------------------------------------------------------------------------------|--------|
| From the President                                                                                      |   |
| Character Indeed                                                                                        |   |
| In  a Time of Crisis, Minuteman Steps Up to the Challenge                                               |   |
| dynamic synergy for  minuteman                                                                          |   |
| Minuteman PowerBoss and Elgin Sweeper Join Forces to  Create a Unique and Exciting New Product Offering |   |
| MINUTEMAN  ENGINEERS AND PROFESSIONAL PRODUCT DESIGNERS                                                 |   |
| An Explosion of New  Products                                                                           |   |
| Minuteman’s  Full Line of Dynamic, Trend-Setting, Powerful Floor Care Products                     |   |
| Financial Report                                                                                        |   |
| Locations and Corporate Information                                                                     |   |

 

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Minuteman International, headquartered in the Chicago suburb ofAddison, Illinois, is afull-line manufacturerof commercial and industrial vacuums and floor and carpet care equipment,chemicalcleaning and coatingproducts under the Multi-Clean brand, litter vacuums, and lawn sweepingequipmentunder the Minuteman Parker label, and rider-operated floor surface maintenanceequipment under the PowerBoss line.

 

Mission StatementA Steadfast Commitment to Our Customers.The core of Minuteman International is anchored by a single, straightforwardvision — todeliver exceptional floor cleaning equipment and chemicals combined with asingle-minded focus to anticipate and answer our customers’ needs.  Answering those needs isjust the beginning of a performance-driven philosophy to help our distributorsmaximizeprofit and provide outstanding service, products and training to each Minutemancustomer.  That philosophy is combinedwith the ongoing development of new and morecost effective methods of manufacturing and product design to keep ourcustomers on theleading edge of floor care technology.

 

from the president

 

To Our Shareholders,The weakness in the general economy during 2001 was a significant influence onMinuteman International’s operating results for the year.  Despite reduced sales andprofits, we were encouraged by noticeable improvement in the fourthquarter.  And weare hopeful that a number of initiatives undertaken during the year will leadto furtherrecovery in 2002.Fourth Quarter Shows ImprovementThroughout 2001, Minuteman instituted initiatives designed to reduce expensesasrevenues eased.  These actions included:     • reducing employment by about 5%of the workforce,     • freezing wages and hirings, and     • selective plant shutdowns fortemporary periods.This should position the Company to increase its profitmargins as demand revives in the recovering economy.The effect of these initiatives was evident by year end, with the fourthquarter of 2001showing a 3.5 percent gain in net income over the fourth quarter of 2000, asrestated.

 

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This compared with a 28.5 percent decline in net income for the fullyear 2001 versus2000, as restated.  Sales in 2001 fell9.3 percent from 2000.The decline in profitability for the year 2001 was significantly affected bythe economy’sweakness and the strength of the dollar against foreign currencies.  Minuteman receivesabout 20 percent of its revenue from more than 40 foreigncountries.  The profit improvement inthe fourth quarter was, in part, a reflection of thecost-containment measures and better demand stimulated by the addition of morecustomers and new products.For the fourth quarter of 2001, net income rose to $1,686,000, or $.47 pershare from$1,629,000, or $.45 per share for the final quarter of 2000, as restated.  Sales for thefourth quarter of 2001 were down 7.7% to $18,107,000versus $19,608,000 for the same quarter a year ago.  Results in the fourth quarter of 2001were affected by certainyear-end adjustments to inventory and various accruals, which increased netincome by$593,000 or $.17 per sharein the fourth quarter.

 

In addition, the Company’s financial statements reflect adjustments in2001 thatincreased net income $73,000 or $.02 per share as a result of the following:     • The 2001 interim results havebeen restated to reflect the adjustments necessaryunder Statement of Financial Standards No. 133, “Accounting for DerivativeInstrumentsand Certain Hedging Activities,” adoptedby Minuteman as of January 1, 2001, which had not been previouslyrecorded.  The effectof this adjustment was to reduce net income for 2001 by $278,000 or$.08 per share.  During the first ninemonths of 2001the reduction to net income related to this restatement was $355,000 or $.10per share.     • In preparing the year-endfinancial statements, wediscovered that we had been incorrectly recording an amount to eliminateintercompanyprofit in inventory since the first quarter of 1999.  As a result, inventoryhad been understated each quarter since the first quarter of 1999 with acorrespondingoverstatement of cost of goods sold.  Wehave restated previously issued annual financialstatements for 2000 and 1999, as well as the quarterly results from the firstquarter of1999 through the third quarter of 2001, to adjust for this accounting error netof therelated impact on income taxes.  Theeffect of this adjustment was to increase net incomefor 2001 by $351,000 or $.10 per share. During the first nine months of 2001net incomewas increased by $283,000 or $.08 per share. Additionally, this increased net income by$373,000 and $335,000 or $.10 and $.09 per share for the years ended December31,2000 and 1999, respectively.SEC & Nasdaq InvestigationsIn November, 2001, the Securities and Exchange Commission (“SEC”) issued aformalorder of investigation of Minuteman International.  We have been fully cooperating withthe SEC by producing documents and providingtestimony from various employees.  InDecember, 2001, Minuteman was requested bythe Nasdaq Stock Market (Nasdaq) to supply information in connection withNasdaq’sresponsibilities to ensure ongoing compliance of issuers with the requirementsforinclusion on the Nasdaq.  We providedthe requested documents and have cooperatedfully with Nasdaq.  Minuteman believesthat the investigations relateto the recognition of revenue in the results of operations for

 

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its interim periods. As previously reported, our Companydetermined that it was necessary to restate interim resultsbased on a review of the timing of the recording of certainsales transactions that were not consistent with Minuteman’s sales recognitionpolicy.Accordingly, we restated our interim results for the period ended March 31,2001 andeach of the first three quartersin the years 2000 and 1999.  Therestatements include the deferral of certain sales fromthe reporting period in whichthe sales were originally recorded to the reporting periodin which the sales would be properly recorded under our Company’s salesrecognitionpolicy.  The investigations have notbeen completed and neither the SEC nor Nasdaq hasinformed Minuteman of any intended action. Consequently, we cannot predict theoutcome of the investigations or assess their ultimate impact on Minuteman.New Products Should Aid 2002Among the new products making their debut in 2001 wasthe biohazard vacuum the Company designed at the requestof the United States Postal Service (USPS) for the remediation, removal andcontainmentof hazardous molds, anthrax dust and viral particulates.  This creation has led to multipleorders from the USPS.  The Bio-Haz Vacjoins the Minuteman familyof critical filter vacuums.Another innovative initiative involved Minuteman’s PowerBoss division enteringinto aproduction and marketing venturewith Elgin Sweeper Company to develop and market the new “LitterBossTM” ridinglitter vacuum/sweeper.  This willcombine PowerBoss’ strength in the industrial andoutdoor markets with Elgin’s leadership position in selling to government andmunicipal users.Also slated for introduction in 2002 will be a series of compact riding floorscrubbers, anupdated battery-powered burnisher, and two machines — a wide-area carpet-careunit withan enclosed bag for specific cleaning applications and a mid-sized walk-behindscrubber— previously not marketed in the Minuteman line.

 

 

These new products feature sleeker styling, simpler and moreergonomically designedcontrol panels, better manufacturing methods and shorter delivery times.Financial Condition and OutlookMinuteman has sufficient capital resources and remains in a strong financialposition tomeet business and liquidity needsas they arise.  In 2001, the Companyimproved its net cashprovided by operations to $6.6 million from $4.2 million in 2000, asrestated.  AtDecember 31, 2001, Minuteman had working capital of $35.5 million, its highestever,representinga current ratio of 5.4 to 1, due primarily to reduced inventories and lowercapitalspending.  Shareholders’ equity rose to$39.6 million for 2001 from $37.3 million for2000, as restated.Minuteman International paid its 54th consecutive quarterly cash dividend onFebruary15, 2002 to shareholders of record on January 31, 2002.  The payment was in the amountof nine cents per share.

 

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Looking to the new year, management is cautiously optimistic that thecost-containmenttrends noted in the latter months of 2001 will continue into 2002.  We see external factorsprobably playing a diminished role; factory orders for durable goods rose againinJanuary, the third increase in the last four monthsand the most recent sign that the manufacturing sector might be beginning topull out ofits slowdown.  I should cautionshareholders, however, that, because of a strong showingof net sales in the opening months of 2001, the first half of the current yearwill be madedifficult by comparison.  But we areoptimistic that if the economy recovers in the secondhalf there should be greater demand for our enhanced product line and benefitsfrom theleveraged effects of the Company’s increased efficiencies should be achieved.Sincerely,

 

 

Gregory J. Rau

President and Chief Executive Officer

March 15, 2002

 

CHANGED FOREVER—A NATION SHOWS ITS CHARACTERHistory will tell us that in order to understand today and shape the future,you mustrecognize and study the past.  OnSeptember 11, 2001, the history of the United Statesand the shape of its future were changed, in one instant, forever.  For the families andsurvivors of those terrorist acts, a lifetime of study and reflection will notsooth theiranguish.  For the people of the UnitedStates, a study of our unique forefathers whofounded this nation on the simple truths of dignity, justice and inalienablehuman rights,helped us recognize and ignite our unkindled, innate belief that we areindivisible—that we will not suffer the crimes of injustice with quiet fury, butwill stand, united, against this new affront to a free nation.Character, Indeed.MADE IN THE USAIn A Chaotic Economic Environment, Minuteman Responds with Prudence and SticksWith What They Do Best— Manufacturing Made in the USA.As the floor care industry struggled to recover from a year-longgeneral weakness in the economy, the prolonged strength of thedollar versus foreign currencies and the September 11th attacks, whichseriouslymagnified ongoing economic pressures, Minuteman operated with prudence in threesuccinct areas: offsetting reduced demand from commercial and industrialcustomers withreductionin employment, a freeze on wages and hirings and selective plant shutdowns fortemporary periods.  These and otheradministrative

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and general expense cost-control efforts continued to allow Minutemanto remainprofitable despite the downturn in sales. However, the year ending 12/31/01 reflected ashaken andcompromised economy, uncertain consumer confidence and an industry yet to seesignsof recovery.  As a result, net income in2001 for the Company was $3,505,000, or $.98per share, compared with $4,899,000, or $1.37 per share for 2000, asrestated.  Sales in2001 were $77,293,000 versus $85,195,000 for 2000.  While sales fell short of the recordperformance of 2000, the Company continuedto react with a multi-layered strategy aimed at stringent control of variablecosts whileenacting more aggressive selling efforts to wina greater share of the available market. These efforts will favorably position Minutemanfor the short and long-term future.MANUFACTURING MADE IN THE USAAs mentioned in Forbes Magazine’s “200 Best Small Companiesin America in 2000*,” Minuteman continues to show that it is a“gritty survivor,” even in challenging economic environments.  For example, theCompany remains dedicated to manufacturing andproducing products primarily in the United States and is focused on activestrategies thatwill return Minuteman to growth and steadyprofitability in the recovering economy. For example, cost effective, high quality, in-house rotational molding is now possible at Minuteman.  This means that moldingcomponents previously being purchasedfrom an outside supplier are currently molded at Minuteman’s Hampshireplant.  Underthe skilled leadership of professionals with over 32 years combined experiencein theindustry, this department produces a wide variety of shapes and sizes such assolutiontanksto support various Minuteman lines.  Minutemanbenefits from the substantial costsavings in product and freight, as well as the direct control over quality andinnovative,timely product design updates.In addition, Minuteman continues to focus on design, engineeringand product development which yielded a number of new products that made theirdebutat the October 2001 International Sanitary Supply Association trade show.*Forbes Magazine, October 30,2000 issue

 

UnbridledDedication.  United by a commonemotional stake, Minuteman employeesrecognize difficult and uncertain times and bind together.CHARACTER INDEEDIn a Time of Crisis, Minuteman Steps Up tothe Challenge

 

US Government Environmental Procurement Special Task Force Develops NewGeneral Cleaning Practices For Post Offices Nationwide.

 

Minuteman Designs Bio-Haz VacuumIn response to continued Anthrax threats, the United States Postal Serviceconvened aspecial task force to protect and support their employees from furtherenvironmentalhazards.  Their charge was to change thePostal facilities existinggeneral cleaning practices from standard dust mopping

 

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procedures, to a system that would contain dust and protectemployees.  As a result, arequest for feasible solutions was delivered nationwide to floor cleaningmanufacturersexperienced with HEPA (High Efficiency Particulate Air) filters.   In late Fall,Minuteman, along with several other manufacturers, met with the USPS (UnitedStatesPostal Service) task forcein Maryland to discuss future general cleaning guidelinesand to eliminate further risk to Postal employees.  Minuteman met the challenge bydeveloping and delivering an immediate solution for the government to providefor thegeneral cleaning needs at their facilities nationwide.Genuine CommitmentUnited by a sense of patriotism, Minuteman employeesrecognized the difficulty facing the Postal System, the nation and Minuteman indifficultand uncertain times.  As a team, theircommitment to providing a timely, customizedsolution to the United States Postal Service was genuine. Fortunately,Minuteman wasone of the key suppliers to handle thegovernment’s specific needs in a time of crisis.  With established research anddevelopment protocols in place, a broad comprehensive knowledge of criticalfiltervacuums andwell-tuned, experienced manufacturing lines, the Company was able to reactquickly andhandle a difficult assignment.The Minuteman Solution:  Bio-Haz VacThe new Bio-Haz Vac, is designed to be easy to use, powerful and specificallyengineered for the remediation of hazardous molds including stachybotryscolonies,aspergillus spores, penicillium spores and for the removal and containment of“Anthrax”dust and viral particulate collection, through five filter media.  In addition to a quickreaction time, Minuteman engineers went one step further and included a ULPA(UltraLow Particulate Air) filter in the Bio-Haz Vac that provides a level of 99.999%efficiencyat 0.12 micron size particulates, an even higher level of efficiency that astandard HEPAfilter.  This allows the Bio-Haz Vac tomeet future USPS goals and

 

 

Bio-Haz Vac

Aggressive, Powerful, Safe Removal and Containment of Anthrax Dust,HazardousMolds and Viral Particulates.

 

 

efficiently vacuum smaller viral particulates, such as smallpox, aswell as other healththreatening viral particulates. TheBio-Haz Vac is also the perfect choice for the decontamination of suspiciousenvelopesand parcels.As a result, Minuteman International was able to help theUS Postal Service change its directive regarding safe cleaning procedures.  New postalfacility guidelines ban dust mopping and sweeping, therefore keeping dust andparticulatescontained to protect employees.

 

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DYNAMIC NEW SYNERGYFOR MINUTEMANElgin Sweeper and Minuteman PowerBoss Join Forces to Create a Unique andExcitingNew Product OfferingInnovative, Performance Driven and Cost EffectiveMinuteman PowerBoss took a synergistic approach to creating a total productofferingthat utilized the strengths of two experienced corporations — Minuteman andElginSweeper Company.  This unusualpartnership integrated the unique expertise from bothcorporations to develop the new “LitterBossTM” riding litter vacuum/sweeper.  Thedecisionto partner with Elgin in jointly marketing the LitterBossTMwas the result of careful evaluation of strategic markets. Minuteman’s designandmanufacturing capabilities combined with Elgin’s outdoor vacuum technology anddistribution channels produced a strong and powerful synergy.  The strength of thepartnership will also be recognized in theversatility of the two corporation’s mutual distributionchannels.  For Minuteman, the addeddistributionnetwork will help the company gain footholds against the competition in thegrounds andturf maintenance markets — while Elgin will continue its strength in selling tothegovernment and municipal funded end-user base.PowerBoss Concentrates Efforts on New ProjectsThanks to the utilization of joint engineering and prototype resources on theLitterBossTM project, PowerBoss engineering has also been able to concentratetheirefforts on thecompletion of three new exclusive PowerBoss projects:a new series of double scrubbers, the 4000 battery sweeper/ scrubber and theWar Pony(the new generation of PowerBoss sweeper/scrubbers). In addition, themanufacturer ofrider operated industrial floor/surface maintenance equipment located in NorthCarolina,continued its strong sales andearnings performance.  The potential forstronger earnings continues as PowerBoss’higher priced equipment, withtraditionally longer selling cycles, begins to payoff.  Minuteman continues to emphasizeits commitment to quality and the continued successful growth of PowerBoss bycontinuing to invest in manufacturing efficiencies at the PowerBossfacility.  Plans alsoinclude implementing thebusiness software Oracle early in 2003 and ISO 9001 Certification procedures.

 

 

MINUTEMAN parker®Parker Adds Depth to Minuteman’s Full Lineof Customer Focused ProductsThe professionallandscapers choicefor quality andperformance, Minuteman Parker® adds depth to Minuteman’s widevariety of lawn,

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turf and industrial maintenance equipment.  Located at Minuteman’s Hampshire facility,Minuteman Parker® products include high quality lawn sweepers, litter vacuums,dethatchers, wheeled blowers, chipper shreddervacuums and portable truck loaders. This exciting productline continues to bring diversity and strength to Minutemanby selling its products through, but not limited to, thejanitorial and cleaning industries as well as lawn/gardenand roofing/ paving distribution channels. These additional distribution channels offerMinuteman another avenue through which to answer customer needs and tocross-selladditional products.  MinutemanParker’s® distinguishedreputation in the market is well known and adds substantial value to theMinutemanbrand.

 

 

 

increasing strength inproduct depth and breadthAn Explosion of New Products

 

Engineering and Product Development Lead New Products Designed to MoreCompletely serve Existing Customers and Expand into New Markets.

 

The year 2001 ignited an explosion of new products and productenhancements to benefitcustomers through cost savings, more durable, long-lasting products and better,moreefficiently designed products.  Sevennew pieces of equipment, including three for theindustrial market, plus innovative chemical products entered the marketplacewith keen interest from customers and distributors.  These include a series of compactriding floor scrubbers, a mid-sized walk-behind machine of a size and price configurationnever before in the Minuteman catalog, an updated battery-powered burnisher at an economical price and a wide-area carpet care unit withanenclosed bag for specific cleaning applications previously not addressed in theMinuteman line.Minuteman International continues to increase the strength of its product lineandmaintain the frontrunner position that the company has earned throughout thepast severalyears through unique, direct-control-over-design, production, product updates,manufacturing technologies, distribution and quality control, as well as newcost-containment efforts.  New productsfeature exciting changes such as sleek styling,simpler and more ergonomically designed control panels, better methods ofproductionand manufacturing, as wellas shorter delivery times.

 

                MinutemanEngineers and Professional Product Designers                Technologically savvy anddedicated engineers work on specific categories ofmachines which are used for distinct                product applications suchas:  carpet, hard floors andconcrete.  These highlytrained, specialized engineers work with                one goal in mind — todesign a product in the most efficient way that performs atMinuteman’s high quality standards                               andmeets customer needs.  Minuteman’s

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team combines field data with CAD-CAM technology, over 22 individualU.S.                                patentsand 9 International patents, ISO 9001 Certification and new cost-effectivemethods of manufacturing.

 

 

MPV®-31 WIDE AREA VACUUMExceptional Performance Over Large Carpeted Areaswith Powerful SuctionMinuteman’s MPV®-31 Wide Area Vacuum commandspowerful suction to clean large carpeted spaces with efficiency, speed,effortlessmaneuverability and quiet operation. Durably constructed of rotationally moldedpolyethylene, the MPV®-31 will endure the rigors of heavy use and action.  Lightweightdesign combined with powerful brush action enables the MPV®-31 to glide acrosscarpetwith ease and deliversimpressive powerful results.  Sweeping awide 28” path,the MPV®-31 cleans up to 25,000 sq. ft. per hour andgreatly reduces labor time.  In additionthe MPV-31 features the Clean Air FiltrationSystem which provides 95% filtrationefficiency at 5 microns and easily changes from a 4 to 5stage filter system with optional cloth filter.  Minuteman’s new wide area vacuum digsdown to clean even the most difficultcarpeted applications.240X SeriesAutomatic scrubberSleek, Powerful and Compact, the 240X SeriesDelivers User-Friendly ControlThe 240X Series Automatic Floor Scrubber is a durable highly maneuverable anduser-friendly 24” automatic floor scrubber. The sleek and compact 240X delivers maximumefficiency and productivity in large, high traffic areas as it wet scrubsand dry vacuums in one pass.  Designedwith efficiency,convenience and easy operationin mind, the 240X features a simple operator-friendly control paneland individual forward and reversebail levers.  The large 20 gallonsolution/recovery tanks of the240X utilizes Minuteman’s patented Maxi-WallTM bladder which is designed tomaximize capacityand performance.  The 240X’s heavy-dutybattery packs provide extended running timeand increased productivity, while the 24” offset scrub head allow cleaning intight areasand corners.  Quick and easy pad orbrush replacement is possible thanks to the design ofthe Quick-Release spring-loaded lever. The 240Xis the right choice for any high volume traffic, tough-to-clean floor area.

 

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LuminaTM 20battery burnisherOptimum Airflow PerformanceMinuteman’s new LuminaTM 20 Battery Burnisher utilizes state-of-the-arttechnologyand Minuteman’s exclusive patented PAMS® (Passive Air Management System) DustControl System.  PAMS® helps to reducethe need for dust mopping after burnishing by capturing finish compound anddustparticles.  This powerful combinationprovides high productivity, dust control, and increased labor savings, all in aquiet,traction drive battery burnisher.  TheLuminaTM 20 features a 20” burnishing pad, withpad driver speeds up to 2600 rpms and a 2.5 hp pad drive motor.  This sturdyergonomically-designed machine features a Multi-Flex® pad driver which adjuststo thehighs and lows of the floor while retarding pad growth.  High productivity, dust controland increased labor savings continue to make a quiet,traction drive battery burnisher ideal for use in hospitals, nursing homes,schools, officebuildings and environments that require a high productivity burnisher.

 

SCV28/32 Rider scrubberAn Agile, Compact Powerhouse Rider ScrubberDespite this rider scrubber’s compact size, the versatile Minuteman SCV28/32 ispackedwith power and versatility.  Maneuveringthrough tight spaces with ease, the SCV28/32scrubs a 28” path, cleaning up to 40,500 sq. ft. per hour (44,000 sq. ft. perhourwith 32” path) while the operator ridesin complete comfort.  In addition, theSCV28/32 Rider Scrubber’s 36 volt system’s runtime outperforms industry standards. The operator sits upon a cushioned seat with abuilt-in safety switch, controls are conveniently positioned and a multi-position tilt steering wheel adjusts toprovide further operator comfort andunobstructed visibility.  Additionalfeatures include an on-board, off-aisle kit thatincludes a brush and a squeegee foreasy, precise cleaning in tight areas.The SCV28/32 is built on a robust rectangular structural steel tubing for yearsofdependable performance.  Featuring asingle front wheel drive that provides optimum traction and allows it to turn360 degreeson its own axis for on-the-spot maneuverability, the SCV28/32 is an agile,powerfulchoice for any tough maintenance job.

 

 

 

minuteman europeMinuteman Europe Continues Rise in Visibility and Product Offerings

 

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Despite the strength of the dollar versus foreign currencies, MinutemanEurope was ableto focus on steady growth and expand product offerings with a wider variety ofproductsthrough its continually growing distribution network.  In addition to greater productofferings, more electrical approvals weregranted which will continue to bolster Minuteman’s growing presence in thepromising European market.  Minutemanwill continueto focus on establishing and building solid distributorrelationships and penetrating the market with evenmore new products, proven growth strategies, aggressive marketing efforts,directcustomer service and reliable cost containment procedures.minuteman’s dynamicweb sitewww.minutemanintl.comMinuteman’s web site continues to service distributors and customers inever-moreexciting ways.  New in 2001 are updatedservices to the password  secured dealersiteincluding the ability to download photos and receive PDF files of Minuteman’sactualliterature directly off the site.This allows dealers to fulfill immediate needs for color photos of products foruse indealer advertisements, literature and information without delay.  Dealers may also orderspecific field tested models directly off the dealer page.The site continues to be a popular destination for customers,distributors and worldwide sales efforts recording thousands of visits per day.Minuteman’s web site also continues tooffer shareholders and visitors complete information about Minuteman FloorCleaningEquipment, PowerBoss, Multi-Clean Chemicals, Minuteman Parker as well as currentproduct news releases, international news, site location,company history, financial reports and current information and notes fromacross thefloor cleaning industry.  Minuteman willcontinue to utilize its site to generate newbusiness by offering immediate access to Minuteman, and stand as a reliablevehicle forcustomers to easily access the best product for their individual cleaningapplication.oracle is live in 2001Customized Minuteman Operational Programsat the Touch of a Finger2001 ushers in a new era of one touch information gathering, analysis and more,withOracle, one of the finest operational software programs for manufacturers.  The Oraclesystem went “live” in the year 2001 and offers the ability to custom designprogramsspecifically suited to Minuteman. Utilization and analysis of information that is clearlyand quickly accessed, more comprehensive sales data, customer information,manufacturing and production output, all enable Minuteman’s management team toaccommodate changing Minuteman needs and marketplace changes for many years.

www.minutemanintl.comwww.multi-clean.comwww.parkersweeper.comwww.powerboss.com

automatic scrubbersMinuteman Offers One of the Largest Lines

 

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of Dynamic Scrubbers in the Industry

 

Minuteman’s Full Line of Dynamic, Trend-Setting,Powerful Floor Care ProductsMinuteman’s new compact, agile SCV28/32 Rider Scrubber and the 240X Automaticaddtwo new powerful scrubbersto an existing product line defined by unmatched product breadth and depth.Minuteman’s ingenuity and ability tolisten and respond to customer needs consistently challenges the competition byofferinga wide variety of scrubber cleaning paths ranging from 17” to 40” with coveragefrom18,000 to 44,000 sq. ft. per hour. Minuteman’s scrubbers are designed to fill a variety ofcustomer floor cleaning needs.  The 170and 200 compact walk-behind scrubbers cleansmall tomid-sized floors with easy operation, increased maneuverability and highperformance.The 260, 320 and 380 automatic scrubbers maneuver at the touch of a hand andoffersimplified, user-friendly controls.  AllMinuteman automatic scrubbers are ergonomicallydesigned to allow for greater operator comfort and control and continue tooutperform thecompetition and provide a solid foundation for Minuteman.  Recent additions to thescrubber line, such as the 200X, the 240X series, the SCV28/32 Rider Scrubber,the 3800Rider Scrubber and the 4000 Sweeper Scrubber, support Minuteman’s dedication tofocuson customer needs and provide a wide variety of solutions for every floorcleaning need.burnishers and floor machinesUnique, Patented PAMS® Dust Control Keeps Minuteman’s Popular BurnishersLeadingthe MarketMinuteman’s burnishers feature a non-fatigue design and offer a patentedPassive AirManagement System (PAMS®).  Unlike anyother burnishers in the industry, PAMS®keeps Minuteman’s 1500, 2400, 2600 and 2700 ABS burnishers leading the market,yearafter year.  In addition to highproductivity and increased labor savings, Mirage® propane burnishers offerdimensionand added depth to the Minuteman product line.More powerful and dynamic engines combined with Minuteman’s exceptionalperformance and engineering, deliver some of the most powerful propaneburnishers onthe market today.  Minuteman’s 17” or20” Front Runner Series floor machines combinehigh durability and operator safety with a competitive pricing structure andone of thelargest floor machine and burnisher lines in the industry.  Recent additions to theBurnisher line, such as the LuminaTM 20 Battery Burnisher continue to brandMinuteman with the most exceptional performance and engineering in burnisherson themarket today.

 

 

 

 

Carpet care machinesDependable, Aggressive, Reliable Carpet Care Machines Deliver High QualityMinuteman Results

 

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Minuteman’s carpet care equipment is a powerful choicefor carpet maintenance and is designed to minimize operator fatigue whileoffering awide variety of machine and floor care products in 2001 is the Multi-PurposeVacuum(MPV®-31) Wide Area Vacuum designed to clean large carpeted spaces withefficiency,speed and effortless maneuverability. The new addition compliments the dailydependability of the MPV® upright, to the total care approach of theAmbassadorTMSeries extractors and the RapidAirTM Carpet and Floor Dryer.  All of Minuteman’sdependable carpet care workhorses feature excellent operator visibility andreliableresults, every time.outdoor cleaning marketProfessional Sweepers Bolster Minuteman’s Positionas a Front RunnerPowerBoss’ new LitterBossTM is just one example of the strength and depth oftheMinuteman product line andtheir commitment to outpace the competition. The addition of a rider sweeper, theLitterBossTM, which sweeps andvacuums litter anywhere it collects, will also complimentthe Minuteman PowerBoss line as well as the Minuteman Parker group.  TheLitterBossTM features a wide 68” sweep path which inculdes two side brushes andfrontmounted spray lets designed to keep dust to a minimum.  Engineered as a high quality,efficient performer, LitterBossTM comfortably joins Minuteman’s outstandingperformers, PowerBoss Armadillo Sweepers and Parker outdoor lawn and vacuumsweepers.  Kleen Sweep 27 is ideal formachine shops, stock rooms, parks, small yards,and is a cost effective option for cleaning up to 31,000 sq. ft. per hour.  Kleen Sweep 45isa compact Rider Sweeper designed for sweeping narrow spaces and reducingmaintenance costs and cleaning time. Sweeping a big 84,000 square feet per hour, KleenSweep 45

is another powerful example of a front runner—Minuteman.critical filter vacuumsAbsolute Filtration in Safe and Powerful Vacuums The introduction of Minuteman’s Bio-HazVac, designed especially for the United StatesPostal Service for the removal and containment of anthrax, hazardous molds andviralparticulates, demonstrates Minuteman’s unique experiencein Critical Filter Vacuums.  With over 100variations of Critical Filter Vacuums,Minuteman is one of the leading experts in the nation for the design,development andmanufacturingof Critical Filter Vacuums.  BecauseCritical Filter Vacuums require both safety andefficiency, Minuteman engineers designed each vacuum to be easy to use,available in awide  variety of sizes and created eachpiece of equipment forspecific hazardous waste applications. For example, the 55 Gallon Explosion—ProofVacuum is designed for use where flammable gases, vapors or finely pulverizeddust maybepresent.  The CRVTM Clean Room Vacuum isspecificallyapplicable to Class 1 through Class 100,000 cleanrooms,pharmaceutical labs, gowning areas, air showers, biological labs and computerrooms.The Mercury Vacuum is designed for the handling and disposing of mercury-basedresidue.

 

14

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“One of our dealers brought a bottle of foaming hand wash home and hisdaughters likedit so much that he is now stocking and promoting it through hisdistributorship.”                                                  Mike Rau,Vice-President, Multi-Cleanmulti-clean®Despite a Challenging Worldwide Economic Environment, Innovative, ChemicalPowerhouseShows Solid PerformanceIn 2001, Multi-Clean performed solidly in an increasinglydifficult economic environment thanks to a number ofprudent cost cutting measures: offsetting reduced demand with a reduction inemployment;  adhering to a strategiccampaign designed to reduce ongoing vendor costs inpackaging and raw materials as well as lowering costs through better purchasingpractices.  Multi-Clean’sstraightforward cost-control efforts led to interviews with newsupplierswhich, in some cases, resulted in changes from existingvendors.  The strength of theMulti-Clean brand continuesto be bolstered by a strong, traditional product line of floorfinishes and chemicals which remain its stable backbone.Exciting new productsat the ISSA ShowMulti-Fresh Skin Care ProductsMaking their debut at the ISSA Show in late 2001 were several innovative newMulti-Clean products.  Multi-Fresh, a seriesof personal care products for use in foaming orliquid dispensers, led the new products introduction with a new Multi-FreshFoamingSystem.  The new foaming hand soap linewas received with great excitement fromcustomers, not onlyfor its fresh scent — similar to a built-in air freshener — and antimicrobialagents, butbecause the Multi-Fresh Foaming System uses up to 40% less soap perwash than with traditional soaps. Additionally, the Multi-Fresh Foaming Systemproducts are designed to dispense creamyfoam directly into a customer’s hand without need to wet hands and lather.  Otherproducts in the Multi-Fresh line include a GelHand Sanitizer, Hand and Body Lotions, Antibacterial Hand Cleanser,AntimicrobialHand Soap, Lotionized Hand Soap, Pink Hand Cleaner and Total Body Shampoo.  TheMulti-Fresh System compliments Multi-Clean’s long term strategic plan to gaingreaterfootholds in new chemical cleaning markets.

 

 

 

 

CGR-150This Powerful Coating and Graffiti Remover also Removes Ultra-Brite UV FloorCoating

 

15

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Multi-Clean’s new CGR-150 Coating remover is an exciting addition forMulti-Cleanand is the result of careful follow-up to customer feedback.  Designed to remove acrylic,urethane and varnish coatings from vinyl tile, terrazzo and concrete floorsurfaces, theCGR-150 will also assist in removing Ultra-Brite II UV Floor coating from vinylandterrazzo floors.  As a graffiti remover,CGR-150 offers easy removal of spray paint froma variety of surfaces including: concrete, brick, stucco, stone, stainlesssteel, aluminumsiding, road signs, lockers, ceramic tile, phone booths, restroom partitionsand more.TCS-1Terrazzo and Concrete SealerAlso introduced at the ISSA Show was the TCS-1 Terrazzo and Concrete Sealer, aspecial waterbased primer/sealer designed to adhere to conventional terrazzofloors basedon portland cement.  Exceptionaladhesion allows TCS-1 to work where other sealers andfinishes have failed.  TCS-1 isrecommended as a primer prior to applying Multi-Cleanconventional floor finishes, or can be used as a stand alone dust-proofingsealer forconcrete floors.  The new sealer canalso be used as a sing coat sealer for use on allconcrete floors prior to application of Ultra Brite II, Ultra Violet System.

 

Multi-Clean’s Ultra Violet Floor Care System Continues to Evolveas the Most Revolutionary Floor Care System in the Industry.

 

UV-22 Retooling Yields a Stunning 50% FasterCure Time.Multi-Clean’s revolutionary Ultra Violet Single Floor Care System continues toimproveand evolve through innovative upgrads to the chemical coatings and to the UVequipment.  For example, the UV-22 wasretooled to increase power and productivity andcure floor coatings a stunning 50% faster. Through an innovative design, MinutemanInternational engineers—designers and manufacturers of the UV-22 changed theballastand lamp to output more intense light while drawing the same amount of powerfrom theelectrical source, which is measured by an automatic volt sensor that ensuresan accuratevoltage reading.  In the process ofdesigning improvements for the UV-22, engineersdeveloped a retro-fit upgrade kit for current owners of the UV-22.Multi-Clean and Minuteman International will continue to engineer, purchase,test, andfurther develop chemicalsand equipment based on customer feedback and changing industry standards.  As anexample, in 2001 Multi-Clean introduced a Satin and Semi-Gloss additive toUltra BriteII in response to customers who were looking for a more durable coating withless glossso that dirt and scratches would not show as quickly.

 

minuteman international financial report 2001

 

16

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**MANAGEMENT’SDISCUSSION AND ANALYSIS OF**

### **RESULTS OF OPERATIONSAND FINANCIAL CONDITION**

 

**RESULTS OF OPERATIONS**

 

**EARNINGS**

 

Net sales in 2001decreased to $77,293,000 from $85,195,000 in 2000.  All of the company’s divisions experienced a decline inorders, reflecting the effect of the economic slowdown in 2001.  A reduction in international sales, whichwere down 11.9% in2001, continued to be exacerbated by strength in the dollar versus thecurrencies of foreign countries.  Grossprofit decreased10.2% in 2001 from 2000, as restated (see also Note K), on the reduced demandfrom commercial and industrial customers,however improved fourth quarter margins increased gross profit as a percent ofsales to 31.2% for all of 2001.  In2000, grossprofit as a percent of sales was 31.6%, as restated.  Operating income for 2001 declined 26.3% from 2000, as restated,to$6,087,000 due to these factors.  Netincome for the year 2001 decreased 28.5% from 2000, as restated, to $3,505,000or $.98per share.  Included in interest expensefor 2001 is $463,000 of charges resulting from the 2001 adoption of a newaccountingpronouncement regarding accounting for derivative financial instruments.

 

The Companyachieved record net sales and net income during 2000.  Net income for the year 2000, as restated, increased12.8% over 1999, as restated, to $4,899,000 or $1.37 per share.  Net sales for 2000 once again reached recordlevels increasing9.7%  over 1999 to $85,195,000.  Net sales of commercial and industrialproducts across all product lines, except for lawn andgarden, were especially strong domestically. International sales, while showing an increase of 9.2% in 2000, wereadverselyaffected by the strong dollar, particularly in Europe.  As a result of this higher volume while beingable to control costs, grossprofit as a percent of sales increased to 31.6%, as restated, over 31.1%reported in 1999, as restated. Operating income for2000, as restated, improved 13.1% from 1999, as restated, to $8,258,000 due tothese factors.

 

**SELLING EXPENSES**

 

Selling expenses,as a percentage of net sales, increased from 16.7% in 2000, as restated, to17.8% in 2001.  Increasedpromotional costs and amounts related to higher uncollectible accounts contributedto the increase in these expenses.

 

Selling expenses,as a percent to net sales, increased from 16.6% in 1999, as restated, to 16.7%in 2000, as restated.Increased costs associated with rising group insurance costs and additionalamounts resulting from higher uncollectible accounts contributed to the totalincrease in these expenses.

 

**GENERAL AND ADMINISTRATIVE EXPENSES**

 

These expenses in2001 decreased 3.0% from 2000, as restated, due primarily to a decrease of24.2% in wages and benefitsexpense.

 

These expensesincreased 11.0% in 2000, as restated, over 1999, as restated, due primarily tohigher casualty insurance costs,and a one time service award approved by the Board of Directors of $375,000paid in the fourth quarter to the estate of JeromeE. Rau in recognition of his 20 years of leadership of the Company prior to hisuntimely death on September 20, 2000. Theseincreases were offset in part by lower professional fees in 2000 associatedwith litigation.

 

**OTHER INCOME/EXPENSE**

 

The Company incurredinterest expense, related principally to debt obligations, of $1,186,000,$810,000 and $863,000 in 2001,2000, as restated, and 1999, as restated, respectively.  Included in the interest expense amount in2001 is $463,000 due torecording the change in the fair value of derivative financial instruments, netof amortization of the transition adjustment recordedin other comprehensive income on January 1, 2001, the date of adoption of FASBStatement No. 133 regarding derivativefinancial instruments  (see Note B ofthe consolidated financial statements).

 

In 2001 interestincome decreased $35,000 from 2000, as restated, as a result of declininginterest rates.

 

In 2000, asrestated, interest income increased $130,000 from 1999, as restated, as aresult of higher investable funds, whileother income in 2000, as restated, decreased $187,000 from 1999, as restated,which was primarily the result of the non-recurring successful patent infringement settlement that occurred in 1999.

 

17

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**INCOME TAXES**

 

The effective taxrate was 31.8%, 37.0% and 36.4% for 2001, 2000, as restated, and 1999, asrestated, respectively.   Thedecrease in the 2001 rate is caused principally by increased benefits fromresearch and development credits and our ForeignSales Corporation.  The increase in the2000 rate, as restated, from the 1999 rate, as restated, was caused  by reduced benefitsfrom research and development credits and our Foreign Sales Corporation.

 

**INFLATION**

 

Inflation has not had asignificant impact on the Company’s business during the past three years.

 

#### **FINANCIALCONDITION**

 

# **General**

 

The Company’s discussionand analysis of its financial condition and results of operations are basedupon its consolidatedfinancial statements.  The preparationof these financial statements are based upon the selection and application ofsignificantaccounting policies (see Note B), which requires management to make significantestimates and judgments that affect theamounts reported in these financial statements.  Actual results may differ from these estimates under differentassumptions orconditions.

 

The Company believes thefollowing are the actual accounting policies that affect its more significantjudgments and estimatesused in the preparation of consolidated financial statements.

# ** **

# **Accounts Receivable**

 

The Company performs ongoing credit evaluations of its customer baseand maintains allowances for doubtful accounts relatedto estimated losses resulting from the inability of its customers to makerequired payments.  If the financialcondition of itscustomers were to deteriorate, resulting in an impairment of their ability tomake payments, additional allowances may berequired.

 

# **Inventory**

 

The Company is required to state our inventories at lower of cost ormarket.  The Company writes down itsinventory forestimated obsolescence or unmarketable inventory equal to the differencebetween the cost of inventory and the estimatedmarket value based upon assumptions about future demand and marketconditions.  If actual market conditionsare lessfavorable than those projected by management, additional inventory write-downsmay be required.

 

# **Warranties**

 

The Company provides for the estimated cost of product warranties atthe time revenue is recognized.  TheCompany’s warrantyobligation is affected by product failure rates, material usage and costsincurred in correcting a product failure. Should actualproduct failure rates, material usage or costs differ from the Company’sestimates, revisions to the estimated warranty liabilitymay be required.

 

# **Income Taxes**

 

We currently havesignificant deferred tax assets, which are subject to periodic recoverabilityassessments.  Realization of ourdeferred tax assets is principally dependent upon our achievement of projectedfuture taxable income.  Our judgmentsregardingfuture profitability may change due to future market conditions and otherfactors.  These changes, if any, mayrequire possiblematerial adjustments to these deferred tax asset balances.

 

**INTANGIBLE ASSETS**

 

Intangible assetsrepresent 9.1%, 9.9% and 12.1% of total assets and 13.1%, 14.8% and 19.9%ofshareholders’ equity atDecember 31, 2001, 2000, as restated, and 1999, as restated, respectively.  These intangible assets were primarily recordedasthe result of the November 1998 PowerBoss acquisition.  The Company does not believe there has beenany impairment in thisasset at December 31, 2001 and 2000, in accordance with Statement of FinancialAccounting Standards No. 121 “Accounting forthe Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposedof”. The determination of the related estimateduseful lives and whether these assets are impaired involves significantjudgments.  Changes in strategy and/ormarket conditionscould significantly impact these judgments and require adjustments to recordedasset balances**. **The Company willapply newrules on accounting for goodwill and other intangible assets beginning in thefirst quarter of 2002 (see Note B to the consolidatedfinancial statements).

 

18

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# **Issues and Uncertainties**

 

In November, 2001 theSecurities Exchange Commission (“SEC”) issued a formal order of investigation.The Company has beenfully cooperating with the SEC by producing documents and providing testimonyfrom various employees. In December, 2001 theCompany was requested by the Nasdaq Stock Market(“Nasdaq”) to supplyinformation in connection with Nasdaq’sresponsibilities to ensure ongoing compliance of issuers with the requirementsfor inclusion on the Nasdaq stock market. TheCompany has provided the requested documents and has cooperated fully with theNasdaq. The Company believes that theinvestigations relate to the recognition of revenue in the results ofoperations for its interim periods. The investigations have notbeen completed and neither the SEC nor Nasdaq has informed the Company of anyintended action. Consequently, theCompany can not predict the outcome of the investigations or assess their ultimateimpact on the Company The Company is alsosubject to proceedings, lawsuits and other claims related to labor, product andother matters.  We are required toassess thelikelihood of any adverse judgments or outcomes to these matters as well aspotential ranges or probable losses.  Adetermination of the amount of reserves required, if any, for thesecontingencies are made after careful analysis of eachindividual issue.  The required reservesmay change in the future due to new developments in each matter or changes inapproach such as a change in settlement strategy in dealing with these matters.

 

**LIQUIDITY AND CAPITAL RESOURCES ANDFINANCIAL POSITION**

 

The Company hadworking capital of $35.5 million, $33.4 million and $30.6 million at December31, 2001, 2000, as restated, and1999,as restated, respectively.  Thisrepresented a current ratio of 5.4 for 2001, 5.4 for 2000, as restated, and 4.8for 1999, asrestated, for those years, respectively.

 

Cash, cashequivalents and short-term investments represented 18.6%, 11.0% and 11.9% ofthis working capital at December31, 2001, 2000, as restated, and 1999, as restated, respectively.  The increase in 2001 was due primarily toreduced inventoryand capital spending during the economic slowdown.  The decrease in 2000, as restated, from 1999, as restated, wasdueprimarily to payment of long-term debt and purchases of property, plant andequipment.

 

At December 31,2001, 2000, as restated, and 1999, as restated, the Company had shareholders’equity of $39.6 million, $37.3million, and  $33.6 million,respectively, which when compared to total liabilities represented an equity toliability ratio of 2.3, 2.0and 1.7, respectively.

 

The Company hassufficient capital resources and is in a strong financial position to meetbusiness and liquidity needs as theyarise.  The Company also has anunsecured line of credit available for its use to assist in meeting anyunexpected liquidity needs.** **The Company foresees no unusualfuture events that will materially change the aforementioned summarization.

 

The Company also had thefollowing contractual cash obligations at December 31, 2001.

 
|                               |   |          |           | **Less than** |       |          |       |                   |          |
|------------------------------------|--------|---------------|----------------|---------------|------------|---------------|------------|------------------------|---------------|
|                               |   | **Total**     |           | **one year**  |       | **1-3 years** |       | **4 years  and after** |          |
|                               |   |          | ** **     |          | ** ** |          | ** ** |                   | ** **    |
| **Long  Term Debt**                |   | **$**         | **10,500,000** | ** **    | **$**      | **1,500,000** | ** ** | **$**                  | **3,000,000** | ** ** | **$** | **6,000,000** | ** ** |
|                               |   |          | ** **     |          | ** ** |          | ** ** |                   | ** **    |
| **Operating  Leases**              |   | **1,907,000** | ** **     | **740,000**   | ** ** | **1,019,000** | ** ** | **148,000**            | ** **    |
|                               |   |          | ** **     |          | ** ** |          | ** ** |                   | ** **    |
| Total Contractual Cash Obligations |   | $             | 12,407,000     |          | 2,240,000  |          | 4,019,000  |                   | $             | 6,148,000 |   |
|                                    |        |               |                |               |            |               |            |                        |               |  |  |  |  |

 

**MARKET RISK**

 

The Company’s earningsand cash flow are subject to fluctuations due to changes in foreign currencyexchange rates.  Currentlythese earnings and foreign currency translation adjustments have not beenmaterial to the overall financial results of theCompany.

 

The Company hasalso entered into an interest rate swap agreement to obtain a fixed interestrate on variable rate debt toreduce certain exposures to interest rate fluctuations.  In the event that a counterparty fails tomeet the terms of the interest rateswap agreement, the Company’s exposure is limited to the interest ratedifferential.  The Company manages thecredit risk ofcounterparties by dealing only with institutions that the Company considersfinancially sound.  The Companyconsiders the risk ofnonperformance to be remote.

 

19

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**CONSOLIDATED BALANCE SHEETS**

 
|                                                                                                                                               |   | **December 31** |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|------------|
|                                                                                                                                               |   | **2001**        |       | **2000** |   | **1999** |   |
|                                                                                                                                               |   |            |       | **(As Restated** |   | **(As Restated** |   |
|                                                                                                                                               |   |            |       | **See Note K)** |   | **See Note K)** |   |
| **ASSETS**                                                                                                                                         |   |            |       |   |   |   |   |
| CURRENT ASSETS                                                                                                                                     |   |            |       |   |   |   |   |
| Cash and cash equivalents                                                                                                                          |   | $               | 416,000    |   | $ | 975,000 |   | $ | 322,000 |   |
| Short-term investments                                                                                                                             |   | 6,200,000       |       | 2,696,000 |   | 3,332,000 |   |
| Accounts  receivable, less allowances of $720,000 in 2001, $562,000 in 2000 and  $469,000 in 1999                                                  |   | 17,483,000      |       | 15,897,000 |   | 14,935,000 |   |
| Due from affiliates                                                                                                                                |   | 170,000         |       | 604,000 |   | 354,000 |   |
| Inventories                                                                                                                                        |   | 18,364,000      |       | 19,975,000 |   | 19,067,000 |   |
| Prepaid expenses                                                                                                                                   |   | 435,000         |       | 224,000 |   | 228,000 |   |
| Refundable income taxes                                                                                                                            |   |            |       |   |   | 62,000 |   |
| Deferred  income taxes                                                                                                                             |   | 479,000         |       | 565,000 |   | 420,000 |   |
| TOTAL CURRENT ASSETS                                                                                                                               |   | 43,547,000      |       | 40,936,000 |   | 38,720,000 |   |
| PROPERTY,  PLANT AND EQUIPMENT                                                                                                                     |   |            |       |   |   |   |   |
| Land                                                                                                                                               |   | 820,000         |       | 820,000 |   | 820,000 |   |
| Building  and improvements                                                                                                                         |   | 6,304,000       |       | 6,189,000 |   | 5,983,000 |   |
| Machinery  and equipment                                                                                                                           |   | 12,306,000      |       | 11,735,000 |   | 10,748,000 |   |
| Office  furniture and equipment                                                                                                                    |   | 3,703,000       |       | 3,444,000 |   | 2,661,000 |   |
| Transportation  equipment                                                                                                                          |   | 808,000         |       | 1,060,000 |   | 1,472,000 |   |
| Construction  in progress                                                                                                                          |   | 171,000         |       | 211,000 |   | 722,000 |   |
|                                                                                                                                               |   | 24,112,000      |       | 23,459,000 |   | 22,406,000 |   |
| Accumulated  depreciation                                                                                                                          |   | (15,632,000     | )          | (14,250,000 | ) | (12,993,000 | ) |
|                                                                                                                                               |   | 8,480,000       |       | 9,209,000 |   | 9,413,000 |   |
| INTANGIBLE  ASSETS — Net of amortization of $1,066,000  in 2001 and $754,000 in 2000 and $442,000 in 1999                                |   | 5,201,000       |       | 5,513,000 |   | 5,825,000 |   |
|                                                                                                                                               |   | $               | 57,228,000 |   | $ | 55,658,000 |   | $ | 53,958,000 |   |
| **LIABILITIES  AND SHAREHOLDERS’ EQUITY**                                                                                                     |   |            |       |   |   |   |   |
|                                                                                                                                               |   |            |       |   |   |   |   |
| CURRENT  LIABILITIES                                                                                                                               |   |            |       |   |   |   |   |
| Current  maturities of long term debt                                                                                                              |   | $               | 1,500,000  |   | $ | 1,500,000 |   | $ | 1,500,000 |   |
| Accounts payable                                                                                                                                   |   | 2,479,000       |       | 2,574,000 |   | 3,359,000 |   |
| Accrued expenses                                                                                                                                   |   | 3,106,000       |       | 3,369,000 |   | 3,235,000 |   |
| Income taxes payable                                                                                                                               |   | 976,000         |       | 121,000 |   |   |   |
| TOTAL CURRENT LIABILITIES                                                                                                                          |   | 8,061,000       |       | 7,564,000 |   | 8,094,000 |   |
|                                                                                                                                               |   |            |       |   |   |   |   |
| LONG-TERM  DEBT, less current maturities                                                                                                           |   | 9,000,000       |       | 10,500,000 |   | 12,000,000 |   |
| OTHER NON-CURRENT LIABILITIES                                                                                                                      |   | 294,000         |       |   |   |   |   |
| DEFERRED  INCOME TAXES                                                                                                                             |   | 243,000         |       | 310,000 |   | 265,000 |   |
| SHAREHOLDERS’  EQUITY                                                                                                                         |   |            |       |   |   |   |   |
| Common stock,  no-par value Authorized shares - 10,000,000 Issued and outstanding shares  -3,568,385 issued and outstanding in 2001, 2000 and 1999 |   | 6,596,000       |       | 6,396,000 |   | 6,396,000 |   |
| Retained  earnings                                                                                                                                 |   | 33,372,000      |       | 31,116,000 |   | 27,395,000 |   |
| Unearned  restricted stock                                                                                                                         |   | (150,000        | )          |   |   |   |   |
| Accumulated  other comprehensive loss                                                                                                              |   | (188,000        | )          | (228,000 | ) | (192,000 | ) |
|                                                                                                                                               |   | 39,630,000      |       | 37,284,000 |   | 33,599,000 |   |
|                                                                                                                                               |   | $               | 57,228,000 |   | $ | 55,658,000 |   | $ | 53,958,000 |   |

 

Seenotes to consolidated financial statements.

 

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**CONSOLIDATED STATEMENTS OF INCOME**

 
|                                                  |   | **Year Ended  December 31** |       |
|-------------------------------------------------------|--------|-----------------------------|------------|
|                                                  |   |                        |       |   |   |   |   |
|                                                  |   | **2001**                    |       | **2000** |   | **1999** |   |
|                                                  |   |                        |       | (As  Restated |   | (As Restated |   |
|                                                  |   |                        |       | See  Note K) |   | See Note K) |   |
|                                                  |   |                        |       |   |   |   |   |
| Net sales                                             |   | $                           | 77,293,000 |   | $ | 85,195,000 |   | $ | 77,682,000 |   |
| Cost of sales                                         |   | 53,146,000                  |       | 58,309,000 |   | 53,494,000 |   |
| Gross profit                                          |   | 24,147,000                  |       | 26,886,000 |   | 24,188,000 |   |
| Operating expenses:                                   |   |                        |       |   |   |   |   |
| Selling                                               |   | 13,766,000                  |       | 14,202,000 |   | 12,896,000 |   |
| General  and administrative                           |   | 4,294,000                   |       | 4,426,000 |   | 3,989,000 |   |
| Operating  expenses                                   |   | 18,060,000                  |       | 18,628,000 |   | 16,885,000 |   |
| **INCOME  FROM OPERATIONS**                           |   | 6,087,000                   |       | 8,258,000 |   | 7,303,000 |   |
| Other income (expense)                                |   |                        |       |   |   |   |   |
| Interest  income                                      |   | 167,000                     |       | 202,000 |   | 72,000 |   |
| Interest expense                                      |   | (1,186,000                  | )          | (810,000 | ) | (863,000 | ) |
| Other  —   net                         |   | 75,000                      |       | 129,000 |   | 316,000 |   |
| Other  income (expense)                               |   | (944,000                    | )          | (479,000 | ) | (475,000 | ) |
| **INCOME  BEFORE INCOME TAXES**                       |   | 5,143,000                   |       | 7,779,000 |   | 6,828,000 |   |
| Provision  (benefit) for income taxes                 |   |                        |       |   |   |   |   |
| Current                                               |   | 1,619,000                   |       | 2,980,000 |   | 2,496,000 |   |
| Deferred                                              |   | 19,000                      |       | (100,000 | ) | (10,000 | ) |
| **PROVISION  FOR INCOME TAXES**                       |   | 1,638,000                   |       | 2,880,000 |   | 2,486,000 |   |
| **NET  INCOME**                                       |   | $                           | 3,505,000  |   | $ | 4,899,000 |   | $ | 4,342,000 |   |
|                                                  |   |                        |       |   |   |   |   |
| Net  income per common share — basic and diluted |   | $                           | 0.98       |   | $ | 1.37 |   | $ | 1.22 |   |
| .                                                     |   |                        |       |   |   |   |   |
|                                                  |   |                        |       |   |   |   |   |
| Average  common shares outstanding — basic       |   | 3,570,365                   |       | 3,568,385 |   | 3,568,385 |   |
| Average  common shares outstanding — diluted     |   | 3,582,698                   |       | 3,568,385 |   | 3,568,385 |   |

 

See notes toconsolidated financial statements

 

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### **ConsolidatedStatements of Shareholders’ Equity**

|                                                                                                               | **Years Ended December 31, 1999, 2000 and 2001** |
|--------------------------------------------------------------------------------------------------------------------|--------------------------------------------------|
|                                                                                                               |                                             |   |   |   |   |   |   |   | **Accumlated** |   |   |   |   |
|                                                                                                               | **Common Stock**                                 |   |   |   | **Other** |   |   |   |   |
|                                                                                                               | **Number of**                                    |   |   |   | **Unearned** |   | **Retained** |   | **Comprehensive** |   |   |   |   |
|                                                                                                               | **Shares**                                       |   | **Amount** |   | **Compensation** |   | **Earnings** |   | **Income (Loss)** |   | **Total** |   |   |
| BALANCE AT DECEMBER 31, 1998                                                                                       | 3,568,385                                        |   | $ | 6,396,000 |   | $ | 0 |   | $ | 24,624,000 |   | $ | (246,000 | ) | $ | 30,774,000 |   |   |
| Dividends ($.44 per share)                                                                                         |                                             |   |   |   |   |   | (1,571,000 | ) |   |   | (1,571,000 | ) |   |
| Comprehensive income:                                                                                              |                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income — As Restated See Note K                                                                           |                                             |   |   |   |   |   | 4,342,000 |   |   |   | 4,342,000 |   |   |
| Foreign currency translation adjustments                                                                           |                                             |   |   |   |   |   |   |   | 54,000 |   | 54,000 |   |   |
| Comprehensive income                                                                                               | _________                                        |   | _________ |   | _________ |   | _________ |   | _________ |   | 4,396,000 |   |   |
| BALANCE AT DECEMBER 31, 1999                                                                                       | 3,568,385                                        |   | 6,396,000 |   | 0 |   | 27,395,000 |   | (192,000 | ) | 33,599,000 |   |   |
| Dividends ($.33 per share)                                                                                         |                                             |   |   |   |   |   | (1,178,000 | ) |   |   | (1,178,000 | ) |   |
| Comprehensive income:                                                                                              |                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income — As Restated See Note K                                                                           |                                             |   |   |   |   |   | 4,899,000 |   |   |   | 4,899,000 |   |   |
| Foreign currency translation adjustments                                                                           |                                             |   |   |   |   |   |   |   | (36,000 | )  | (36,000 | ) |   |
| Comprehensive income                                                                                               | ________                                         |   | _________ |   | _________ |   | _________ |   | _________ |   | 4,863,000 |   |   |
| BALANCE AT DECEMBER 31, 2000                                                                                       | 3,568,385                                        |   | 6,396,000 |   | 0 |   | 31,116,000 |   | (228,000 | ) | 37,284,000 |   |   |
| Dividends ($.35 per share)                                                                                         |                                             |   |   |   |   |   | (1,249,000 | ) |   |   | (1,249,000 | ) |   |
| Issuance of restricted stock                                                                                       |                                             |   | 200,000 |   | (200,000 | ) |   |   |   |   |   |   |   |
| Amortization of unearned compensation                                                                              |                                             |   |   |   | 50,000 |   |   |   |   |   | 50,000 |   |   |
| Comprehensive income:                                                                                              |                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                                         |                                             |   |   |   |   |   | 3,505,000 |   |   |   | 3,505,000 |   |   |
| Foreign currency translation adjustments                                                                           |                                             |   |   |   |   |   |   |   | (61,000 | ) | (61,000 | ) |   |
| Cumulative effect of change in accounting  for derivatives net of applicable income  taxes of $85,000         |                                             |   |   |   |   |   |   |   | 127,000 |   | 127,000 |   |   |
| Amortization to income of cumulative effect  reclassified to other net of applicable income tax benefit of $17,000 |                                             |   |   |   |   |   |   |   | (26,000 | ) | (26,000 | ) |   |
| Comprehensive income                                                                                               | ________                                         |   | _________ |   | _________ |   | _________ |   | _________ |   | 3,545,000 |   |   |
| BALANCE AT DECEMBER 31, 2001                                                                                       | 3,568,385                                        |   | $ | 6,596,000 |   | $ | (150,000 | ) | $ | 33,372,000 |   | $ | (188,000 | ) | $ | 39,630,000 |   |   |

 

See notes toconsolidated financial statements.

 

22

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**Consolidated Statements of Cash Flows**

 
|                                                                               |   | **Year Ended  December 31** |   |
|------------------------------------------------------------------------------------|--------|-----------------------------|--------|
|                                                                               |   | **2001**                    |   | **2000** |   | **1999** |   |
|                                                                               |   |                        |   | **(As  Restated** |   | **(As  Restated** |   |
|                                                                               |   |                        |   | **See Note  K)** |   | **See Note  K)** |   |
| OPERATING  ACTIVITIES                                                              |   |                        |   |   |   |   |   |
| Net  income                                                                        |   | $3,505,000                  |   | $4,899,000 |   | $4,342,000 |   |
| Adjustments  to reconcile net income to net cash provided by operating activities: |   |                        |   |   |   |   |   |
| Depreciation                                                                       |   | 1,609,000                   |   | 1,666,000 |   | 1,636,000 |   |
| Amortization                                                                       |   | 312,000                     |   | 312,000 |   | 312,000 |   |
| Compensation  earned under restricted stock plan                                   |   | 50,000                      |   |   |   |   |   |
| Deferred  income taxes                                                             |   | 19,000                      |   | (100,000 | ) | (10,000 | ) |
| Other                                                                              |   | 395,000                     |   |   |   |   |   |
| Changes  in operating assets and liabilities:                                      |   |                        |   |   |   |   |   |
| Accounts  receivable and due from affiliates                                       |   | (1,152,000                  | )      | (1,212,000 | ) | (127,000 | ) |
| Inventories                                                                        |   | 1,611,000                   |   | (908,000 | ) | (2,051,000 | ) |
| Prepaid  expenses and refundable income taxes                                      |   | (211,000                    | )      | 66,000 |   | (4,000 | ) |
| Accounts  payable, accrued expenses and income taxes payable                       |   | 497,000                     |   | (530,000 | ) | 579,000 |   |
| NET  CASH PROVIDED BY OPERATING ACTIVITIES                                         |   | 6,635,000                   |   | 4,193,000 |   | 4,677,000 |   |
| INVESTING  ACTIVITIES                                                              |   |                        |   |   |   |   |   |
| Purchases  of property, plant and equipment, net                                   |   | (880,000                    | )      | (1,462,000 | ) | (1,097,000 | ) |
| Purchases  of short-term investments                                               |   | (3,504,000                  | )      |   |   | (3,331,000 | ) |
| Maturities  of short-term investments                                              |   |                        |   | 636,000 |   |   |   |
| NET  CASH USED IN INVESTING ACTIVITIES                                             |   | (4,384,000                  | )      | (826,000 | ) | (4,428,000 | ) |
| FINANCING  ACTIVITIES                                                              |   |                        |   |   |   |   |   |
| Payment  of long-term debt                                                         |   | (1,500,000                  | )      | (1,500,000 | ) |   |   |
| Dividends  paid                                                                    |   | (1,249,000                  | )      | (1,178,000 | ) | (1,571,000 | ) |
| NET  CASH USED IN FINANCING ACTIVITIES                                             |   | (2,749,000                  | )      | (2,678,000 | ) | (1,571,000 | ) |
| EFFECT  OF FOREIGN EXCHANGE RATE CHANGES                                           |   | (61,000                     | )      | (36,000 | ) | 54,000 |   |
| INCREASE  (DECREASE) IN CASH AND CASH EQUIVALENTS                                  |   | (559,000                    | )      | 653,000 |   | (1,268,000 | ) |
|                                                                               |   |                        |   |   |   |   |   |
| CASH  AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                    |   | 975,000                     |   | 322,000 |   | 1,590,000 |   |
| CASH  AND CASH EQUIVALENTS AT END OF YEAR                                          |   | $416,000                    |   | $975,000 |   | $322,000 |   |

 

See notes toconsolidated financial statements.

 

23

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##### **NOTES TO CONSOLIDATEDFINANCIAL STATEMENTS**

 

**NOTE A — BUSINESS INFORMATION**

 

Minuteman International,Inc.  (the “Company”) operates primarilyin one business segment, which consists of thedevelopment, manufacture and marketing of commercial and industrial floormaintenance equipment and related products. TheCompany sells to a multitude of regional, national and international customers,primarily within the sanitary supply industry. Nosingle customer accounted for more than ten percent of net sales in 2001, 2000or 1999.

 

The Company sells toaffiliated (see Note G ) and unaffiliated customers in foreign countries.  For 2001, 2000, and 1999, thesesales aggregated $15,918,000, $18,078,000 and $16,552,000, respectively, andwere principally to customers in Canada, thePacific Rim, the Middle East, Europe, and Latin America.

 

##### **NOTE B** — SUMMARYOF SIGNIFICANT ACCOUNTING POLICIES

 

**Principles of Consolidation**

 

The consolidatedfinancial statements include the accounts of the Company (an Illinoiscorporation) and its wholly–ownedsubsidiaries, Multi–Clean, Minuteman PowerBoss, Inc., Minuteman Canada,Inc., Minuteman European B.V. and MinutemanInternational Foreign Sales Corporation. Significant intercompany accounts andtransactions have been eliminated inconsolidation.

 

**Revenue Recognition**

 

The Company recognizessales upon transfer of title of product, generally upon shipment of itsproducts, net of applicableprovisions for discounts and allowances. The Company also provides for its estimate of warranty and bad debts atthe time ofsales.

 

**Use of Estimates**

 

The preparation offinancial statements in conformity with accounting principles generallyaccepted in the United Statesrequires management to make estimates and assumptions that affect the amountsreported in the financial statements andaccompanying notes. Actual results could differ from those estimates.

 

**Inventories**

 

Inventories at December31, 2001,2000 and 1999 are stated at the lower of cost or market using the last–in,first-out (LIFO)method for 53%, 54% and 53% of inventories, respectively.  The first–in, first–out (FIFO)method is used for the remainder.Inventories at December 31, 2001,2000 and 1999 consist of the following:

 
|                      |   | **2001**   |       | **2000**          |   | **1999**          |   |
|---------------------------|--------|------------|------------|-------------------|--------|-------------------|--------|
|                      |   |       |       | **(As  Restated** |   | **(As  Restated** |   |
|                      |   |       |       | **See Note  K)**  |   | **See Note  K)**  |   |
| Inventories at FIFO cost: |   |       |       |              |   |              |   |
| Finished  goods           |   | $          | 7,418,000  |              | $      | 8,971,000         |   | $ | 8,075,000 |   |
|                      |   |       |       |              |   |              |   |   |   |   |
| Work  in process          |   | 7,975,000  |       | 8,562,000         |   | 8,451,000         |   |
|                      |   |       |       |              |   |              |   |
| Raw  materials            |   | 4,947,000  |       | 4,497,000         |   | 4,628,000         |   |
|                      |   | 20,340,000 |       | 22,030,000        |   | 21,154,000        |   |
| Less  LIFO reserve        |   | (1,976,000 | )          | (2,055,000        | )      | (2,087,000        | )      |
| Total  Inventories        |   | $          | 18,364,000 |              | $      | 19,975,000        |   | $ | 19,067,000 |   |

 

 

 

### **Property,Plant and Equipment**

 

Property, plant andequipment are stated on the basis of cost. Depreciation is computed by both the straight line andaccelerated methods for financial reporting purposes and by the acceleratedmethod for tax purposes.  Estimateduseful livesfor buildings and improvements range from 15 to 40 years.  All other property, plant and equipmentlives range from 3 to 7years.

 

 

24

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### **IntangibleAssets**

 

The Company hasclassified as intangible assets the cost in excess of the fair value of netassets of businesses acquired.Amortization is computed on a straight line basis over twenty years.  The Company does not believe there has beenanyimpairment in this asset at December 31, 2001, 2000 and 1999, in accordancewith the Statement of Financial AccountingStandards No. 121 “ Accounting for the Impairment of Long-Lived Assets and forLong-Lived Assets to be Disposed of”. Seealso New Accounting Pronouncements, below.

 

**Income Taxes**

 

Deferred income taxassets and liabilities are determined based on differences between financialreporting and tax basesof assets and liabilities, and are measured using the enacted tax rates andlaws that will be in effect when the differences areexpected to reverse.

 

**Earnings Per Share**

 

Basic earnings per shareis computed by dividing income available to common stockholders (the numerator)by the weighted-average number of common shares outstanding (the denominator) for the period.  The computation of the diluted earnings pershare is similar to the basic earnings per share, except that the denominatoris increased to include the number of additionalcommon shares that would have been outstanding if the potentially dilutive commonshares had been issued.

 

**Foreign Currency Translation**

 

The functional currencyof the Company’s foreign subsidiaries is the local currency.  Accordingly, the balance sheet accountsof the foreign subsidiaries have been translated into United States dollarsusing the current exchange rate at the balance sheetdate and income statement amounts have been translated using the averageexchange rate for the year.  Foreigncurrencytranslation adjustments resulting from the change in exchange rates have been classifiedas a separate component ofshareholders’ equity.

 

**Cash Equivalents**

 

The Company considers allbank certificates of deposit and Eurodollar certificate investments with amaturity of three monthsor less when purchased to be cash equivalents.

 

**Short-Term Investments**

 

Short-term investmentshave been categorized as available for sale and are stated at cost, whichapproximates fair value.Investments, all of which are with domestic commercial banks, includecertificates of deposit and Eurodollar and treasurycertificates.

 

**Research and Development Expenses**

 

Research and developmentexpense for 2001, 2000 and 1999, approximated $1,587,000, $1,459,000 and$1,329,000respectively.

 

**Shipping and Handling Costs**

 

The Company classifiesshipping and handling costs it incurs as selling expenses in the accompanyingconsolidatedstatements of income.  Shipping andhandling costs in 2001, 2000 and 1999 were $779,000, $907,000 and $797,000,respectively.  All shipping and handlingamounts billed to customers are classified as net sales and the associatedcosts arerecorded as cost of sales.

 

**Advertising Costs**

 

Advertising costs areexpensed as incurred and were $797,000, $841,000 and $750,000 in 2001, 2000 and1999, respectively.

 

 

25

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**Derivative Financial Instruments**

 

As of January 1,2001, the Company adopted SFAS No. 133, “Accounting for Derivative Instrumentsand Hedging Activities”(Statement 133), which was issued in June 1998 and its amendments, SFAS No.137, “Accounting for Derivative Instrumentsand Hedging Activities — Deferral of the Effective Date of FASB Statement No.133”, and SFAS 138, “Accounting for DerivativeInstruments and Certain Hedging Activities”, issued in June 1999 and June 2000,respectively (collectively referred to as SFASNo. 133).

 

As a result ofadoption of SFAS No. 133, the Company recognizes all derivative financialinstruments, such as interest rateswap contracts in the consolidated financial statements at fair valueregardless of the purpose or intent for holding theinstrument.  Changes in the fair valueof derivative financial instruments are either recognized periodically inincome or inshareholders’ equity as a component of comprehensive income depending onwhether the derivative financial instrumentqualifies for hedge accounting, and if so, whether it qualifies as a fair valuehedge or cash flow hedge. Generally, changes infair values of derivatives accounted for as fair value hedges are recorded inincome along with the portions of the changes inthe fair values of the hedged items that relate to the hedged risks.  Changes in fair values of derivativesaccounted for as cashflow hedges, to the extent they are effective and designated as hedges, arerecorded in other comprehensive income net oftax.  Changes in fair values ofderivatives not qualifying as hedges are reported as interest expense.

 

The Companyaccounted for the accounting changes as a cumulative effect of a change inaccounting principle.  The adoptionof Statement 133, on January 1, 2001 resulted in an increase of $127,000, netof applicable income taxes of $85,000, to othercomprehensive income.

 

The Companydetermined its documentation for its interest rate swap was not sufficient tobe in accordance with the applicableprovisions of SFAS 133, “Accounting for Derivative Instruments and HedgingActivities”, and, therefore, the effect of adjustingthe swap to market, was $463,000 (net of tax benefit of $185,000), resulting ina $278,000 charge to net income.

 

Prior to January1, 2001, the Company also used interest rate swap contracts for hedgingpurposes.  For interest rate swaps,the net amounts paid or received and net amounts accrued through the end of theaccounting period were included in interestexpense. Unrealized gains or losses on interest swap contracts were notrecognized in income.  Gains or losseson anycontracts terminated early were deferred and amortized to income over theremaining average life of the terminated contracts.

 

In1998, the Company entered into an interest rate swap agreement to obtain afixed interest rate on variable rate debt andreduce certain exposures to interest rate fluctuations.  At December 31, 2001, 2000 and 1999 theCompany had interest rateswaps with notional amounts of $10,500,000, $12,000,000 and $13,500,000,respectively.  The swaps will terminateon thesame basis as the long-term debt repayment schedule ending November, 2005 (SeeNote C).  The swaps for 2001, 2000 and1999 result in fixed rate payments at an effective interest rate of 6.1%, 6.1%and 6.2%, respectively.  Variable ratepayments arebased on LIBOR interest rate plus an applicable margin (See Note C).

 

 

**NewAccounting Pronouncements**

 

In June 2001, theFinancial Accounting Standards Board issued Statements of Financial AccountingStandards No. 141,“Business Combinations”, and No. 142, ‘Goodwill and Other Intangible Assets”,effective for fiscal years beginning afterDecember 15, 2001.  Under the new rules,goodwill and intangible assets deemed to have indefinite lives will no longerbeamortized but will be subject to annual impairment tests in accordance with theStatements.  Other intangible assetswillcontinue to be amortized over their useful lives.

 

TheCompany will apply the new rules on accounting for goodwill and otherintangible assets beginning in the first quarter of2002.  Application of thenonamortization provisions of the Statement is expected to result in anincrease in net income of$190,000 per year.  During 2002, theCompany will perform the first of the required impairment tests of goodwill andindefinitelived intangible assets as of January 1, 2002 and has not yet determined whatthe effect, if any, of these tests will be on theearnings and balance sheet of the Company.

 

 

26

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##### **NOTE C — DEBT**

 

### **ShortTerm Debt**

 

The Company has anunsecured Line of Credit arrangement for a short-term debt facility with afinancial institution whichexpires in November 2002.  Under theterms of this facility the Company may borrow up to $5 million on termsmutuallyagreeable to the Company and the financial institution.  There are no requirements for compensatingbalances or restrictions ofany kind involved in this arrangement. At December 31, 2001, 2000, and 1999 there were no borrowings outstanding.

### ** **

### **Long Term Debt**

 

TheCompany has a term loan agreement with a financial institution.  This unsecured credit facility provides foran interest rateat LIBOR plus an applicable margin based upon the ratio of debt outstanding tothe Company’s earnings before interest, taxes,depreciation and amortization and ranges from .70% to 1.15%.  The margin rate on this debt at December 31,2001 andDecember 31, 2000  and December 31, 1999was .70%, .70% and .80%, respectively (see Note E). The effective interest rateon this debt at December 31, 2001 was 6.1%. The Company agreed to maintain certain minimum financial ratios.  Maturitiesof long term debt are as follows:

 
| Due    | 2002                    |   | $          | 1,500,000 |   |
|--------|-------------------------|--------|------------|-----------|--------|
|   | 2003                    |   | 1,500,000  |      |
|   | 2004                    |   | 1,500,000  |      |
|   | 2005 and thereafter     |   | 6,000,000  |      |
|   |                    |   | 10,500,000 |      |
|   | Less current maturities |   | (1,500,000 | )         |
|   |                    |   | $          | 9,000,000 |   |

 

Interest paid forshort-term and long-term debt obligations in 2001, 2000 and 1999 was $708,000,$798,000 and $847,000,respectively.

 

**NOTE D — INCOME TAXES**

 

Deferred income taxesprimarily relate to temporary differences in the recognition of depreciationexpense and other accruedexpenses for financial reporting and income tax purposes.  The temporary differences between thefinancial statement carryingamounts and the tax bases of assets and liabilities that result in significantamounts of deferred taxes in the consolidatedbalance sheets at December 31, 2001, 2000 and 1999 are as follows:

 
|                                                              |   | **Deferred  Tax Assets (Liabilities)** |       |     |       |
|-------------------------------------------------------------------|--------|----------------------------------------|------------|----------|------------|
|                                                              |   |                                   |       |     |       |   |   |
|                                                              |   | **2001**                               | ** ** | **2000** | ** ** | **1999** |   |
| Accounts  receivable allowance                                    |   | $                                      | 187,000    |     | $          | 133,000 |   | $ | 100,000 |   |
| Property,  plant and equipment tax depreciation in excess of book |   | (272,000                               | )          | (240,000 | )          | (230,000 | ) |
| Accrued  expenses and other                                       |   | 186,000                                |       | 362,000  |       | 285,000 |   |
| Derivative  financial instruments                                 |   | 135,000                                |       |     |       |   |   |
|                                                              |   | $                                      | 236,000    |     | $          | 255,000 |   | $ | 155,000 |   |

 

The effectiveincome tax rate differed from the Federal statutory rate as follows:
|                                            |   |     |   | **As Restated** |   | **As Restated** |   |
|-------------------------------------------------|--------|----------|--------|-----------------|--------|-----------------|--------|
|                                            |   | **2001** |   | **2000**        |   | **1999**        |   |
| Federal  statutory rate                         |   | 34.0     | %      | 34.0            | %      | 34.0            | %      |
| State  income taxes, net of Federal tax benefit |   | 4.0      |   | 4.6             |   | 4.6             |   |
| Foreign  sales                                  |   |     |   |            |   |            |   |
| Corporation  benefit                            |   | (2.5     | )      | (1.9            | )      | (2.1            | )      |
| Research  and development tax credits           |   | (1.9     | )      | (.6             | )      | (1.1            | )      |
| Other,  net                                     |   | (1.8     | )      | .9              |   | 1.0             |   |
|                                            |   | 31.8     | %      | 37.0            | %      | 36.4            | %      |

 

 

27

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The components ofthe provision (benefit) for income taxes are:

 
|    |   | **2001** |      | **2000**        |   | **1999**        |   |
|---------|--------|----------|-----------|-----------------|--------|-----------------|--------|
|    |   |     |      | **As Restated** |   | **As Restated** |   |
| Federal |   | $        | 1,337,000 |            | $      | 2,277,000       |   | $ | 1,980,000 |   |
| State   |   | 320,000  |      | 530,000         |   | 450,000         |   |
| Foreign |   | (19,000  | )         | 73,000          |   | 56,000          |   |
|    |   | $        | 1,638,000 |            | $      | 2,880,000       |   | $ | 2,486,000 |   |

 

 

TheCompany paid income taxes, net of refunds received, of $987,000, $2,763,000 and$2,421,000 in 2001, 2000 and 1999,respectively.

###### ** **

###### **NoteE — FINANCIAL INSTRUMENTS**

 

Financial instrumentswhich potentially subject the Company to concentrations of credit risk consistprincipally of cashequivalents and accounts receivables. The Company places its cash equivalents with high credit qualityfinancial institutions,which are Federally insured up to prescribed limits.  However, the amount of cash equivalents at any one institutionmayexceed the Federally insured prescribed limits.  Concentrations of credit risks with regard to trade receivablesare limited dueto the large number of customers comprising the Company’s customer base.  The Company performs ongoing creditevaluations of its customers and maintains allowances for potential creditlosses which, when incurred, have been within therange of management expectations.

 

In1998, the Company entered into an interest rate swap agreement to obtain afixed interest rate on variable rate debt andreduce certain exposures to interest rate fluctuations.  At December 31, 2001, 2000 and 1999 theCompany had interest rateswaps with notional amounts of $10,500,000, $12,000,000 and $13,500,000,respectively.  The swaps will terminateon thesame basis as the long-term debt repayment schedule ending November, 2005 (SeeNote C).  The swaps for 2001, 2000 and1999 result in fixed rate payments at an effective interest rate of 6.1%, 6.1%and 6.2%, respectively.  Variable ratepaymentsare based on LIBOR interest rate plus an applicable margin (See Note C).

 

Interest ratedifferentials paid or received under this agreement are recognized as anadjustment to interest expense.  TheCompany does not hold or issue interest rate swap agreements for tradingpurposes.

 

In the event thata counterparty fails to meet the terms of the interest rate swap agreement, theCompany’s exposure is limitedto the interest rate differential.  TheCompany manages the credit risk of counterparties by dealing only withinstitutions that theCompany considers financially sound. The Company considers the risk of nonperformance to be remote. The netcarryingamounts and fair values of the Company’s financial instruments areapproximately the same.

 

**NOTE F — LEASE COMMITMENTS**

 

The Company andits subsidiaries lease certain manufacturing, warehousing and other facilitiesand equipment.  The leasesgenerally provide for the lessee to pay taxes, maintenance, insurance andcertain other operating costs of the leased property.The leases on most of the properties contain renewal provisions.  The following is a summary of future minimumpaymentsunder operating leases that have initial or remaining noncancelable lease termsin excess of one year at December 31, 2001:

 
| 2002   |   | $       | 740,000   |   |
|--------|--------|---------|-----------|--------|
| 2003   |   | 650,000 |      |
| 2004   |   | 369,000 |      |
| 2005   |   | 148,000 |      |
|   |   | $       | 1,907,000 |   |

 

 

Rental expense foroperating leases amounted to $753,000, $708,000 and $451,000, in 2001, 2000 and1999, respectively.

 

### **NOTE G — RELATED PARTY TRANSACTIONS**

 

Hako–WerkeInternational GmbH & Co. (a German corporation) owns 68.2% of theoutstanding common stock of the Companythrough a subsidiary.

 

The Company soldapproximately $715,000,  $1,482,000and  $1,460,000 of merchandise to Hako–Werkeand certain of itssubsidiaries during 2001, 2000 and 1999, respectively.  Amounts due from affiliates, which relate tothese sales, are due within90 days from the date of sale.

 

28

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**NOTE H — EMPLOYEE BENEFIT PLANS**

 

The Company maintains aparticipatory defined contribution plan for substantially all employees underSection 401(k) of theInternal Revenue Code.  In addition to adiscretionary contribution, the Company also matches employee contributionsbasedupon a formula up to a specified maximum. Contributions to the plan and related expense were $365,000, $400,000and$403,000 for the years ended 2001, 2000 and 1999 respectively.

 

**NOTE I — RESTRICTED STOCK PLAN**

 

On April 18, 2000 theshareholders approved the Minuteman 2000 Restricted Stock Plan, (“RestrictedStock Plan”), which isdesigned to attract and retain the services of key management employees byproviding such persons with a proprietary interestin the Company through the granting of Minuteman common stock. The maximumnumber of shares of Minuteman commonstock that shall be available for issuance shall be 150,000 shares.  At December 31, 2001 and 2000 there were131,140 and150,000 shares available to be granted, respectively.  At December 31, 2001, 18,860 shares have been granted with amarketvalue of $200,385 on the date of grant. Awards may be issued under the Restricted Stock Plan through December31, 2009,subject to the vesting periods not to exceed three years.  At the sole discretion of the Company, anaward of restricted stockmay be awarded to an eligible employee based upon certain conditions andrestrictions including, but not limited to, past andcontinued service with the Company, achievement of specific businessobjectives, superior work performance, and othermeasurements of individual or Company performance.  In the event that the employee’s employment with Minuteman isterminated (except due to death or total disability) prior to the end of thevesting period, the non-vested portion of the awardshall be forfeited.  However, in theevent of an employee’s death or total disability, or a change in control of theCompany, theaward shall immediately become fully vested. Shares issued under the plan are recorded at fair market value on thedate ofgrant with a corresponding charge to shareholders’ equity representing theunearned portion of the award.  Theunearnedportion is amortized as compensation expense ($50,000 in 2001) on a straightline basis over the related vesting period.

 

**Note J — INVESTIGATIONS**

 

In the summer of2001, the United States Securities and Exchange Commission (the “SEC”)commenced an informalinvestigation of the Company and on November 13, 2001 issued a formal order ofinvestigation.  The Company has beencooperating with the SEC and has produced documents requested by the SEC.  In addition, testimony of officers andemployees requested by the SEC has been provided.

 

In December 2001,the Company was requested by The Nasdaq Stock Market (“Nasdaq”) to supplyinformation in connectionwith Nasdaq’s responsibilities to ensure ongoing compliance of issuers with therequirements for inclusion on The NasdaqStock Market.  The Company has providedthe requested documents and is cooperating with the Nasdaq.

 

The Companybelieves that the investigation by the SEC and by Nasdaq is related to therecognition of revenue in theCompany’s results of operations for its interim periods.  Based on the Company’s review of the timingof the recording ofcertain sales transactions, which were not consistent with the Company’srevenue recognition policy, it was necessary torestate interim results and the Company restated its financial statements forthe interim periods ended March 31, June 30 andSeptember 30 in each of 1999 and 2000 and for March 31, 2001.  Amended Form 10-Qs and amended Form 10-Ksreflectingthe restatements for the interim periods were filed with the SEC in 2001.

 

The investigationshave not been completed and neither the SEC nor Nasdaq has informed the Companyof any intendedaction.  Consequently, the Company isnot able to predict the outcome of the investigations or to assess theirultimate impacton the Company.

 

**NOTE K** — RESTATEMENTSOF PRIOR PERIODS

 

Inpreparing the year end financials for 2001, the Company discovered that it had been incorrectly recording anamount toeliminate intercompany profit in inventory since the first quarter of1999.  As a result, inventory had beenunderstated eachquarter since the first quarter of 1999 with a corresponding overstatement ofcost of sales.  As required byaccountingprinciples generally accepted in the United States, the Company has restatedpreviously issued financial statements for 2000and 1999 to adjust for the accounting error noted above net of the relatedimpact on income taxes.  The effect ofsuchrestatements was to decrease cost of sales by $604,000 and $540,000 in 2000 and1999, respectively.  General andadministrative expense was increased by $3,000 in 2000 for a bonus based on thepretax income adjustment above.  Netincome was increased by $373,000 ($.10 per share) and $335,000 ($.09 per share)for the years ended December 31, 2000and 1999, respectively.  See Note L forthe impact of the restatement on the previously reported quarterly results for2001,2000 and 1999.

 

29

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**NOTE L — QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)**

 

The following is asummary of the quarterly results of operations for the years ended December 31,2001, 2000 and 1999.****Aspreviously reported, the Company determined that it was necessary to restatethe interim results based on a review of thetiming of the recording of certain sales transactions which were not consistentwith the Company’s sales recognition policy.Accordingly, the Company restated its interim results for the period endedMarch 31,2001 and each of the first three quarters inthe years 2000 and 1999. The restatements include the deferral of certain salesfrom the reporting period in which the saleswere originally recorded to the reporting period in which the sales would beproperly recorded under the Company’s salesrecognition policy.   The 2001, 2000 and1999 results, as previously reported, have been restated to reflect theadjustmentsrelated to the overstatement of cost of sales due to the inventory valuationerror as described in Note K, Restatements of PriorPeriods. In addition, the 2001 results as previously reported, have been restatedto reflect the adjustments necessary to adoptSFAS No. 133 as of January 1, 2001, which had not previously been recorded bythe Company and which is more fullydescribed in Note B, Derivative Financial Instruments (In thousands of dollars,except per share data):
|                                                                            |   | **Three Months Ended** |   |
|---------------------------------------------------------------------------------|--------|------------------------|--------|
|                                                                            |   | **As  Restated**  |   | **As Restated** |   | **As Restated** |   |   |   |
| **2001**                                                                        |   | **March 31**           |   | **June 30** |   | **September 30** |   | **December 31** |   |
| Net  Sales                                                                      |   | $                      | 21,658 |   | $ | 19,935 |   | $ | 17,593 |   | $ | 18,107 |   |
| Gross  profit,as previously reported                                            |   | 6,385                  |   | 5,719 |   | 5,135 |   | 6,446 |   |
| Gross  profit, as restated                                                      |   | 6,567                  |   | 5,849 |   | 5,285 |   | 6,446 |   |
| Net  income, as previously reported                                             |   | 784                    |   | 712 |   | 395 |   | 1,686 |   |
| Adjustment  — inventory valuation error                                    |   | 112                    |   | 79 |   | 92 |   |   |   |
| Adjustment  — SFAS 133                                                     |   | (154                   | )      | 41 |   | (242 | ) |   |   |
| Net  income, as restated                                                        |   | 742                    |   | 832 |   | 245 |   | 1,686 |   |
| Net  income per common share — basic & diluted, as previously reported |   | .22                    |   | .20 |   | .11 |   | .47 |   |
| Adjustment                                                                      |   | (.01                   | )      | .03 |   | (.04 | ) |   |   |
| Net  income per common share — basic & diluted, as restated            |   | $                      | .21    |   | $ | .23 |   | $ | .07 |   | $ | .47 |   |

 

 
|                                                                            |   | **As  Restated** |       | **As  Restated** |       | **As  Restated**  |       | **As  Restated** |       |
|---------------------------------------------------------------------------------|--------|-----------------------|------------|------------------|------------|-------------------|------------|------------------|------------|
| **2000**                                                                        |   | **March 31**          |       | **June 30**      |       | **September  30** |       | **December  31** |       |
| Net  Sales                                                                      |   | $                     | 22,731     |             | $          | 21,713            |       | $                | 21,143     |   | $ | 19,608 |   |
| Gross  profit, as previously reported                                           |   | 6,900                 |       | 6,642            |       | 6,357             |       | 6,383            |       |
| **Gross profit, as restated**                                                   |   | **7,075**             | ** ** | **6,783**        | ** ** | **6,493**         | ** ** | **6,535**        | ** ** |
| Net  income, as previously reported                                             |   | 979                   |       | 976              |       | 1,036             |       | 1,535            |       |
| Adjustment  — inventory valuation error                                    |   | 108                   |       | 87               |       | 84                |       | 94               |       |
| Net  income, as restated                                                        |   | 1,087                 |       | 1,063            |       | 1,120             |       | 1,629            |       |
| Net  income per common share — basic & diluted, as previously reported |   | .27                   |       | .28              |       | .29               |       | .43              |       |
| Adjustment                                                                      |   | .03                   |       | .02              |       | .03               |       | .02              |       |
| Net  income per common share — basic & diluted, as restated            |   | $                     | .30        |             | $          | .30               |       | $                | .32        |   | $ | .45 |   |

 

 
|                                                                            |   | **As  Restated** |   | **As  Restated** |   | **As  Restated** |   | **As  Restated** |   |
|---------------------------------------------------------------------------------|--------|------------------|--------|------------------|--------|-----------------------|--------|------------------|--------|
| **1999**                                                                        |   | **March 31**     |   | **June 30**      |   | **September  30**     |   | **December  31** |   |
| Net  Sales                                                                      |   | $                | 19,053 |             | $      | 19,030                |   | $                | 20,576 |   | $ | 19,023 |   |
| Gross  profit, as previously reported                                           |   | 5,518            |   | 5,854            |   | 6,098                 |   | 6,178            |   |
| Gross  profit, as restated                                                      |   | 5,608            |   | 5,965            |   | 6,319                 |   | 6,296            |   |
| Net  income, as previously reported                                             |   | 679              |   | 795              |   | 1,011                 |   | 1,522            |   |
| Adjustment  — inventory valuation error                                    |   | 56               |   | 69               |   | 136                   |   | 74               |   |
| Net  income, as restated                                                        |   | 735              |   | 864              |   | 1,147                 |   | 1,596            |   |
| Net  income per common share — basic & diluted, as previously reported |   | .19              |   | .22              |   | .29                   |   | .42              |   |
| Adjustment                                                                      |   | .02              |   | .02              |   | .03                   |   | .03              |   |
| Net  income per common share — basic & diluted, as restated            |   | $                | .21    |             | $      | .24                   |   | $                | .32    |   | $ | .45 |   |

 

 

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Results in thefourth quarter of 2001 were affected by certain year end adjustments includinginventory adjustmentsaggregating $560,000 and adjustments of $230,000 to reduce variousaccruals.  Such adjustments increasednet income by$593,000 ($0.17 per share) in the fourth quarter.  The Company believes it is not practicable to determine what impactsuchadjustments would have had on each of the first three quarters of 2001.

 

 

 

**MARKETS FOR THE COMPANY’S SECURITIESAND RELATED MATTERS**

 

On March 7, 2002 the lastreported sales price of the common stock on the Nasdaq Stock Market(“NASDAQ”)system $9.26approximate number of holders of common stock was 400.

 

Since 1988 the Board ofDirectors has declared regular quarterly dividends and the fourth quarterdividend in 2001 representsthe fifty-third consecutive dividend paid to shareholders.  Future dividend policy will be determined bythe Board of Directors inlight of prevailing financial needs and earnings of the Company and otherrelevant factors.

 

The common stockof Minuteman International, Inc. is quoted on The Nasdaq Stock Market and itstrading symbol is “MMAN”. The following tables set forth for 2001and 2000 the range of bid prices for the Company’s common stock as reported intheNASDAQ systems for the period indicated:

 
|         |   |     |   |    |   | **Dividends** |   |
|--------------|--------|----------|--------|---------|--------|---------------|--------|
|         |   | **High** |   | **Low** |   | **Per Share** |   |
|         |   |     |   |    |   |          |   |
| 2001         |   |     |   |    |   |          |   |
|         |   |     |   |    |   |          |   |
| 1st  Quarter |   | $        | 12.13  |    | $      | 8.63          |   | $ | .08 |   |
| 2nd  Quarter |   | 10.50    |   | 9.44    |   | .09           |   |
| 3rd  Quarter |   | 10.00    |   | 9.00    |   | .09           |   |
| 4th  Quarter |   | 9.32     |   | 7.75    |   | .09           |   |
|         |   |     |   |    |   |          |   |
| 2000         |   |     |   |    |   |          |   |
|         |   |     |   |    |   |          |   |
| 1st  Quarter |   | $        | 10.50  |    | $      | 8.00          |   | $ | .11 |   |
| 2nd  Quarter |   | 10.00    |   | 7.63    |   | .07           |   |
| 3rd  Quarter |   | 9.00     |   | 7.50    |   | .07           |   |
| 4th  Quarter |   | 9.25     |   | 7.88    |   | .08           |   |

 

 

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**Selected Consolidated Financial Data**

 

 

See “Management’sDiscussion and Analysis of Results of Operations and Financial Condition”, and“Notes to Consolidated Financial Statements”.
|                                                  |   | **Year Ended December 31,**                         |   |
|-------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                  |   | **2001**                                            |   | **2000** |   | **1999** |   | **1998** |   | **1997** |   |
|                                                  |   |                                                |   | **(As restated** |   | **(As restated** |   |   |   |   |   |
|                                                  |   |                                                |   | **see Note K)** |   | **see Note K)** |   |   |   |   |   |
|                                                  |   | **(In thousands, except share and per share data)** |   |
| INCOME STATEMENT DATA                                 |   |                                                |   |   |   |   |   |   |   |   |   |
| Net  sales                                            |   | $                                                   | 77,293 |   | $ | 85,195 |   | $ | 77,682 |   | $ | 57,380 |   | $ | 54,212 |   |
| Cost  of sales                                        |   | 53,146                                              |   | 58,309 |   | 53,494 |   | 39,333 |   | 37,783 |   |
| Gross  profit                                         |   | 24,147                                              |   | 26,886 |   | 24,188 |   | 18,047 |   | 16,429 |   |
| Selling  expenses                                     |   | 13,766                                              |   | 14,202 |   | 12,896 |   | 10,548 |   | 9,869 |   |
| General  and administrative expenses                  |   | 4,294                                               |   | 4,426 |   | 3,989 |   | 2,482 |   | 2,310 |   |
| Income  from operations                               |   | 6,087                                               |   | 8,258 |   | 7,303 |   | 5,017 |   | 4,250 |   |
| Interest  income (expense), net                       |   | (1,019                                              | )      | (608 | ) | (791 | ) | (164 | ) | (4 | ) |
| Other,  net                                           |   | 75                                                  |   | 129 |   | 316 |   | 400 |   | 107 |   |
| Income  before income taxes                           |   | 5,143                                               |   | 7,779 |   | 6,828 |   | 5,253 |   | 4,353 |   |
| Income  tax expense                                   |   | 1,638                                               |   | 2,880 |   | 2,486 |   | 1,921 |   | 1,506 |   |
| Net  income                                           |   | $                                                   | 3,505  |   | $ | 4,899 |   | $ | 4,342 |   | $ | 3,332 |   | $ | 2,847 |   |
|                                                  |   |                                                |   |   |   |   |   |   |   |   |   |
| PER  SHARE DATA                                       |   |                                                |   |   |   |   |   |   |   |   |   |
| Cash dividends                                        |   | $                                                   | .35    |   | $ | .33 |   | $ | .44 |   | $ | .44 |   | $ | .44 |   |
| Net  income per common share — basic and diluted |   | $                                                   | .98    |   | $ | 1.37 |   | $ | 1.22 |   | $ | .93 |   | $ | .80 |   |
| Weighted  average number of shares outstanding        |   |                                                |   |   |   |   |   |   |   |   |   |
| —  basic                                         |   | 3,570,365                                           |   | 3,568,385 |   | 3,568,385 |   | 3,568,385 |   | 3,568,385 |   |
| —  diluted                                       |   | 3,582,698                                           |   | 3,568,385 |   | 3,568,385 |   | 3,568,385 |   | 3,568,385 |   |
| BALANCE  SHEET DATA                                   |   |                                                |   |   |   |   |   |   |   |   |   |
| Working  capital                                      |   | $                                                   | 35,486 |   | $ | 33,372 |   | $ | 30,626 |   | $ | 28,360 |   | $ | 19,901 |   |
| Total  assets                                         |   | 57,228                                              |   | 55,658 |   | 53,958 |   | 50,670 |   | 32,493 |   |
| Long-term  debt                                       |   | 9,000                                               |   | 10,500 |   | 12,000 |   | 13,500 |   |   |   |
| Shareholders’  equity                            |   | 39,630                                              |   | 37,284 |   | 33,599 |   | 30,774 |   | 29,082 |   |

 

 

report of independent auditors

 

To The Shareholders of Minuteman International, Inc.

 

32

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We have audited the accompanying consolidated balance sheets ofMinutemanInternational, Inc. and subsidiaries as of December 31, 2001, 2000 and 1999 andtherelated consolidated statements of income, shareholders’ equity and cash flowsfor eachof the three years in the period ended December 31, 2001. These financialstatements are the responsibility of the Company’s management.  Our responsibility is toexpress an opinion on these financialstatements based on our audits.We conducted our audits in accordance with auditing standards generallyaccepted in theUnited States.  Those standards requirethat we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterialmisstatement.  An audit includesexamining, on a test basis,evidence supporting the amounts and disclosures in the financialstatements.  An auditalso includes assessing the accounting principles used and significantestimates made bymanagement, as well as evaluating the overall financial statementpresentation.  Webelieve that our audits provide a reasonable basis for our opinion.In our opinion, the financial statements referred to above present fairly, inall materialrespects, the consolidated financial position of Minuteman International, Inc.andsubsidiaries at December 31, 2001, 2000 and 1999, and the consolidated resultsof theiroperations and their cash flows for each of the three years in the period endedDecember31, 2001, in conformity with accounting principles generally accepted in theUnitedStates.As discussed in Note B to the consolidated financial statements,in 2001 the Company changed its method of accounting forderivative financial instruments.

 

 

Chicago, IllinoisFebruary 15, 2002

 

 

report of managementThe management of Minuteman International, Inc. is responsiblefor the integrity of the information presented in this Annual Report, includingtheCompany’s financial statements.  Thesestatements have been prepared in conformitywith accounting principlesgenerally accepted  in the United Statesand include, wherenecessary, informed estimates and judgments by management.The Company maintains systems of accounting and internalcontrols designed to provide assurance that assets are properly accounted for,as well asto insure that the financial records arereliable for preparing financial statements. The systems are augmented by qualifiedpersonnel and are reviewed on a periodic basis.The Company maintains high standards when selecting, training, and developingpersonnel, to ensure that management’s objectives of maintaining strong,effective 

 

33

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internal accounting controls and unbiased, uniform reporting standardsare attained.  TheCompany believes its policies and procedures provide reasonable assurance thatoperations are conducted in conformity with law and with the Company’scommitment toa high standard of business conduct.Our independent auditors, Ernst & Young LLP, conduct annual audits of ourfinancialstatements in accordance with auditingstandards generally accepted  in theUnited States which includethe review of internal controls for the purpose of establishing their auditscope, and issuean opinion of the fairness of such financial statements.The Board of Directors pursues its responsibility for the quality ofthe Company’s financial reporting primarily through its Audit Committee, whichiscomposed of three outside directors. The Audit Committee meets periodically withmanagement and the independent auditors to review the manner in which they areperforming their responsibilities and to discuss auditing, internal accountingcontrols, andfinancial reporting matters. The independent auditors periodically meet alonewith theAudit Committee and have full and free access to the Audit Committee at anytime.

 

 

 
| Gregory J. Rau      | Thomas J. Nolan           |
|---------------------|---------------------------|
| President and Chief | Chief Financial Officer   |
| Executive Officer   | Secretary & Treasurer |

 

 

 

 

Gregory J. Rau

President &

Chief Executive Officer

Minuteman International, Inc.

 

Thomas J. Nolan

Chief Financial Officer,

Secretary & Treasurer

Minuteman International, Inc.

 

eckart kottkamp

Chief Executive Officer

Hako Holding

GmbH and Co.

 

34

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Frederick W. Hohage

Board Member of

BSH Home Appliances

 

 

James C. Schrader, Jr.

President

Precision Enterprises, Ltd.

Frank R. Reynolds

Attorney

Law Offices of Reynolds &

Reynolds, Ltd.

 

board of directors

Operating Officers

Gregory J. Rau

President & Chief

Executive Officer

Thomas J. Nolan

Chief Financial Officer,

Secretary & Treasurer

Michael A. Rau

Vice President

Multi-Clean Division

Dean W. Theobold

Vice President

Manufacturing

Corporate Information

General Counsel

Law Offices of Reynolds &

Reynolds, Ltd.

Chicago, Illinois

Independent Auditors

Ernst & Young LLP

Chicago, Illinois

Transfer Agent

Mellon Investor Services, L.L.C.

85 Challenger Road, Overpeck Centre

Ridgefield Park, New Jersey 07660

1-888-213-0965 Shareholders Information

1-800-231-5469 TDD (Telecommunications Device for the Deaf)

1-201-329-8660 Foreign Shareholders

1-201-329-8354 Foreign Shareholders (TDD)

Stock Listing

Traded over-the-counter on The Nasdaq Stock Market under the symbol“MMAN”

Annual Meeting

April 23, 2002 at 10:00 a.m.

at LaSalle National Bank

 

35

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135 South LaSalle Street

Forty-third Floor

Board Room

Chicago, Illinois 60603

Form 10-K

Minuteman International, Inc. will send

a copy of its Form 10-K report for fiscal

2001 as filed with the Securities and

Exchange Commission upon written

request to Thomas J. Nolan, Chief

Financial Officer, at the corporate office.

Locations

Corporate Offices and

World Headquarters

Minuteman International, Inc.

111 South Rohlwing Road

Addison, Illinois 60101

(630) 627-6900

Manufacturing Facilities

Minuteman International, Inc.

111 South Rohlwing Road

Addison, Illinois 60101

(630) 627-6900

Minuteman International, Inc.

14N845 U.S. Route 20

Hampshire, Illinois 60140

(847) 683-5210

Minuteman PowerBoss, Inc.

175 Anderson Street

Aberdeen, North Carolina 28315

(910) 944-2105

Multi-Clean,

Division of Minuteman

International, Inc.

600 Cardigan Road

Shoreview, Minnesota 55126

(651) 481-1900

Sales Offices

United States

Minuteman International, Inc.

111 South Rohlwing Road

Addison, Illinois 60101

(630) 627-6900

Minuteman Parker

111 South Rohlwing Road

Addison, Illinois 60101

(630) 627-6900

Minuteman PowerBoss

 

36

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1190 North Villa Avenue

Villa Park, Illinois 60181

(630) 530-0007

Minuteman PowerBoss

25920 Northline Commerce Drive

Suite 400

Taylor, Michigan 48180

(734) 946-2903

Canada

Minuteman Canada, Inc.

2210 Drew Road

Mississauga, Ontario

Canada L5S 1B1

(905) 673-3222

FAX: (905) 673-5161

Europe

Minuteman European B.V.

Haver Straat 31

2153 GB Nieuw-Vennep

The Netherlands

(31) 252-623000

FAX: (31) 252-623001

 

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