TO STAND FOR SOMETHING

Quality. Integrity. Value.Innovation. Performance. Quality. Integrity. Value. Innovation. Performance.Quality. Integrity. Value. Innovation. Performance.

 

2000 ANNUAL REPORT

Minuteman International, Inc.

 

To Stand For Something

 

JeromeE. Rau, late Chairman and CEO of Minuteman International, leaves a legacy ofexceptional insight, renowned leadership and unchallenged competitive strength.

 

                When Jerry Rau delivered a message, people heard it.It was hard to ignore his passion for details and getting things right, everytime. Because to Jerry Rau, every detail mattered - especially those detailsthat stood for quality, integrity and performance.

 

                Under Rau's 19 year leadership beginning in 1981,Minuteman flourished, increasing in sales from $5.5 to more than $85 millionthis year. In March 1987, Minuteman's prosperity enabled the company to becomea public corporation traded on the NASDAQ Exchange.

 

                In 1996, Rau was elected president of theInternational Sanitary Supply Association, the first executive from theequipment sector of the industry to head this premier trade group since 1959.

 

                Jerry Rau's dynamic management style brought thecompany's product line to an industry breadth and depth challenged by few. Inaddition, Rau ushered in an era of innovative engineering and cutting edgetechnology which led to over 33 patents for the company and "first-timeever" products such as the Ultra Violet Single Floor Coat System. Rau'sintuitive vision continued to drive the company into new markets such asindustrial cleaning, outdoor cleaning and lawn cleaning. Many of theinitiatives he undertook in recent years directly contributed to our recordbreaking year including:

 

·        Doubling the size of Minuteman'sstate-of-the-art Hampshire, Illinois manufacturing plant to 100,000 square feetin 1995

 

·        Capitalizing on global opportunities,establishing Minuteman Europe's distribution facility in the Netherlands inearly 1998 and overseas expansion into more than 40 countries.

 

·        Positioning Multi-Clean cleaning chemicalsdivision as an autonomous operating entity in 1997.

 

·        Acquisition of AAR PowerBoss Corporation'scomplementary line of industrial equipment in 1998.

 

                Rau aggressively sought out new marketing programsfor distributors, maintained cost structures and provided the best possibletraining and customer service available to distributors. Today the company isan acquirer in a consolidating business, turning formerly unprofitablecompanies into cash generating leaders such as PowerBoss.

                Quality,innovation, integrity and sharing responsibility for success, was a legend thatleft few customers, distributors and employees untouched. For Jerry Rau, hisword was his bond - it stood for something.

 

                We will miss him.

 

JeromeE. Rau,

1932-2000

 

Cover:

The eagle on the cover of our2000 Annual Report stands in tribute to founder, President and CEO, Jerome E.Rau who appreciated the eagle's strength and majestic character.

 

Mission Statement

 

A Steadfast Commitment to OurCustomers. The core of Minuteman International is anchored by a single,straightforward vision - to deliver exceptional floor cleaning equipment andchemicals combined with a single-minded focus to anticipate and answer ourcustomers' needs. Answering those needs is just the beginning of aperformance-driven philosophy to help our distributors maximize profit andprovide outstanding service, products and training to each Minuteman customer.That philosophy is combined with the ongoing development of new and more costeffective methods of manufacturing and product design to keep our customers onthe leading edge of floor care technology into the next century.

 

20 Year Summary Net Sales

 

Minuteman's record settingsales are driven by attention to detail, quality, integrity, value, performance,and leadership. A team effort and dedication to customer needs ensure thatMinuteman's steadfast commitments are long-lasting:

 

·        Maintaining and developing the deepest,most varied product line

·        Nurturing long-held stable customerrelationships

·        Continuing to develop innovative costcontrols

·        Specific, targeted, marketing andaggressive customer promotions

·        Unmatched customer service

·        State-of-the-art technology, research andproduct development

·        Insightful, unchallenged leadership

2000

 

20-Year Summary Net Sales     $85,195

 

Minuteman International,headquartered in the Chicago suburb of Addison, Illinois, is a full-linemanufacturer of commercial and industrial vacuums and floor and carpet careequipment, chemical cleaning and coating products under the Multi-Clean brand,litter vacuums, and lawn sweeping equipment under the Minuteman Parker label,and rider-operated floor surface maintenance equipment under PowerBoss.

 
| **Contents**                                        |   |
|-----------------------------------------------------|--------|
| From the President                                  |   |
| To  Stand for Something                             |   |
| Manufacturing  and Engineering Set Stage for Growth |   |
| New  Laser Cutter Adds State-of-the-Art Technology  |   |
| An Eye to the Future—The Oracle System         |   |
| Aggressive  New Products                            |   |
| Multi-Clean Innovation                              |   |
| Minuteman Parker Reliability and  Quality           |   |
| Financial  Report                                   |   |
| Locations and Corporate Information                 |   |

 

 

FROMTHE PRESIDENT

"We are proud of our 2000year end results and remain optimistic that future increases will mirror thatof historical performances" Greg Rau, President and CEO, MinutemanInternational

 

To Our Shareholders,

Another record year! Strongdemand for our floor, carpet and lawn-care equipment, both here and abroad,combined with continuing attention to cost containment, produced the bestoperating results in Minuteman's 20-year history. Net income for the year rose13.0 percent on a 9.7 percent increase in sales.

 

No wonder Forbes magazine namedus one of the "200 Best Small Companies" in America. The chosencompanies were selected from more than 8,000 candidates, all of whom werefiltered through a statistical screen by an independent service. What didForbes use as its criteria? "Sales between $50 million and $350 million,five years of consistent sales and earnings-per-share growth, four consecutivequarters of net income surpassing $1 million, and combing their financialdocuments for the slightest scent of trouble: bad debts, lawsuits, slowreceivables, funny accounting - all grounds for dismissal." This is notthe first time Forbes has acknowledged our performance. A similar accord wasgranted in 1989 (when we were Hako Minuteman). At that time, Forbes wrote, "Notevery one of these (200) companies will survive in our churning, dynamiceconomy..." We not only survived but we have flourished! For that earlieryear we reported sales of about $30 million. Even backing out something inexcess of $20 million added by the PowerBoss acquisition in 1998, the originalMinuteman's sales have more than doubled since that earlier accolade.

This year's revenue of$85,195,000, up from $77,682,000 for 1999, was largely accounted for byvigorous demand from dealers and distributors throughout the United States. Butinternational sales in almost 40 countries also rose 9.4 percent despite theadverse effects of a strong dollar, particularly in Europe. All productcategories participated except the weather-sensitive lawn care line, with robustgains at our Multi-Clean chemicals division giving that unit its best yearever. Fourth quarter sales likewise were a record for any final quarter,traditionally the company's slowest because of reduced shipments through theholiday period. The 1.3 percent sales increase for the October-December quarterto $17,290,000 from $17,074,000 was a favorable comparison with the same perioda year earlier because several large non-recurring orders were delivered inDecember of 1999.

 

The earnings gain for the yearwas even greater than the sales increase, producing wider profit margins. Thegross margin was higher, the operating margin reached 9.0 percent from 8.7percent for 1999, and the net margin improved to 5.3 percent versus 5.2 percentlast year. Operating expenses were kept in line, allowing profits to beleveraged by the larger volume. We are most gratified by the rapidity withwhich the PowerBoss subsidiary, operating at a loss when we bought that line in1998, has achieved profitability. In only two years, our management team hasworked both diligently and successfully in integrating PowerBoss intoMinuteman's culture and systems, eliminating overlapping expenses andcapitalizing on economies of scale.

 

A word about our fourth quarterearnings. The $76,000 or 6.8 percent decline was more than accounted for by aone-time service award of $375,000 paid to the estate of Jerome E. Rau, thecompany's late chairman and CEO. The award recognized Jerry's leadership overthe past two decades until his untimely death in September of 2000. Thefavorable results from operations during the fourth quarter are a testament tothe durability of the strategic concepts my father formulated in recent years.

 

In addition, he left thecompany in a very sound financial condition, with assets sufficient to fundbusiness or liquidity needs as they arise. Working capital rose to $32.7million from $30.3 million a year ago, the current ratio increased to 5.4 from4.7, long-term debt is equal to only 29 percent of shareholders' equity andbook value, at $10.25 per share, is greater than the price of the stock.

 

We also passed a milestone inour dividend history. Minuteman International paid its 50th consecutivequarterly cash dividend on February 15, 2001 to shareholders of record January31, 2001.

The payment was in the amountof eight cents per share.

 

Many large expenditures weremade in 2000 - for example, plant improvements and computer software - thatwill not have to be repeated again anytime soon. An investment in rotationalmolding equipment, previously outsourced, is budgeted to yield savings in theneighborhood of 30-35 percent annually with full payback in the next 12-18months. And a new Mitsubishi laser cutter reduces costs while increasingproductivity, quality and safety.

 

The year 2001 will be a greatyear for new product debuts. We stand on the threshold of launching severaladditions to our lines that were brought to completion in late 2000. Amongthese are the Model 4000 Scrubber that combines the fume-free features of abattery-powered rider sweeper with an industrial scrubber; the Model 2000RapidAir carpet floor dryer that cuts drying time in half for use on and undercarpeted surfaces; and the LitterBoss, a rider-operated sweeper/vacuum for theoutdoor market that opens the way for Minuteman to cross-sell many of itsproducts (lawn care, chemicals, etc.) into that market.

 

For all of these reasons andmore, I see the year ahead as very bright. This does not mean there won't bechallenges. The outlook for the general economy is a bit guarded and the futurerelationship of foreign currencies to the dollar is unclear. But I believe thegeneral expansion of the sanitary services industry, the lift from new productsand the unrivaled reputation Minuteman enjoys throughout the world will rewardour company with another favorable year.

 

Sincerely,

 

 

Gregory J. Rau

 

President and Chief ExecutiveOfficer

March 15, 2001

Performance, efficiency andcomfort combine to make LitterBoss the number one choice for litter controlwith ease.

 

tostand for something.

Value

 

Minuteman International BestYear In 20 Year History. Profits up 13%. In a year marked by consolidation in achanging industry, Minuteman International's profits reached the highest everattained in a single year in the company's 20 year history. In fact, 2000 was arecord breaking year in many ways. Earnings jumped 13.0% with sales 9.7% aheadof 1999. Operating profit increased 13.2%. Minuteman achieved these recordresults through keen management whose steadfast adherence to a strategicbusiness plan continues to simplify and gain efficiencies in manufacturing,engineering, customer service, distribution, marketing, training and productdevelopment.

 

Forbes Magazine DeclaresMinuteman Among the 200 Best Small Companies in America. "Those that makethe cut are truly gritty survivors"

-ForbesMagazine

October30, 2000 Issue

 

What does it take to bedeclared the best? The numbers reflect one story, but equally satisfying wasthe recognition the company received in the October 30, 2000 issue of Forbesmagazine who declared Minuteman International to be "One of the 200 bestsmall companies in America".

 

What does it take to be thebest? Minuteman wasn't arbitrarily selected for this distinction. The companyearned it. Consider that according to the criteria used by Forbes, the shortlist of companies were selected from more than 8,000 candidates all of whomwere filtered through a statistical screen by an independent service. TheForbes criteria was straightforward. Companies must meet the following:"Sales between $50 million and $350 million, five years of consistentsales and earnings-per-share growth four consecutive quarters of net incomesurpassing $1 million and combing financial documents for the slightest scent oftrouble: bad debts, lawsuits, slow receivables, funny accounting - all groundsfor dismissal."* We're proud to have made the list and sincerely thank ouroutstanding employees and loyal distributors without whose consistent effortsMinuteman's plans and objectives would never have been realized.

 

We look forward to another yearof shared goals and "gritty" success.

 

*Forbes Magazine, October 30,2000 Issue

industry consolidation.

 

Leadership

 

Competitive Advantages Open NewDoors for Profit. Rapid consolidation in the floor cleaning industry hasresulted in fewer customers and sharper competition. For MinutemanInternational, the challenge is clear - increase manufacturing efficiencies,maintain long-held, stable relationships with each of our customers, maintainand foster an exceptional management team, continue to be an acquirer andmaintain Minuteman's position as a market leader with unchallenged productbreadth and depth. The acquisition of PowerBoss, unprofitable when firstacquired, continues to generate positive cash flow as sales in 2000 continuedto expand. In addition, acquisitions such as PowerBoss allow Minuteman to enterthe new markets that complement Minuteman's traditional walk-behind units. For,example, PowerBoss enables Minuteman to enter new distribution channels such asindustrial markets.

Unmatched Product Breadth andDepth -

A Minuteman Signature.

Minuteman continues to berewarded during this consolidation period with outstanding sales thanks tocontinued customer loyalty and ongoing efforts to maintain and strengthenlong-held relationships. Unusual product breadth, marked by the greatestvariety of commercial and industrial floor, carpet and lawn care equipment forboth indoor and outdoor floor surfaces in the industry will continue to solidifyMinuteman as an easy front runner in the industry.

 

PowerBoss ManufacturingEfficiencies, Innovative Engineering and Operational Control Propel PowerBoss

 

PowerBoss, the rider operatedindustrial floor/surface maintenance equipment company located in NorthCarolina, continued its strong sales and earnings performance. The potentialfor stronger earnings continues as PowerBoss' higher priced equipment, withtraditionally longer selling cycles, begins to payoff. In addition, enormouspotential for even greater earnings and market penetration exists thanks to anumber of Minuteman initiatives begun immediately after the late 1998acquisition of the company. For example, more efficient, cost effectivepurchasing combined with Minuteman to increase volume and therefore offergreater economies of scale. Transferring the PowerBoss billing, parts andinventory to Minuteman's time-tested computer tracking system made production,ordering, shipping and purchasing analysis more efficient and timely. ExistingMinuteman quality control standards in all areas including engineering,production and transportation were implemented into the PowerBoss operation.Utilizing the strengths of both the Minuteman and the PowerBoss manufacturingfacilities, production of Minuteman's 3800 rider scrubber was moved to thePowerBoss plant because the facility was better equipped to handle the larger,rider-operated equipment. Minuteman continues to emphasize its commitment toquality and the continued successful growth of PowerBoss by continuing toinvest in manufacturing efficiencies at the PowerBoss facility. The recentaddition of a new Mitsubishi laser cutter located at the PowerBoss facilityoffers state-of-the-art technology combined with energy-saving features. Plansalso include implementing ISO 9001 Certification procedures.

 

PowerBoss TSS/82

 

PowerBoss 26 features anoff-aisle pump kit for cleaning hard-to-reach areas.

getting it right, efficiently.

Quality

 

Manufacturing and EngineeringSet Stage for Growth

 

Cost effective andtechnologically advanced methods of manufacturing benefit both Minuteman andcustomers. Minuteman's unique, direct control over design, production, productupdates, manufacturing technologies, distribution and quality control, positionthe company to get it right for customers, every time, efficiently.

 

Flexibility in Manufacturing

 

Efficiency begins withflexibility. The ability to respond quickly to customer needs and manufactureand assemble equipment that meets the needs of "real" customers iscritical to a profitable and successful outcome. Innovative and advancedmanufacturing methods and assembly at Minuteman facilities are designed toremain flexible so that easy changeover to new product assembly and productionis simple. For example, fluid assembly lines are designed in "cells"or autonomous units. Each step of the "cell or station" is clearlydocumented so that any new piece of equipment can follow straightforward,step-by-step assembly instructions. Custom manufacturing finesse combined with detailand flexibility in design and production, is indicative of Minuteman'sdedication to deliver the highest quality, most cost effective productpossible.

 

Minuteman's manufacturingprocess is combined with intuitive, team-oriented management. Productionmanagers meet daily with staff to assure efficient use of facilities, setrealistic goals and make certain that everyone is fully aware of the dailyschedule. In addition, parts, billing, ordering, shipping, purchasing analysisand inventory control continue to form the backbone of customer service usingMinuteman's efficient, time-tested computer tracking system.

 

Technological Innovation

 

Minuteman's dedicated team ofengineers and professional product designers work on specific categories ofmachines in select product areas such as carpet, hard floors and concrete tofurther enhance productivity. These highly trained, specialized engineers workwith one goal in mind to design a product in the most efficient way thatperforms at Minuteman's high quality standards and meets customer needs.Minuteman's team combines field data with CAD-CAM technology, 24 individualU.S. patents, ISO 9001 Certification and new cost-effective methods ofmanufacturing. Engineers continue to redesign and develop new and existingproducts so that customers benefit through cost savings and more durable,long-lasting products.

Seasoned Management Team.

Integrity, Leadership, Insightand Professional Experience

 

Minuteman's long termmanagement team continues to draw from hands-on experience with Minuteman andtheir dealers/distributors within the industry. This exceptionally skilledmanagement group brings years of individual experience, integrity and long heldcommitment to the industry and to each Minuteman policy, product and customerrelationship. A seasoned management team with a strong and succinct businessplan, combined with many years of insight and guidance from late Chairman,Jerome E. Rau, will continue to guide the company successfully into the futureas a leading manufacturer of commercial and industrial floor and outdoor careequipment for indoor and outdoor floor surfaces, and continue to enhanceMinuteman's performance for shareholders, distributors and employees.

 

200X Automatic Scrubber

 

The Minuteman Result MirrorShine.

Marble Smooth.

Dust-Free.

Wet-Look. Professional.

 

The next time you hesitate tostep on a floor because it looks wet, consider that Minuteman has probably beenthere. Intense attention to detail, quality and performance, combined with afierce deter- mination to quickly answer customer needs with innovativecleaning solutions, ensures Minuteman International's position as one of thefrontrunners in the competitve sanitary cleaning industry.

 

Minuteman's 3800 Rider Scrubber

 

new laser cutter adds state-of-the-arttechnology

Performance

 

Minuteman's' recent purchase ofa technologically sophisticated laser cutter exemplifies an ongoing commitmentto manufacturing sophistication and efficiency. Located at the company's NorthCarolina PowerBoss facility, the new laser cutter cuts raw material up to 3/4inch thick with unchallenged precision, intricacy and finish. Edges are smoothwith no burrs, therefore eliminating costly secondary deburing operations. Themachine is unique in its ability to heighten productivity by using a palletchanger that continuously feeds materials to the laser and therefore increasescutting time. Maximum cutting performance is achieved by a high-speed cuttingdevice that controls the laser beam quality according to material type,intricacy or material thickness. Familiar Window-style screens reduce theamount of time an operator needs for program manipulation and is designed toaccommodate the ergonomics and ease of use for the operator. For operatorsafety, a safety area sensor feature detects anyone entering the processingarea from the operation area, and automatically stops machine movement andprocessing. Maintenance costs are reduced due to user-friendly screens whichprompt operators to perform parts and replacement inspections as well. The newlaser combines flexibility, precision and the ability to plan for greater, moreefficient future product manufacturing and development.

 

New Manufacturing DepartmentFuels Minuteman Profits and Maintains Quality. Minuteman's direct control overdesign, production, manufacturing technologies, distribution and productupdates allows them to gain profits while controlling quality and timing. Thenew department, staffed by experienced Minuteman professional managers,continues this steadfast Minuteman trend.

 

Versatile, Cost Effective,Rotational Molder

 

Cost effective, high quality,in-house rotational molding is now possible thanks to the purchase of arotational molding machine in October 2000. This means that molding componentscurrently being purchased from an outside supplier will be molded atMinuteman's Hampshire plant. The new operation initially will consist of onerotational molding machine with plans in place for a second machine to bepurchased and installed by late fall 2001. Under the skilled leadership ofprofessionals with over 32 years combined experience in the industry, thismachine will produce a wide variety of shapes and sizes such as solutionrecovery tanks, machine frames, housing and other polyethylene parts to supportthe Minuteman and Minuteman Parker lines of floor care equipment. The equipmentuses heat to melt and fuse plastic resin in a closed mold. Unlike most plasticprocesses, no pressure is involved. The simple three-stage process includesloading the resin in the mold, heating and fusion of the resin and cooling andunloading the mold. When in full operation, Minuteman will benefit from thesubstantial cost savings in product and freight as well as allow direct controlover quality and innovative, timely, design updates. 

New Robotic Welder AddsFast-Turning, Fast Payback Production

Minuteman's commitment toefficiency, quality and cost-effectiveness is sharply demonstrated by therecent purchase of a Versa RCT robotic welding system. Located in the company'sheadquarters in Addison, Illinois, the new Versa RCT is configured to weldparts which are tooled and programmed by Minuteman International. The newsystem greatly enhances Minuteman's production and includes an extremely fast84-inch diameter weld turntable which completes its 180-degree sweep in 2-2.5seconds and is capable of handling 750 pounds on each side of the table. Thefast turning time yields more parts per hour, which returns a faster payback.Specifically, the Versa RCT includes a six-axis robot and controller. The robotis mounted in the center of the table so that the working envelope of the robotmatches the table diameter. The table and the robot are one unit which enablesthe system to be moved and returned to production without touch-up of programs.The new Versa RCT robotic welding system combines speed, flexibility inprogramming and more options for today's productivity.

 

Minuteman Europe

Minuteman Europe PenetratesCompetitive Market With Nearly Double Digit Sales Increase

 

Despite the strength of thedollar versus local European currencies, Minuteman Europe was still able topost nearly a double digit increase as compared to the previous year. Thissubstantial performance was due to Minuteman Europe's dedicated focus onestablishing and building solid distributor relationships and penetrating themarket with new products, proven growth strategies, aggressive marketingefforts, direct customer service, cost containment and more efficientdistribution. Minuteman solidified its commitment to the European marketseveral years ago through the maintenance and success of a Netherland'swarehouse especially designed to stock CE-approved machines to allow for moretimely delivery to European customers as well as to bolster a growing presencein the market.

 

Minuteman's Dynamic Web Site

www.minutemanintl.com

 

Minuteman's web site continuesto be a popular destination for customers, distributors and worldwide salesefforts. Recording thousands of visits per day, the site continues to offershareholders and visitors complete information about Minuteman Floor CleaningEquipment, PowerBoss, Multi-Clean Chemicals, Minuteman Parker as well ascurrent product news releases, international news, site locations, companyhistory, financial report and current information and notes from across thefloor cleaning industry. This year, the site introduced a New Dealer Page whichallows distributors to purchase refurbished equipment and facilitates otherneeds such as the ability to download new color photos of products for use indealer advertisements. In addition, the website provides another avenue throughwhich Minuteman can deliver high quality information about products, directlygenerate new business by offering immediate access to Minuteman, and stand as aneasy way for customers to access the best product for their individual cleaningapplication.

An EyeTo the Future

 

ORACLE Forecasts, Analyzes andExpands Minuteman Insight. One of the finest operational software programs formanufacturers will usher Minuteman into a new era of quick information at thetouch of a finger. The Oracle system will go live in the year 2001 and offersthe ability to custom design programs specifically suited to MinutemanInternational. Management will be able to utilize and analyze informationclearly and quickly to access more comprehensive sales data, customerinformation, manufacturing and production output. The software is designed toaccommodate changing Minuteman needs and marketplace changes for many years.

 

www.minutemanintl.com

www.multi-clean.com

www.parkersweeper.com

All hot-linked to MinutemanPowerBoss at www.powerboss.com

 

marketing savvy.

                relationship building.

 

Integrity

 

Distributors Profit

 

Maintaining and nurturing solidlong-time relationships with distributors is a major force within the Minutemanphilosophy. In fact, building solid relationships with distributors is a keyelement in the success of Minuteman. Sales incentives, targeted end-useradvertising campaigns, and direct sales opportunities for distributors helpMinuteman and distributors flourish. Both national advertising and marketingcampaigns bolster the Minuteman product line and distributors through expandedmarket visibility and by direct response leads gathered from industrypublications which are then distributed directly to applicable distributors.

Aggressive New Products FuelFrontrunner Position

4000 Sweeper Scrubber

 

Powerful, Dual Performance in aRider Sweeper/ Rider Scrubber Rugged, powerful and maneuverable, MinutemanPowerBoss's updated and inventive 4000 Sweeper Scrubber, combines the fume-freeconvenience of battery power with an industrial mid-sized sweeper scrubber. The4000 features dust controlled sweeping in a large 50 inch path into a 6 cubicfoot hopper that can be power dumped to a height of 60 inches. The 4000 is alsoa full capacity scrubber with a 40-inch scrub path that includes Edge Scrubcapability. The 65-gallon solution and recovery tank incorporate Minuteman'sexclusive Maxi-WallTM System. Designed for efficiency, the 4000Sweeper/Scrubber includes a 600 amp-hour industrial battery for full-shiftruntime. The operator is strategically seated for 360 degrees maximumvisibility. Proven solid state controls are utilized in this design providingconvenience for the operator and maximizing cleaning productivity. The newPowerBoss 4000 Sweeper/Scrubber sweeps and scrubs deep down handling even themost difficult to clean applications.

 

RapidAir

Optimum Airflow Performance

 

Minuteman's RapidAirCarpet/Floor Dryer is designed to create and channel airflow while maximizingCFM. RapidAir provides optimum performance with a powerful 3/4 HP motor thatgenerates 4,100 CFM to slash dry time in half. RapidAir offers optimumperformance when pitched at a 45 degree or 90 degree angle to circulateairflow, or when placed on or under carpeted surfaces for concentrated airflow.RapidAir's exclusive interlocking design makes it possible to safely stack andsecure multiple machines for increased airflow. Constructed of durablerotationally molded polyethylene, RapidAir is noncorrosive and thepolypropylene fan blade provides maximum CFM in a light weight compact unit.

 

New Markets, New Opportunities

PowerBoss Enters OutdoorCleaning Market

 

In keeping with an aggressivelong-term business plan, PowerBoss entered the outdoor cleaning market in 2000with a new product, LitterBoss(TM), a rider operated litter sweeper/vacuum. Themove demonstrates an ongoing initiative to expand into new markets as the floorcleaning industry consolidates. The opportunity to develop a new distributionchannel and establish a new market will continue to bolster Minuteman'sposition as a front runner. LitterBoss is a natural extension of the PowerBossproduct line and directly compliments Minuteman Parker, which offers a widevariety of lawn, turf and industrial maintenance equipment, and allows thecompany to cross-sell many products into the outdoor cleaning market.

LitterBoss(TM)

The Answer to All Litter Issues

Performance, Efficiency andComfort

 

Minuteman's new LitterBoss is alitter pick-up problem solver. Offering the convenience and comfort of a rider,the LitterBoss sweeps and vacuums litter virtually anywhere it collects. Thewide 68 inch sweep path features two side brushes that are actuator controlledto raise and lower simply with the push of a button while the brushes rotate tosweep litter towards the center vacuum shoe. Minuteman engineers consideredcustomer needs when designing front mounted spray jets which expel a light mistto keep dust to a minimum. The LitterBoss picks up broken glass, soda cans,cigarette butts, food spills and more, from sidewalks, curbs, parking lots,alleys and landscaped areas. A convenient 14 foot accessory hose vacuums updebris in hard to reach areas such as under and around picnic tables andbenches, trees, lamp posts, signage and fences. Performance, efficiency andcomfort combine to make LitterBoss the number one choice for litter controlwith ease.

 

Automatic Scrubbers

 

Minuteman Expands One of theLargest Lines of Dynamic Scrubbers in the Industry Minuteman's updated andinventive new scrubber, 4000 Sweeper Scrubber, which combines the strength ofbattery rider sweepers with rider scrubbers, adds another powerful scrubber toan existing product line defined by unmatched product breadth and depth.Minuteman's ingenuity and ability to listen and respond to customer needsconsistently challenges the competition by offering a wide variety of scrubbercleaning paths ranging from 17" to 40" with coverage from 18,000 to44,000 sq. ft. per hour. Minuteman's scrubbers are designed to fill a varietyof customer floor cleaning needs. The 170 and 200 compact walk-behind scrubbersclean small to mid-sized floors with easy operation, increased maneuverabilityand high performance. The 260, 320 and 380 automatic scrubbers maneuver at thetouch of a hand and offer simplified, user-friendly controls. All Minutemanautomatic scrubbers are ergonomically designed to allow for greater operatorcomfort and control and continue to outperform the competition and provide asolid foundation for Minuteman. Recent additions to the scrubber line, such asthe 200X, the 3800 Rider Scrubber and the 4000 Sweeper Scrubber, supportMinuteman's dedication to focus on customer needs and provide a wide variety ofsolutions for every floor cleaning need.

Burnishers and Floor Machines

Unique, Patented PAMS(R) DustControl Keeps Minuteman's Popular Burnishers

Leading the Market

 

Minuteman's burnishers featurea non-fatigue design and offer a patented Passive Air Management System (PAMS).Unlike any other burnishers in the industry, PAMS keeps Minuteman's 1500, 2400,2600 and 2700 ABS burnishers leading the market, year after year. In additionto high productivity and increased labor savings, Mirage(R) propane burnishersoffer dimension and added depth to the Minuteman product line. More powerfuland dynamic engines combined with Minuteman's exceptional performance andengineering, deliver some of the most powerful propane burnishers on the markettoday. Minuteman's 17" or 20" Front Runner Series floor machinescombine high durability and operator safety with a competitive pricingstructure and complete one the largest floor machine and burnisher lines in theindustry.

 

Carpet Care Machines

 

Aggressive, Power-Packed CarpetCare Machines Deliver Dependable, Reliable, High Quality Minuteman ResultsMinuteman's carpet care equipment is a powerful choice for carpet maintenanceand is designed to minimize operator fatigue while offering a wide variety ofmachine and floor care products. New to Minuteman's carpet care products in2000 is the RapidAir Carpet/Floor Dryer designed to create and channel airflowwhen placed on or under carpeted surfaces for concentrated airflow. The newaddition compliments the daily dependability of the Multi-Purpose Vacuum(MPV(R)) upright, to the total care approach of the Ambassador(TM) Seriesextractors. All of Minuteman's dependable carpet care workhorses featureexcellent operator visibility and reliable results, every time.

 

Indoor/Outdoor Sweepers

 

Professional Sweepers BolsterMinuteman's Position as a Front Runner

 

PowerBoss' new LitterBoss(TM)is just one example of the strength and depth of the Minuteman product line andtheir commitment to outpace the competition. The addition of a rider sweeper,the LitterBoss, which sweeps and vacuums litter anywhere it collects, willcompliment the Minuteman Parker line as well. The wide 68" sweep pathfeaturing two side brushes and front mounted spray jets, to keep dust to aminimum, make the LitterBoss a high quality, efficient performer thatcomfortably joins Minuteman's outstanding performers, PowerBoss ArmadilloSweepers and Parker outdoor lawn and vacuum sweepers. Kleen Sweep 27 is idealfor machine shops, stock rooms, parks, small yards, and is a cost effectiveoption for cleaning up to 31,000 sq. ft. per hour. Kleen Sweep 45 is a compactRider Sweeper designed for sweeping narrow spaces and reducing maintenancecosts 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 Vacuums

 

Absolute Filtration in Safe andPowerful Vacuums

 

Critical Filter Vacuums requireboth safety and efficiency. To guarantee efficiency, Critical Filter Vacuumsare designed to be easy to use, are available in a wide variety of sizes andare created for specific hazardous waste applications. Users are able to selectthe Minuteman vacuum that best suits their unique hazardous waste removalneeds. For example, the 55 Gallon Explosion-Proof Vacuum is designed for usewhere flammable gases, vapors or finely pulverized dust may be present. TheCRV(TM) Clean Room Vacuum is specifically applicable to Class 1 through Class100,000 cleanrooms, pharmaceutical labs, gowning areas, air showers, biologicallabs and computer rooms. The Mercury Vacuum series is designed for the handlingand disposing of mercury-based residue. 

 

The "MinutemanResult". Mirror Shine. Marble Smooth. Dust Free. Professional.

 

multi-clean(R)

 

Innovation

 

Innovative Products,Professional Staff and Unique Systems Propel Multi-Clean

 

"We've run into caseswhere people felt that our Ultra Bright Coating was too glossy and looked wet.As a result, we'll introduce the satin version of the coating. It's justanother example of how our dynamic staff continues to meet the needs of eachcustomer and, in turn, satisfy the needs of future users. I'm very proud of ourefforts and outstanding results this year. It's a tribute to a real teameffort."

 

MikeRau, Vice-President, Multi-Clean

 

Multi-Clean continues to carvea sharp edge in the chemical manufacturing industry. Multi-Clean's aggressiveand outstanding performance is a direct result of a dynamic team ofprofessionals working together to deliver and develop some of the most effectiveand efficient chemical products for all floor types including resilient tile,hard floors, carpet, concrete and wood. Aggressive growth is also supported byinnovative new products such as the Ultra Violet Floor Care System, as well asnew and improved products such as the Eliminator 3, a ready-to-use foamingspray cleaner for dirt and grease primarily on walls, with improved cleaningpower and fragrance; the reintroduction of two new bowl cleaners - the 950featuring 9.5% Hydrochloric acid, and the 2300 which offers 23% hydrochloricacid for maximum cleaning strength. Both products are now registered for use inall 50 states and offer exceptional germicidal activity. Many of theseinnovative product introductions are in response to Multi-Clean's continuingefforts to broaden existing relationships within its current target markets.Continued growth is also possible through Multi-Clean's long-held dedication tohigh quality state-of-the-art research and development, where talented chemistsand professional engineers are supported by a dynamic sales team dedicated todelivering the very best floor care and chemicals available.

Unchallenged Ultra Violet FloorCare System

Multi-Clean's Future Floor CareVision Takes Shape

 

In its first full year of directsales, Multi-Clean's Ultra Violet Floor Care System leads the Company'sdramatic growth. In addition to driving sales, the UV system offers Multi-Cleansales professionals the opportunity to demonstrate a new floor care system,which performs better than conventional methods, and allows a talented salesforce to cross-sell other Multi-Clean products such as floor cleaners, toiletbowl cleaners and disinfectants.

 

"We're selling a completesystem that includes machines and chemical usage together. The incrementalongoing sales of those elements will continue to drive profits."

 

MikeRau, Vice President, Multi-Clean

 

The Ultra Violet Floor CareSystem has united Minuteman International, designers and manufacturers of theUV-22 machine, and Multi-Clean, creators of chemicals for the UV system, as adynamic team force. Together, the two powerhouse companies will continue toengineer, purchase, test and further develop chemicals and equipment designedto provide ever-improving floor care solutions to customers.

 

Worldwide Multi-Clean SalesExpand

 

Multi-Clean successfullylaunched the UV System in the Pacific Rim as well as in Western Europe. Inaddition, the Ultra Violet System was introduced last year at the IntercleanTrade Show in Amsterdam to rave reviews. Similar to US sales of the UltraViolet System, incremental sales of chemicals and other Multi-Clean productsadded to the tremendous increase in volume.

Minuteman(R)Parker(R)

For Over a Century, theProfessional Landscaper's Choice for Performance, Reliability and QualityMinuteman Parker adds depth to Minuteman's wide variety of floor care optionsin addition to providing a wide variety of lawn, turf and industrialmaintenance equipment. Located at Minuteman's Hampshire facility, MinutemanParker products include high quality lawn sweepers, litter vacuums,dethatchers, wheeled blowers, chipper shredder vacuums and portable truckloaders. This exciting product line continues to bring diversity and strengthto Minuteman by selling its products through, but not limited to, thejanitorial and cleaning industries as well as lawn/garden and roofing/pavingdistribution channels. These additional distribution channels offer Minutemananother avenue through which to answer customer needs and to cross-sell additionalproducts. Minuteman Parker products have been the choice of professionallandscapers and discriminating consumers for over a century. Minuteman Parker'sdistinguished reputation in the market is well known and adds substantial valueto the Minuteman brand.

 

Watch for Multi-Clean's newRestroom Pack, a set of high performance restroom sanitation products including6 cleaners: Fresh 100, a non-acid bowl cleaner; Multi-Shine Cleaner, for glassand surface cleaning; GTS Foaming Disinfectant Cleaner, a cleaner,disinfectant, deodorizer for all restroom surfaces; Phos-Clean, a bowl and tilecleaner with 20% phosphoric acid; Freshence, an air freshener-deodorant; andMAC(R) Plus, a restroom maintenance cleaner to clean soap scum and hard waterdeposits.

 

Minuteman ParkerThatch-o-Matic(R)

 

Minuteman InternationalFinancial Report     2000

 

Management's Discussion andAnalysis of Results of Operations and Financial Condition

 

Results of Operations

Earnings

 

The Company achieved record netsales and net income during 2000. Net income for the year 2000 increased 13.0%over 1999 to $4,526,000 or $1.27 per share. Net sales for 2000 once againreached record levels increasing 9.7% over 1999 to $85,195,000. Net sales ofcommercial and industrial products across all product lines, except for lawnand garden, were especially strong domestically. International sales, whileshowing an increase of 9.4% in 2000, were adversely affected by the strongdollar, particularly in Europe. As a result of this higher volume while being ableto control costs, gross profit as a percent of sales increased to 30.8% over30.4% reported in 1999. Operating income for 2000 improved 13.2% to $7,657,000due to these factors.

For 1999 net income increased20.3% to $4,007,000 or $1.12 per share compared with $3,332,000 or $.93 pershare in 1998. Net sales in 1999 increased 35.4% to $77,682,000 as compared to1998. This increase was due primarily to the inclusion of twelve months ofrevenue related to the products of PowerBoss, acquired in November 1998,compared to only one month in 1998. This increase also was attributed to strongdomestic sales of commercial products in 1999 as well as a rebound in someinternational markets, which were depressed in 1998. Gross profit during 1999as a percent to net sales was 30.4% reflecting lower margins on PowerBossindustrial products but offset in part by higher volume and improved margins oncommercial products. As a result, operating income improved 34.8%, from$5,017,000 to $6,763,000, which was reduced by interest expense of $863,000(related principally to the debt from the PowerBoss acquisition). Included in1999 other income/expense is the non-recurring gain related to the successfulsettlement of patent litigation.

 

Selling Expenses

 

Selling expenses, as a percentto net sales, increased from 16.6% in 1999 to 16.7% in 2000. Increased costsassociated with rising group insurance costs and additional amounts resultingfrom higher uncollectible accounts contributed to the total increase in theseexpenses.

 

Selling expenses, as a percentto net sales, decreased from 18.4% in 1998 to 16.6% in 1999. The decreaseresulted primarily from an increase in sales over 1998, which more than offsethigher personnel and promotional expenses as well as incremental PowerBossexpenses in 1999.

 

General and AdministrativeExpenses

 

These expenses increased 10.9%over 1999 due primarily to higher casualty insurance costs, and a one timeservice award approved by the Board of Directors of $375,000 paid in the fourthquarter to the estate of Jerome E. Rau in recognition of his 20 years ofleadership of the Company prior to his untimely death on September 20, 2000.These increases were offset in part by lower professional fees in 2000associated with litigation.

 

For 1999 these expensesincreased 60.7% from 1998 due primarily to higher professional fees related tolitigation and personnel expenses, as well as incremental PowerBoss expenses in1999.

 

Other Income/Expense

 

The Company incurred interestexpense, related principally to the debt from the PowerBoss acquisition in1998, of $810,000, $863,000 and $196,000 in 2000, 1999 and 1998 respectively.Interest expense also resulted from the purchases of inventory and capitalexpenditures in 1999 and 1998.

 

In 2000 interest income increased$130,000 from 1999 as a result of higher investable funds, while other incomein 2000 decreased $187,000 which was primarily the result of the non-recurringsuccessful patent infringement settlement that occurred in 1999. In 1999 otherincome, net decreased $84,000 compared to 1998 due primarily to the gainrecognized on the sale of our former Glendale California warehouse facility in1998, offset in part by the successful settlement of patent infringementlitigation against an industry competitor.

Income Taxes

 

The effective tax rate was36.9%, 36.3% and 36.7% for 2000, 1999 and 1998, respectively. The increase inthe 2000 rate is caused by reduced benefits from research and developmentcredits and our Foreign Sales Corporation. The decrease in the 1999 rate wascaused principally by increased benefits received from our Foreign SalesCorporation, which includes the incremental effects of the PowerBoss exportbusiness.

 

Inflation

 

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

 

Financial Condition Liquidityand Capital Resources and Financial Position

 

The Company had working capitalof $32.7 million and $30.3 million at December 31, 2000 and 1999, respectively.This represented a current ratio of 5.4 and 4.7 for those years, respectively.Cash, cash equivalents and short-term investments represented 11.2% and 12.1%of this working capital at December 31, 2000 and 1999, respectively. Thisdecrease in 2000 was due primarily to payment of long-term debt and purchasesof property, plant and equipment. This increase in 1999 was due primarily toimproved collection of receivables during 1999.

 

At December 31, 2000 and 1999,the Company had shareholders' equity of $36.6 million and $33.3 million,respectively, which when compared to total liabilities represented an equity toliability ratio of 2.0 and 1.6, respectively.

 

The Company has more thansufficient capital resources and is in a strong financial position to meetbusiness and liquidity needs as they arise. The Company foresees no unusualfuture events that will materially change the aforementioned summarization.

 

Intangible Assets

 

Intangible assets represent10.1% and 10.9% of total assets and 15.1% and 17.5% of shareholders' equity atDecember 31, 2000 and 1999, respectively. These intangible assets wereprimarily recorded as the result of the November 1998 PowerBoss acquisition(see note C to the consolidated financial statements). The Company does notbelieve there has been any impairment in this asset at December 31, 2000 and1999, in accordance with Statements of Financial Accounting Standards No. 121"Accounting for the Impairment of Long-Lived Assets and for Long-LivedAssets to be Disposed of". If it became probable that the projected futureundiscounted cash flows of acquired assets were less than the carrying value ofintangible assets, the Company would recognize an impairment loss in accordancewith the provisions of SFAS No. 121.

 

Market Risk

 

The Company's earnings and cashflow are subject to fluctuations due to changes in foreign currency exchangerates. Currently these earnings and foreign currency translation adjustmentshave not been material to the overall financial results of the Company.

 

The Company has also enteredinto an interest rate swap agreement to obtain a fixed interest rate onvariable rate debt to reduce certain exposures to interest rate fluctuations.In the event that a counterparty fails to meet the terms of the interest rateswap agreement, the Company's exposure is limited to the interest ratedifferential. The Company manages the credit risk of counterparties by dealingonly with institutions that the Company considers financially sound. TheCompany considers the risk of nonperformance to be remote.

 

ConsolidatedStatements of Income

 
|                                            |   | **Year Ended  December 31** |       |
|-------------------------------------------------|--------|-----------------------------|------------|
|                                            |   | **2000**                    |       | **1999** |   | **1998** |   |
| Net  sales                                      |   | $                           | 85,195,000 |   | $ | 77,682,000 |   | $ | 57,380,000 |   |
| Cost  of sales                                  |   | 58,913,000                  |       | 54,034,000 |   | 39,333,000 |   |
| Gross  profit                                   |   | 26,282,000                  |       | 23,648,000 |   | 18,047,000 |   |
|                                            |   |                        |       |   |   |   |   |
| Operating  expenses                             |   |                        |       |   |   |   |   |
| Selling                                         |   | 14,202,000                  |       | 12,896,000 |   | 10,548,000 |   |
| General  and administrative                     |   | 4,423,000                   |       | 3,989,000 |   | 2,482,000 |   |
| Operating  expenses                             |   | 18,625,000                  |       | 16,885,000 |   | 13,030,000 |   |
| Income  From Operations                         |   | 7,657,000                   |       | 6,763,000 |   | 5,017,000 |   |
| Other  income (expense)                         |   |                        |       |   |   |   |   |
| Interest  income                                |   | 202,000                     |       | 72,000 |   | 32,000 |   |
| Interest  expense                               |   | (810,000                    | )          | (863,000 | ) | (196,000 | ) |
| Other  - net                                    |   | 129,000                     |       | 316,000 |   | 400,000 |   |
| Other  income (expense)                         |   | (479,000                    | )          | (475,000 | ) | 236,000 |   |
| Income  Before Income Taxes                     |   | 7,178,000                   |       | 6,288,000 |   | 5,253,000 |   |
|                                            |   |                        |       |   |   |   |   |
| Provision  (credit) for income taxes            |   |                        |       |   |   |   |   |
| Current                                         |   | 2,752,000                   |       | 2,291,000 |   | 1,766,000 |   |
| Deferred                                        |   | (100,000                    | )          | (10,000 | ) | 155,000 |   |
| Provision  For Income Taxes                     |   | 2,652,000                   |       | 2,281,000 |   | 1,921,000 |   |
| Net  Income                                     |   | $                           | 4,526,000  |   | $ | 4,007,000 |   | $ | 3,332,000 |   |
| Net  income per common share--basic and diluted |   | $                           | 1.27       |   | $ | 1.12 |   | $ | .93 |   |

 

Seenotes to consolidated financial statements.

 

ConsolidatedBalance Sheets

 

 
|                                                                                                                  |   | **December 31** |       |
|-----------------------------------------------------------------------------------------------------------------------|--------|-----------------|------------|
|                                                                                                                  |   | **2000**        |       | **1999** |   |
| Assets                                                                                                                |   |            |       |   |   |
| Current  Assets                                                                                                       |   |            |       |   |   |
| Cash  and cash equivalents                                                                                            |   | $               | 975,000    |   | $ | 332,000 |   |
| Short-term  investments                                                                                               |   | 2,696,000       |       | 3,332,000 |   |
| Accounts  receivable, less allowances of $562,000 in 2000 and $469,000 in 1999                                        |   | 15,897,000      |       | 14,935,000 |   |
| Due  from affiliates                                                                                                  |   | 604,000         |       | 354,000 |   |
| Inventories                                                                                                           |   | 18,831,000      |       | 18,527,000 |   |
| Prepaid  expenses                                                                                                     |   | 224,000         |       | 228,000 |   |
| Refundable  income taxes                                                                                              |   | 312,000         |       | 267,000 |   |
| Deferred  income taxes                                                                                                |   | 565,000         |       | 420,000 |   |
| Total  Current Assets                                                                                                 |   | 40,104,000      |       | 38,385,000 |   |
| Property,  Plant and Equipment                                                                                        |   |            |       |   |   |
| Land                                                                                                                  |   | 820,000         |       | 820,000 |   |
| Building  and improvements                                                                                            |   | 6,294,000       |       | 5,983,000 |   |
| Machinery  and equipment                                                                                              |   | 11,735,000      |       | 10,886,000 |   |
| Office  furniture and equipment                                                                                       |   | 3,550,000       |       | 3,265,000 |   |
| Transportation  equipment                                                                                             |   | 1,060,000       |       | 1,472,000 |   |
|                                                                                                                  |   | 23,459,000      |       | 22,406,000 |   |
| Accumulated  depreciation                                                                                             |   | (14,250,000     | )          | (12,993,000 | ) |
|                                                                                                                  |   | 9,209,000       |       | 9,413,000 |   |
| Intangible  Assets--Net of amortization of $754,000 in 2000 and $442,000 in 1999                                      |   | 5,513,000       |       | 5,825,000 |   |
|                                                                                                                  |   | $               | 54,826,000 |   | $ | 53,623,000 |   |
| LIABILITIES  AND SHAREHOLDERS' EQUITY                                                                                 |   |            |       |   |   |
| Current  Liabilities                                                                                                  |   |            |       |   |   |
| Current  maturities of long term debt                                                                                 |   | $               | 1,500,000  |   | $ | 1,500,000 |   |
| Accounts  payable                                                                                                     |   | 2,574,000       |       | 3,359,000 |   |
| Accrued  expenses                                                                                                     |   | 3,366,000       |       | 3,235,000 |   |
| Total  Current Liabilities                                                                                            |   | 7,440,000       |       | 8,094,000 |   |
| Long-Term  Debt, less current maturities                                                                              |   | 10,500,000      |       | 12,000,000 |   |
| Deferred  Income Taxes                                                                                                |   | 310,000         |       | 265,000 |   |
| Shareholders'  Equity                                                                                                 |   |            |       |   |   |
| Common  stock, no-par value Authorized shares - 10,000,000 Issued and outstanding  shares- 3,568,385 in 2000 and 1999 |   | 6,396,000       |       | 6,396,000 |   |
| Retained  earnings                                                                                                    |   | 30,408,000      |       | 27,060,000 |   |
| Cumulative  foreign currency translation adjustments                                                                  |   | (228,000        | )          | (192,000 | ) |
|                                                                                                                  |   | 36,576,000      |       | 33,264,000 |   |
|                                                                                                                  |   | $               | 54,826,000 |   | $ | 53,623,000 |   |

 

Seenotes to consolidated financial statements.

 

ConsolidatedStatements of

Shareholders'Equity

 
|                          |   | **Years Ended  December 31, 1998, 1999 and 2000** |   |
|-------------------------------|--------|---------------------------------------------------|--------|
|                          |   | **Common Stock**                                  |   | **Cumulative  Foreign** |   |   |   |
|                          |   | **Number of**                                     |   |   |   | **Retained** |   | **Translation** |   |   |   |
|                          |   | **Shares**                                        |   | **Amount** |   | **Earnings** |   | **Adjustments** |   | **Total** |   |
| Balance  at January 1, 1998   |   | 3,568,385                                         |   | $ | 6,396,000 |   | $ | 22,862,000 |   | $ | (176,000 | ) | $ | 29,082,000 |   |
| Dividends  (.44 per share)    |   |                                              |   |   |   | (1,570,000 | ) |   |   | (1,570,000 | ) |
| Net  income                   |   |                                              |   |   |   | 3,332,000 |   |   |   | 3,332,000 |   |
| Translation  adjustment       |   |                                              |   |   |   |   |   | (70,000 | ) | (70,000 | ) |
| Comprehensive  income         |   |                                              |   |   |   |   |   |   |   | 3,262,000 |   |
| Balance  at December 31, 1998 |   | 3,568,385                                         |   | 6,396,000 |   | 24,624,000 |   | (246,000 | ) | 30,774,000 |   |
| Dividends  (.44 per share)    |   |                                              |   |   |   | (1,571,000 | ) |   |   | (1,571,000 | ) |
| Net  income                   |   |                                              |   |   |   | 4,007,000 |   |   |   | 4,007,000 |   |
| Translation  adjustment       |   |                                              |   |   |   |   |   | 54,000 |   | 54,000 |   |
| Comprehensive  income         |   |                                              |   |   |   |   |   |   |   | 4,061,000 |   |
| Balance  at December 31, 1999 |   | 3,568,385                                         |   | 6,396,000 |   | 27,060,000 |   | (192,000 | ) | 33,264,000 |   |
| Dividends  (.33 per share)    |   |                                              |   |   |   | (1,178,000 | ) |   |   | (1,178,000 | ) |
| Net  income                   |   |                                              |   |   |   | 4,526,000 |   |   |   | 4,526,000 |   |
| Translation  adjustment       |   |                                              |   |   |   |   |   | (36,000 | ) | (36,000 | ) |
| Comprehensive  income         |   |                                              |   |   |   |   |   |   |   | 4,490,000 |   |
| Balance  at December 31, 2000 |   | 3,568,385                                         |   | $ | 6,396,000 |   | $ | 30,408,000 |   | $ | (228,000 | ) | $ | 36,576,000 |   |

 

Seenotes to consolidated financial statements.

 

CONSOLIDATEDSTATEMENTS OF CASH FLOWS

 

 
|                                                                               |   | **Year Ended  December 31** |          |
|------------------------------------------------------------------------------------|--------|-----------------------------|---------------|
|                                                                               |   | **2000**                    |          | **1999** |   | **1998** |   |
| OPERATING  ACTIVITIES                                                              |   |                        |          |   |   |   |   |
| Net  income                                                                        |   | $                           | 4,526,000     |   | $ | 4,007,000 |   | $ | 3,332,000 |   |
| Adjustments  to reconcile net income to net cash provided by operating activities: |   |                        |     |   |     |   |     |
| Depreciation                                                                       |   | 1,666,000                   |          | 1,636,000 |   | 1,547,000 |   |
| Amortization                                                                       |   | 312,000                     |          | 312,000 |   | 39,000 |   |
| Deferred  income taxes (credit)                                                    |   | (100,000                    | )             | (10,000 | ) | 155,000 |   |
| Other                                                                              |   | (36,000                     | )             | 54,000 |   | (70,000 | ) |
| Changes  in operating assets and liabilities:                                      |   |                        |          |   |   |   |   |
| Accounts  receivable and due from affiliates                                       |   | (1,212,000                  | )             | (127,000 | ) | (2,691,000 | ) |
| Inventories                                                                        |   | (304,000                    | )             | (1,511,000 | ) | (1,056,000 | ) |
| Prepaid  expenses and refundable income taxes                                      |   | (41,000                     | )             | (209,000 | ) | (142,000 | ) |
| Accounts  payable, accrued expenses and income taxes                               |   | (654,000                    | )             | 579,000 |   | 1,126,000 |   |
| Net  Cash Provided by Operating Activities                                         |   | 4,157,000                   |          | 4,731,000 |   | 2,240,000 |   |
| Investing  ACTIVITIES                                                              |   |                        |          |   |   |   |   |
| Purchase  of AAR PowerBoss                                                         |   |                        |          |   |   | (11,631,000 | ) |
| Purchases  of property, plant and equipment, net                                   |   | (1,462,000                  | )             | (1,097,000 | ) | (1,670,000 | ) |
| Purchases  of short-term investments                                               |   |                        |          | (3,331,000 | ) |   |   |
| Maturities  of short-term investments                                              |   | 636,000                     |          |   |   | 157,000 |   |
| Net  Cash Used in Investing Activities                                             |   | (826,000                    | )             | (4,428,000 | ) | (13,144,000 | ) |
| Financing  ACTIVITIES                                                              |   |                        |          |   |   |   |   |
| Proceeds  from long-term debt                                                      |   |                        |          |   |   | 13,500,000 |   |
| Payment  of long-term debt                                                         |   | (1,500,000                  | )             |   |   |   |   |
| Dividends  paid                                                                    |   | (1,178,000                  | )             | (1,571,000 | ) | (1,570,000 | ) |
| Net  Cash Provided by (Used in) Financing Activities                               |   | (2,678,000                  | )             | (1,571,000 | ) | 11,930,000 |   |
| Increase  (Decrease) in Cash and Cash Equivalents                                  |   | 653,000                     |          | (1,268,000 | ) | 1,026,000 |   |
| Cash  and Cash Equivalents at Beginning of Year                                    |   | 322,000                     |          | 1,590,000 |   | 564,000 |   |
| Cash  and Cash Equivalents at End of Year                                          |   | $                           | 975,000       |   | $ | 322,000 |   | $ | 1,590,000 |   |

 

Seenotes to consolidated financial statements.

 

Notes to Consolidated FinancialStatements

 

Note A - Business Information

 

Minuteman International, Inc.(the "Company") operates primarily in one business segment, whichconsists of the development, manufacture and marketing of commercial andindustrial floor maintenance equipment and related products. The Company sellsto a multitude of regional, national and international customers, primarilywithin the sanitary supply industry. No single customer accounted for more thanten percent of net sales in 2000, 1999 or 1998.

 

The Company sells to affiliated(see Note H) and unaffiliated customers in foreign countries. For 2000, 1999,and 1998, these sales aggregated $17,896,000, $16,351,000 and $10,642,000,respectively, and were principally to customers in Canada, the Pacific Rim, theMiddle East, Europe, and Latin America.

 

NOTE B - Summary of SignificantAccounting Policies

 

Principles of Consolidation

 

The consolidated financialstatements include the accounts of the Company (an Illinois corporation) andits wholly-owned subsidiaries, Multi-Clean, Minuteman PowerBoss, Inc.,Minuteman Canada, Inc., Minuteman European B.V. and Minuteman InternationalForeign Sales Corporation. Significant intercompany accounts and transactionshave been eliminated in consolidation.

 

Revenue Recognition

 

The Company recognizes salesupon transfer of title of product, generally upon shipment of its products, netof applicable provisions for discounts and allowances. The Company also providesfor its estimate of warranty and bad debts at the time of sales.

 

Use of Estimates

 

The preparation of financialstatements in conformity with accounting principles generally accepted in theUnited States requires management to make estimates and assumptions that affectthe amounts reported in the financial statements and accompanying notes. Actualresults could differ from those estimates.

Inventories

 

Inventories are stated at thelower of cost or market using the last-in, first-out (LIFO) method for amajority (2000-51%, 1999-54%) of inventories and the first-in, first-out (FIFO)method for the remainder. Inventories at December 31, 2000 and 1999 consist ofthe following:

 
|                       |   | **2000**   |       | **1999**   |   |
|----------------------------|--------|------------|------------|------------|--------|
| Inventories  at FIFO cost: |   |       |       |       |   |
| Finished  goods            |   | $          | 8,216,000  |       | $      | 7,760,000 |   |
| Work  in process           |   | 8,562,000  |       | 8,451,000  |   |
| Raw  materials             |   | 4,108,000  |       | 4,403,000  |   |
|                       |   | 20,886,000 |       | 20,614,000 |   |
| Less  LIFO reserve         |   | (2,055,000 | )          | (2,087,000 | )      |
| Total  Inventories         |   | $          | 18,831,000 |       | $      | 18,527,000 |   |

 

Property, Plant and Equipment

 

Property, plant and equipmentare stated on the basis of cost. Depreciation is computed by both the straightline and accelerated methods for financial reporting purposes and by theaccelerated method for tax purposes. Estimated useful lives for buildings andimprovements range from 15 to 40 years. All other property, plant and equipmentlives range from 3 to 7 years.

 

Intangible Assets

 

The Company has classified asintangible assets the cost in excess of the fair value of net assets ofbusinesses acquired. Amortization is computed on a straight line basis overtwenty years.

 

The Company does not believethere has been any impairment in this asset at December 31, 2000 and 1999, inaccordance with Statement of Financial Accounting Standards (SFAS) No. 121"Accounting for the Impairment of Long-Lived Assets and for Long-LivedAssets to be Disposed of". If it became probable that the projected futureundiscounted cash flows of acquired assets were less than the carrying value ofintangible assets, the Company would recognize an impairment loss in accordancewith the provisions of SFAS No. 121.

 

Income Taxes

 

Income taxes have been providedusing the liability method. Under this method deferred tax assets andliabilities are determined based on differences between financial reporting andtax bases of assets and liabilities, and are measured using the enacted taxrates and laws that will be in effect when the differences are expected toreverse.

 

Net Income Per Common Share

 

Net income per common share isbased on the weighted average number of common shares outstanding during eachyear (3,568,385 in 2000, 1999 and 1998). Basic and fully diluted earnings pershare are the same amounts.

Foreign Currency Translation

 

The functional currency of theCompany's foreign subsidiaries is the local currency. Accordingly, the balancesheet accounts of the foreign subsidiaries have been translated into UnitedStates dollars using the current exchange rate at the balance sheet date andincome statement amounts have been translated using the average exchange ratefor the year. Foreign currency translation adjustments resulting from thechange in exchange rates have been classified as a separate component ofshareholders' equity.

 

Cash Equivalents

 

The Company considers all bankcertificates of deposit and Eurodollar certificate investments with a maturityof three months or less when purchased to be cash equivalents.

 

Short-Term Investments

 

Short-term investments havebeen categorized as available for sale and are stated at cost, whichapproximates fair value. Investments, all of which are with domestic commercialbanks, include certificates of deposit and Eurodollar and treasurycertificates.

 

Research and DevelopmentExpenses

 

Research and developmentexpense for 2000, 1999 and 1998, approximated $1,459,000, $1,329,000 and$1,118,000 respectively.

 

Shipping and Handling Costs

 

The Company classifies shippingand handling costs it incurs as selling expenses in the accompanyingconsolidated statements of income. Shipping and handling costs in 2000, 1999and 1998 were $907,000, $797,000 and $777,000, respectively. All shipping andhandling amounts billed to customers are classified as net sales and theassociated costs are recorded as cost of sales.

 

Reclassifications

 

Certain amounts in the 1999 and1998 financial statements, as previously reported, have been reclassified toconform to the 2000 presentation. Net sales and cost of sales amounts have beenincreased to reflect the reclassification of freight costs billed to customers.Previously, such billings were recorded net of the related costs in sellingexpenses.

 

New Accounting Pronouncements

 

During 1998, the FinancialAccounting Standards Board issued Statement No. 133, "Accounting forDerivative Instruments and Hedging Activities" (the Statement), which wasamended by SFAS No. 137 and SFAS No. 138. Provisions of the Statement arerequired to be adopted for years beginning after June 15, 2000 and will requirethe Company to recognize all derivatives in the balance sheet at fair value.The Company adopted the Statement in its amended form effective January 1,2001, and estimates that the adoption of the Statement will not be material toits operations, financial position or cash flows.

NOTE C - Acquisition

 

On November 23, 1998, theCompany entered into an Asset Purchase Agreement with AAR PowerBoss, Inc.,("PowerBoss") for the acquisition of substantially all of the netassets and assumption of certain liabilities of PowerBoss. PowerBoss designs,manufactures, and repairs ride-on and walk-behind sweepers and scrubbers forfloor and carpet care for use in industrial applications. The cash purchaseprice, including related acquisition costs, was $11,494,000, after finalpurchase price adjustment. The acquisition was accounted for as a purchase.Accordingly, the accounts and transactions of PowerBoss have been included inthe consolidated financial statements since the date of acquisition. Theacquisition was financed with borrowed funds from the long-term debt agreemententered into on November 18, 1998 (see Note D). The aggregate consideration hasbeen allocated to the assets of PowerBoss based upon their respective fairmarket values. The excess of the purchase price over the fair value of the netassets acquired (intangible assets) in 1998 approximated $5,950,000 and isbeing amortized over 20 years.

 

NOTE D - Debt

 

Short Term Debt

The Company entered into anunsecured Line of Credit arrangement for short-term debt with a financialinstitution which expires in May 2001. Under the terms of this agreement theCompany may borrow up to $5 million on terms mutually agreeable to the Companyand the financial institution. There are no requirements for compensatingbalances or restrictions of any kind involved in this arrangement. At December31, 2000 and 1999 there were no borrowings outstanding. Long Term Debt TheCompany financed the PowerBoss acquisition (See Note C) by entering into a termloan agreement with a financial institution on November 18, 1998 for$13,500,000. This unsecured credit facility provides for an interest rate atLIBOR plus an applicable margin based upon the ratio of debt outstanding to theCompany's earnings before interest, taxes, depreciation and amortization andranges from .70% to 1.15%. The margin rate on this debt at December 31, 2000and December 31, 1999 was .70% and .80%, respectively (see Note F).Theeffective interest rate on this debt at December 31, 2000 was 6.1%. The Companyagreed to maintain certain minimum financial ratios. Maturities of long term debtare as follows:

 
| Due                      | 2001                 |       | $          | 1,500,000  |   |
|--------------------------|----------------------|------------|------------|------------|--------|
|                     | 2002                 |       | 1,500,000  |       |
|                     | 2003                 |       | 1,500,000  |       |
|                     | 2004                 |       | 1,500,000  |       |
|                     | 2005  and thereafter |       | 6,000,000  |       |
|                     |                 |       | 12,000,000 |       |
| Less  current maturities |                 | (1,500,000 | )          |
| Total                    |                 |       | $          | 10,500,000 |   |
|                          |                      |            |            |            |        |  |

Interest paid for short-termand long-term debt obligations in 2000, 1999 and 1998 was $798,000, $847,000and $110,000, respectively.

 

NOTE E - Income Taxes

 

Deferred income taxes primarilyrelate to temporary differences in the recognition of depreciation expense andother accrued expenses for financial reporting and income tax purposes. Thetemporary differences between the financial statement carrying amounts and thetax bases of assets and liabilities that result in significant amounts ofdeferred taxes in the consolidated balance sheets at December 31, 2000 and 1999are as follows:

 
|                                                                |   | **Deferred Tax  Asset (Liabilities)** |    |
|---------------------------------------------------------------------|--------|---------------------------------------|---------|
|                                                                |   |                                  |    |   |   |
|                                                                |   |                                  |    |   |   |
|                                                                |   |                                  |    |   |   |
|                                                                |   |                                  |    |   |   |
|                                                                |   | **December 31**                       |    |
|                                                                |   | **2000**                              |    | **1999** |   |
| Accounts  receivable allowance                                      |   | $                                     | 133,000 |   | $ | 100,000 |   |
| Property,  plant & equipment tax depreciation in excess of book |   | (240,000                              | )       | (230,000 | ) |
| Accrued  expenses & other                                       |   | 362,000                               |    | 285,000 |   |
|                                                                |   | $                                     | 255,000 |   | $ | 155,000 |   |

 

The effective income tax rateon income taxes differed from the Federal statutory rate as follows: 

 
|                                            |   | **2000** |   | **1999** |   | **1998** |   |
|-------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| Federal  statutory rate                         |   | 34.0     | %      | 34.0     | %      | 34.0     | %      |
| State  income taxes, net of Federal tax benefit |   | 3.3      |   | 3.4      |   | 3.1      |   |
| Foreign  Sales                                  |   |     |   |     |   |     |   |
| Corporation  benefit                            |   | (2.1     | )      | (2.3     | )      | (1.5     | )      |
| Research  and Development Tax Credits           |   | (.7      | )      | (1.2     | )      | (.3      | )      |
| Other,  net                                     |   | 2.4      |   | 2.4      |   | 1.4      |   |
|                                            |   | 36.9     | %      | 36.3     | %      | 36.7     |   |

 

The components of the provision(benefit) for income taxes are:

 
|    |   | **2000** |      | **1999** |   | **1998**  |   |
|---------|--------|----------|-----------|----------|--------|-----------|--------|
| Federal |   | $        | 2,049,000 |     | $      | 1,775,000 |   | $ | 1,693,000 |   |
| State   |   | 530,000  |      | 450,000  |   | 328,000   |   |
| Foreign |   | 73,000   |      | 56,000   |   | (100,000  | )      |
|    |   | $        | 2,652,000 |     | $      | 2,281,000 |   | $ | 1,921,000 |   |

 

The Company paid income taxesof $2,763,000, $2,421,000 and $1,975,000 in 2000, 1999 and 1998, respectively.

 

Note F - Financial Instruments

 

Financial instruments whichpotentially subject the Company to concentrations of credit risk consist principallyof cash equivalents and trade receivables. The Company places its cashequivalents with high credit quality financial institutions, which areFederally insured up to prescribed limits. However, the amount of cashequivalents at any one institution may exceed the Federally insured prescribedlimits. Concentrations of credit risks with regard to trade receivables arelimited due to the large number of customers comprising the Company's customerbase. The Company performs ongoing credit evaluations of its customers andmaintains allowances for potential credit losses which, when incurred, havebeen within the range of management expectations.

In 1998, the Company enteredinto an interest rate swap agreement to obtain a fixed interest rate onvariable rate debt and reduce certain exposures to interest rate fluctuations.At December 31, 2000 and 1999, the Company had interest rate swaps with anotional amount of $12,000,000 and $13,500,000, respectively. The swaps willterminate on the same basis as the long-term debt repayment schedule endingNovember, 2005 (See Note D). The swaps for 2000 and 1999 result in fixed ratepayments at an effective interest rate of 6.1% and 6.2%, respectively. Variablerate payments are based on LIBOR interest rate plus an applicable margin (SeeNote D).

 

Interest rate differentialspaid or received under this agreement are recognized as an adjustment tointerest expense. The Company does not hold or issue interest rate swapagreements for trading purposes.

 

In the event that acounterparty fails to meet the terms of the interest rate swap agreement, theCompany's exposure is limited to the interest rate differential. The Companymanages the credit risk of counterparties by dealing only with institutionsthat the Company considers financially sound. The Company considers the risk ofnonperformance to be remote. The net carrying amounts and fair values of theCompany's financial instruments are approximately the same.

 

NOTE G - Lease Commitments

 

The Company and itssubsidiaries lease certain manufacturing, warehousing and other facilities andequipment. The leases generally provide for the lessee to pay taxes,maintenance, insurance and certain other operating costs of the leasedproperty. The leases on most of the properties contain renewal provisions. Thefollowing is a summary of future minimum payments under operating leases thathave initial or remaining noncancelable lease terms in excess of one year atDecember 31, 2000:

 
| 2001   |   | $       | 688,000   |   |
|--------|--------|---------|-----------|--------|
| 2002   |   | 686,000 |      |
| 2003   |   | 573,000 |      |
| 2004   |   | 275,000 |      |
| 2005   |   | 98,000  |      |
|   |   | $       | 2,320,000 |   |
|        |        |         |           |        |  |

 

Rental expense for operatingleases amounted to $708,000, $451,000 and $219,000, in 2000, 1999 and 1998,respectively.

NOTE H - Related PartyTransactions

 

Hako-Werke GmbH & Co. (aGerman corporation) owns 68.2% of the outstanding common stock of the Companythrough a subsidiary. The Company sold approximately $1,482,000, $1,460,000 and$1,403,000 of merchandise to Hako-Werke and certain of its subsidiaries during2000, 1999 and 1998, respectively. Amounts due from affiliates, which relate tothese sales, are due within 90 days from the date of sale.

 

NOTE I - Employee Benefit Plans

 

The Company maintains aparticipatory defined contribution plan for substantially all employees underSection 401(a) of the Internal Revenue Code. In addition to a discretionarycontribution, the Company also matches employee contributions based upon aformula up to a specified maximum. Contributions to the plan and relatedexpense were $400,000, $403,000 and $284,000 for the years ended 2000, 1999 and1998 respectively.

 

NOTE J - RESTRICTED STOCK PLAN

 

On April 18, 2000 theshareholders approved the Minuteman 2000 Restricted Stock Plan,("Restricted Stock Plan"), which is designed to attract and retainthe services of key management employees by providing such persons with aproprietary interest in the Company through the granting of Minuteman commonstock. The maximum number of shares of Minuteman common stock that shall beavailable for issuance shall be 150,000. At December 31, 2000 there were150,000 shares available to be granted. Awards may be issued under theRestricted Stock Plan through December 31, 2009, subject to the vesting periodsnot to exceed three years. At the sole discretion of the Company, an award ofrestricted stock may be awarded to an eligible employee based upon certainconditions and restrictions including, but not limited to, past and continuedservice with the Company, achievement of specific business objectives, superiorwork performance, and other measurements of individual or Company performance.In the event that the employee's employment with Minuteman is terminated(except due to death or total disability) prior to the end of his or hervesting period, the non-vested portion of the award shall be forfeited.However, in the event of an employee's death or total disability, or a changein control of the Company, the award shall immediately become fully vested.Shares issued under the plan are recorded at fair market value on the date ofgrant with a corresponding charge to shareholders' equity representing theunearned portion of the award. The unearned portion is amortized ascompensation expense on a straight line basis over the related vesting period.

 

NOTE K - QUARTERLYRESULTS OF OPERATIONS

(UNAUDITED)

The Company is restatingthe following summary of quarterly results of operations for the years endedDecember 31, 2000 and 1999. The Company determined that it was necessary torestate these resultsbased on a review of the timing of the recording of certainsales transactions on a quarterly basis, which were not consistent with theCompany's sales recognition policy. The annual amounts reported remainunaffected.

 
|                        |   |                                               |   | **Restated** |   |     |   | **Restated** |   |          |   | **Restated**  |   |         |   | **Restated** |   |
|-----------------------------|--------|----------------------------------------------------|--------|--------------|--------|----------|--------|--------------|--------|---------------|--------|---------------|--------|--------------|--------|--------------|--------|
|                        |   | **March**                                          |   | **March**    |   | **June** |   | **June**     |   | **September** |   | **September** |   | **December** |   | **December** |   |
|                        |   | **31**                                             |   | **31**       |   | **30**   |   | **30**       |   | **30**        |   | **30**        |   | **31**       |   | **31**       |   |
| **2000**                    |   | **(Thousands of dollars, except  per share data)** |   |
|                        |   |                                               |   |         |   |     |   |         |   |          |   |          |   |         |   |         |   |
|                        |   |                                               |   |         |   |     |   |         |   |          |   |          |   |         |   |         |   |
| Net  Sales                  |   | $                                                  | 23,083 |         | $      | 22,731   |   | $            | 22,461 |          | $      | 21,713        |   | $            | 22,361 |         | $      | 21,143 |   | $ | 17,290 |   | $ | 19,608 |   |
|                        |   |                                               |   |         |   |     |   |         |   |          |   |          |   |         |   |         |   |
| Gross  Profit               |   | 7,047                                              |   | 6,900        |   | 6,884    |   | 6,642        |   | 6,826         |   | 6,357         |   | 5,525        |   | 6,383        |   |
|                        |   |                                               |   |         |   |     |   |         |   |          |   |          |   |         |   |         |   |
| Net  Income                 |   | 1,063                                              |   | 979          |   | 1,113    |   | 976          |   | 1,304         |   | 1,036         |   | 1,046        |   | 1,535        |   |
|                        |   |                                               |   |         |   |     |   |         |   |          |   |          |   |         |   |         |   |
| Net Income per common share |   | $                                                  | 0.30   |         | $      | 0.27     |   | $            | 0.31   |          | $      | 0.28          |   | $            | 0.37   |         | $      | 0.29 |   | $ | 0.29 |   | $ | 0.43 |   |
|                        |   |                                               |   |         |   |     |   |         |   |          |   |          |   |         |   |         |   |
|                        |   |                                               |   |         |   |     |   |         |   |          |   |          |   |         |   |         |   |
| **1999**                    |   |                                               |   |         |   |     |   |         |   |          |   |          |   |         |   |         |   |
|                        |   |                                               |   |         |   |     |   |         |   |          |   |          |   |         |   |         |   |
| Net  Sales                  |   | $                                                  | 19,491 |         | $      | 19,053   |   | $            | 20,007 |          | $      | 19,030        |   | $            | 21,110 |         | $      | 20,576 |   | $ | 17,074 |   | $ | 19,023 |   |
|                        |   |                                               |   |         |   |     |   |         |   |          |   |          |   |         |   |         |   |
| Gross  Profit               |   | 5,682                                              |   | 5,518        |   | 6,155    | a)     | 5,854        |   | 6,333         |   | 6,098         |   | 5,478        |   | 6,178        |   |
|                        |   |                                               |   |         |   |     |   |         |   |          |   |          |   |         |   |         |   |
| Net  Income                 |   | 772                                                |   | 679          |   | 966      |   | 795          |   | 1,147         |   | 1,011         |   | 1,122        |   | 1,522        |   |
|                        |   |                                               |   |         |   |     |   |         |   |          |   |          |   |         |   |         |   |
| Net Income per common share |   | $                                                  | 0.22   |         | $      | 0.19     |   | $            | 0.27   |          | $      | 0.22          |   | $            | 0.32   |         | $      | 0.29 |   | $ | 0.31 |   | $ | 0.42 |   |

 

a)The amount originallyreported for Gross Profit for June 30,1999 was improperly listed as $6,115 dueto typographical error.

Markets for the Company'sSecurities and Related Matters

 

On March 1, 2001 the lastreported sales price of the common stock on the NASDAQ systems was $9.81. Theapproximate number of holders of common stock was 400. Since 1988 the Board ofDirectors has declared regular quarterly dividends and the fourth quarterdividend in 2000 represents the forty-ninth consecutive dividend paid toshareholders. Future dividend policy will be determined by the Board ofDirectors in light of prevailing financial needs and earnings of the Companyand other relevant factors.

 

The common stock of MinutemanInternational, Inc. is quoted on The Nasdaq Stock Market and its trading symbolis "MMAN". The following tables set forth for 2000 and 1999 the rangeof bid prices for the Company's common stock as reported in the NASDAQ systemsfor the period indicated:

 
|         |   |         |   |         |   | **Dividends** |   |
|--------------|--------|--------------|--------|--------------|--------|---------------|--------|
|         |   | **High**     |   | **Low**      |   | **Per Share** |   |
| 2000         |   |         |   |         |   |          |   |
| 1st  Quarter |   | 10  1/2      |   |   8     |   | $             | .11    |   |
| 2nd  Quarter |   | 10           |   |   7 5/8 |   | $             | .07    |   |
| 3rd  Quarter |   |   9     |   |   7 1/2 |   | $             | .07    |   |
| 4th  Quarter |   |   9 1/4 |   |   7 7/8 |   | $             | .08    |   |
|         |   |         |   |         |   |          |   |
| 1999         |   |         |   |         |   |          |   |
| 1st  Quarter |   | 13  3/4      |   | 10  1/8      |   | $             | .11    |   |
| 2nd  Quarter |   | 10  1/2      |   |   7 3/4 |   | $             | .11    |   |
| 3rd  Quarter |   | 10  1/2      |   |   7 1/2 |   | $             | .11    |   |
| 4th  Quarter |   | 10  1/4      |   |   7 1/2 |   | $             | .11    |   |

 

Selected Consolidated FinancialData

 

See "Management'sDiscussion and Analysis of Results of Operations and Financial Condition",and "Notes to Consolidated Financial Statements" These amounts havebeen restated to reflect reclassifications per Note B.

 
|                                           |   | **Year Ended  December 31,**                     |   |
|------------------------------------------------|--------|--------------------------------------------------|--------|
|                                           |   | **2000**                                         |   | **1999** |   | **1998** |   | **1997** |   | **1996** |   |
|                                           |   | (In  thousands, except share and per share data) |   |
| Income  Statement Data                         |   |                                             |   |   |   |   |   |   |   |   |   |
| Net  sales                                     |   | $                                                | 85,195 |   | $ | 77,682 |   | $ | 57,380 |   | $ | 54,212 |   | $ | 49,886 |   |
| Cost  of sales                                 |   | 58,913                                           |   | 54,034 |   | 39,333 |   | 37,783 |   | 34,698 |   |
| Gross  profit                                  |   | 26,282                                           |   | 23,648 |   | 18,047 |   | 16,429 |   | 15,188 |   |
| Selling  expenses                              |   | 14,202                                           |   | 12,896 |   | 10,548 |   | 9,869 |   | 8,548 |   |
| General  and administrative expenses           |   | 4,423                                            |   | 3,989 |   | 2,482 |   | 2,310 |   | 2,207 |   |
| Income  from operations                        |   | 7,657                                            |   | 6,763 |   | 5,017 |   | 4,250 |   | 4,433 |   |
| Interest  income (expense), net                |   | (608                                             | )      | (791 | ) | (164 | ) | (4 | ) | 54 |   |
| Other,  net                                    |   | 129                                              |   | 316 |   | 400 |   | 107 |   | 486 |   |
| Income  before income taxes                    |   | 7,178                                            |   | 6,288 |   | 5,253 |   | 4,353 |   | 4,973 |   |
| Income  tax expense                            |   | 2,652                                            |   | 2,281 |   | 1,921 |   | 1,506 |   | 1,812 |   |
| Net  income                                    |   | $                                                | 4,526  |   | $ | 4,007 |   | $ | 3,332 |   | $ | 2,847 |   | $ | 3,161 |   |
|                                           |   |                                             |   |   |   |   |   |   |   |   |   |
| Per  Share Data                                |   |                                             |   |   |   |   |   |   |   |   |   |
| Cash  dividends                                |   | $                                                | .33    |   | $ | .44 |   | $ | .44 |   | $ | .44 |   | $ | .40 |   |
| Net  income per common share                   |   | 1.27                                             |   | 1.12 |   | .93 |   | .80 |   | .89 |   |
|                                           |   |                                             |   |   |   |   |   |   |   |   |   |
| Weighted  average number of shares outstanding |   | 3,568,385                                        |   | 3,568,685 |   | 3,568,685 |   | 3,568,385 |   | 3,568,385 |   |
| Balance  Sheet Data                            |   |                                             |   |   |   |   |   |   |   |   |   |
|                                           |   |                                             |   |   |   |   |   |   |   |   |   |
| Working  capital                               |   | $                                                | 32,664 |   | $ | 30,291 |   | $ | 28,360 |   | $ | 19,901 |   | $ | 19,184 |   |
| Total  assets                                  |   | 54,826                                           |   | 53,623 |   | 50,670 |   | 32,493 |   | 30,968 |   |
| Long-term  debt                                |   | 10,500                                           |   | 12,000 |   | 13,500 |   |   |   |   |   |
| Shareholders'  equity                          |   | 36,576                                           |   | 33,264 |   | 30,774 |   | 29,082 |   | 27,854 |   |

 

 

Report of Independent Auditors

 

To The Shareholders of

Minuteman International, Inc.

 

We have audited theaccompanying consolidated balance sheets of Minuteman International, Inc. andsubsidiaries as of December 31, 2000 and 1999 and the related consolidatedstatements of income, shareholders' equity and cash flows for each of the threeyears in the period ended December 31, 2000. These financial statements are theresponsibility of the Company's management. Our responsibility is to express anopinion on these financial statements based on our audits.

 

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

 

In our opinion, the financialstatements referred to above present fairly, in all material respects, theconsolidated financial position of Minuteman International, Inc. andsubsidiaries at December 31, 2000 and 1999, and the consolidated results oftheir operations and their cash flows for each of the three years in the periodended December 31, 2000, in conformity with accounting principles generallyaccepted in the United States.

 

ERNST & YOUNG LLP

Chicago, Illinois

February 13, 2001

 

Report of Management

 

The management of MinutemanInternational, Inc. is responsible for the integrity of the informationpresented in this Annual Report, including the Company's financial statements.These statements have been prepared in conformity with accounting principlesgenerally accepted in the United States and include, where necessary, informedestimates and judgments by management.

 

The Company maintains systemsof accounting and internal controls designed to provide assurance that assetsare properly accounted for, as well as to insure that the financial records arereliable for preparing financial statements. The systems are augmented byqualified personnel and are reviewed on a periodic basis.

 

The Company maintains highstandards when selecting, training, and developing personnel, to ensure thatmanagement's objectives of maintaining strong, effective internal accountingcontrols and unbiased, uniform reporting standards are attained. The Companybelieves its policies and procedures provide reasonable assurance thatoperations are conducted in conformity with law and with the Company'scommitment to a high standard of business conduct.

 

Our independent auditors, Ernst& Young LLP, conduct annual audits of our financial statements inaccordance with auditing standards generally accepted in the United Stateswhich include the review of internal controls for the purpose of establishingtheir audit scope, and issue an opinion of the fairness of such financialstatements.

 

The Board of Directors pursuesits responsibility for the quality of the Company's financial reportingprimarily through its Audit Committee, which is composed of three outsidedirectors. The Audit Committee meets periodically with management and the independentauditors to review the manner in which they are performing theirresponsibilities and to discuss auditing, internal accounting controls, andfinancial reporting matters. The independent auditors periodically meet alonewith the Audit Committee and have full and free access to the Audit Committeeat any time.

 

 

Thomas J. Nolan

Chief Financial Officer,

Secretary & Treasurer

 

 

Gregory J. Rau

President and Chief

Executive Officer

 

Gregory J. Rau

President &

Chief Executive Officer

Minuteman International, Inc.

 

 

Tyll Necker

Chief Executive Officer

Hako-Werke International

GmbH & Co.

 

 

Frederick W. Hohage

President

BSH Home Appliances

 

 

A Subsidiary of Robert Bosch

Corporation, Sales Group

James C. Schrader, Jr.

President

Precision Enterprises, Ltd.

Frank R. Reynolds

Attorney

Law Offices of Reynolds

& Reynolds, Ltd.

 

 

THOMAS J. NOLAN (not pictured)

Chief Financial Officer,

Secretary & Treasurer

Minuteman International, Inc.

 

Minuteman considers anyacquisition opportunity if, in the opinion of its management and Board ofDirectors, it would be in the best interest of the company.

 

Board of Directors

 

Operating Officers

Gregory J. Rau

President & Chief ExecutiveOfficer

 

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 Jersey07660

1-888-213-0965 ShareholdersInformation

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

1-201-329-8660 ForeignShareholders

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

 

Stock Listing

Traded over-the-counter on TheNasdaq Stock Market under the symbol "MMAN"

 

Annual Meeting

April 17, 2001 at 10:00 a.m. atLaSalle National Bank 135 South LaSalle Street

Forty-third Floor Board RoomChicago, Illinois 60603

 

Form 10-K

Minuteman International, Inc.will send a copy of its Form 10-K report for fiscal 2000 as filed with theSecurities and Exchange Commission upon written request to Thomas J. Nolan,Chief Financial Officer, at the corporate office.

 

Locations

Corporate Offices and WorldHeadquarters

Minuteman International, Inc.

111 South Rohlwing Road

Addison, Illinois 60101

(630) 627-6900

 

Manufacturing

Facilities MinutemanInternational, 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 MinutemanInternational, 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

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 L5S1B1

(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

 

Minuteman International, Inc.

111 South Rohlwing Road

Addison, Illinois 60101

Telephone: (630) 627-6900

www.minutemanintl.com