F O R M  10 - KSB

                   SECURITIES AND EXCHANGE COMMISSION

                         Washington, D.C. 20549

(Mark One)

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

For the fiscal year ended 	December 31, 2000

                                   OR

(  )	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	EXCHANGE ACT OF 1934	 (NO FEE REQUIRED)

For the transition period from  ______________ to _______________

Commission file number   O-7267

                         WEB PRESS CORPORATION
----------------------------------------------------------------

Washington                                      91-0851298
----------------------------                    ----------------

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

22023 68th Avenue South, Kent, Washington           98032
-----------------------------------------       ----------------
(Address of principal executive offices)	 (Zip Code)

Registrant's telephone number, including area code (253) 395-3343

Securities Registered Pursuant to 12(b) of the Act:

Title of each class     Name of each exchange on which registered

None
----------------        -----------------------------------------

Securities Registered Pursuant to Section 12(g) of the Act:

Common Stock, Par Value $.025
-------------------------------------------------------------
                            (Title of Class)

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

All reports during the preceding 12 months have been filed.

State issuer's revenues for its most recent fiscal year....$10,717,590.

As of February 28, 2001, 3,105,413 common shares were outstanding,
and the aggregate market value of the common shares (based upon
the closing bid price provided by the National Quotation Bureau,
Inc.) held by non-affiliates was approximately $363 thousand.

Documents incorporated by reference:  Exhibits as described in
Part III, Item 13.

<PAGE>


                         WEB PRESS CORPORATION

           TABLE OF CONTENTS TO ANNUAL REPORT ON FORM 10-KSB

ITEM        DESCRIPTION                                        PAGE
----        -----------                                        ----

                                 PART I

 1.         BUSINESS........................................   4
 2.         PROPERTIES......................................   7
 3.         LEGAL PROCEEDINGS...............................   7
 4.         SUBMISSION OF MATTERS TO A VOTE OF
            SECURITY HOLDERS................................   8

                                 PART II

 5.         MARKET FOR THE REGISTRANT'S COMMON STOCK
            AND RELATED SECURITY HOLDER MATTERS.............   9
 6.         MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS...  10
 7.         FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.....  14
 8.         CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
            ON ACCOUNTING AND FINANCIAL DISCLOSURE..........  14

                                PART III

 9.         DIRECTORS AND EXECUTIVE OFFICERS
            OF REGISTRANT...................................  15
10.         EXECUTIVE COMPENSATION..........................  18
11.         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
            OWNERS AND MANAGEMENT...........................  18
12.         CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..  20
13.         EXHIBITS, FINANCIAL STATEMENT SCHEDULES
            AND REPORTS ON FORM 8-K.........................  20

<PAGE>

                      ANNUAL REPORT ON FORM 10-KSB
                         WEB PRESS CORPORATION

                                 PART I
                                 ---- -

ITEM 1.   BUSINESS

(A)  General Development of Business

Web Press Corporation (herein referred to as "Web" or "Company")
was founded in late 1967 under the name "Web Press Aid" as a sole
proprietorship.  The company was incorporated in November, 1969
under the laws of the State of Washington.  Initially, the Com-
pany was involved primarily in the rebuilding and repair of web-
fed printing presses and related equipment.  Shortly after incor-
poration, the Company undertook the development of a line of
printing press equipment of its own design.  During 1972, the
Company commenced production of this equipment.  While the manu-
facture of new equipment is now the Company's primary business,
it continues to deal in rebuilt and used equipment as an adjunct
to its new press sales.  The Company also sells parts and service
for its new equipment.  The sale of new and used presses ac-
counted for approximately 83% and 3%, respectively, of the Com-
pany's revenues in 2000.  The Company's presses are primarily de-
signed to print on absorbent paper such as newsprint.  Products
produced by the presses are newspapers (both broadsheet and tab-
loid sizes), shoppers, advertising inserts, and paperback books.

During 1984 and 1985, the Company developed four models of a new
high-speed press and added them to its product line.  In 1992,
the Company added a new size cutoff to this line of presses, in-
creasing the number of models to six.

In 1995, the Company introduced and sold its first integrated
rollstand perfecting unit (IRU).  The IRU has a single roll posi-
tion under the perfecting unit in place of a free-standing two-
position rollstand.

In June 1998, the Company introduced the Quad-Stack 4+4 perfect-
ing unit as a new module for the Atlas product line.  The Quad-
Stack prints color simultaneously on both sides of the paper.
Its unique design results in a compact size for a 4+4 press.

(B)  Financial Information About Segments

See Note 7 of Notes to Consolidated Financial Statements for in-
formation about the Company's operations by segment and geo-
graphic area for the years ended December 31, 2000 and 1999.

<PAGE>

(C)  Narrative Description of Business

Equipment which Web Press Corporation manufactures consists of
two basic products, the Marc-25 and the Atlas.  The Atlas is made
in six different models.  The principal difference between the
Marc-25 and the Atlas is that the Atlas is twenty percent faster.
Each press is composed of standard modules to unwind, print, cut-
off and fold the roll of paper into a finished product.  Each is
arranged to meet the particular printer's requirements for the
number of pages, color, and size of their products.  Following
are descriptions of these modules:

PERFECTOR.  Web's perfector is a rotary offset perfecting print-
ing press unit, consisting of two printing couples running "back-
to-back".  Each perfector will print four broadsheet-size newspa-
per pages, in one color, on each revolution of the printing cou-
ples.  Perfectors can be configured to print up to four colors.
They can print up to 32 broadsheet-size pages.

QUADRA-COLOR UNIT.  Web's Quadra-Color unit consists of four
printing stations mounted around a common impression cylinder.
This unit prints four colors on two broadsheet-size pages at a
time.  It offers better control over color register and thus is
capable of greater accuracy in color printing than conventional,
unit-to-unit methods for color printing.  It is used in conjunc-
tion with the Company's other products to provide close register,
four-color capability in the printing system.

QUAD-STACK.  Web's Quad-Stack unit consists of eight printing
stations positioned in two juxtaposed vertical stacks of four
printing stations each.  The horizontal layout of each printing
station results in a compact 4+4 perfector that prints four col-
ors on four broadsheet-size pages at the same time.  Like the
Quadra-Color, it offers excellent control over color register
resulting in superior color printing.  It is available both with
or without an integrated rollstand and is used in conjunction
with the Atlas product line.

FOLDER.  Web's folder is used in conjunction with perfecting,
Quadra-Color and Quad-Stack units to fold the printed paper into
a finished product.  The folder cuts the paper off in every plate
cylinder revolution and folds it in standard broadsheet-size
newspapers, tabloid-size papers, and shopping-flyer or magazine-
size products.  The Company also produces two folder styles which
have the capability of making a second parallel fold to produce
"digest"-size signatures which are used in printing some books
and pamphlets.

TWO-POSITION ROLL ROLLSTANDS.  Web's rollstand supports two 36-
inch wide rolls of paper and is used in conjunction with the per-

<PAGE>

fector and Quadra-Color units. The base rollstand holds two 42-
inch diameter rolls of paper. A larger rollstand that holds two
52-inch diameter rolls of paper is also available.  The rollstand
controls the unwinding of the paper roll and feeds it to the
printing units under controlled tension.

The Company has an agreement granting it the exclusive right to
manufacture and sell in the United States and most other coun-
tries printing equipment designed by Color Impact International,
Inc. The grantor may purchase the equipment from the Company and
resell it in Russia and China. Another company has the exclusive
right to manufacture and sell the equipment in India. The agree-
ment commenced on August 17, 1998, and is for a period of 10
years. It requires the company to pay Color Impact International,
Inc. a license fee equal to 7 percent of the gross selling price
for equipment. The minimum license fee is $70 thousand in any 12-
month period from the commencement date.  The Company may enhance
or modify the equipment and commingle it with equipment of its
own design.

Web Press Corporation markets its products through Company em-
ployed representatives in the United States and Canada.  Foreign
sales are made through independent organizations in Latin Amer-
ica, Asia, Europe, and the Middle East.

The Company's presses are sold in a highly competitive world mar-
ket.  Competition is based on a combination of price, service,
quality, and the versatility of the equipment.  Web's presses are
priced competitively with similar products.  The Company believes
that features incorporated in its presses, as well as the Com-
pany's policies of supporting its customers, will allow it to
continue to be very competitive.  Web Press Corporation is the
only manufacturer in the United States producing a Quadra-Color
unit for its market.

The primary competitors of the Company are Goss Graphic Systems,
P.E.C. Corporation (King Press Division), Dauphin Graphic Ma-
chines, Inc. and Harris Graphics. Certain of these companies have
financial resources in excess of the Company's.

The most important materials employed in Web's product line are
steel and aluminum (plate and bar stock), tubing, bearings, and
rubber coverings.  All are available through local suppliers.
The Company believes that its sources of supply for these materi-
als are adequate for its needs and that it is not substantially
dependent upon any one supplier.  Lead times of up to six months
are required at some times for certain materials.

Web Press Corporation maintains an ongoing program of product de-
velopment and improvement.  This program consists primarily of

<PAGE>

technical improvements and supplementary developments which have
produced features and capabilities that management believes will
result in competitive marketing advantages for Web's product
line.  In 2000, $477 thousand was expended for research and de-
velopment compared to $503 thousand in 1999.

Total employment of 55 persons as of December 31, 2000 compares
with approximately 69 at December 31, 1999.

Substantially all of the Company's operations are run by electri-
cal energy purchased from a local utility.  The Company has not
experienced energy shortages and does not anticipate any diffi-
culties in the foreseeable future.  Extended shortages of energy
would have an adverse impact on the Company.

Compliance with federal, state and local environmental protection
laws during 2000 had no material effect upon capital expendi-
tures, earnings, or the competitive position of Web Press Corpo-
ration.


(D)  Foreign Operations

The Company's foreign operations consist entirely of export sales
and related services originating at its facilities within the
United States.  Export sales accounted for 42.3% of total sales
in 2000 and 53.1% in 1999.  Further financial information relat-
ing to foreign operations for the two years ended December 31,
2000, is set forth in Note 7 (Segment Information) of the Notes
to Consolidated Financial Statements.

ITEM 2.   PROPERTIES

OFFICE AND MANUFACTURING FACILITIES.  The Company presently occu-
pies approximately 49,000 square feet of leased office and manu-
facturing space at 22023 68th Avenue South, Kent, Washington.
The term of the lease is five years, commencing in November 1998,
with a five-year renewal option. The monthly rental payment is
$16,155.

The Company has arrangements for small offices for each of its
three salesmen who are located in Burlington, Vermont; Blue
Springs, Missouri; and Charlotte, North Carolina.

ITEM 3.	LEGAL PROCEEDINGS

There are no material pending legal proceedings, other than ordi-
nary legal matters incidental to the Company's business, to which
the Company is a party or in which any of the Company's property
is the subject.

<PAGE>


ENVIRONMENTAL PROCEEDINGS.  There are no proceedings against the
Company involving federal, state or local statutes or ordinances
dealing with environmental protection.


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

None.

<PAGE>

                                PART II
                                ---- --

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
        SECURITY HOLDER MATTERS

(A)  Principal Market, Stock Price, and Dividend Information

Although certain dealers regularly provide quotations on the Com-
pany's stock, actual trading activity is limited.

The following table sets forth the high and low bid quotations
per share for the Company's common stock for the periods indi-
cated.  These figures were provided by the National Quotation Bu-
reau, LLC,  and may reflect inter-dealer prices, without retail
mark-up, mark-down or commission.  They do not necessarily repre-
sent actual transactions.

                         2000                          1999
                         ----                          ----

  Quarter             High    Low                 High      Low
  -------             ----    ---                 ----      ---

  First              $.406   $.375               $.629     $.46875
  Second              .375    .344                .6875     .53125
  Third               .48     .281                .53125    .50
  Fourth              .375    .281                .50       .375

The Company has paid no dividends during the two years ended De-
cember 31, 2000.

(B)  Approximate Number of Holders of Common Stock

The number of holders of record for the Company's common stock as
of February 28, 2001 was 513.


<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS


OPERATING RESULTS
-----------------

                        2000 Compared With 1999


Sales in 2000 were $10.717 million, a decrease of $977 thousand
from 1999 sales of $11.694 million.  New press sales decreased
$583 thousand to $8.907 million in 2000, a 6.1 percent decrease
from 1999 sales of $9.490 million.  Domestic sales of new equip-
ment were $4.886 million in 2000, $974 thousand higher than 1999
sales of $3.912 million.  However, international sales of new
equipment declined to $4.020 million from 1999 sales of $5.576
million, a decrease of $1.556 million.  The Company believes the
strength of the dollar compared with other currencies, combined
with slower economic growth, caused the decline in international
sales.  Used equipment sales were $269 thousand in 2000 and $799
thousand in 1999.  Revenues from the sales of replacement parts
and service were $1.542 million in 2000, an increase of $136
thousand from 1999 sales of $1.406 million.

The gross profit margin on total sales was 23.3 percent in 2000,
compared with 19.4 percent in 1999.  The gross profit margin on
new equipment sales and parts sales both increased in 2000 from
1999.  New equipment sales, which amounted to 83.1 percent of to-
tal sales in 2000, had a gross profit of 28.7 percent in 2000
compared with 26.4 percent in 1999.  Used equipment sales con-
tributed a gross loss of $4 thousand in 2000.  In 1999, used
equipment sales resulted in a gross profit of $88 thousand.  In
2000, cost of sales included a write-down of $68 thousand for ob-
solete parts and certain equipment, compared with a write down of
$102 thousand in 1999.  Research and development expenses were
$477 thousand in 2000 and $503 thousand in 1999.  Engineering
costs in 2000 included the internalization of electrical design
work, design and development of a 52-inch diameter rollstand, in-
terlocks for the press guards, and preliminary design work to
help analyze features and cost for a contemplated new product
line.

Selling, general and administrative expense declined $170 thou-
sand, or 8.2 percent, in 2000 from 1999.  In 2000, selling ex-
penses increased $78 thousand, and administrative expenses de-
creased $248 thousand.  Advertising and promotional expenses in-
creased $100 thousand in 2000 from 1999.  The Company spent $180
thousand attending international trade shows and $130 thousand
attending domestic trade shows in 2000, compared with $78 thou-

<PAGE>

sand and $109 thousand in 1999, respectively.  Offsetting this
increase was $16 thousand less in advertisements in trade publi-
cations.  Commission expense decreased $35 thousand in 2000 from
1999 due to lower sales.  In 1999, administrative expenses in-
cluded a $250 thousand charge for a product liability claim set-
tled in March 2000.  In 2000, administrative payroll costs in-
creased $44 thousand from 1999.  The Company accrued $63 to bad
debt expense in 2000, compared with $113 thousand in 1999.

Interest expense decreased $30 thousand in 2000 from 1999.  1999
interest expense included $47 thousand in interest to the Inter-
nal Revenue Service for a tax deficiency in the Company's 1993
tax return.  The average interest rate on the Company's revolving
lines of credit with the bank were 9.3 percent in 2000, compared
with 8.6 percent in 1999.  The average borrowings from the bank
were $1.852 million in 2000 and $1.841 million in 1999.  The
higher average interest rate in 2000 was caused by the higher
prime rate being charged by the bank as a result of several in-
terest rate increases by the Federal Reserve Bank.

The Company had pre-tax earnings of $342 thousand and net earn-
ings of $235 thousand in 2000.  In 1999, the Company had a pre-
tax loss of $89 thousand and a net loss of $61 thousand.

                        1999 Compared With 1998

Sales in 1999 were $11.694 million, an increase of $1.724 million
from 1998 sales of $9.970 million.  New press sales increased
$1.836 million to $9.490 million in 1999, a 23.4 percent increase
from 1998.  International sales of new equipment were $5.576 mil-
lion in 1999, an increase of $3.804 million from 1998 sales of
$1.773 million.  Domestic sales of new equipment were $3.912 mil-
lion, a decline of $1.969 million from 1998 sales of $5.881 mil-
lion.  International customers purchased larger size press con-
figurations then domestic customer in 1999 as most domestic sales
were add-ons to existing press lines, resulting in a change in
the mix of international sales versus domestic sales.  Used
equipment sales were $799 thousand in 1999, compared with $784
thousand in 1998.  Revenues from the sales of replacement parts
and service were $1.406 million in 1999, a decline of $126 thou-
sand from 1998 sales of $1.532 million.

The gross profit margin on total sales was 19.4 percent in 1999,
compared with 22.8 percent in 1998.  The primary reason for the
lower gross profit margin in 1999 was cost overruns primarily in
the field of $320 thousand from 1998 sales that were unexpectedly
incurred in 1999.  A decrease in the average gross profit per-
centage for new equipment sales to 26.4 percent in 1999 from 28.2
percent in 1998 also contributed to the lower gross profit mar-
gin.  Used equipment sales contributed a gross profit of $88

<PAGE>

thousand in 1999 and $86 thousand in 1998.  In 1999, cost of
sales included a write-down of $102 thousand for obsolete parts
and certain equipment, compared with a write-down of $83 thousand
in 1998.  Research and development expense were $503 thousand in
1999, compared with $450 thousand in 1998.  Continuing develop-
ment of the Quad-Stack printing module and internalization of the
electrical design work have resulted in higher engineering costs
during both 1998 and 1999.

Selling, general and administrative expenses increased $398 thou-
sand, or 23.6 percent, in 1999 from 1998.  In 1999, selling ex-
penses declined $21 thousand, and administrative expenses in-
creased $419 thousand compared with 1998.  Sales commissions in-
creased $76 thousand in 1999 from 1998, and other payroll costs
related to sales increased $21 thousand.  Lower promotional ex-
penses offset the increase.  In 1999, the Company spent $78 thou-
sand attending international trade shows, compared with $208
thousand in 1998.  Administrative expenses increased due to
higher payroll costs of $44 thousand, a charge of $113 thousand
for bad debts, higher bank fees and professional service fees,
and the establishment of a reserve for the product liability
judgement against the Company discussed elsewhere in this report.

Interest expense increased $72 thousand in 1999 from 1998.  Pay-
ment of $47 thousand in interest to the Internal Revenue Service
for a tax deficiency in the Company's 1993 tax return caused most
of the increase.  The average interest rate on the Company's re-
volving lines of credit with the bank were 8.6 percent in 1999,
compared with 10.1 percent in 1998.  The average borrowings from
the bank were $1.841 million in 1999 and $623 thousand in 1998.
The higher average borrowings in 1999 resulted from the conver-
sion of most of the company's long-term debt into a long-term re-
volving line of credit, allowing the Company to pay interest only
on the money it needs to borrow.  The lower average interest rate
on those borrowings in 1999 is because the interest rate on the
new revolving line of credit is 2 percent lower than the rate for
the retired short-term revolving line of credit used by the Com-
pany in 1998 and during the first quarter of 1999.

The Company had a pre-tax loss of $89 thousand and a net loss of
$61 thousand in 1999. In 1998, the Company had pre-tax earnings
of $444 thousand and net earnings of $280 thousand.

                                  2001
                                  ----

The Newspaper Association of America (NAA) projection for 2001 is
for advertising spending to increase by 5.1 percent over 2000.
If advertising grows at this robust rate the Company does not be-
lieve it will translate into press sales.  Interest rate in-
creases in 2000 by the Federal Reserve Bank have put a dampener

<PAGE>

on consumer spending and mortgage financing, and higher energy
prices are taking money from consumers and businesses alike.  The
year-long decline of the stock market has taken away much of the
wealth generated during the past five years as financial assets
lost value and their owners ability to borrow and spend declined.
The NAA reports that newspapers are reacting to the slowing econ-
omy by cutting capital spending and by layoffs and hiring
freezes.

Because of the high value of each order for the Company's equip-
ment and the irregular timing of orders, projections for particu-
lar time periods are very difficult to make.  Due to slowing
sales, the Company reduced the workweek for most of its employees
in mid-October 2000.  A normal workweek was restored in January
2001.  The Company is working from an extensive list of prospects
for its equipment; however, sales in the first quarter of 2001
have been slow both domestically and internationally.  The Com-
pany believes this list of prospects will allow it to operate
profitably in 2001.  However, if sales do not materialize in the
second quarter of 2001, the Company will have to consider produc-
tion cutbacks

The Company does not anticipate purchasing any new machine tools
in 2001.

LIQUIDITY
---------

Net working capital was $4.720 million and the current ratio was
4.2:1 on December 31, 2000.  Changes in working capital compo-
nents include a decrease in accounts receivable of $1.478 mil-
lion; inventories increased $328 thousand; deposits decreased by
$102 thousand; accounts payable declined by $206 thousand; cus-
tomers deposits declined by $128 thousand; accrued expenses de-
creased by $1.182 million; and income taxes payable decreased by
$135 thousand.  Net cash provided from operations was $143 thou-
sand in 2000.

Raw materials and parts inventories, finished goods inventory,
and used equipment inventory decreased $110 thousand, $359 thou-
sand, and $58 thousand, respectively, in 2000 from 1999. Work in
progress increased $795 thousand in 2000.

Funds provided by operations are the Company's primary source of
liquidity.  In addition, the Company uses two revolving lines of
credit with a commercial bank to finance fluctuating working
capital requirements.  On December 31, 2000, the Company had ad-
ditional borrowing capacity of $1.471 million from its operating
line of credit.  The Company's operating line of credit matures
on June 1, 2003.  There were no borrowings against the export

<PAGE>

line on December 31, 2000.  The Company can request additional
loans for export sales using the export line of credit in 2001.

CAPITAL RESOURCES
-----------------

Total assets decreased $1.351 million from December 31, 1999, to
$7.075 million on December 31, 2000.  In 2000, stockholders' eq-
uity increased by $235 thousand; working capital increased by
$462 thousand; non-current deferred income taxes increased by
$110 thousand; and long-term debt (including the long-term re-
volving line of credit) increased by $90 thousand.

Long-term financing in the form of secured notes are used to ac-
quire manufacturing equipment.  The Company incurred $160 thou-
sand of new long-term debt in 2000.  The Company believes that
its additional long-term borrowing capacity is sufficient to pro-
vide for orderly growth.

ITEM 7.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial statements and supplementary data filed as part of this
report are listed in the index appearing in Item 13 to this Form
10-KSB Annual Report.

ITEM 8.   CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURES

None.

<PAGE>

                                PART III
                                ---- ---

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The executive officers and directors of the Company are:

Name               Position                             Age
----               --------                             ---
G. B. Palmer       President and Director               52


E. P. Beierlorzer  Vice President of Engineering        61
                   and Director

R. G. Mercer       Vice President of Manufacturing      59
                   and Director

R. B. Thompson     Vice President of Technical          60
                   Services and Director

A. W. White        Vice President of Purchasing         46
                   and Director

R. M. Sprague      Director                             61

P. F. Dunn         Director                             52

C. L. Mathison     Vice President of Finance            58
                   and Secretary/Treasurer

C. A. Gath         Vice President of Sales              60


There are no family relationships between any directors or ex-
ecutive officers of the registrant.  Officers are appointed by
the Board of Directors and serve at its will or until they re-
sign.

BUSINESS EXPERIENCE:

G. B. Palmer
------------

Mr. Palmer has been president and a director of the Company
since December 1996.  He served as the Company's director of
manufacturing from August 1990 to December 1996, and has been
employed by the Company since 1986.  Prior to joining the Com-
pany, he was director of manufacturing of Pacific Hoe Corpora-
tion. He is a metallurgical engineer.

<PAGE>

E. P. Beierlorzer
-----------------

Mr. Beierlorzer rejoined the Company as director of engineering
in June 1997.  He was elected to the board of directors at that
time and appointed vice president of engineering in November
1997.  From July 1996 to June 1997, he was a consultant.  Mr.
Beierlorzer was chief engineer with the Ecopak division of Ran-
pak Corporation from August 1992 to June 1996.  From March 1984
to August 1992, he was director of engineering for the Company.
He holds four patents for equipment design.

R. G. Mercer
------------

Mr. Mercer has worked for the Company in manufacturing since
1972.  He was elected to the board of directors in June 1997 and
appointed vice president of manufacturing in November 1997.  He
was director of manufacturing from December 1996 to November
1997.  From August 1990 to December 1996, he was production man-
ager.

R. B. Thompson
--------------

Mr. Thompson has worked for the Company in technical services
since 1970.  He was elected to the board of directors in June
1997 and appointed vice president of technical services in No-
vember 1997.  He was customer service manager from October 1985
to November 1997.

A. W. White
-----------

Mr. White has worked for the Company in purchasing since 1976.
He was elected to the board of directors in June 1997 and ap-
pointed vice president of purchasing in November 1997.  He has
been the Company's purchasing manager for 21 years.

R. M. Sprague
-------------

Mr. Sprague has been a director of the Company since January
1997.  He is the founder and owner of Sprague Metal Company, a
manufacturer of specialty sheet metal products.  He founded the
company in 1974 and has been employed in the metal trades busi-
ness for over 30 years.

P. F. Dunn
----------

Mr. Dunn has been a director of the Company since February 1997.
Since July 2000, he has been the tax manager for the State and
Local Division with Amazon.com. Prior to that, he was employed
by the Boeing Company in various financial positions since 1973

<PAGE>

C. L. Mathison
--------------

Mr. Mathison was appointed vice president of finance in June
1998.  He has been secretary/treasurer of the Company since
January 1997, and the Company's controller since October 1979.
Prior to joining the Company, he was assistant controller of
Bayliner Marine Corporation.

C. A. Gath
----------

Prior to joining the Company as vice president of sales in May
of 1985, Mr. Gath was manager of South and Western Operations in
the Cheshire Division of Xerox Corporation, a manufacturer of
addressing and labeling equipment.  He started with that divi-
sion in 1976 as a sales representative and progressed through
several management positions in sales and marketing.


401(K) PLAN:

Effective January 1, 1988, the Company established a 401(K) plan
under the Internal Revenue Service Regulations.  Employees are
eligible to participate after one year of service. Plan partici-
pants self-direct their investments choosing from eleven options
sponsored by Merrill Lynch.  An employee who elects to partici-
pate may contribute in a year up to the lower of 15% of gross
pay or the dollar limit under the regulations, which in 2000 was
$10,500.  The Company contributes a matching amount of 25% of
the first $4,000 contributed by an employee in a year.  In addi-
tion, the Company may make a discretionary matching contribu-
tion.  The total amount is determined by the Company's Board of
Directors and allocated to the participants based on their con-
tributions.  There were no discretionary contributions in 2000
and 1999. Fees paid the administrator, plus the company's match-
ing contribution, totals approximately $33 thousand in 2000 and
$31 thousand in 1999.

<PAGE>

ITEM 10.  EXECUTIVE COMPENSATION

The following table sets forth the aggregate total cash compen-
sation accrued during the fiscal years ended December 31, 2000,
1999, and 1998 for the chief executive officer of the Company.

                          Annual Compensation
                          ------ ------------

                                               Long-Term     All Other
Name/Principal              Salary    Bonus   Compensation  Compensation
   Position           Year    ($)      ($)          $            $
--------------        ----  ------    -----   ------------  ------------

G.B. Palmer           2000   95,000   2,392         0            0
President/            1999   85,625   1,317         0            0
General Manager       1998   72,500     0           0            0

The vice president of sales is paid commissions equal to 1% of firm
orders accepted.  The remainder of the officers and directors are
under no formal compensation agreements.

During 2000, there were no options outstanding under the Company's
Stock Option Plan.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

The following table sets forth as of February 28, 2001, informa-
tion with respect to the beneficial ownership of common stock of
the Company by each person who is known by the Company to have
owned beneficially more than 5% of the Company's common stock,
by each of its officers and directors, and by its officers and
directors as a group:

                                                      Percent
Name and Address               Shares Owned           Of Class
----------------               ------------           --------

Alan W. White                    551,400               17.76%
3025 196th Ave. Ct. E
Sumner, WA  98390

Rolynn G. Mercer                 520,667 (1)           16.77%
14409 - 151 Pl. SE
Renton, WA  98056

Roy B. Thompson                  513,000 (2)           16.52%
3901 NE 22
Renton, WA  98056

<PAGE>

Gary B. Palmer                   264,833                8.53%
285 Mt. Rainier Pl.
Issaquah, WA  98027

Edwin P. Beierlorzer             256,500               8.26%
4714 - 161 Ave. SE
Bellevue, WA  98006

William F. Carmody               155,800 (3)           5.02%
10826 Auburn Ave. S
Seattle, WA  98178

Rufus M. Sprague                  63,200               2.04%
417 Milwaukee Blvd. N.
Pacific, WA  98047

Charles A. Gath                    6,000 (4)            .19%
640 Jasmine Pl. N.W.
Issaquah, WA  98027

Patrick F. Dunn                      -0-                 *
9768 Waters Ave. S
Seattle, WA  98118

Craig L. Mathison                    -0-                 *
9553 49th Ave. N.E.
Seattle, WA  98115

All Directors and Officers
 as a Group (9 persons)        2,175,600             70.06%

*  Less than 1%

(1)	Includes 73,894 shares owned by Mr. Mercer's wife.

(2)	Includes 54,605 shares owned by Mr. Thompson's wife.

(3)	Includes 800 shares held as custodian for Mr. Carmody's
child as to which he disclaims beneficial ownership.

(4)	Includes 1,000 shares held as custodian for Mr. Gath's
grandchild as to which he disclaims beneficial ownership.

Except as noted, each person named in the table is believed to
have sole voting and investment power over the shares owned.

<PAGE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

No officer, director, nominee or associate of any officer, di-
rector, or nominee was indebted to the Company in an amount in
excess of $60,000 at any time during the fiscal year ended De-
cember 31, 2000.

R. M. Sprague, a director of the Company and owner of Sprague
Metal Company, has an ongoing relationship with the Company as a
supplier of sheet metal products and other miscellaneous parts.
This relationship is expected to continue in the future.  During
the fiscal year ended December 31, 2000, the Company purchased
parts costing $131,915 from the Sprague Metal Company.  The Com-
pany's management negotiates purchase orders and prices for the
items purchased.  Management believes the prices paid are com-
petitive with other sources.

ITEM 13.  EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS
ON FORM 8-K

(a) (1) and (2)  The response to this portion of Item 13 is sub-
mitted as a separate section of this report.


(a) (3)  The following exhibits are incorporated herein by ref-
erence:

  (3)	Articles of Incorporation and by-laws.  Exhibit 1 to
        Registrant's Form 10-K for the year ended December 31,
        1980, File No. 0-7267.

 (10)  	Material Contracts

(10a)	Exhibit 3 to Registrant's Form 10-K for the year
        ended December 31, 1980, File No. 0-7267 being
        Web Press Corporation's Company Stock Option
        Plan.

(10b) 	being the lease for the Company's facilities be-
        tween Web Press Corporation (lessee) and William
        J. Bennett (lessor) dated October 16, 1987.

(10c)	being the Business Loan Agreement between Web
        Press Corporation and KeyBank National Associa-
        tion dated April 7, 1999.

<PAGE>


(21)  Subsidiaries of Registrant

      (21a)  Web Leader International, Inc.

 (b)   Report on Form 8-K

       There have been no reports on Form 8-K filed during the
       three months ended December 31, 2000.


                               SIGNATURES
                               ----------

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


                                   WEB PRESS CORPORATION


March 20, 2001               By:     /s/ Gary B. Palmer
                                     ------------------
                                     Gary B. Palmer
                                     President and Chairman
                                     of the Board


March 20, 2001               By:     /s/ Craig L. Mathison
                                     ---------------------
                                     Craig L. Mathison
                                     Vice President of Finance
                                     (Principal Accounting
                                     Officer)

<PAGE>

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

/s/ Gary B. Palmer                               March 20, 2001
------------------
Gary B. Palmer
President and Chairman
of the Board


/s/ Edwin P. Beierlorzer                         March 20, 2001
------------------------
Edwin P. Beierlorzer
Vice President of Engineering
and Director


/s/ Rolynn G. Mercer                             March 20, 2001
--------------------
Rolynn G. Mercer
Vice President of Manufacturing
and Director


/s/ Roy B. Thompson                              March 20, 2001
-------------------
Roy B. Thompson
Vice President of Technical Services
and Director


/s/ Alan W. White                                March 20, 2001
-----------------
Alan W. White
Vice President of Purchasing
and Director


/s/ Rufus M. Sprague                             March 20, 2001
--------------------
Rufus M. Sprague
Director


/s/ Patrick F. Dunn                              March 20, 2001
-------------------
Patrick F. Dunn
Director

<PAGE>

                         WEB PRESS CORPORATION
                              FORM 10-KSB
                       ITEMS 7, 13(a) (1) AND (2)
                     INDEX OF FINANCIAL STATEMENTS


    The following financial statements of the registrant and
its subsidiary required to be included in Item 7 are listed be-
low:


                                                           Page
                                                           ----

Consolidated Financial Statements:
  Report of Independent Certified Public
    Accountants.........................................    24
  Balance Sheet as of December 31, 2000.................    25
  Statements of Operations for each of the two
    years ended December 31, 2000.......................    27
  Statements of Stockholders' Equity for each of
    the two years ended December 31, 2000...............    28
  Statements of Cash Flows for each of the two
    years ended December 31, 2000.......................    29
  Notes to Consolidated Financial Statements............    31

<PAGE>


           Report of Independent Certified Public Accountants
           --------------------------------------------------





Board of Directors and Stockholders
Web Press Corporation
Kent, Washington


We have audited the accompanying consolidated balance sheet of
Web Press Corporation (a Washington corporation) and Subsidiary
as of December 31, 2000 and 1999, and the related consolidated statements
of operations, stockholders' equity, and cash flows for the years
then ended.  These financial statements are the responsibility of
the Company's management.  Our responsibility is to express an opinion
on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above pres-
ent fairly, in all material respects, the consolidated financial
position of Web Press Corporation and Subsidiary as of December
31, 2000 and 1999, and the consolidated results of their operations and
their consolidated cash flows for the years then ended, in conformity
with accounting principles generally accepted in the United States of
America.


/s/ Grant Thornton LLP

Seattle, Washington
March 16, 2001

<PAGE>

<TABLE>
<CAPTION>



                         WEB PRESS CORPORATION

                       CONSOLIDATED BALANCE SHEET
                         (Dollars in Thousands)


ASSETS                                            December 31, 2000
                                                  -----------------
<S>                                                    <C>
Current Assets:
Cash.........................................          $   -
Accounts receivable, less allowance for
  doubtful accounts of $146 (Note 3).........		1,244
Inventories (Notes 2 and 3)..................		4,531
Deferred Tax Assets (Note 4).................             274
Refundable income taxes (Note 4).............              49
Deposits.....................................              33
Prepaid expenses.............................              47
                                                       ------
Total Current Assets.........................		6,178

Machinery and Leasehold Improvements,
  at cost (Notes 2 and 3):
  Machinery and equipment.....................          3,586
  Leasehold improvements......................            220
                                                       ------
                                                        3,806

  Less accumulated depreciation
    and amortization...........................         2,961

Machinery and Leasehold Improvements (Net)...             845

Leased Equipment (Net) (Note 2)..............              52
                                                       ------

Total Assets.................................          $7,075
                                                       ======
</TABLE>

The accompanying notes are an integral part of the Consolidated
Financial Statements.

<PAGE>

<TABLE>
<CAPTION>


                         WEB PRESS CORPORATION

                       CONSOLIDATED BALANCE SHEET
                         (Dollars in Thousands)


LIABILITIES AND STOCKHOLDERS'                     December 31, 2000
EQUITY                                            -----------------
<S>                                                    <C>
Current Liabilities:
Accounts payable............................           $  469
Customer deposits...........................               72
Accrued expenses............................              872
Current portion of long-term debt...........               45
                                                       ------
Total Current Liabilities...................            1,458

Long-Term Debt, less current
  portion (Note 3)..........................            1,757

Deferred tax liabilities (Note 4)...........              698

Commitments (Note 6)

Stockholders' Equity (Note 5):
  Common stock, par value $.025
  per share:
    Authorized, 4,000,000 shares
    Issued, 3,436,513 shares                               86
  Paid-in capital..........................               320
  Retained earnings........................             2,853
                                                       ------
                                                        3,259

  Treasury stock, 331,100 shares
    at cost................................               (97)
                                                       ------

Total Stockholders' Equity.................             3,162
                                                       ------

Total Liabilities and Stockholders' Equity.            $7,075
                                                       ======
</TABLE>

The accompanying notes are an integral part of the Consolidated
Financial Statements.

<PAGE>

<TABLE>
<CAPTION>




                         WEB PRESS CORPORATION

                 CONSOLIDATED STATEMENTS OF OPERATIONS
              (Dollars in Thousands Except Per Share Data)


                                            Year Ended December 31,
                                            -----------------------
                                                 2000      1999
                                                 ----      ----
    <S>                                         <C>       <C>
    Sales (Note 7)......................        $10,717   $11,694
    Cost of Sales.......................          8,225     9,428
                                                -------   -------
                                                  2,492     2,266

    Selling, general and
      administrative expenses (Note 6)..          1,916     2,086
                                                -------   -------
                                                    576       180

    Other income........................              7         2
    Interest expense....................           (241)     (271)
                                                -------   -------
                                                   (234)     (269)
                                                -------   -------
    Earnings (loss) before taxes........            342       (89)

    Taxes (benefit) on earnings (loss)
      (Note 4)..........................            107       (28)
                                                -------   -------
    Net basic and diluted earnings
      (loss)............................        $   235   $   (61)
                                                =======   =======
    Basic and diluted earnings (loss)
      per share.........................           $.08     ($.02)
                                                   ====      ====
</TABLE>

The accompanying notes are an integral part of the Consolidated
Financial Statements.

<PAGE>


<TABLE>
<CAPTION>

                                        WEB PRESS CORPORATION

                            CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                         (Dollars in Thousands)



                              Common Stock     Treasury  Paid-in  Retained
                            Shares     Amount   Stock    Capital  Earnings
                            -----------------  --------  -------  --------
<S>                        <C>          <C>      <C>       <C>     <C>
Balance, January 1, 1999   3,436,513    $86      $(97)     $320    $2,679

Net loss for the year                                                 (61)
                           ---------    ---      ----      ----    ------
Balance, December 31, 1999 3,436,513     86       (97)      320     2,618

Net earnings for the year                                             235
                           ---------    ---      ----      ----    ------
Balance, December 31, 2000 3,436,513    $86      $(97)     $320    $2,853
                           =========    ===      ====      ====    ======


</TABLE>

The accompanying notes are an integral part of the Consolidated
Financial Statements.

<PAGE>

<TABLE>
<CAPTION>



                         WEB PRESS CORPORATION

                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                         (Dollars in Thousands)

                                           Year Ended December 31,
                                           -----------------------
                                               2000      1999
                                               ----      ----
Cash flows from operating activities:
  <S>                                        <C>        <C>
  Net earnings (loss)...................     $  235     $  (61)
  Adjustments to reconcile net
   earnings (loss) to net cash
   provided (used) by operating
   activities:
     Depreciation and amortization......        156        184
     Provision for losses on accounts
       receivable.......................         28        108
     Inventory valuation reserve........          8        109
     Deferred taxes.....................        103       (196)
     Gain from retirement of
       plant assets.....................         (1)

  Increase (Decrease) in cash from
  changes in operating accounts:
     Accounts receivable................      1,478       (884)
     Refundable income taxes............         16         19
     Inventory..........................       (328)      (398)
     Deposits...........................        102       (109)
     Prepaid expenses...................         (3)         1
     Accounts payable...................       (206)      (201)
     Customer deposits..................       (128)       (69)
     Accrued expenses...................     (1,182)     1,293
     Income taxes payable...............       (135)       135
                                             ------     ------

     Total adjustments..................        (92)        (8)
                                             ------     ------
  Net cash provided (used) by operating
  activities                                    143        (69)

Cash flows from investing activities:
  Capital expenditures..................        (76)      (236)
  Proceeds from retirement of plant
     assets.............................          1
                                             ------     ------

  Net cash used in investing activities.        (75)      (236)


(Continued on following page)

<PAGE>

(Continued from previous page)

Cash Flows from financing activities:
  Proceeds from issuance of
     long-term debt.....................        160         55
  Payments on long-term debt............        (38)      (988)
  Net borrowings (payments) on short-
     term line of credit................       (172)      (315)
  Net borrowings (payments) on
     long-term line of credit...........        (18)     1,547
                                             ------     ------
  Net cash provided (used) by
     financing activities...............        (68)       299
                                             ------     ------
Net increase (decrease) of period.......        -           (6)

Cash at beginning of period.............        -            6
                                             ------     ------
Cash at end of period...................     $  -       $  -
                                             ------     ------
Supplemental disclosures of cash
   flow information:

Cash was paid during the year for:

  Interest                                     $289       $213
  Taxes                                         171         16

Non-cash investing and financing
 activities:

  Inventory transferred to
    leased equipment                             52

</TABLE>

The accompanying notes are an integral part of the Consolidated
Financial Statements.

<PAGE>


                         WEB PRESS CORPORATION

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                   TWO YEARS ENDED DECEMBER 31, 2000


Note 1 - Nature of the Company's Business:

     The Company manufactures web-fed offset printing presses.
It has two product lines, the Web Leader and the Atlas.  The
primary difference between the Web Leader and the Atlas is that
the Atlas is fifty percent faster and is manufactured in three
different broadsheet newspaper page lengths.  The Company's
presses are designed to print on absorbent paper such as news-
print.  Among the products produced by the presses are newspa-
pers (both broadsheet and tabloid sizes), shoppers, advertising
inserts, and paperback books.  Each press is composed of stan-
dard modules to unwind, print, cut-off and fold the roll of pa-
per into a finished product.  The equipment is arranged to meet
the particular printer's requirements for the number of pages,
color, and size of products.

     The Company markets its presses worldwide.  Company em-
ployed sales representatives sell the Company's presses in the
United States and Canada.  Foreign sales are made through inde-
pendent agents in Central and South America, Asia, Europe, and
the Middle East.  Sales are based on a combination of price,
service, quality, and the versatility of the equipment.

Note 2 - Summary of Significant Accounting Policies:

Principles of consolidation
---------------------------

     The accompanying consolidated financial statements include
the accounts of Web Press Corporation and Web Leader Interna-
tional, Inc., its wholly-owned Domestic International Sales Cor-
poration (DISC).  All significant inter-company accounts and
transactions have been eliminated in consolidation.

Inventories
-----------

    Raw materials, work-in-progress and finished goods are
stated at the lower of average cost or market.  Used presses and
other related press equipment are stated at the lower of
cost(specific identification basis) or market.  Inventory costs
include material, labor, and manufacturing overhead.  Invento-
ries were classified as follows at December 31, 2000:

<PAGE>




                                      (Dollars in Thousands)

     Raw materials and parts
     (including subassemblies)........       $2,022
     Work-in-progress.................        1,265
     Finished goods...................          986
     Used equipment...................          258
                                             ------
                                             $4,531

     Leased equipment has been transferred from inventory.  Its
original cost was $53 thousand.  The net carry amount of the
leased equipment on December 31, 2000, was $52 thousand.  The
Company is not holding any other equipment for lease as of De-
cember 31, 2000.

Machinery and leasehold improvements
------------------------------------

     Machinery and equipment are depreciated on the straight-
line method for financial statement purposes, based upon useful
lives of three to ten years.  Leasehold improvements are amor-
tized over their useful lives or the term of the lease, which-
ever is shorter.  For income tax purposes, accelerated methods
are used for all eligible assets.

     Maintenance and repairs are charged directly to costs or
expenses as incurred.  Equipment of only nominal value and re-
newals and betterments which do not appreciably extend the life
of the asset are charged directly to costs or expenses.

     Fully depreciated or fully amortized assets which are no
longer in use or are not identifiable are written off by charges
to the allowance for accumulated depreciation and amortization.
When assets are retired or disposed of, the costs and accumu-
lated depreciation of such assets are removed from the accounts
and the difference between the net depreciated cost and the
amount received is recorded in the statements of operations.

Research and development costs
------------------------------

     Research and development costs are expensed as incurred.
Total research and development costs charged to operations dur-
ing the years ended December 31, 2000 and 1999 were $477 thou-
sand and $503 thousand, respectively.

Advertising
-----------

     Advertisements placed primarily in periodical printing-
trade magazines and newspapers are used to promote the
Company's printing presses.  Advertising costs are expensed in
the period the advertising initially takes place.  Total adver-

<PAGE>

tising costs charged to operations during the years ended Decem-
ber 31, 2000 and 1999 were $156 thousand and $174 thousand, re-
spectively.  The Company does not use direct-response advertis-
ing.

Revenue recognition
-------------------

     Revenue from sales of manufactured products under firm con-
tracts is recognized generally at the time the equipment is
available for shipment.  All freight and installation costs are
accrued at the time revenue is recognized.  Estimated costs re-
lated to product warranties are accrued at the time of sale.
Proceeds received on contracts prior to recognition as a sale
are recorded as deposits.

     The Company is leasing a printing module to a customer un-
der an operating lease.  The lease commenced on November 1,
2000, and is for a period of 36 months.  Monthly payments from
the lease are $1,647.  The lease is non-cancelable; however, the
lessee may purchase the equipment for $57 thousand any time af-
ter June 1, 2001, or at the current market value of the equip-
ment at the end of the lease.  Future remaining lease payments
are:

                         (Dollars in Thousands)

                      2001       $20
                      2002        20
                      2003        16
                                 ---

                                 $56
                                 ===

Earnings per share
------------------

     Earnings per share-basic and diluted were calculated based
on the weighted average number of shares outstanding.  The
weighted average-basic and diluted number of shares outstanding
was 3,105,413 in 2000 and 1999.

Estimates
---------

     The Company makes certain cost estimates when it records a
press sale and uses other estimates and assumptions regarding
certain types of assets, liabilities, revenues, and expenses.
Such estimates primarily relate to unsettled transactions and
events as of the date of the financial statements.  All are re-
ported in conformity with generally accepted accounting princi-
ples.  Company management believes the basis for these estimates
are accurately reflected in the financial statements; however,
actual results may differ from estimated amounts.

<PAGE>


Note 3 - Financing

     The Company has a revolving line of credit with a commercial
bank for borrowing up to $3 million.  Borrowings against this
line were $1.529 million on December 31, 2000.  Because the loan
matures on June 1, 2003, that amount is included in long-term
debt on the balance sheet.  The interest rate charged is the
bank's prime rate.  That rate was 9.5 percent on December 31,
2000. Accounts receivable, firm orders in production, invento-
ries, and values in excess of the long-term financing on equip-
ment are pledged as collateral.

     The Company has a second line of credit with the bank for
borrowing, on a short-term basis, up to an additional $2 million
to manufacture equipment for export.  On December 31, 2000, there
were no borrowings against this line.  The Company may request
additional loans using this facility.  The interest rate charged
is the bank's prime rate. Loans made using this financing facil-
ity are secured by an "export working capital guarantee" from the
Export-Import Bank of the United States.

<PAGE>

	Long-term debt consists of the following:

                                           (Dollars in Thousands)
                                              December 31, 2000
                                              -----------------

Revolving line of credit due
June 1, 2003..............................         $1,529

Note payable, 9%, due in monthly
installments of $2,027 including
interest.  Final payment
due April, 2010...........................            153

Note payable for equipment, 9.3%,
due in monthly installments of $2,198
including interest.  Final payment due
in March, 2004............................             74

Note payable for equipment, 8.97%, due in
monthly installments of $1,124 including
interest. Final payment due in March,
2003......................................             43

Note payable for equipment, 8.23%, due in
monthly installments of $277 including
interest.  Final payment due in December,
2001......................................              3
                                                   ------
                                                    1,802

Less current portion......................             45
                                                   ------

                                                   $1,757
                                                   ======

     Equipment with an original cost of $206 thousand is pledged
as collateral under the notes payable for equipment.

     Maturities of the long-term debt for the next five years
are as follows:

                               (Dollars in Thousands)
         2001                         $   45
         2002                             45
         2003                          1,579
         2004                             31
         2005                             16
         Thereafter                       86
                                      ------

                                      $1,802
                                      ======

     The estimated fair value of long-term debt approximates
carrying value at December 31, 2000, based on the borrowing

<PAGE>

rates currently available to the Company for bank loans with
similar terms and average maturities.

Note 4 - Income Taxes:

     The taxes (benefit) on earnings (loss) consist of the follow-
ing:

                                   (Dollars in Thousands)
                                   Year Ended December 31,
                                   -----------------------
                                      2000         1999
                                      ----         ----

Current tax expense                   $ 26        $ 168
Deferred taxes                          81         (196)
                                      ----        -----

                                      $107        $ (28)
                                      ====        =====

     The taxes (benefit) on earnings (loss) differ from the fed-
eral statutory rate as follows:

                                    (Dollars in Thousands)
                                    Year Ended December 31,
                                    -----------------------
                                      2000          1999
                                      ----          ----

Taxes (benefit) at statutory rate     $117          $(30)
Permanent difference                     5             7
Prior year tax adjustment              (15)           (5)
                                      ----          ----
                                      $107          $(28)

     The components of deferred taxes included in the balance
sheet as of December 31, 2000, are as follows:

                               (Dollars in Thousands)

Current deferred tax Assets:
  Inventory valuation reserve.....      $ 53
  Warranty reserve................        57
  Allowance for doubtful accounts.        50
  Vacation accrual................        35
  Product liability reserve.......        49
  263(a) costs....................        30
                                        ----

                                        $274
                                        ====

Non-current deferred tax liabilities:
  Deferred DISC income............      $623
  Excess tax depreciation.........        75
                                        ----

                                        $698
                                        ====
<PAGE>

Note 5 - Common Stock:

     The Company's Stock Option Plan permits issuance of stock
options to key employees at prices not less than 100% of market
price at the date of grant.  An aggregate of 600,000 shares of
common stock is reserved in connection with this Plan.  As of
December 31, 2000, no options have been granted under this Plan.

Note 6 - Commitments and contingencies:

     The Company has an agreement granting it the exclusive
right to manufacture and sell in the United States and most
other countries printing equipment designed by Color Impact In-
ternational, Inc.  The grantor may purchase the equipment from
the Company and resell it in Russia and China.  Another company
has the exclusive right to manufacture and sell the equipment in
India.  The agreement commenced on August 17, 1998, and is for a
period of 10 years.  It requires the Company to pay Color Impact
International, Inc. a license fee equal to 7 percent of the
gross selling price for the equipment.  The minimum license fee
is $70 thousand in any 12-month period from the commencement
date.  The Company may enhance or modify the equipment and com-
mingle it with equipment of its own design.

     The Company has leased a 49,000 square foot manufacturing
and office facility located in Kent, Washington, since May 1988.
The lease expires in November 2003, and includes a five-year re-
newal option. The total monthly payment is $16,155.

     Rental expense was $215 thousand in 2000 and $212 thousand
in 1999.

     Remaining minimum rental commitments are as follows:

                            (Dollars in Thousands)
               2001.........         $194
               2002.........          194
               2003.........          173
                                     ----

                                     $561
                                     ====
Note 7 - Market Segment and Concentration Information:

     Substantially all of the Company's operations relate to the
manufacture and sale of printing presses and associated equipment.
The Company markets its presses worldwide.  International sales
accounted for 42.3% of total sales in 2000 and 53.1% in 1999.  The
Company is not dependent on any country or region of the world for
international sales and domestic sales are disseminated throughout
the United States.

<PAGE>

     Export sales of equipment by geographical area were as fol-
lows:

                               (Dollars in Thousands)
                               Year Ended December 31,
                               -----------------------
                                  2000         1999
                                  ----         ----

       Europe                    $2,265       $4,095
       Western Hemisphere         1,014        1,616
       Asia                         913          -
                                 ------       ------

                                 $4,192       $5,711
                                 ======       ======

     The Company normally has one or more individual press sales
which account for more than 10% of revenues in a given year.  It
is uncommon for a customer to place a large order for additional
equipment in the years immediately following purchase of a press.
On an ongoing basis, the Company does not believe it is dependent
on any one customer for a significant portion of its business.

     During 2000, the Company did not have any sales to one cus-
tomer which, as a percentage of total consolidated sales, was
greater than 10%. In 1999, the Company had sales to one customer
which accounted for 10.8% of sales.

Note 8 - Retirement Savings Plan:

     The Company has a 401(k) plan covering all employees who
have completed one year of service.  Plan participants self-
direct their investments choosing from eleven options sponsored
by Merrill Lynch.  The Company matches up to 25% of the first
$4,000 contributed by the employee in a year. The Company may
also make discretionary contributions to the plan.  Fees paid
the administrator, plus the Company's matching contribution,
totaled approximately $33 thousand in 2000 and $31 thousand in
1999.

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