<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-K

Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934

For the fiscal year ended June 30, 1999

Commission file number 1-9429

                           ROTONICS MANUFACTURING INC.
          ------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                  Delaware                                36-2467474
        --------------------------------              -----------------
         (State or other jurisdiction of                (I.R.S. Employer
         incorporation or organization)                 Identification No.)

         17022 South Figueroa Street
                Gardena, California                        90248
        --------------------------------               ---------------
         (Address of principal offices)                 (Zip Code)

Registrant's telephone number, including area code: (310) 538-4932

Securities registered pursuant to Section 12(b) of the Act:

         Common Stock ($.01 stated value)            American Stock Exchange
        ----------------------------------          ------------------------
                  Titles of each class                Name of each Exchange
                                                       on which registered

Securities registered pursuant to Section 12(g) of the Act:   None

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) for the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and has been subject to such
filing requirements for the past 90 days. Yes /X/ No

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

The aggregate market value of the voting stock held by non-affiliates of the
registrant, as of September 17, 1999, was $6,134,200 (1).

The number of shares of common stock outstanding at September 17, 1999 was
15,085,811.

(1) Excludes 8,951,569 shares held by directors, officers and stockholders
whose ownership exceeded 5% of the outstanding shares at September 17, 1999.
Exclusion of such shares should not be construed to indicate that the holders
thereof possess the power, direct or indirect, to direct the management or
policies of registrant, or that such persons are controlled by or under
common control with the registrant.



<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE
                      -------------------------------------
Document                                                              Form 10-K
--------                                                                 Part
                                                                      ----------
Definitive Proxy Statement to be used in connection with
the Annual Meeting of Stockholders to be held on December 3, 1999       III


                                      2

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I                                                                Page
------                                                                ----
<S>                                                                   <C>
Item 1   Business                                                       4
Item 2   Properties                                                     6
Item 3   Legal Proceedings                                              7
Item 4   Submission of Matters to a Vote of Security Holders            7


PART II
-------
Item 5   Market for Registrant's Common Stock and Related
                  Stockholder Matters                                   8
Item 6   Selected Financial Data                                        9
Item 7   Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                   11
Item 8   Financial Statements and Supplementary Data                    14
Item 9   Changes in and Disagreements with Accountants on
                  Accounting and Financial Disclosure                   14


PART III
--------
Item 10  Directors and Executive Officers of the Registrant             15
Item 11  Executive Compensation                                         15
Item 12  Security Ownership of Certain Beneficial Owners
                  and Management                                        15
Item 13  Certain Relationships and Related Transactions                 15


PART IV
-------
Item 14  Exhibits, Financial Statement Schedules, and Reports
                  on Form 8-K                                           16

SIGNATURES                                                              17
</TABLE>


                                      3

<PAGE>

                                     PART I

ITEM 1.   BUSINESS

INTRODUCTION

Rotonics Manufacturing Inc. (the "Company") was founded as an Illinois
Corporation, and was reincorporated in Delaware in December 1986. Effective
July 1, 1991, the Company merged with Rotonics Molding, Inc.-Chicago
("Rotonics"), with the Company being the surviving entity. In accordance with
the 1991 merger agreement, the Company issued 2,666,666 (after giving effect
to a 1-for-3 reverse stock split) shares of its common stock and 4,999,997
shares of a newly issued non-voting preferred stock in exchange for all the
outstanding voting stock of Rotonics. The preferred stock, which has
subsequently been redeemed, was entitled to cumulative dividends of $.09 per
share per annum and had a liquidation value of $1.00 per share, plus accrued
unpaid dividends in preference to any payment on the common stock.

Rotonics had operations in Itasca, Illinois; Deerfield, Wisconsin; Denver,
Colorado; and Bartow, Florida. Three of these operations currently conduct
business as divisions of the Company using the trade names RMI-C, RMI-D, and
RMI-F, respectively. Rotonics was a privately held California Corporation
which was 52% owned by Mr. Sherman McKinniss. Mr. McKinniss became president
and chief executive officer of the Company on August 12, 1991.

In September 1991, the Company's wholly owned subsidiary, Rotational Molding,
Inc. ("RMI"), was merged into the Company and now operates as two divisions
using the trade names RMI-G and RMI-I with manufacturing operations in
Gardena, California and Caldwell, Idaho, respectively.

Effective January 1, 1992, the Company acquired Plastech Holdings, Inc.
("Plastech"), and its wholly owned subsidiary, Plastech International, Inc.,
for $1,777,070 in cash. Plastech was headquartered in Warminster,
Pennsylvania with an additional operation in Gainesville, Texas. In July
1992, Plastech was merged with the Company and now operates as a division of
the Company using the trade name RMI-T.

Effective April 1, 1995, the Company purchased certain assets and assumed
certain liabilities of Custom Rotational Molding, Inc. ("CRM") for 300,000
shares of the Company's common stock. The Company assumed CRM's operations in
Arleta, California.

In September 1994, the Company purchased a larger manufacturing facility in
Bensenville, Illinois and subsequently relocated its Itasca, Illinois
operations into this new facility. In December 1995, the Company discontinued
its operations at its Deerfield, Wisconsin location and combined these
operations into its newly purchased Bensenville, Illinois operation. The
Wisconsin facility is currently being leased to two tenants on a
month-to-month term basis at $6,000 per month.

In February 1997, the Company purchased a 9.73 acre facility consisting of
63,000 square feet of manufacturing and office building space in Commerce
City, Colorado. The Company has since expended significant resources to
refurbish the facility to house its Colorado operations. In addition to the
new facility the Company added two state of the art roto-molding machines and
a CNC router to increase and enhance existing manufacturing capacity. Also,
the facility is located within an enterprise zone which should provide
additional benefits.

Effective April 1, 1998, the Company merged with Rotocast International, Inc.
and its wholly owned subsidiaries ("Rotocast"), with the Company being the
surviving entity. In accordance with the Merger Agreement, the Company issued
2,072,539 shared of its common stock and a $2,000,000 note payable secured by
a stand-by letter of credit in exchange for all the outstanding voting stock
of Rotocast.

Rotocast had operations in Miami, Florida; Knoxville, Tennessee; Brownwood,
Texas; Las Vegas, Nevada; and Bossier City, Louisiana. These operations
currently conduct business as divisions of the Company using the trade names
Nutron/AMP, Rotocast of Tennessee, Rotocast of Texas and RMI-Nevada. Prior to
the merger the operations in Bossier City, Louisiana were substantially
discontinued. Rotocast was a privately held Florida corporation owned by GSC
Industries, Inc. ("GSC"). The Company leases the remaining Rotocast
facilities from GSC, and other affiliated parties, under long-term lease
arrangements. Effective April 1998, and pursuant to the Merger Agreement, Mr.
Robert Grossman, a shareholder of GSC and former President of Rotocast, was
named to the Company's Board of Directors.


                                      4
<PAGE>

In conjunction with the Rotocast merger the Company initiated the
consolidation of its Warminster, Pennsylvania and Arleta, California
facilities into its remaining operations. The consolidation of these
facilities has enhanced the operations of the Company's remaining facilities,
reduced its overall manufacturing overhead costs, and has allowed the Company
to take greater advantage of its marketing and distribution channels since
the completion of the Rotocast merger. The consolidation of the facilities
was completed in fiscal 1999. Also in fiscal 1999, the Company consolidated
its Miami operations into the remaining operating facilities. The Company
will continue to work on streamlining the operations effected by these
consolidations in the ensuing year.

The Corporate office of the Company is located at the same site as the RMI-G
(Gardena, California) facility.

DESCRIPTION OF BUSINESS

The Company currently has ten manufacturing locations and was again listed by
a plastics industry periodical as one of the top ten Rotational Molders in
North America. These operating divisions manufacture a variety of plastic
products for commercial, agricultural, pharmaceutical, point of purchase
display, medical waste, refuse, retail, recreation, marine, healthcare and
residential use, as well as a vast number of custom plastic products for a
variety of industries, utilizing the roto-molding process and, on a smaller
scale; injection molding and dip molding processes. In April 1998, the
injection molding process was added to the Company's manufacturing operations
as part of the Rotocast merger. Utilizing this process the Company markets a
variety of parts for commercial, promotional and residential uses under the
trade names Nutron and AMP. Roto-molding is a process for molding plastic
resin by rotating a mold in a heated environment while the plastic resin
powder placed inside the mold melts and evenly coats the inner wall of the
mold. The injection molding process varies in that the plastic resin is first
heated to a molten state and then injected under pressure into a mold. The
roto-molding process has been used for many years and continues to be
recognized as a growth industry in recent years as a result of numerous
ongoing business consolidations and the development of new resins. These new
resins allow roto-molded items to compete with more traditional materials
such as carbon and stainless steel, especially in the fabrication of large,
lightweight, one-piece molded items such as storage tanks. Roto-molding is a
particularly advantageous process for users of molded plastic products who
may want to test different prototypes, or who do not require sufficient
numbers of such products to justify a more expensive manufacturing process.
The Company's products include various types of storage tanks, bin lids,
refuse containers for automated removal, medical waste containers,
point-of-purchase displays, agricultural/livestock products, kayaks, outdoor
lamp posts, furniture, planters, and other molded items.

The Company purchases resin from eight major suppliers in the U.S. and
Canada. As the majority of the resin used in the manufacturing process is a
polyethylene derived from natural gas, resin price is not directly related to
the price for petrochemicals and until recent years has not generally been
subject to volatile fluctuations which are often experienced by the petroleum
industry. The Company also incorporates the use of post-consumer plastic
products blended with virgin materials in the manufacturing of products that
call for their use.

The Company holds several patents on storage containers used for
pharmaceutical, commercial and residential applications. The patents expire
through the year 2010. Although the Company has been able to capture its
share of these niche markets and expects to see continued growth, no one
patent or groups of patents is considered material to the business as a whole.

Competition for the Company's products is governed by geography and region
since large capacity tanks and bulky hollow products are expensive to ship
long distances and, as such, any prospective competitor is constrained by
shipping costs. There are numerous single-location as well as a growing trend
to structure multi-location roto-molding businesses throughout the United
States. However, each of these businesses still competes in a geographic
region which is determined by customer demand within that region, a
constraint inherent to the industry. Due to its nationwide presence, the
Company has substantially alleviated this constraint. The Company's sales are
usually not subject to large seasonal fluctuations as the business typically
operates on significant backlogs with a diverse product mix. Peak season is
usually experienced in the period from April through June. Historically the
quarter from January through March is the slowest production period of the
year. The Company's backlog was $4,017,800 and $4,252,800 as of June 30, 1999
and 1998, respectively. All of the backlog orders as of June 30, 1999 are
expected to be filled during fiscal 2000.

The Company's products are marketed through the in-house sales and
engineering staff, various distributors and outside commission-based sales
representatives. The Company continues to build a strong, broad and diverse
customer base which covers a multitude of industries. As such, since fiscal
1991, no sales to any one single customer represented a material part of the
Company's business.

Research and development expenditures for the Company were insignificant for
the last three fiscal years.


                                      5
<PAGE>

REGULATION

The Company believes that it is in compliance with all applicable federal,
state and local laws relating to the protection of the environment and does
not anticipate that any such laws will have any material effect on its
financial position, capital expenditures, or competitive position.

EMPLOYEES

As of June 30, 1999, the Company employed a total of 550 individuals. The
Company maintains, for its respective employees who are eligible, a medical
insurance plan (some of which is contributory), a group life insurance plan,
an annual bonus plan and a semi-annual attendance bonus plan.

ITEM 2. PROPERTIES

The Company's corporate office occupies a separate building comprising
approximately 3,600 square feet of the facilities of RMI-G in Gardena,
California.

The operating divisions lease warehouse, production and office space as
follows:
<TABLE>
<CAPTION>
                                    Building      Total Facility         Annual
Property                             Square           Square              Base              Expiration
Location                             Footage         Footage              Rent               Date   (2)
--------                             -------         -------              ----               ----   ---
<S>                                 <C>           <C>                    <C>               <C>
Gardena, California (1)                42,800           183,300          $ 259,300         October 2001

Caldwell, Idaho                        21,250            71,200          $  73,900         September 2000

Bartow, Florida                        38,200           174,600          $ 121,600         September 2004

Miami, Florida (3)                     50,000            86,000          $ 150,400         March 2013

Gainesville, Texas (4)                      -           108,900          $   1,000         April 2001

Brownwood, Texas                       42,800           136,120          $  67,800         March 2013

Las Vegas, Nevada                      30,000            90,000          $ 124,100         March 2013

Knoxville, Tennessee                   44,000           174,240          $ 137,500         March 2013
</TABLE>

(1)  The Company has an option to purchase these facilities.

(2)  Does not give effect to any renewal options.

(3)  The Company is currently listing the Rotocast-Miami building (20,000 sq ft)
     for lease.

(4)  Represents a 2.5 acre ground lease adjacent to Texas facility.

The Company owns 2.1 acres (including 38,000 square feet of warehouse,
production and office space) in Gainesville, Texas. In September 1994 the
Company purchased 3.1 acres (including 63,300 square feet of warehouse,
production and office space) in Bensenville, Illinois for the Company's
Illinois manufacturing operations. The Texas and Illinois facilities are
currently encumbered by a combined $1.9 million mortgage. In February 1997
the Company purchased for cash 9.73 acres (including 63,000 square feet of
warehouse, production and office space) in Commerce City, Colorado for the
Company's Colorado manufacturing operations. The Company also owns
approximately 1.59 unencumbered acres (including 35,100 square feet of
warehouse, production and office space) in Deerfield, Wisconsin which was
vacated in December 1995 by the Company and its operations incorporated into
the Illinois facility. The Wisconsin facility is currently leased to two
unrelated lessees for $6,000 per month.


                                      6

<PAGE>

ITEM 3. LEGAL PROCEEDINGS

In the normal course of business, the Company encounters certain litigation
matters, which in the opinion of management, will not have a significant
adverse effect on the financial position or the results of operations of the
Company.

On April 16, 1996, the Company was named as defendant in a complaint filed by
Bonar U.S., Inc. in Delaware Superior Court. The complaint alleged claims for
breach of contract and promissory estoppel relating to an Agreement in
Principle entered into in connection with a proposed acquisition of the
Company by Bonar U.S., Inc. On April 3, 1996 the Company announced that it
had terminated the Agreement in Principle pursuant to its terms. The
complaint requested damages of $7,011,484. On May 17, 1996, the Company filed
a counterclaim against Bonar U.S., Inc. and Bonar Plastics, Inc. seeking
damages totaling $25,237,725 for breach of the Confidentiality Agreement with
the Company, misappropriation of trade secrets, intentional interference with
a prospective economic advantage which the Company obtained as a result of an
indication of interest from a third party and breach of a Royalty Agreement
between Bonar Plastics, Inc. and one of the Company's operating divisions
(formally known as Custom Rotational Molding, Inc.). In March 1997, the
Company reached an amicable out of court settlement with Bonar. The
settlement involved mutual general releases by the parties, dismissals of the
actions brought by the parties and payments to Bonar of $400,000 in March
1997 and $350,000 in September 1997.

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

None.


                                      7

<PAGE>



                                     PART II


ITEM 5.  MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

The Company's Common Stock ($.01 stated value) is traded on the American Stock
Exchange ("AMEX") under the symbol "RMI". The number of stockholders of record
of the Company's Common Stock was approximately 4,000 at September 17, 1999.



                           PRICE RANGE OF COMMON STOCK

The following table sets forth the quarterly price ranges of the Company's
Common Stock in Fiscal 1999 and 1998, as reported on the composite transactions
reporting system for AMEX listed stocks.

<TABLE>
<CAPTION>
FISCAL PERIOD                                                 HIGH           LOW
-------------                                                 ----           ---
<S>                                                         <C>             <C>
Fiscal 1998
             First Quarter Ended September 30, 1997         $ 1-5/16        $1-3/8
             Second Quarter Ended December 31, 1997            1-3/4         1-3/8
             Third Quarter Ended March 31, 1998               1-9/16         1-1/4
             Fourth Quarter Ended June 30, 1998                1-3/8         15/16

Fiscal 1999
             First Quarter Ended September 30, 1998         $ 1-3/16       $ 11/16
             Second Quarter Ended December 31, 1998           1-1/16          9/16
             Third Quarter Ended March 31, 1999               1-3/16           3/4
             Fourth Quarter Ended June 30, 1999                1-1/8           7/8

</TABLE>

In fiscal years 1996-1999, the Company paid a regular cash dividend of $.04 per
share on its Common Stock. Any future cash dividends or other distributions of
stock will be determined solely by the Board of Directors and will be based on
the Company's future financial ability to declare and pay such dividends.
Additionally, certain lending agreements restrict the Company from declaring or
paying dividends on its Common Stock. (See Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations: Liquidity and Capital
Resources.") According to the lending agreement with its bank, the Company may
not declare or pay any dividend or distribution on any stock or redeem, retire,
repurchase or otherwise acquire any of such shares unless the Company can obtain
prior bank authorization and appropriate waivers.

                                     8



<PAGE>




<TABLE>
<CAPTION>

      ITEM 6.  SELECTED FINANCIAL DATA

                                                                                Year ended June 30,
                                                -----------------------------------------------------------------------------------
                                                     1999            1998(B)           1997             1996           1995(C)
                                                -----------------------------------------------------------------------------------
      <S>                                         <C>              <C>             <C>                <C>              <C>
      INCOME STATEMENT DATA
      Net sales                                   $  45,499,700    $  38,058,900   $  39,385,100      $  35,703,600    $  35,887,600

      Cost of goods sold                             33,335,300       29,268,400      29,292,100         26,443,700       26,298,900

      Gross margin                                   12,164,400        8,790,500      10,093,000          9,259,900        9,588,700

      Selling, general and
         administrative expenses (D)                  8,841,600        7,327,300       6,239,600          6,313,100        5,767,900

      Interest expense                                  987,700          793,700         556,500            696,500          766,500

      Net income (E)                              $   1,326,000    $     417,200   $   1,441,800       $  1,472,700    $   3,287,600

      Basic/diluted income
         per common share                         $        0.09    $        0.03   $        0.10       $    0.10       $        0.24

      Average common shares
         outstanding (A)                             15,379,400       14,445,200      14,134,600         13,848,500       12,595,200

      OTHER FINANCIAL DATA

      Net income as a percent of sales                     2.9%             1.1%            3.7%             4.1%             9.2%

</TABLE>

(A)  Computed on the basis of the weighted average number of common shares
     outstanding during each year.

(B)  Includes the results of operations of Rotocast since the effective date of
     merger.

(C)  Includes the results of operations of CRM since the effective date of
     acquisition.

(D)  In fiscal 1999 and 1998, includes $394,400 and $280,300 respectively, in
     plant consolidation expenses.

(E)  Fiscal year 1997 includes $1,010,800 in costs relating to a lawsuit
     settlement


                                     9

<PAGE>


<TABLE>
<CAPTION>                                                                               At June 30,
                                            -----------------------------------------------------------------------------------
                                                 1999           1998(B)            1997             1996           1995(C)
                                            -----------------------------------------------------------------------------------
      <S>                                     <C>             <C>              <C>              <C>              <C>
      BALANCE SHEET DATA

      Current assets                          $  15,701,500   $  16,463,600    $  12,814,000    $  13,023,000    $  11,903,200

      Current liabilities                         5,965,900       6,452,800        5,099,700        4,864,500        4,766,000

      Working capital surplus                     9,735,600      10,010,800        7,714,300        8,158,500        7,137,200

      Total assets                               39,300,300      40,563,800       30,634,400       29,055,700       30,359,400

      Long-term debt                              9,470,600      10,976,500        6,486,100        5,864,100        7,707,700

      Total liabilities                          17,866,000      19,155,900       11,589,800       10,732,600       12,477,700

      Preferred stock                                     -               -                -                -        3,000,000


      Current ratio                                2.6 to 1        2.6 to 1         2.5 to 1         2.7 to 1         2.5 to 1

      Net book value per
        common share (A)                              $1.42           $1.35            $1.35            $1.29   $  1.15

</TABLE>

(A)  Computed on the basis of the actual number of common shares outstanding at
     the end of the fiscal year.

(B)  Includes the effect of the Rotocast merger.

(C)  Includes the effect of the acquisition of CRM.

                                     10

<PAGE>




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

INTRODUCTION

To the extent that this 10-K Annual Report discusses matters which are not
historical, including statements regarding future financial results, information
or expectation about products or markets, or otherwise makes statements about
future events, such statements are forward-looking and are subject to a number
of risks and uncertainties that could cause actual results to differ materially
from the statements made. These include, among others, fluctuations in costs of
raw materials and other expenses, costs associated with plant closures,
downturns in the markets served by the Company, the costs associated with new
product introductions, as well as other factors described under the heading Item
3, "Legal Proceedings", under this Item 7, "Management's Discussion and Analysis
of Financial Condition and Results of Operations", and Footnote 1 to Financial
Statements.

OPERATIONS

Net sales increased 19.6% to $45,499,700 in fiscal 1999 compared to $38,058,900
in fiscal 1998. Approximately 81% of the increase is attributable to the product
lines acquired with the Rotocast merger with the remaining 19% attributed to
increased sales volumes pertaining to the Company's pre-merger operations.
Following last year's transition through the merger and consolidation process of
several of its facilities, the Company has emerged with a heightened sense of
direction and a strong operating base. Market conditions continue to be
favorable in spite of recent inflationary concerns. The Company noted the
largest gains in its custom molded (10%), material handling (64%), and marine
(24%), products compared to last year. Management is also very enthused with the
product lines acquired with the merger (buoys, kayaks, lamp posts, and planters)
as it continues to find new avenues to distribute and market these products. The
Company has also launched two new product lines in fiscal 1999. The first
through an acquisition of a line of residential planters marketed under the
trade name Terrabella. The second is a new line of linen and laundry carts. Both
lines are great additions to RMI's family of products and will enhance regional
sales as we strive to exceed our growth projections.

Net sales were $38,058,900 in fiscal 1998 which fell 3.4% below fiscal 1997 net
sales of $39,385,100. Fiscal 1998 was a transitional year for the Company as it
endured difficult market conditions while continuing its internal efforts to
increase manufacturing capabilities, promote efficient operations and
restructure and build its marketing functions. Following fiscal 1997's stellar
increase in custom molded sales, the Company reported a 17.6% drop in this
category. As such, during fiscal 1998 this reduction accounted for the majority
of the loss in sales volumes in the current period. The Company's markets have
been unpredictable over the last few years and have caused the Company to
readily adapt itself to always take the utmost advantage of the current economic
and market conditions in which we operate. During the fourth quarter of fiscal
1998, the Company began to see improvements in the marketplace. This coupled
with the Rotocast merger resulted in improved sales volumes in the fourth
quarter of fiscal 1998. Sales volumes increased approximately 26.5% to
$12,798,400 for the three months ended June 30, 1998 compared to the same period
last year. Sales from the recently merged Rotocast divisions accounted for 9% of
the Company's net sales in fiscal 1998.

Cost of goods sold was $33,335,300 or 73.3% of net sales in fiscal 1999 compared
to $29,268,400 or 76.9% and $29,292,100 or 74.4% of net sales in fiscal 1998 and
1997, respectively. The Company is beginning to realize the positive impact the
recent plant consolidations have had on reducing overall fixed overhead costs
and thus improving gross margins. Gross margins also benefited from fairly
stable resin prices during most of the year and a favorable product mix with the
incorporation of acquired Rotocast product lines for the first complete year.
Although resin prices were favorable in most of fiscal 1999, the roto-molding
industry has experienced extreme volatility in plastic resin prices over the
last five years. The cost of plastic resin represents a significant portion of
the Company's manufacturing costs and has continually challenged the Company to
effectively mitigate these price increases. Again in the latter portion of
fiscal 1999, the Company experienced significant increases in plastic resin
costs. Over the years, the Company has been relatively successful in mitigating
these resin price increases by initiating customer price increases and various
raw material purchasing strategies. Management will continue to institute the
same practices in fiscal 2000 to combat the most recent material price hikes. A
similar situation occurred between fiscal 1997 and 1998. However, due to adverse
market conditions which resulted in a notable decline in custom product sales in
fiscal 1998, the Company was not able to maintain consistent operating results
and realized a 2.5% decrease in its gross margin. Management is optimistic about
its ability to mitigate these most recent resin price increases. However, it
would like to issue a word of caution that if market conditions change and/or
resin prices continue to rise, it could hamper the Company's goal to maintain
consistent future operating results.

Selling, general and administrative expenses were $8,447,200 or 18.6% of net
sales in fiscal 1999 compared to $7,047,000 or 18.5% of net sales in fiscal
1998. As a percentage of sales, selling, general and administrative costs
remained relatively consistent. However, total costs increased primarily due to
the additional operations acquired in connection with last year's merger. With
the consolidation of several plants since the merger, management anticipates
reducing overall selling, general,

                                     11

<PAGE>

and administrative costs in the ensuing year. In addition, management's
efforts to realign and streamline its sales and administrative functions
continue to benefit the Company as it strives to keep these costs in line
with future sales projections.

Selling, general and administrative expenses were $7,047,000 or 18.5% of net
sales in fiscal 1998 compared to $6,239,600 or 15.8% of net sales in fiscal
1997. The increase relative to net sales is attributed to the decrease in sales
volumes during the first three quarters of fiscal 1998 plus the additional
expenses related to the Rotocast operations (approximately $1.2 million) which
were incurred in the fourth quarter of fiscal 1998. Since the Rotocast merger,
management has focused its efforts on restructuring sales and administrative
functions at these facilities. These efforts coupled with the plant
consolidations mentioned above should result in necessary cost reductions to
bring SG&A costs in synch with future sales volumes and management's objectives.

The Company incurred $394,400 and $280,300 in fiscal years 1999 and 1998,
respectively, in costs related to the consolidation of three of its plants. The
Company began and substantially completed the consolidation of its Arleta,
California and Warrminster, Pennsylvania plants in the fourth quarter of fiscal
1998 and then completed the process during the first quarter of fiscal 1999.
Shortly after the completion of these consolidations, it launched the
consolidation of the Miami, Florida Rotocast operation. This consolidation was
completed during the third quarter of fiscal 1999.

These consolidations have had a definite impact on the current, as well as
future, operating results of the Company. Although the Company had to incur the
initial costs associated with the consolidation process, the future benefits
obtainable are unsurpassed. The Company has improved manufacturing utilization
at its remaining sites and reduced manufacturing overhead. These are long-term
benefits the Company should realize without compromising the manufacturing,
marketing, or distribution of its products.

Income from operations was $3,322,800 or 7.3% of net sales in fiscal 1999
compared to $1,463,200 or 3.8% and $3,853,400 or 9.8% of net sales in fiscal
1998 and 1997, respectively. Current year operating profits rebounded from last
year's levels due to the increase in sales volumes and the cost savings and
efficiencies obtained from the plant consolidations. Again, this is a marked
improvement over last year's results. Overall market conditions have been
favorable and the Company continues to see the positive impact on sales volumes
due to its enhanced marketing and selling efforts. Management will continue to
redefine its sales and marketing techniques and considers this process one of
their top priorities in efforts to meet future growth projections.

Interest expense increased $194,000 to $987,700 in fiscal 1999 compared to
$793,700 in fiscal 1998. The increase is primarily attributed to the initial
increase in the Company's debt structure of approximately $3.8 million resulting
from last year's merger. However, the additional interest costs incurred have
been partially mitigated due to subsequent repayments of debt and a drop in the
bank's prime rate during fiscal 1999. Beginning in the second quarter of fiscal
2000, management anticipates a slight increase in interest costs once the
Rotocast merger note is repaid using the Company's line of credit.

Interest expense increased $237,200 to $793,700 in fiscal 1998, compared to
$556,500 in fiscal 1997. The increase is primarily attributed to an increase in
the Company's debt structure when compared to the same period last year. The
increase in the Company's debt structure is attributed to the Colorado facility
purchase and its subsequent improvements in the later part of fiscal 1997 and
during fiscal 1998 (approximately $1.4 million), $1.6 million in capital
expenditures at the other Company facilities in fiscal 1998, and the additional
debt issued in connection with the Rotocast merger as well as the debt assumed
in the transaction which together amounted to approximately $3.8 million. In
addition, the Company incurred an increase in short-term borrowings due to a
decrease in cash flows from operations.

Net income increased 218% to $1,326,000 in fiscal 1999 compared with $417,200 in
fiscal 1998. Earnings per share also increased 200% to $0.09 per common share in
fiscal 1999 compared to $0.03 per common share in fiscal 1998. Management
attributed the improvement to the increase in sales volumes, the Company's
enhanced marketing efforts and cost reductions obtained from prior plant
consolidations. Management is very pleased with these results reflecting the
first full year's operations since the Rotocast merger. Now that the plant
consolidations are primarily behind us, management anticipates continued
improvements in operational results as we move forward.

Net income was $417,200 or $.03 per common share in fiscal 1998 compared to
$1,441,800 or $.10 per common share in fiscal 1997. The decrease is directly
related to the reduction in sales volume levels which impeded the preservation
of the Company's gross margin goals coupled with the increases in SG&A and
interest expenses outlined above.

LIQUIDITY AND CAPITAL RESOURCES

Working capital decreased $300,000 to $9.7 million at June 30, 1999 compared to
$10 million at June 30, 1998. The decrease is attributed to fluctuations in
accounts receivable, inventories, accounts payable, and deferred taxes
consistent with the Company's current operations. However, cash provided by
operations increased 138% to $4,615,700 for fiscal 1999


                                     12

<PAGE>

compared with $1,937,300 for the same period last year. The increase is
related to the current year's 218% increase in net income coupled with
increases in non-cash amounts for depreciation, amortization, and deferred
income taxes.

The Company expended a total of $2,141,400 for property, plant, and equipment
during fiscal 1999 compared to $2,103,100 in fiscal 1998. The expenditures were
fairly consistent and reflected the Company's continued commitment to provide
the necessary equipment and upgrades to effectively dominate in the industry.

In July 1998, the Company was advanced an additional $1 million against its
machinery and equipment note No. 5 bringing the total outstanding on this note
to $3 million. This note was originally issued to retire Rotocast's debt
acquired as part of the merger and later refinanced based on the appraisal of
Rotocast's machinery and equipment. The note is due in monthly principal
installments of $50,000 plus interest and will mature July 1, 2003. Also, in
July 1998, the bank replaced the Company's existing real estate loan with a new
$2 million loan secured by the Company's Bensenville, Illinois and Gainesville,
Texas properties. The note is due in monthly principal installments of $6,700
plus interest on a twenty-five year amortization with the outstanding principal
due July 1, 2008.

In November 1998, the Company advanced the remaining $500,000 available under
its machinery and equipment term-loan commitment. The proceeds were used to
repay amounts originally borrowed under the Company's revolving line of credit
to finance $625,000 in machinery and equipment purchases. This brought the total
principal outstanding to $1.2 million which is due in monthly principal
installments of $20,000 plus interest and matures on July 15, 2003.

In June 1999, the Company modified it credit agreement with the bank to extend
the maturity date on its working line of credit to October 1, 2001. In addition,
the bank issued a term loan commitment in the mount of $1.2 million to finance
future machinery and equipment acquisitions. Advances under the note will be
subject to monthly interest only payments at the bank's prime or LIBOR interest
rate until July 1, 2000 at which time it will convert to a sixty-month fully
amortizable note.

Net borrowings under the line of credit decreased $1.6 million to $2.3 million
between June 30, 1998 and June 30, 1999. The decrease is attributed to the
advances in long-term debt previously mentioned above, of which a portion went
to repay short-term borrowings under the line of credit. The Company has further
reduced the outstanding balance owed under the line of credit with excess
current operating cash flows. At June 30, 1999, the Company had approximately
$2.7 million available for future borrowings under the revolving line of credit.
The remaining $2 million open on the line is reserved for the letter of credit
which was issued to secure the GSC note payable. This amount will be advanced
upon repayment of the GSC note on or around September 25, 1999.

On December 8, 1998, the Board of Directors declared at its Annual Meeting of
Stockholders its fourth annual cash dividend on the Company's common stock. A
regular dividend of $.04 per common share was paid on January 29, 1999 to
stockholder's of record on January 19, 1999. The Board of Directors is confident
about the Company's continued success and believes our loyal shareholders should
continue to receive a return on their investments for their continued support.
In fiscal 1999, the Company continued its common stock buyback program. During
the fiscal year, the Company acquired 734,000 shares of common stock at a cost
of $688,900. During the last 3 years, the Company has repurchased a total of
1,166,200 shares of its common stock. Management expects to acquire an
additional 290,000-300,000 shares under the current program during fiscal 2000.

On April 16, 1996, the Company was named as a defendant in a complaint filed by
Bonar U.S., Inc. in Delaware Superior Court. The complaint alleged claims for
breach of contract and promissory estoppel relating to an Agreement in Principle
entered into in connection with a proposed acquisition of the Company by Bonar
U.S., Inc. On April 3, 1996, the Company announced that it had terminated the
Agreement of Principle pursuant to its terms. The complaint requested damages of
$7,011,484. On May 17, 1996, the Company filed a counterclaim against Bonar
U.S., Inc. and Bonar Plastic, Inc. seeking damages totaling $25,237,725 for
breach of the Confidentiality Agreement with the Company, misappropriation of
trade secrets, intentional interference with a prospective economic advantage
which the Company obtained as a result of an indication of interest from a third
party and breach of a Royalty Agreement between Bonar Plastic, Inc. and one of
the Company's operating divisions (formally known as Custom Rotational Molding
Inc.) In March 1997, the Company reached an amicable out of court settlement
with Bonar. The settlement involved mutual general releases by the parties,
dismissals of the actions brought by the parties and payments to Bonar of
$400,000 in March 1997 and $350,000 in September 1997.

Cash flows from operations in conjunction with the Company's revolving line of
credit and machinery and equipment loan commitment are expected to meet the
Company's needs for working capital, capital expenditures and repayment of
long-term debt for the foreseeable future.

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133
"Accounting for Derivative Instruments and Hedging Activities". The Statement
establishes accounting and reporting standards requiring that every derivative
instrument (including certain derivative instruments embedded in other
contracts) be recorded in the balance sheet as either an asset or

                                     13


<PAGE>

liability measured at its fair value. The Statement requires changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. SFAS No. 133 is effective for fiscal years
beginning after June 15, 2000. The adoption of this pronouncement is not
expected to have a significant impact on the Company's financial statements.

YEAR 2000

Management has been fully apprised of the issues surrounding the year 2000
dilemma. In assessing the potential impact this issue had on the Company,
management reviewed both its manufacturing and accounting systems to ascertain
critical applications which would be affected. Due to the nature of the
Company's manufacturing process and the equipment utilized, it was determined
that even equipment which was operated by or incorporated computerized controls
or programs were not dependent on calendar functions to operate and thus would
not be impacted by the year 2000 problem.

As part of the year 2000 issue the Company also assessed compliance of its
network computing systems. To date the Company believes that all of its
operating divisions, including its corporate headquarters, were fully Y2K
compliant as of June 30, 1999. The Company does not believe it will encounter
any additional problems associated with the year 2000 issue between now and the
millennium. The costs associated with becoming compliant did not have a material
effect on the Company's financial position.

To complete the Company's assessment of the year 2000 problem, the Company has
contacted its major suppliers in an effort to ascertain their readiness and
ability to function beyond this critical date and what impact, if any, it will
have on the Company's ability to continue normal operations. Based on their
responses, we feel confident that most of them are in compliance or will be
prior to December 31, 1999, and as such, should not impact our ability to
manufacture and supply products to our customers.

ITEM 7A. DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK

The Company is exposed to certain market risks relating to interest rate
volatility on its existing and future issuances of variable rate debt with the
bank. Primary exposures include movements in U.S. Treasury rates and LIBOR rates
which in turn effect the bank's prime and LIBOR option rates.

The Company had approximately $9.5 million of variable rate debt as of June 30,
1999. In efforts to reduce interest rate volatility and mitigate exposure on
variable rate debt, the Company entered into an interest rate swap effective
July 15, 1998. The swap has a notional amount of $7.5 million at July 15, 1999,
which reduces to $5.0 million at July 15, 2000 and remains at this amount until
its expiration on July 15, 2003. The swap fixes the bank's LIBOR option rate at
6.2%, plus 200 basis points, over the term of the contract. If average interest
rates increased by 1% during fiscal 2000 as compared to fiscal 1999, the Company
would not expect a significant increase in projected fiscal 2000 interest
expense.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Financial Statements and Financial Statement Schedules listed in Item
14(a)(1) and (2).


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

None.

                                     14

<PAGE>



                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS

The Company incorporates by reference the information set forth under the
caption "Election of Directors" in the Company's Proxy Statement to be filed
with the Securities and Exchange Commission, and mailed to stockholders in
connection with the Company's Annual Meeting of the Stockholders to be held on
December 3, 1999 ("the Proxy Statement")

EXECUTIVE OFFICERS

As of September 17, 1999, the executive officers of the Company were as follows:

<TABLE>
<CAPTION>


NAME                     AGE      POSITION
----                     ---      --------
<S>                      <C>      <C>
Sherman McKinniss        63       President, Chief Executive Officer, Chairman of the Board

Robert E. Gawlik         51       Executive Vice-President, Chief Operating Officer

E. Paul Tonkovich        61       Secretary, Director

Douglas W. Russell       38       Chief Financial Officer, Assistant Secretary/Treasurer

</TABLE>


SHERMAN MCKINNISS. Mr. McKinniss has served as President, Chief Executive
Officer and a Director of the Company since August 1991 and was appointed as
Chairman of the Board in December 1994. He was President and a Director of
Rotonics from 1987-1991. Previously, he owned and operated RMI, which he sold to
the Company in 1986 and was a partial owner of Rotational Molding, Inc.-Florida
which was merged into Rotonics in 1988.

ROBERT E. GAWLIK. Mr. Gawlik was appointed as Chief Operating Officer of the
Company in August 1998. Prior to this, he served as General Manager for Bonar
Plastic's Oregon facility from 1991-1998, and as Executive Vice-President of
Encore Industries from 1986-1989, and later as President of Encore Group from
1989-1991.

E. PAUL TONKOVICH. Mr. Tonkovich has served as Secretary and a Director of the
Company since August 1991. He has been a practicing attorney since January 1966.
He was legal counsel to Rotonics and to Mr. McKinniss and is now legal counsel
for the Company.

DOUGLAS W. RUSSELL. Mr. Russell has served as Chief Financial Officer and
Assistant Secretary/Treasurer of the Company since 1991. Prior to that he was a
Senior Auditor for the accounting firm Hallstein & Warner from 1988 until 1991,
and was Assistant Controller of RMI from September 1985 to September 1987.


ITEM 11.   EXECUTIVE COMPENSATION

The Company incorporates by reference the information set forth under the
captions "Compensation of Executive Officers", the "Summary Compensation Table"
and related disclosure information, "Certain Transactions", and "Compensation of
Directors" in the Proxy Statement.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The Company incorporates by reference the information set forth under the
caption "Security Ownership by Certain Beneficial Holders" in the Proxy
Statement.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company incorporates by reference the information set forth under the
headings "Information Concerning the Board of Directors" under the caption
"Election of Directors", "Executive Officers", and "Certain Transactions" in the
Proxy Statement.

                                     15
<PAGE>

                                     PART IV

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

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

<TABLE>
<CAPTION>
                                                                                   Page
                  <S>                                                              <C>
                  (1)      Financial Statements:

                           Report of Independent Public Accountants                  F-1
                           Balance Sheet, June 30, 1999 and 1998                     F-2
                           Statement of Income,
                             Years Ended June 30, 1999, 1998 and 1997                F-3
                           Statement of Changes in Stockholders' Equity,
                             Years Ended June 30, 1999, 1998, and 1997               F-4
                           Statement of Cash Flows,
                             Years Ended June 30, 1999, 1998, and 1997               F-5
                           Notes to Financial Statements                             F-6

                  (2)      Financial Statement Schedules:

                           VIII     Valuation and Qualifying Accounts,
                                      Years Ended June 30, 1999, 1998, and 1997      F-18
</TABLE>

                  All other schedules are omitted because they are not
applicable or the required information is shown in the financial statements or
notes thereto.

         (b) Reports on Form 8-K - None.


         (c) The following exhibits are filed as part of this report:



<TABLE>
<CAPTION>

Exhibit
Number        Exhibit Title
------        -------------
<S>    <C>
10.1   Credit Agreement between registrant and Wells Fargo Bank dated June 23,
       1999.

23(a)  Consent of Independent Public Accountants - Arthur Andersen LLP


</TABLE>

                                     16

<PAGE>

                                   SIGNATURES

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

                                       ROTONICS MANUFACTURING INC.


                                                        By /s/ SHERMAN MCKINNISS
                                                 -------------------------------
                                                               Sherman McKinniss
                                              President, Chief Executive Officer

                                                                 Date 09/28/1999


                                                       By /s/ DOUGLAS W. RUSSELL
                                                  ------------------------------
                                                              Douglas W. Russell
                                                         Chief Financial Officer
                                                   Assistant Secretary/Treasurer

                                                                 Date 09/28/1999


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

<TABLE>
<CAPTION>

Signature                          Title                        Date
---------                          -----                        ----
<S>                              <C>                          <C>


/s/  E. PAUL TONKOVICH           Secretary, Director          09/28/1999
-------------------------
E. Paul Tonkovich


/s/  DAVID C. POLITE             Director                     09/28/1999
-------------------------
David C. Polite


/s/  LARRY DEDONATO              Director                     09/28/1999
-------------------------
Larry DeDonato


/s/  JAMES E. EVANS              Director                     09/28/1999
-------------------------
James E. Evans


/s/  LARRY L. SNYDER             Director                     09/28/1999
-------------------------
Larry L. Snyder


/s/  ROBERT GROSSMAN             Director                     09/28/1999
-------------------------
Robert Grossman
</TABLE>
                                     17
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS




To the Board of Directors
and Stockholders of Rotonics Manufacturing Inc.:

We have audited the accompanying balance sheets of ROTONICS
MANUFACTURING INC. (a Delaware corporation) as of June 30, 1999 and
1998, and the related statements of income, changes in stockholders'
equity and cash flows for each of the three years in the period ended
June 30, 1999. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Rotonics
Manufacturing Inc. as of June 30, 1999 and 1998, and the results of
their operations and their cash flows for each of the three years in
the period ended June 30, 1999 in conformity with generally accepted
accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index
appearing under Item 14(a)(2) is presented for purposes of complying
with the Securities and Exchange Commission's rules and is not a
required part of the basic financial statements. This schedule has been
subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken
as a whole.




                                               ARTHUR ANDERSEN LLP
Orange County, California
August 25, 1999


                                     F-1




<PAGE>





                           ROTONICS MANUFACTURING INC.
                                  BALANCE SHEET

<TABLE>
<CAPTION>


                                                                                                       JUNE 30,
                                                                                    -------------------------------------------
                                                                                    ----------------           ----------------
                                                                                         1999                       1998
<S>
                                                                                    ----------------           ----------------
                                     ASSETS                                         <C>                   <C>
Current assets:
   Cash                                                                              $      3,300         $     30,700
   Accounts receivable, net of allowance for doubtful accounts
    of $321,400 and $148,000, respectively (Notes 8 and 9)                              6,570,200            6,973,800
   Current portion of notes receivable (Note 3)                                            51,700               62,600
   Inventories (Notes 4 , 8 and 9)                                                      6,973,700            7,081,900
   Deferred income taxes, net (Note 14)                                                 1,885,900            2,106,400
   Prepaid expenses and other current assets                                              216,700              208,200
                                                                                     ------------         ------------

     Total current assets                                                              15,701,500           16,463,600

Notes receivable, less current portion (Note 3)                                           502,800              455,000
Investment in partnership (Note 5)                                                        124,200              133,200
Property, plant and equipment, net (Notes 6, 8 and 9)                                  18,093,800           18,250,000
Intangible assets, net (Note 7)                                                         4,800,800            5,131,800
Other assets                                                                               77,200              130,200
                                                                                     ------------         ------------

                                                                                     $ 39,300,300         $ 40,563,800
                                                                                     ------------         ------------
                                                                                      ------------         ------------
                       LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:
  Current portion of long-term debt (Note 9)                                         $  2,067,000         $  1,784,000
  Accounts payable                                                                      2,818,800            3,719,600
  Accrued liabilities (Note 11)                                                         1,037,100              949,200
  Income taxes payable (Note 14)                                                           43,000                    -
                                                                                     ------------         ------------
       Total current liabilities                                                        5,965,900            6,452,800

Bank line of credit (Note 8)                                                            2,287,400            3,926,200
Long-term debt, less current portion (Note 9)                                           5,183,200            5,050,300
Long-term debt, due related parties (Note 10)                                           2,000,000            2,000,000
Deferred income taxes, net (Note 14)                                                    2,429,500            1,726,600
                                                                                     ------------         ------------

       Total liabilities                                                               17,866,000           19,155,900
                                                                                     ------------         ------------

Commitments and contingencies (Note 15)

Stockholders' equity:
Common stock, stated value $.01: authorized 20,000,000 shares;
  issued and outstanding 15,072,320 and 15,806,361 shares, respectively,
  net of treasury shares (Note 13)                                                     26,232,500           26,921,400
Accumulated deficit                                                                    (4,798,200)          (5,513,500)
                                                                                     ------------         ------------

       Total stockholders' equity                                                      21,434,300           21,407,900
                                                                                     ------------         ------------

                                                                                     $ 39,300,300         $ 40,563,800
                                                                                     ------------         ------------
                                                                                     ------------         ------------

</TABLE>
     The accompanying notes are an integral part of these financial statements.
                                     F-2


<PAGE>




                                            ROTONICS MANUFACTURING INC.
                                                STATEMENT OF INCOME


<TABLE>
<CAPTION>
                                                                     FOR THE YEAR ENDED JUNE 30,
                                                      ------------------------------------------------------
                                                        1999                  1998                   1997
                                                      ------------         ------------         ------------

<S>                                                   <C>                  <C>                  <C>
Net sales                                             $ 45,499,700         $ 38,058,900         $ 39,385,100
                                                      ------------         ------------         ------------

Costs and expenses:
  Cost of goods sold                                    33,335,300           29,268,400           29,292,100
  Selling, general and administrative expenses           8,447,200            7,047,000            6,239,600
  Plant consolidation expenses (Note 2)                    394,400              280,300                    -
                                                      ------------         ------------         ------------

     Total costs and expenses                           42,176,900           36,595,700           35,531,700
                                                      ------------         ------------         ------------

Income from operations                                   3,322,800            1,463,200            3,853,400
                                                      ------------         ------------         ------------

Other (expense)/income:
  Interest expense                                        (987,700)            (793,700)            (556,500)
  Lawsuit settlement (Note 15)                                   -                    -           (1,010,800)
  Other income, net                                        138,400               96,200               98,500
                                                      ------------         ------------         ------------
     Total other expense                                  (849,300)            (697,500)          (1,468,800)
                                                      ------------         ------------         ------------

Income before income taxes                               2,473,500              765,700            2,384,600

Income tax provision (Note 14)                          (1,147,500)            (348,500)            (942,800)
                                                      ------------         ------------         ------------

Net income                                            $  1,326,000         $    417,200         $  1,441,800
                                                      ------------         ------------         ------------
                                                      ------------         ------------         ------------

Basic/diluted income per common share (Note 1)        $        .09         $        .03         $        .10
                                                      ------------         ------------         ------------
                                                      ------------         ------------         ------------
</TABLE>

      The accompanying notes are an integral part of these financial statements.

                                     F-3




<PAGE>




                           ROTONICS MANUFACTURING INC.
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                 COMMON STOCK
                                         ----------------------------------        ACCUMULATED
                                            SHARES             AMOUNT                 DEFICIT                    TOTAL
                                         ----------------  -----------------   -------------------        ---------------
<S>                                      <C>               <C>                 <C>                        <C>
Balances, June 30, 1996                        14,158,517       $ 24,577,400         $ (6,254,300)        $ 18,323,100

Stock issued in connection with
  exercise of outstanding options                   7,500               6,100                    -                6,100
Repurchase of common stock                       (100,022)           (161,000)                   -             (161,000)
Common stock dividends                                  -                   -             (565,400)            (565,400)

Net income                                              -                   -            1,441,800            1,441,800
                                             ------------        ------------         ------------         ------------

Balances, June 30, 1997                        14,065,995          24,422,500           (5,377,900)          19,044,600

Stock issued in connection with
  Rotocast International, Inc. merger           2,072,539           3,000,000                    -            3,000,000
Repurchase of common stock                       (332,173)           (501,100)                   -             (501,100)
Common stock dividends                                  -                   -             (552,800)            (552,800)

Net income                                              -                   -              417,200              417,200
                                             ------------        ------------         ------------         ------------

Balances, June 30, 1998                        15,806,361          26,921,400           (5,513,500)          21,407,900

Repurchase of common stock                       (734,041)           (688,900)                   -             (688,900)
Common stock dividends                                  -                   -             (610,700)            (610,700)

Net income                                              -                   -            1,326,000            1,326,000
                                             ------------        ------------         ------------         ------------

Balances, June 30, 1999                        15,072,320        $ 26,232,500         $ (4,798,200)        $ 21,434,300
                                             ------------        ------------         ------------         ------------
                                             ------------        ------------         ------------         ------------


</TABLE>

    The accompanying notes are an integral part of these financial statements.


                                     F-4


<PAGE>




                                             ROTONICS MANUFACTURING INC.
                                               STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>


                                                                                               FOR THE YEAR ENDED JUNE 30,
                                                                                  -------------------------------------------------
                                                                                        1999             1998             1997
                                                                                  ---------------  ---------------  ---------------

<S>                                                                               <C>              <C>              <C>
Cash flows from operating activities:
  Net income                                                                     $  1,326,000       $    417,200       $  1,441,800
  Adjustments to reconcile net income to
    net cash provided by operating activities:
      Depreciation and amortization                                                 2,635,300          2,034,800          1,617,000
      (Gain)/loss on sales of equipment                                                (1,500)            67,500             21,800
      Deferred income tax expense                                                     923,400            323,000            786,200
      Provision for doubtful accounts                                                 179,300             39,300             63,900
      Changes in assets and liabilities, net of effect from purchase of
           business:
           Decrease/(increase) in accounts receivable                                 160,400           (324,900)           392,400
           Decrease/(increase) in inventories                                         108,200           (267,000)          (663,300)
           (Increase)/decrease in prepaid expenses and other current assets            (8,500)           177,200            (23,600)
           Decrease/(increase) in other assets                                         42,100            (72,400)            23,200
           (Decrease)/increase in accounts payable                                   (879,900)          (177,100)           243,700
           Increase/(decrease) in accrued liabilities                                  87,900           (280,300)          (124,200)
           Increase in income taxes payable                                            43,000                  -                  -
                                                                                 ------------       ------------       ------------

Net cash provided by operating activities                                           4,615,700          1,937,300          3,778,900
                                                                                 ------------       ------------       ------------

Cash flows from investing activities:
  Acquisition of Rotocast, net of cash obtained                                             -            (74,100)                 -
  Repayments/(advances) on notes receivable                                            27,000            (11,600)            (1,200)
  Capital expenditures                                                             (2,141,400)        (2,103,100)        (3,797,800)
  Proceeds from sales of equipment                                                      5,700             93,500              3,200
  Distribution from investment in partnership                                           9,000              2,300                  -
                                                                                 ------------       ------------       ------------

Net cash used in investing activities                                              (2,099,700)        (2,093,000)        (3,795,800)
                                                                                 ------------       ------------       ------------

Cash flows from financing activities:
  Borrowings under line of credit                                                  11,670,500         11,638,800          9,700,000
  Repayments under line of credit                                                 (13,309,300)       (10,086,000)        (9,310,100)
  Proceeds from issuance of long-term debt                                          3,505,900            950,000          1,526,400
  Repayments of long-term debt                                                     (3,090,000)        (1,285,500)        (1,189,700)
  Payment of common stock dividends                                                  (631,600)          (541,900)          (554,300)
  Proceeds from exercise of stock options and warrants                                      -                  -              6,100
  Repurchases of common stock                                                        (688,900)          (501,100)          (161,000)
                                                                                 ------------       ------------       ------------

Net cash (used in)/provided by financing activities                                (2,543,400)           174,300             17,400
                                                                                 ------------       ------------       ------------

Net (decrease)/increase in cash                                                       (27,400)            18,600                500
Cash at beginning of year                                                              30,700             12,100             11,600
                                                                                 ------------       ------------       ------------

Cash at end of year                                                              $      3,300       $     30,700       $     12,100
                                                                                 ------------       ------------       ------------
                                                                                 ------------       ------------       ------------

</TABLE>



      The accompanying notes are an integral part of these financial statements.

                                     F-5

<PAGE>




                           ROTONICS MANUFACTURING INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1- ORGANIZATION, OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:

ORGANIZATION AND OPERATIONS

Rotonics Manufacturing Inc. (the "Company"), a Delaware corporation manufactures
and markets plastic products for commercial, agricultural, refuse,
pharmaceutical, marine, recreation, healthcare, retail, and residential use, as
well as an array of custom molded plastic products to customers in a variety of
industries located in diverse geographic markets. No single customer accounted
for more than 10% of the Company's net sales in fiscal 1999, 1998, or 1997. In
fiscal 1999, the Company purchased in aggregate approximately 90% of its plastic
resin from three vendors. Plastic resin represents a significant portion of the
Company's manufacturing costs. As such, economic factors that affect the
Company's plastic resin vendors will have a potential impact on the Company's
future operations.

The Company's significant accounting policies are as follows:

REVENUE RECOGNITION

Revenues are recognized upon shipment to the customer or when title passes to
the customer based on the terms of the sales, and are recorded net of sales
discounts, returns and allowances.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of accounts receivable and trade payables approximates the
fair value due to their short-term maturities. The carrying value of the
Company's line of credit and notes payable is considered to approximate fair
market value because the interest rates of these instruments are based
predominately on variable reference rates.

INVENTORIES

Inventories are stated at the lower of cost or market. Cost is determined on the
first-in, first-out method.

PROPERTY, PLANT AND EQUIPMENT

Depreciation is computed using the straight-line method and the estimated useful
lives of the assets range from three to thirty-nine years. When assets are
retired or otherwise disposed of, the cost and related accumulated depreciation
are removed from the accounts, and any resulting gain or loss is included in
income for the period. The cost of maintenance and repairs is charged to income
as incurred; costs relating to significant renewals and betterments are
capitalized.

INTANGIBLE ASSETS

The excess of the aggregate purchase price over the fair value of the net assets
of businesses acquired is amortized on the straight-line basis over periods
ranging from fifteen to forty years. Patents are amortized on the straight-line
basis over their useful lives of seventeen years, or at their remaining useful
life from date of acquisition.



                                       F-6

<PAGE>

INCOME TAXES

The Company accounts for income taxes pursuant to Statement of Financial
Accounting Standards No. 109 ("SFAS 109"), "Accounting for Income Taxes".
SFAS 109 is an asset and liability approach that requires the recognition of
deferred tax assets and liabilities for the expected future tax consequences
of events that have been recognized in the Company's financial statements or
tax returns. In estimating future tax consequences, SFAS 109 generally
considers all expected future events other than enactments of changes in tax
laws or rates.

EARNINGS PER SHARE

Earnings per share are calculated under guidelines of SFAS No. 128 "Earnings
per Share" which was adopted by the Company as of December 31, 1997. SFAS No.
128 replaces primary EPS with basic EPS and fully diluted EPS with diluted
EPS. Basic EPS is computed by dividing reported earnings by weighted average
shares outstanding. Diluted EPS is computed the same way as fully diluted EPS
except the calculation now uses the average share price for the reporting
period to compute dilution from potential dilutive securities under the
treasury stock method. Potential dilutive securities for the Company include
outstanding stock options.

The table below details the components of the basic and diluted earnings per
share ("EPS") calculations:
<TABLE>
<CAPTION>
                                         Income          Shares       EPS Amount
                                        -------------   ---------   ------------
<S>                                      <C>             <C>          <C>
JUNE 30, 1999
   Basic EPS
     Net Income                          $1,326,000      15,379,400      $0.09

   Effect of dilutive stock options           -               4,700        -
                                         ----------      ----------      -----

   Diluted EPS                           $1,326,000      15,384,100      $0.09
                                         ==========      ==========      =====

JUNE 30, 1998
   Basic EPS
     Net Income                          $  417,200      14,445,200      $0.03

   Effect of dilutive stock options           -               -            -
                                         ----------      ----------      -----

   Diluted EPS                           $  417,200      14,445,200      $0.03
                                         ==========      ==========      =====

JUNE 30, 1997
   Basic EPS
     Net Income                          $1,441,800      14,134,600      $0.10

   Effect of dilutive stock options           -                 600        -
                                         ----------      ----------      -----

   Diluted EPS                           $1,441,800      14,135,200      $0.10
                                         ==========      ==========      =====
</TABLE>


                                      F-7
<PAGE>

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

Effective July 1, 1996, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-lived
Assets and Long-lived Assets to be Disposed of" and SFAS No. 123, "Accounting
for Stock-Based Compensation." Under SFAS No. 123, the Company has elected to
disclose pro forma net income and earnings per share as if the fair value
based accounting method of SFAS No. 123 had been used for stock based
compensation. The adoption of these pronouncements had no impact to the
Company's financial position or results of operations.

Effective September 30, 1998, the Company adopted SFAS No. 130 "Reporting
Comprehensive Income". SFAS No. 130 defines comprehensive income as a measure
of all changes in equity of an enterprise during a period that results from
transactions and other economic events of the period other than transactions
with owners. The adoption of this pronouncement did not have a significant
impact on the Company's results of operations.

Effective for fiscal year 1999, the Company adopted SFAS No. 131 "Disclosures
About Segments of an Enterprise and Related Information". SFAS No. 131
introduces management's approach to defining operating segments. This
approach corresponds to the way management organizes units and internally
evaluates performance of its operations based on products, services,
geography, legal or management structure. Once operating segments are
identified, they are then grouped based on similar characteristics to
determine reportable segments. Under the provisions of SFAS No. 131 the
Company's operations are conducted under one operating segment.

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133
"Accounting for Derivative Instruments and Hedging Activities". The Statement
establishes accounting and reporting standards requiring that every
derivative instrument (including certain derivative instruments embedded in
other contracts) be recorded in the balance sheet as either an asset or
liability measured at its fair value. The Statement requires changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. SFAS No. 133 is effective for fiscal years
beginning after June 15, 2000. The adoption of this pronouncement is not
expected to have a significant impact on the Company's financial statements.

NOTE 2 - ACQUISITIONS:

Pursuant to an Agreement and Plan of Merger and Reorganization dated March
24, 1998 between the Company and GSC Industries, Inc. ("GSC"), the Company
acquired all of GSC's outstanding common stock holdings in Rotocast
International, Inc. ("Rotocast") and Rotocast's wholly owned subsidiaries
Rotocast Plastic Products, Inc.; Wonder Products, Inc.; Nutron Plastic, Inc.;
Rotocast Plastic Products of Texas, Inc.; Rotocast Plastic Products of
Nevada, Inc.; Rotocast Plastic Products of Tennessee, Inc.; and Rotocast
Management Corporation. In accordance with the merger and reorganization
Rotocast was merged into the Company and the Company issued to GSC 2,072,539
shares of its own common stock and a $2,000,000 eighteen-month promissory
note bearing interest at 5.26% per annum. The promissory note is secured by a
$2,000,000 irrevocable standby letter of credit issued by Wells Fargo Bank,
which can only be called upon if the principal balance of the note is not
paid within ten days of maturity. Pursuant to the merger agreement the
transaction was effective March 31, 1998.

To provide recourse to the Company, five percent of the common shares issued
to GSC will be held in an escrow account to cover any claims by the Company
in the event of any breaches of representations, warranties or covenants by
GSC as outlined in the agreement. The Company incurred approximately $80,000
of fees and expenses in conjunction with the merger. In addition the Company
obtained an appraisal on Rotocast's machinery and equipment which resulted in
the write-up of Rotocast's machinery and equipment to $7.2 million and the
recognition of goodwill amounting to $357,200. These amounts will be
amortized over their estimated useful life of fifteen years. The above
transaction was accounted for using the purchase accounting method and the
results of the transaction were included in the Company's financial
statements effective as of March 31, 1998.

As part of the reorganization of Rotonics and Rotocast, the Company relocated
its operations in Warminster, Pennsylvania, Arleta, California, and Miami,
Florida into its other operating facilities. The relocation of these plants
resulted in non-recurring costs of approximately $394,400 and $280,300 in
fiscal years 1999 and 1998, respectively.


                                       F-8
<PAGE>

PRO FORMA FINANCIAL INFORMATION (UNAUDITED)

The following unaudited pro forma condensed statement of combined operations
for the years ended June 30, 1998 and 1997 assumes the Rotocast merger
occurred at the beginning of the respective periods after giving effect to
certain adjustments, including amortization of goodwill, increased interest
expense on acquisition debt, depreciation expense and related income tax
effects. The pro forma results have been prepared for comparative purposes
only and do not purport to indicate the results of operations which would
actually have occurred had the combination been in effect on the date
indicated, or which may occur in the future.
<TABLE>
<CAPTION>
                                                             Combined
                                                   For the years ended June 30,
                                                   -----------------------------
                                                        1998                1997
                                                     ------------       -----------
<S>                                                  <C>                <C>
Net sales                                            $ 45,746,800       $ 49,152,100

Total costs and expenses                              (45,765,700)       (47,422,300)
                                                     ------------       ------------

Income/(loss) before provision for income taxes           (18,900)         1,729,800

Provision for income taxes                                  -               (691,900)
                                                     ------------       ------------

Net income/(loss)                                    $    (18,900)      $  1,037,900
                                                     =============      =============

Income per common share                              $        .00       $        .06
                                                     ============       ============
</TABLE>

NOTE 3 - NOTES RECEIVABLE:

On March 31, 1995, the Company and a customer entered into an agreement under
which the Company acquired from this customer certain assets, including molds
and trade accounts receivable, at their total estimated fair value of
$357,800, which was applied against the principal of a 1993 Promissory Note
owed by this customer to the Company. The remaining unpaid principal,
together with accrued interest and open trade receivable from this customer
as of March 31, 1995, were exchanged for a new note with a principal balance
of $455,000, bearing interest at 8% per annum and maturing on March 31, 2005.

Effective March 31, 1995, the Company sold products manufactured using these
molds directly to end users. The Company shall pay to this former customer
royalties at the initial rate of 10% of the Company's net sales of these
products. Half of the royalty payments shall be applied to reduce principal
and interest until the former customer has received a total of $300,000 in
royalty payments or March 31, 1998, whichever is earlier. Subsequently, all
royalty payments shall be applied to principal and interest until such
principal and interest are paid in full, at which time the royalty rate will
be reduced to 5% through March 31, 2005. As of June 30, 1999 and 1998, the
total balance of this note amounted to $490,700 and $517,600 including
accrued interest of $35,700 and $62,600, respectively. The Company intends to
hold this note until maturity.

NOTE 4 - INVENTORIES:

<TABLE>
<CAPTION>
Inventories consist of:                            June 30,
                                        ------------------------------
                                            1999              1998
                                        ------------      ------------
<S>                                     <C>                <C>
Raw materials                           $  2,728,000       $ 4,002,400
Finished goods                             4,245,700         3,079,500
                                          ----------         ---------

                                        $  6,973,700       $ 7,081,900
                                        ============       ===========
</TABLE>


                                      F-9
<PAGE>

NOTE 5 - INVESTMENT IN PARTNERSHIP:

The Company owns a 33-1/3% interest in a real estate venture that was
acquired in 1998 and is accounted for using the equity method. The investment
consists principally of a note receivable which is payable in monthly
installments, including interest at 7%, to 2004, with annual principal
reductions as provided.

NOTE 6 - PROPERTY, PLANT AND EQUIPMENT:

<TABLE>
<CAPTION>
Property, plant and equipment consist of:                                                June 30,
                                                                              ------------------------------
                                                                                  1999              1998
                                                                              ------------      ------------
<S>                                                                           <C>               <C>
Land                                                                          $  1,039,500      $  1,039,500
Buildings and building improvements                                              4,291,300         4,021,000
Machinery, equipment, furniture and fixtures                                    23,603,300        21,534,500
Construction in progress                                                           610,600           836,300
                                                                                  --------           -------
                                                                                29,544,700        27,431,300

Less - accumulated depreciation                                                (11,450,900)       (9,181,300)
                                                                              -------------      ------------

                                                                               $18,093,800       $18,250,000
                                                                              ============       ===========
</TABLE>

NOTE 7 - INTANGIBLE ASSETS:

<TABLE>
<CAPTION>
Intangible assets consist of:                                                            June 30,
                                                                              ------------------------------
                                                                                  1999              1998
                                                                              ------------      ------------
<S>                                                                           <C>               <C>
Patents, net of accumulated amortization of $107,000 and $100,900             $     45,200       $    51,300
Goodwill, net of accumulated amortization
  of $2,701,800 and $2,377,000                                                   4,755,600         5,080,500
                                                                                ----------         ---------

                                                                              $  4,800,800       $ 5,131,800
                                                                              ============       ===========
</TABLE>

The carrying values of long-lived assets are reviewed if the facts and
circumstances suggest that an item may be impaired. If this review indicates
that a long-lived asset will not be recoverable, as determined based on the
future undiscounted cash flows of the asset, the Company's carrying value of
the long-lived asset is reduced to fair value.

NOTE 8 - BANK LINE OF CREDIT:

The Company has a $7,000,000 revolving line of credit with Wells Fargo Bank,
which matures on October 1, 2001. The line is secured by the Company's
machinery and equipment, accounts receivable and inventories. Interest is
payable monthly at the bank's prime rate. The bank's prime rate at June 30,
1999 was 7.75% per annum. In addition, the loan agreement allows the Company
to convert the outstanding principal balance in increments of $250,000 to a
LIBOR-based loan for up to 90-day periods. At June 30, 1999, total borrowings
under the Company's line of credit were $2,287,400 of which $2,250,000 was
borrowed under the LIBOR option bearing a LIBOR interest rate of 7.0% per
annum and maturing on July 15, 1999. Proceeds from the loan were used for
working capital purposes. At June 30, 1999, the Company had approximately
$2,712,600 available for future borrowings under the revolving line of
credit. The remaining $2,000,000 open on the line of credit is reserved for
the letter of credit which was issued to secure the GSC note payable. The
loan agreement contains various covenants pertaining to tangible net worth,
net income and liquidity ratios, capital expenditures, payments of dividends,
payment of subordinated debt as well as various other restrictions. The
Company was in compliance with these covenants for fiscal 1999.


                                      F-10
<PAGE>

NOTE 9 - LONG-TERM DEBT:

<TABLE>
<CAPTION>
Long-term debt consists of:                                       June 30,
                                                        ----------------------------
                                                           1999              1998
                                                        ----------       -----------
<S>                                                       <C>             <C>
Note payable - Bank       (A)                           $  733,300        $1,533,300
Note payable - Bank       (B)                              191,700           291,700
Note payable - Bank       (C)                              288,100           389,800
Note payable - Bank       (D)                              600,000           800,000
Note payable - Bank       (E)                            1,040,000           700,000
Note payable - Bank       (F)                            2,450,000         2,000,000
Note payable - Bank       (G)                            1,926,700         1,080,600
Other                                                       20,400            38,900
                                                     -------------     -------------
                                                         7,250,200         6,834,300

Less-current portion                                    (2,067,000)      (1,784,000)
                                                     -------------     -------------
                                                        $5,183,200        $5,050,300
                                                     =============     =============
</TABLE>

(A)  In May 1995 the Company restructured its credit agreement with Wells Fargo
     Bank. The loan consists of a $4,000,000 sixty-month term loan. The note is
     due in monthly principal installments of $66,700 plus interest at the
     bank's prime rate (7.75% at June 30, 1999). In addition, the loan agreement
     allows the Company to convert all or a portion of the outstanding principal
     to a LIBOR-based loan for periods up to 180 days. At June 30, 1999, the
     total outstanding principal balance was under the LIBOR option at 7.0% per
     annum maturing on July 15, 1999. The note is secured by the Company's
     machinery and equipment, accounts receivable and inventories and matures on
     May 16, 2000.

(B)  In fiscal 1996, the Company was advanced $500,000 on its machinery and
     equipment term-loan commitment with Wells Fargo Bank. The proceeds were
     used to repay amounts originally borrowed under the Company's revolving
     line of credit to finance approximately $700,000 in machinery and equipment
     purchases. The note is due in monthly principal installments of
     approximately $8,300 plus interest at the bank's prime rate (7.75% at June
     30, 1999) or LIBOR interest rate option for periods up to six months. At
     June 30, 1999, the total outstanding principal was under the LIBOR option
     at 7.0% per annum maturing July 15, 1999. The note is secured by the
     Company's machinery and equipment and matures on May 15, 2001.

(C)  In March 1997 the Company was advanced $500,000 on its second machinery and
     equipment term-loan commitment with Wells Fargo Bank. The proceeds were
     used to repay amounts originally borrowed under the Company's revolving
     line of credit to finance approximately $625,000 in machinery and equipment
     purchased. The note is due in monthly principal installments of
     approximately $8,500 plus interest at the bank's prime rate (7.75% per
     annum at June 30, 1999) or LIBOR interest rate option for periods up to six
     months. At June 30, 1999, the total outstanding principal was under the
     LIBOR option at 7.0% per annum maturing July 15, 1999. The note is secured
     by the Company's machinery and equipment and matures on May 15, 2002.

 (D) In June 1997, the Company was advanced $1,000,000 on its third machinery
     and equipment term-loan commitment with Wells Fargo Bank. The proceeds were
     used to repay amounts originally borrowed under the Company's revolving
     line of credit to finance approximately $1,250,000 in machinery and
     equipment purchases. The note is due in monthly principal installments of
     approximately $16,700 plus interest at the bank's prime rate (7.75% per
     annum at June 30, 1999) or LIBOR interest rate option for periods up to
     three months. At June 30, 1999, the total outstanding principal was under
     the LIBOR option at 7.0% per annum maturing July 15, 1999. The note is
     secured by the Company's machinery and equipment and matures on June 27,
     2002.

(E)  In 1998, the Company was advanced $1,200,000 on its fourth machinery and
     equipment term-loan commitment with Wells Fargo Bank. The proceeds were
     used to repay amounts originally borrowed under the Company's revolving
     line of credit to finance approximately $1,500,000 in machinery and
     equipment purchases. The note was due in monthly interest only payments at
     the bank's prime rate or LIBOR interest rate options until November 15,
     1998. At this time the note converted to a sixty month fully amortizable
     loan due in monthly principal installments of $20,000 plus interest at the
     bank's prime rate, (7.75% per annum at June 30, 1999), or LIBOR interest
     rate option for periods up to three months. At June 30, 1999, the total
     outstanding principal was under the LIBOR option at 7.0% per annum maturing
     July 15, 1999. The note is secured by the Company's machinery and equipment
     and matures on July 15, 2003.


                                      F-11
<PAGE>

     At June 30, 1999, the Company had available a term-loan commitment in the
     amount of $1,200,000 for future machinery and equipment purchases. Advances
     under the line will be subject to monthly interest only payments at the
     bank's prime or LIBOR interest rates until July 1, 2000 at which time
     amounts borrowed will convert to a sixty month fully amortizable loan.

(F)  In connection with the Rotocast acquisition, the Company retired Rotocast's
     existing line of credit and long-term debt with a 90-day note issued by
     Wells Fargo Bank in the amount of $1,750,000. In April 1998, pursuant to an
     appraisal of Rotocast's machinery and equipment, this note was replaced
     with a $2,000,000 sixty-month fully amortizable note. In July 1998, the
     note again was replaced with a $3,000,000 sixty-month fully amortizable
     loan. The note is due in monthly interest only payments at the bank's prime
     rate (7.75% per annum at June 30, 1999) or LIBOR interest rate option for
     periods up to three months until August 15, 1998. At such time the note
     converted to a sixty-month fully amortizable loan due in monthly
     installments of $50,000. At June 30, 1999, the total outstanding principal
     was under the LIBOR option at 7.0% per annum maturing July 15, 1999. The
     note is secured by the Company's machinery and equipment and matures on
     July 1, 2003.

(G)  In July 1998, a $2,000,000 real estate loan secured by the Company's
     Bensenville, Illinois and Gainesville, Texas properties was issued to Wells
     Fargo Bank. This note replaced the 1994 real estate loan issued in
     connection with the purchase of the Bensenville, Illinois property. The
     note is due in monthly principal installments of approximately $6,700 plus
     interest at the bank's prime rate, (7.75% per annum at June 30, 1999), or
     LIBOR interest rate option on a twenty-five year amortization with the
     outstanding principal due on July 1, 2008. At June 30, 1999, the total
     outstanding principal was under the LIBOR option at 7.0% per annum maturing
     July 15, 1999.

     Effective July 15, 1998, the Company initiated an interest rate swap
     agreement with the bank. The agreement will allow the Company to fix a
     portion of its outstanding term and line of credit debt ($7.5 million as of
     July 15, 1999) from a variable floating rate to a fixed interest rate in
     efforts to protect against future increases in the bank's prime rate. The
     agreement matures July 15, 2003.


Aggregate annual maturities of long-term debt are summarized as follows:
<TABLE>
<CAPTION>
       Year Ending June 30,
      ----------------------
      <S>                                             <C>
              2000                                    $2,067,000
              2001                                     1,321,700
              2002                                     1,204,800
              2003                                       920,000
              2004                                       210,000
             Thereafter                                1,526,700
                                                      -----------
                                                      $7,250,200
                                                      -----------
                                                      -----------
</TABLE>
NOTE 10 - RELATED PARTY TRANSACTIONS:
<TABLE>
<CAPTION>
Related party debt consists of:                                    June 30,
                                                         ----------------------------
                                                            1999             1998
                                                         ----------       -----------
<S>                                                      <C>              <C>
Note payable - (A)                                       $2,000,000       $2,000,000
                                                         ==========       ==========
</TABLE>
(A)  This note was issued to GSC Industries, Inc., which a director of the
     Company has a 54% interest, in connection with the acquisition of Rotocast.
     The note bears interest at 5.26% per annum and is payable with one interest
     only payment which was paid on March 25, 1999 and a second principal and
     interest payment due upon maturity of the note on September 25, 1999. The
     Company intends to fund payment for this note from the current availability
     under its revolving line of current.

     The note is secured by a $2,000,000 irrevocable standby letter of credit
     that may be called upon if the principal balance of the note is not paid
     within ten days of maturity.


                                      F-12

<PAGE>

ADDITIONAL RELATED PARTY TRANSACTIONS:

The Company sells plastic resin and molded plastic products to a company in
which an officer/director of the Company has a minority interest. Sales to
the Company amounted to $461,000, $392,400 and $412,300 in fiscal years 1999,
1998 and 1997, respectively. Amounts due on sales to this company were
$89,400 and $171,800 at June 30, 1999 and 1998, respectively, and are
included in accounts receivable in the accompanying balance sheet.

In fiscal years 1999, 1998 and 1997, the Company incurred legal fees and
costs amounting to $44,500, $83,400 and $103,400, respectively, for services
by E. Paul Tonkovich Professional Corporation, of which an officer/director
of the Company is an employee.

The Company leases its facilities in Miami, Florida; Knoxville, Tennessee;
Brownwood, Texas; Bossier City, Louisiana, and Las Vegas, Nevada from GSC
Industries, Inc. of which a director of the Company has a 54% ownership
interest. The facilities, except Bossier City which was leased on a
month-to-month basis through August 1998, are leased on a long-term basis
through March 2013 and are subject to annual CPI adjustments. In fiscal 1999
and 1998, the Company paid rent on these facilities amounting to $491,300 and
$135,000, respectively.

NOTE 11 - ACCRUED LIABILITIES:

<TABLE>
<CAPTION>

Accrued liabilities consist of:                                         June 30,
                                                              ---------------------------
                                                                 1999              1998
                                                              ----------       ----------
<S>                                                           <C>              <C>
Salaries, wages, commissions and related payables             $  712,800       $  607,900
Other                                                            324,300          341,300
                                                                --------         --------

                                                              $1,037,100       $  949,200
                                                              ==========       ==========
</TABLE>

NOTE 12 - STOCK OPTION PLAN:

In December 1994, at the Annual Meeting of Stockholders of the Company, the
stockholders voted by majority decision to ratify and approve a new stock
option plan as adopted by the Board of Directors in June 1994. The plan
allows, at the discretion of the Board of Directors, for the granting of
options to key employees, officers, directors, and consultants of the Company
to purchase 1,000,000 shares of the Company's common stock. Under the terms
and conditions set forth in the plan, the exercise price of the stock options
will be a least 85% of the fair market value of the Company's common stock on
the grant date. The plan expires June 12, 2004.

STOCK OPTION ACTIVITY

<TABLE>
<CAPTION>
                                               Outstanding       Exercisable      Weighted Average
                                                  Shares            Shares         Price Per Share
                                               -----------       -----------      ----------------
<S>                                            <C>               <C>              <C>
Balance outstanding at June 30, 1996                12,500            12,500               $0.8125
                                                                 ===========
           Exercised                                (7,500)                                $0.8125
           Cancelled                                (5,000)                                $0.8125
                                               -----------

Balance outstanding at June 30, 1997                     -
           Granted                                 115,000                                 $0.8669
                                               -----------

Balance outstanding at June 30, 1999              115,000            100,000               $0.8750
                                               ===========       ===========
</TABLE>


In fiscal 1998, there was no activity in the plan. In August and September
1998, the Company issued stock options to key employees to purchase an
aggregate of 115,000 shares of common stock at fair market value at the date
of grant. At June 30, 1999, the Company had 885,000 shares available for
future grants.


                                     F-13


<PAGE>

In August 1999, a key employee was issued stock options to purchase 40,000
shares of common stock at fair market value at the date of grant.

The Company accounts for stock options under Accounting Principles Board
Opinion 25 ("APB25"), "Accounting for Stock Issued to Employees", which is
permitted under SFAS No. 123. "Accounting for Stock Based Compensation",
issued in 1995. Had compensation cost for the plan been determined instead in
accordance with rules set out in SFAS 123, the Company's net income and
income per common share data would not be significantly different.

NOTE 13 - COMMON STOCK:

In March 1998, the Company issued 2,072,539 shares of the Company's common
stock in connection with the Rotocast merger (see Note 2).

On December 8, 1998, at the Company's Annual Meeting of Stockholders, the
Board of Directors declared a common stock dividend of $.04 per common share
payable on January 28, 1999 to stockholders of record on January 19, 1999.
This marks the fourth consecutive annual payment of dividends on the
Company's common stock.

In fiscal year 1999 and 1998, the Company acquired 734,000 and 332,200 shares
of its own common stock which it had purchased in connection with the
Company's Buy Back Program at a total cost of $688,900 and $501,100,
respectively.

Treasury stock is recorded at cost. At June 30, 1999 and 1998, the treasury
stock consisted of 13,491 and 1,775 shares of common stock at a cost of
$13,800 and $1,500, respectively.

NOTE 14 - INCOME TAXES:

The components of the income tax provision were:

<TABLE>
<CAPTION>

                                         For the years ended June 30,
                               ------------------------------------------------
                                   1999              1998              1997
                               ------------      ------------      ------------
<S>                            <C>               <C>               <C>
Current:
   Federal                         $(72,900)          $(6,400)         $(63,000)
   State                           (151,200)          (19,100)          (93,600)
                               ------------      ------------      ------------
                                   (224,100)          (25,500)         (156,600)
                               ------------      ------------      ------------
Deferred:
   Federal                         (939,700)         (301,500)         (744,100)
   State                             16,300           (21,500)          (42,100)
                               ------------      ------------      ------------
                                   (923,400)         (323,000)         (786,200)
                               ------------      ------------      ------------

                               $ (1,147,500)       $ (348,500)       $ (942,800)
                               ============      ============      ============
</TABLE>

                                     F-14

<PAGE>

At June 30, 1999, the Company has net operating loss (NOL) carryforwards of
approximately $4,900,000 and $7,346,000 for federal and state income tax
purposes, respectively. The NOL carryforwards, which are available to offset
future taxable income of the Company and are subject to limitations should a
"change in ownership" as defined in the Internal Revenue code occur, will
begin to expire in 2003 and 2000 for federal and state purposes,
respectively, if not utilized. The federal and state NOL carryforwards expire
as follows:


      Amount of unused operating loss carryforwards     Expiration during year
        Federal                             State            ended June 30,
      ----------                         ----------     ----------------------
      $    -                             $  371,000             2000
           -                                405,000             2001
           -                                207,000             2002
         200,000                            451,000             2003
       3,400,000                            273,000             2004
         600,000                            444,000             2005
         500,000                            155,000             2006
           -                                708,000             2007
           -                                603,000             2008
         200,000                          1,054,000             2009
           -                                395,000             2010
           -                                555,000             2011
           -                                477,000             2012
           -                                406,000             2013
           -                                842,000             2014
      ----------                         ----------

      $4,900,000                         $7,346,000
      ==========                         ==========

At June 30, 1999, the Company had a federal alternative minimum tax credit of
approximately $263,400 which is available to offset future federal income
taxes once the Company is no longer subject to an alternative minimum tax for
federal income tax purposes.

In conjunction with the adoption of SFAS 109 in fiscal 1994, management
determined the future taxable income of the Company will more likely than not
be sufficient to realize the tax benefits of its NOL's. As such, an initial
deferred tax asset of $4,013,000, net of a valuation allowance of $2,662,000
was recorded.

Based on the operating results since the adoption of SFAS 109 and
management's continuing assessment, management believes that the Company will
continue to utilize its NOL's in the normal course of business. As of fiscal
1997, management has reduced the initial $2,662,000 valuation allowance to
zero. Since this time, the Company's deferred tax provision increased
substantially in unison with the depletion of the federal valuation allowance
in fiscal 1996. As such, the Company's will continue to report a large
deferred tax provision until such time that the Company's NOL's and
corresponding deferred tax assets are fully utilized. In connection with the
Rotocast merger, the Company recorded a deferred tax asset of $394,400, net
of a valuation allowance of $192,400 as of June 30, 1998, for the future
benefit related to state NOL carryforwards. The current state valuation
allowance represents the estimated amount of NOL's which will expire prior to
their utilization. Again, realization of the future tax benefits of the NOL
carryforwards is dependent on the Company's ability to generate taxable
income within the carryforward period. Management will continue to assess the
likelihood of utilizing its federal and state NOL's by taking into
consideration historical results and current economic conditions in which the
Company operates. Management does not consider any non-routine transactions
in assessing the likelihood of realization of the recorded deferred tax
asset. Any future adjustments to the valuation allowance will be reflected as
a component of the current years tax provision. Management also notes that
the deferred tax provision does not result in current outlays of cash flows
due to the utilization of its NOL's. These cashflow savings are then
available to supplement funding of the Company's expansion projects, pay
common stock dividends and reduce outstanding debt.


                                     F-15

<PAGE>

         The following reconciles the federal statutory income tax rate to the
effective rate of the provision for income taxes:

                                                 For the year ended June 30,
                                                 ---------------------------
                                                 1999       1998        1997
                                                 ---------------------------

Federal statutory rate                           34.0%      34.0%       34.0%
State income taxes (net of federal benefit)       3.5        1.7         2.6
Goodwill amortization                             4.5       13.6         4.3
Other items, net                                  4.4       (3.8)       (1.4)
                                                 ----       ----        ----

         Effective income tax rate               46.4%      45.5%       39.5%
                                                 ====       ====        ====

Deferred tax assets and liabilities are summarized as follows:

<TABLE>
<CAPTION>
                                                                                  June 30,
                                                                        -----------------------------
                                                                            1999              1998
                                                                        -----------       -----------
<S>                                                                     <C>               <C>
Deferred tax assets:
    Federal NOL                                                         $ 1,680,900       $ 2,852,500
    State NOL  (net of federal benefit)                                     412,900           387,600
    Tax credit carryforwards                                                263,400           253,100
    Employment-related reserves                                             144,600            79,200
    Allowance for doubtful accounts                                         126,200            57,700
                                                                        -----------       -----------
                                                                          2,628,000         3,630,100
Deferred tax liabilities:
    Depreciation and amortization                                        (2,928,300)       (3,057,900)
                                                                        -----------       -----------
    Net deferred tax (liability)/assets before valuation allowance         (300,300)          572,200
    Deferred tax assets valuation allowance                                (243,300)         (192,400)
                                                                        -----------       -----------
    Net deferred tax (liability)/asset                                  $  (543,600)      $   379,800
                                                                        ===========       ===========
</TABLE>

NOTE 15 - COMMITMENTS AND CONTINGENCIES:

COMMITMENTS

The Company leases various office and warehouse facilities, and equipment
under long-term operating leases expiring through March 2013. Certain of the
leases provide for five-year renewal options and rental increases based on
the Consumer Price Index. Operating lease expense for fiscal 1999, 1998, and
1997 amounted to $991,100, $896,300 and $830,500, respectively.

At June 30, 1999, the future minimum lease commitments, excluding insurance
and taxes, are as follows:

      Year Ending June 30,
      --------------------
              2000                                           $   972,700
              2001                                               896,300
              2002                                               673,800
              2003                                               608,200
              2004                                               604,300
             Thereafter                                        4,229,100
                                                             -----------
                                                             $ 7,984,400
                                                             ===========

In October 1998, the Company purchased a line of planters which it markets
under the name Terrabella. The Company agreed to pay the seller a total
royalty of $175,000 for the use of the Terrabella name which is to be paid in
quarterly installments at the rate of 3% of sales generated from the planters
or $1,000, whichever is greater. The royalty is due in full by October 15,
2004.

                                     F-16

<PAGE>

CONTINGENCIES

In the normal course of business, the Company encounters certain litigation
matters, which in the opinion of management will not have a significant
adverse effect on the financial position or the results of operations of the
Company.

On April 16, 1996, the Company was named as a defendant in a complaint filed
by Bonar U.S., Inc. in Delaware Superior Court. The complaint alleged claims
for breach of contract and promissory estoppel relating to an Agreement in
Principle entered into in connection with a proposed acquisition of the
Company by Bonar U.S., Inc. On April 3, 1996, the Company announced that it
had terminated the Agreement of Principle pursuant to its terms. The
complaint requested damages of $7,011,484. On May 17, 1996, the Company filed
a counterclaim against Bonar U.S., Inc. and Bonar Plastic, Inc. seeking
damages totaling $25,237,725 for breach of the Confidentiality Agreement with
the Company, misappropriation of trade secrets, intentional interference with
a prospective economic advantage which the Company obtained as a result of an
indication of interest from a third party and breach of a Royalty Agreement
between Bonar Plastics, Inc. and one of the Company's operating divisions
(formally known as Custom Rotational Molding, Inc.). In March 1997, the
Company reached an amicable out of court settlement with Bonar. The
settlement involved mutual general releases by the parties, dismissals of the
actions brought by the parties and payments to Bonar of $400,000 in March
1997 and $350,000 in September 1997. The total settlement payment of $750,000
plus additional related legal costs of $260,800 have been classified as
lawsuit settlement in the accompanying statement of income.

NOTE 16 - SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Supplemental disclosures of cash flows information are as follows:

<TABLE>
<CAPTION>
                                                                      For the years ended June 30,
                                                              -------------------------------------------
                                                                 1999             1998            1997
                                                              -----------      ----------      ----------
<S>                                                           <C>              <C>             <C>
Cash paid during the year for:
    Interest                                                  $ 1,002,400      $  749,300      $  555,900
                                                              ===========      ==========      ==========
    Income taxes                                              $   175,400      $  103,800      $  188,500
                                                              ===========      ==========      ==========

Non-cash investing activity:
    Acquisition of Rotocast by issuance of common stock       $    -           $3,000,000      $   -
                                                              ===========      ==========      ==========

Non-cash financing activities:
    Acquisition of Rotocast by issuance of note payable       $    -           $2,000,000      $   -
                                                              ===========      ==========      ==========
    Conversion of Rotocast bank debt to new note payable      $    -           $1,750,000      $   -
                                                              ===========      ==========      ==========
    Common dividends declared but not paid                    $     3,300      $   11,400      $   11,700
                                                              ===========      ==========      ==========
</TABLE>

NOTE 17 - UNAUDITED QUARTERLY RESULTS:

<TABLE>
<CAPTION>

                                                                Quarter Ended
                                       --------------------------------------------------------------
                                         September        December          March             June
                                       --------------------------------------------------------------
<S>                                    <C>              <C>              <C>              <C>
Fiscal Year 1999:
     Net sales                         $11,873,800      $11,295,500      $10,370,500      $11,959,900
     Gross profit                        3,211,400        2,594,300        2,720,900        3,637,800
     Net income                            362,100           81,100          210,900          671,900

Per share:
     Net income                        $       .02      $       .01      $       .01      $       .05
                                       ==============================================================

Fiscal Year 1998:
     Net sales                         $ 8,597,000      $ 8,563,900      $ 8,099,600      $12,798,400
     Gross profit                        1,803,700        1,873,900        1,700,200        3,412,700
     Net income                             98,300          107,600           48,400          162,900

Per share:
     Net income                        $       .01      $       .01      $    -           $       .01
                                       ==============================================================
</TABLE>


                                     F-17

<PAGE>




                           ROTONICS MANUFACTURING INC.
                                  SCHEDULE VIII
                        VALUATION AND QUALIFYING ACCOUNTS
                    Years Ended June 30, 1999, 1998 and 1997


<TABLE>
<CAPTION>

          Column A                              Column B              Column C                   Column D             Column E
------------------------------------        ---------------  ---------------------------        ----------        ---------------
                                                                      Additions
                                              Balance at     ---------------------------                            Balance at
                                              beginning          Charged to                                           end of
            Description                       of period      Costs & Expenses      Other        Deductions            period
------------------------------------        ---------------  ----------------   ----------      ----------        ---------------
<S>                                         <C>              <C>                <C>             <C>               <C>
June 30, 1999:
   Allowance for
     doubtful accounts                      $       148,000  $        179,300   $    -          $   (5,900) (1)   $       321,400
                                            ===============  ================   ==========      ==========        ===============

   Deferred tax asset valuation allowance   $       192,400  $          -       $   50,800 (3)  $     -           $       243,200
                                            ===============  ================   ==========      ==========        ===============

June 30, 1998:
   Allowance for
     doubtful accounts                      $        90,000  $         34,600   $   49,800 (4)  $  (26,400) (1)   $       148,000
                                            ===============  ================   ==========      ==========        ===============

   Deferred tax asset valuation allowance   $         -      $          -       $  192,400 (3)  $     -           $       192,400
                                            ===============  ================   ==========      ==========        ===============

June 30, 1997:
   Allowance for
     doubtful accounts                      $        90,000  $         63,900   $    -          $  (63,900) (1)   $        90,000
                                            ===============  ================   ==========      ==========        ===============

   Deferred tax asset valuation allowance   $        54,500  $          -       $    -          $  (54,500) (2)   $         -
                                            ===============  ================   ==========      ==========        ===============
</TABLE>


(1)  Doubtful accounts written off during the year.
(2)  Decrease in valuation allowance based on current years' additional
     utilization or expiration of net operating loss carryforwards.
(3)  Represents valuation allowance for potential state NOL's which will expire
     prior to utilization.
(4)  Represents Rotocast balance at date of merger.


                                     F-18