8-K/A

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K/A

AMENDMENT NO. 1 TO
CURRENT REPORT

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

Date of Report (Date of earliest event reported): March 27, 2003

HASTINGS MANUFACTURING COMPANY
(Exact name of registrant as
specified in its charter)

Michigan
(State or other jurisdiction
of incorporation) 1-3574
(Commission
File Number) 38-0633740
(IRS Employer
Identification no.)

325 North Hanover Street
Hastings, Michigan
(Address of principal executive offices)
49058
(Zip Code)

Registrant's telephone number,
including area code:  (269) 945-2491

          Hastings Manufacturing Company (the "Company") hereby amends Item 7, Financial Statements and Exhibits, of its Current Report on Form 8-K filed April 11, 2003 (the "Form 8-K"), and amends and restates Item 2, Acquisition or Disposition of Assets, of the Form 8-K, all as set forth in the following pages.

          Pursuant to paragraphs (a)(4) and (b)(2) of Item 7 of Form 8-K, Item 7 of the Form 8-K is hereby amended to include the financial statements and pro forma financial information required to be filed in connection with the acquisition reported in Item 2.

Item 2. Acquisition or Disposition of Assets.

          As previously reported on the Form 8-K, effective on March 27, 2003 the Company, through its Canadian subsidiary, Hastings, Inc., acquired 100 percent of the outstanding shares of Ertel Manufacturing Corporation of Canada, Ltd. ("Ertel") and Syzygy Auto Distribution Inc. ("Syzygy"), both Canadian corporations. Ertel and Syzygy are referred to herein collectively as the "Acquired Companies." The financial statements and financial results of the Acquired Companies, as discussed in the combined financial statements set forth in Exhibit 99.1 hereto, and the pro forma condensed combined statements of operations set forth in Exhibit 99.2 hereto, are referred to as that of the "Ertel and Syzygy Business."

          The acquisition of Ertel was conducted pursuant to a Share Purchase Agreement dated as of February 11, 2003, as amended, by and among Paul Elliott and Jeffrey Scott (collectively, the "Ertel Sellers"), Hastings, Inc. and Ertel. The acquisition of Syzygy was conducted pursuant to a Share Purchase Agreement dated as of February 11, 2003 by and among Ann Jackson and Lydia Scott (collectively, the "Syzygy Sellers") and Hastings, Inc. See Exhibits 2.1 through 2.4. Paul Elliott is married to Ann Jackson and Jeffrey Scott is married to Lydia Scott. Prior to the Ertel acquisition, the Ertel Sellers acquired from Ertel all of the outstanding stock of Ertel's subsidiaries Michigan 99 Inc., a Michigan corporation, and Syzygy Auto Distribution Corp., a Texas corporation.

          Ertel distributes a full line of internal engine parts through a network of distribution centers located throughout Canada. Syzygy is a distributor of consignment aftermarket products in Canada through Ertel's distribution network. As a result of these acquisitions, the Company (through Hastings, Inc.) is expected to be a leading Canadian distributor of internal engine components, including piston rings, pistons, gaskets, bearings, camshafts and other parts. The Company expects to reduce costs of the combined Canadian operations through economies of scale and various operational synergies.

          As indicated above, the Acquired Companies were related parties prior to the acquisitions. For purposes of this filing, the purchase transactions were aggregated. The purchase price payable to the sellers was $6,979,220, including $4,083,000 of cash and $2,896,220 of secured term notes payable issued to the sellers. The total purchase price, for accounting purposes, including estimated acquisition and restructuring costs, amounted to $7,695,303. The final purchase price (for accounting purposes) will change as actual acquisition and restructuring costs are determined. The terms of the Share Purchase Agreements, including the purchase prices to be paid to the Ertel Sellers and the Syzygy Sellers, were arrived at through

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arms-length negotiations between the parties. Due to the nature of the distribution operations of the Acquired Companies, the purchase price was primarily determined based on the Acquired Companies' past operating results rather than their tangible assets. Ertel's and Syzygy's net sales for the year ended December 31, 2002 were approximately $16,617,000 and $143,000, respectively.

          In connection with the acquisitions, the Company restructured its U.S. and Canadian loan agreements. The Company's U.S. secured short-term line with its primary lender, Bank One, was increased from $4,250,000 to $7,000,000. In Canada, Hastings, Inc.'s secured $700,000 short-term line with its former lender was replaced with a secured $5,784,000 short-term line with the Canadian affiliate of the Company's primary lender. This new line is secured by all Canadian accounts receivable, inventory and equipment and, through an unlimited guarantee of the Company, all other assets of the Company. Hastings, Inc. also borrowed $1,890,000 on a term loan that is secured by a first mortgage on its land and buildings located in Barrie, Ontario. With this new borrowing capacity, the Company financed the $4,083,000 of cash paid in the acquisitions.

          Before these transactions, there were no material relationships between the Ertel Sellers, the Syzygy Sellers or the Acquired Companies, on one hand, and the Company, Hastings, Inc. or any of their directors or executive officers, or associates of such persons, on the other hand.

          All dollar amounts set forth in this Item 2 are in United States Dollars.

Item 7.	Financial Statements, Pro Forma Financial Information, and Exhibits.
(a)	Financial Statements of Business Acquired: The report of independent auditors and combined financial statements of the Ertel and Syzygy Business are filed as Exhibit 99.1 hereto and are here incorporated by reference. These financial statements include:

(i)	Report of Independent Auditors dated March 20, 2003 (except Note 14, which is as of March 27, 2003).
(ii)	Combined Balance Sheets at December 31, 2002 and December 31, 2001.
(iii)	Combined Statements of Operations and Retained Earnings for the years ended December 31, 2002 and December 31, 2001.
(iv)	Combined Statements of Cash Flows for the years ended December 31, 2002 and December 31, 2001.
(v)	Summary of Significant Accounting Policies.
(vi)	Notes to Combined Financial Statements.

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(b) Pro Forma Financial Information: Unaudited pro forma financial information for the Company is filed as Exhibit 99.2 hereto and is here incorporated by reference. This financial information includes:

(i)	Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2002.
(ii)	Unaudited Pro Forma Condensed Combined Statement of Operations for the three months ended March 31, 2003.
(iii)	Notes to Unaudited Pro Forma Condensed Combined Statements of Operations.

(c) Exhibits: The following documents are attached as exhibits to this report on Form 8-K:

2.1	Share Purchase Agreement dated as of February 11, 2003 by and among Paul Elliott, Jeffrey Scott, Hastings, Inc. and Ertel Manufacturing Corporation of Canada, Ltd. Previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2002. Here incorporated by reference.
2.2	Amendment dated March 21, 2003 to Share Purchase Agreement dated as of February 11, 2003 by and among Paul Elliott, Jeffrey Scott, Hastings, Inc. and Ertel Manufacturing Corporation of Canada, Ltd. Previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2002. Here incorporated by reference.
2.3	Confirmation of Extension of Closing Date relating to Share Purchase Agreement dated as of February 11, 2003 by and among Paul Elliott, Jeffrey Scott, Hastings, Inc. and Ertel Manufacturing Corporation of Canada, Ltd., as amended. Previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2002. Here incorporated by reference.
2.4	Share Purchase Agreement relating to Syzygy Auto Distribution Inc. dated as of February 11, 2003 by and among Ann Jackson, Lydia Scott and Hastings, Inc. Previously filed as an exhibit to the Company's Form 8-K filed on April 11, 2003. Here incorporated by reference.
23.1	Consent of BDO Dunwoody LLP.

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99.1

The Ertel and Syzygy Business' Report of Independent Auditors dated March 20, 2003 (except Note 14, which is as of March 27, 2003); Combined Balance Sheets at December 31, 2002 and December 31, 2001; Combined Statements of Operations and Retained Earnings for the years ended December 31, 2002 and December 31, 2001; Combined Statements of Cash Flows for the years ended December 31, 2002 and December 31, 2001; Summary of Significant Accounting Policies; and Notes to Combined Financial Statements.

99.2

The Company's Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2002; Unaudited Pro Forma Condensed Combined Statement of Operations for the three months ended March 31, 2003; and Notes to Unaudited Pro Forma Condensed Combined Statements of Operations.

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SIGNATURES

          Pursuant to the requirements 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.

Date:  June 9, 2003	HASTINGS MANUFACTURING COMPANY
	By	/s/ Thomas J. Bellgraph
		Thomas J. Bellgraph Vice President-Finance

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EXHIBIT INDEX

Exhibit Number	Document
2.1	Share Purchase Agreement dated as of February 11, 2003 by and among Paul Elliott, Jeffrey Scott, Hastings, Inc. and Ertel Manufacturing Corporation of Canada, Ltd. Previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2002. Here incorporated by reference.
2.2	Amendment dated March 21, 2003 to Share Purchase Agreement dated as of February 11, 2003 by and among Paul Elliott, Jeffrey Scott, Hastings, Inc. and Ertel Manufacturing Corporation of Canada, Ltd. Previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2002. Here incorporated by reference.
2.3	Confirmation of Extension of Closing Date relating to Share Purchase Agreement dated as of February 11, 2003 by and among Paul Elliott, Jeffrey Scott, Hastings, Inc. and Ertel Manufacturing Corporation of Canada, Ltd., as amended. Previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2002. Here incorporated by reference.
2.4	Share Purchase Agreement relating to Syzygy Auto Distribution Inc. dated as of February 11, 2003 by and among Ann Jackson, Lydia Scott and Hastings, Inc. Previously filed as an exhibit to the Company's Form 8-K filed on April 11, 2003. Here incorporated by reference.
23.1	Consent of BDO Dunwoody LLP.
99.1	The Ertel and Syzygy Business' Report of Independent Auditors dated March 20, 2003 (except Note 14, which is as of March 27, 2003); Combined Balance Sheets at December 31, 2002 and December 31, 2001; Combined Statements of Operations and Retained Earnings for the years ended December 31, 2002 and December 31, 2001; Combined Statements of Cash Flows for the years ended December 31, 2002 and December 31, 2001; Summary of Significant Accounting Policies; and Notes to Combined Financial Statements.
99.2	The Company's Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2002; Unaudited Pro Forma Condensed Combined Statement of Operations for the three months ended March 31, 2003; and Notes to Unaudited Pro Forma Condensed Combined Statements of Operations.

EX-23

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We hereby consent to the incorporation by reference in the previously filed Form S-8 registration statement (Registration No. 333-74489) of Hastings Manufacturing Company Stock Option and Restricted Stock Plan of 1997, as amended, of our report on the Ertel and Syzygy Business dated March 20, 2003 (except for Note 14, which is as of March 27, 2003), which report is included in Exhibit 99.1 to this Amendment No. 1 to Current Report on Form 8-K/A.

/s/ BDO DUNWOODY LLP

Markham, Canada
June 9, 2003

EX-99

Exhibit 99.1

Ertel and Syzygy Business
Combined Financial Statements
For the years ended December 31, 2002 and 2001
(Expressed in Canadian Dollars)

	Contents
Auditors' Report	2
Combined Financial Statements
Balance Sheets	3
Statements of Operations and Retained Earnings	4
Statements of Cash Flows	5
Summary of Significant Accounting Policies	6-7
Notes to Financial Statements	8-13

Auditors' Report

Hastings Manufacturing Company
Hastings, Michigan

We have audited the combined balance sheets of the Ertel and Syzygy Business as at December 31, 2002 and 2001 and the combined statements of operations and retained earnings and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform an audit to obtain reasonable assurance 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.

In our opinion, these combined financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2002 and 2001 and the results of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted accounting principles.

/s/ BDO Dunwoody LLP

Chartered Accountants

Markham, Ontario
March 20, 2003 (Except Note 14, which is as of March 27, 2003)

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Ertel and Syzygy Business
Combined Balance Sheets
(Expressed in Canadian Dollars)

December 31		2002		2001
Assets
Current
Short-term investments (Note 1)	$	13,321	$	13,121
Accounts receivable		3,157,655		3,766,236
Inventory		6,720,698		7,075,171
Due from shareholders (Note 2)		289,422		289,422
Prepaid expenses		169,535		160,063
		10,350,631		11,304,013
Other assets		42,000		42,000
Tradenames, trademarks and other intangibles (Note 3)		52,574		85,248
Future income taxes		147,360		83,500
Capital assets (Note 4)		175,159		192,498
	$	10,767,724	$	11,707,259

Liabilities and Shareholders' Equity

Current
Bank overdraft (Note 5)	$	186,611	$	405,990
Bank loans (Note 5)		6,810,383		6,868,333
Accounts payable and accrued liabilities		2,078,776		2,670,674
Income taxes		69,953		131,118
Due to shareholder (Note 6)		400,000		400,000
		9,545,723		10,476,115
Shareholders' equity
Share capital (Note 7)		400		400
Retained earnings		1,221,601		1,230,744
		1,222,001		1,231,144
	$	10,767,724	$	11,707,259

The accompanying summary of significant accounting policies and notes are an integral part of these financial statements.

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Ertel and Syzygy Business
Combined Statements of Operations and Retained Earnings
(Expressed in Canadian Dollars)

For the year ended December 31	2002			2001
Sales	$	26,339,507		$	29,548,559
Cost of Sales		19,165,295			21,935,014
Gross Profit		7,174,212			7,613,545
Operating Expenses
Advertising		118,442			139,011
Selling		1,894,930			2,120,910
General and administrative		3,438,374			3,798,370
		5,451,746			6,058,291
Operating Income		1,722,466			1,555,254
Other Expenses
Interest
Short-term		400,000			389,602
Long-term		-			24,975
		400,000			414,577
Income before income taxes		1,322,466			1,140,677
Income taxes (recovery)
Current		547,486			463,616
Future		(63,860	)		-
		483,626			463,616
Net income for the year		838,840			677,061
Retained earnings, beginning of year		1,230,744			1,614,652
Adjustment to retained earnings (Note 8)		(847,983	)		(1,060,969	)
Retained earnings, end of year	$	1,221,601		$	1,230,744

The accompanying summary of significant accounting policies and notes are an integral part of these financial statements.

4

Ertel and Syzygy Business
Combined Statements of Cash Flows
(Expressed in Canadian Dollars)

For the year ended December 31	2002			2001
Cash provided by (used in)
Operating activities
Net income for the year	$	838,840		$	677,061
Adjustments to reconcile net income to net cash provided by
operating activities
Amortization		145,184			139,990
Future income taxes		(63,860	)		-
Changes in non-cash working capital balances
Accounts receivable		608,581			(32,312	)
Inventory		354,473			(77,071	)
Prepaid expenses		(9,472	)		(9,176	)
Accounts payable and accrued liabilities		(591,898	)		321,445
Income taxes		(61,165	)		(36,103	)
		1,220,683			983,834
Investing activities
Funds provided to subsidiary (Note 8)		(847,983	)		(1,060,969	)
Purchase of capital assets		(95,171	)		(33,301	)
Purchase of short term investments		(200	)		(448	)
		(943,354	)		(1,094,718	)
Financing activities
Bank overdraft		(219,379	)		(1,337,449	)
Increase in (repayment of) bank loans		(57,950	)		1,448,333
		(277,329	)		110,884
Increase in cash during the year		-			-
Cash, beginning and end of year		-			-
Supplemental Cash Flow Information
Cash paid for interest	$	400,000		$	421,812
Cash paid for income taxes	$	606,677		$	501,488

The accompanying summary of significant accounting policies and notes are an integral part of these financial statements.

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Ertel and Syzygy Business
Summary of Significant Accounting Policies

December 31, 2002 and 2001
Background, Nature of Business and Basis of Presentation	As discussed in Note 14, subsequent to year-end, Hastings, Inc., a Canadian subsidiary of U.S.-based Hastings Manufacturing Company, acquired 100 percent of the outstanding shares of Ertel Manufacturing Corporation of Canada ("Ertel") and Syzygy Auto Distribution Inc. ("Syzygy"), both Canadian corporations. Ertel distributes a full line of internal engine parts through a network of distribution centres located throughout Canada. Syzygy is a distributor of consignment aftermarket products in Canada through Ertel's distribution network.
	Two former subsidiaries of Ertel (one wholly owned and one 90 percent owned) were not included in the sale and were distributed to the owners of Ertel prior to the closing. Those subsidiaries had been accounted for on the cost basis in Ertel's prior historical financial statements. The accompanying combined financial statements include the assets, liabilities and operating results of Ertel, exclusive of the two former subsidiaries. Because these subsidiaries were previously accounted for on the cost basis, no revenue or expense allocations were necessary in the preparation of the accompanying combined statements of operations and retained earnings as Ertel's historical statements of operations and retained earnings excluded the operating results of the former subsidiaries.
	Prior to the acquisitions, Ertel and Syzygy were related parties. For purposes of these combined financial statements, the historical financial statements of Ertel have been combined with the historical financial statements of Syzygy, and are herein referred to as the combined financial statements of the "Ertel and Syzygy Business" or the "Company."
	The accompanying combined financial statements, which are expressed in Canadian dollars, have been prepared in accordance with Canadian generally accepted accounting principles. There are no material differences between Canadian and United States generally accepted accounting standards as they relate to the accompanying combined financial statements.
Revenue Recognition	Revenue is recognized when products are shipped to customers.
Inventory	Inventory is stated at the lower of weighted average cost and net realizable value.

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Ertel and Syzygy Business
Summary of Significant Accounting Policies

December 31, 2002 and 2001
Tradenames, Trademarks, and Other Intangibles	The excess of assigned values of the net assets acquired over the cost has been assigned to the intangible assets. Amortization on the tradenames, trademarks, and other intangibles is provided on a straight line basis over 10 years.
Income Taxes	The Company follows the liability method of tax allocation in accounting for income taxes. Under this method, future tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities, and measured using the substantively enacted tax rates and laws expected to be in effect when the differences are realized.
Capital Assets	Capital assets are stated at cost less accumulated amortization. Amortization based on the estimated useful life of the asset is calculated as follows:
	Building	5% straight line basis
	Furniture, fixtures    and equipment	10% - 25% straight line basis
	Computer software	25% straight line basis
	Leasehold improvements	Over the lease term
Foreign Currency Translation	Foreign currency accounts are translated into Canadian dollars as follows:
	At the transaction date, each asset, liability, revenue and expense is translated into Canadian dollars by the use of the exchange rate in effect at that date. At the year end date, monetary assets and liabilities are translated into Canadian dollars by using the exchange rate in effect at that date. The resulting foreign exchange gains and losses are included in income in the current period.
Use of Estimates	The preparation of financial statements in accordance with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of 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 management's best estimates as additional information becomes available in the future.

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Ertel and Syzygy Business
Notes to Combined Financial Statements
(Expressed in Canadian Dollars)

December 31, 2002 and 2001
1.	Short - Term Investments
	The Company holds investments in a Canadian T-Bill fund at an average unit price of $10.
2.	Due From Shareholders
	The balances are non-interest bearing and repayable on demand.
3.	Tradenames, Trademarks and Other Intangibles

		2002		2001
Cost	$	286,734	$	286,734
Accumulated amortization		234,160		201,486
	$	52,574	$	85,248

4. Capital Assets

						2002		2001
		Cost		Accumulated Amortization		Net Book Value		Net Book Value
Land	$	16,000	$	-	$	16,000	$	16,000
Building		84,000		30,100		53,900		58,100
Furniture, fixtures
and equipment		571,819		519,052		52,767		74,128
Computer software		239,737		193,323		46,414		26,147
Leasehold improvements		115,999		109,921		6,078		18,123
	$	1,027,555	$	852,396	$	175,159	$	192,498

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Ertel and Syzygy Business
Notes to Combined Financial Statements
(Expressed in Canadian Dollars)

December 31, 2002 and 2001

5. Bank Loans

		2002		2001
Revolving demand loan	$	6,077,050	$	4,325,000
Revolving US$ demand loan ($1,000,000 U.S.)		-		1,610,000
Non-revolving demand loan		733,333		933,333
	$	6,810,383	$	6,868,333

	The revolving demand loan, non-revolving demand loan and bank overdraft bear interest at the bank's prime rate plus 0.75% calculated daily and payable monthly. The revolving US$ demand loan bears interest at the bank's U.S. base rate plus 0.75%. All of the demand loans are secured by a general assignment of book debts, pledge of inventory, assignment of fire insurance, a general security agreement, a subordination and postponement of claim of all loans, advances and accrued interest payable to shareholders and a general security agreement from the subsidiary.
	All bank loans were repaid subsequent to year end in conjunction with the sale of the Company (See Note 14).
6.	Due to Shareholder
	The amount due to shareholder is due on demand and bears interest at prime plus 1/4% per annum. The Company has pledged its assets under a general security agreement. The amount owing to the shareholder is subordinate to the bank indebtedness.
	The entire balance was repaid subsequent to year end in conjunction with the sale of the Company (See Note 14).
	Interest on this balance amounted to $17,789 (2001 - $24,975).

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Ertel and Syzygy Business
Notes to Combined Financial Statements
(Expressed in Canadian Dollars)

December 31, 2002 and 2001

7.	Share Capital
	Ertel
	Authorized
		Unlimited number of Class "A" and Class "B" non-voting, non-cumulative and non-participating special shares, redeemable and retractable at amount paid up thereon. Unlimited number of common shares.
	Issued

			2002		2001
50	Class "A" shares	$	50	$	50
50	Class "B" shares		50		50
100	Common shares		100		100
			200		200

Syzygy
Authorized
	Unlimited number of Class "A" and Class "B" non-voting, non-cumulative and non-participating special shares, redeemable and retractable at amount paid up thereon. Unlimited number of common shares.
Issued

200	Common shares		200		200
		$	400	$	400

10

Ertel and Syzygy Business
Notes to Combined Financial Statements
(Expressed in Canadian Dollars)

December 31, 2002 and 2001

8.	Related Party Transactions
	During 2002 and 2001, the Company had the following transactions with a former subsidiary of the Company. The subsidiary is one of the two subsidiaries, discussed in the "Summary of Significant Accounting Policies", which are not included in the accompanying combined financial statements.

		2002		2001
Expenses
Purchases from a related party	$	1,714,795	$	1,815,899
Reimbursed costs from a related party		-		21,000

These transactions are in the normal course of operations and are measured at the exchange value (the amount of consideration established and agreed to by the related parties).

		2002		2001
Accounts Receivable
Amounts due from related parties included in
accounts receivable	$	-	$	9,513

In addition to the above transactions, the Company provided additional funding to a former subsidiary described in the Background, Nature of Business and Basis of Presentation note amounting to $847,983 and $1,060,969 during the years ended December 31, 2002 and 2001, respectively. Because the subsidiary is not reflected in the accompanying combined financial statements, these fundings have been reflected as charges to retained earnings in the accompanying combined statements of operations and retained earnings.

9.	Commitments
	The Company has leased premises and automobiles with approximate annual payments for the next five years as follows:

2003	$	484,540
2004		206,070
2005		151,980
2006		126,180
2007		107,480
Thereafter		60,190
	$	1,136,440

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Ertel and Syzygy Business
Notes to Combined Financial Statements
(Expressed in Canadian Dollars)

December 31, 2002 and 2001

10.	Major Customers and Suppliers
	Sales to five major customers represent approximately 55% (2001 - 49%) of the Company's sales for the year ended December 31, 2002. The accounts receivable from these five customers represent approximately 43% (2001 - 38%) of the total accounts receivable at December 31, 2002.
	Purchases from five major suppliers (one being a subsidiary - see Note 8) represent approximately 71% (2001 - 67%) of the Company's purchases for the year ended December 31, 2002. The accounts payable balances from these five suppliers represent approximately 73% (2001 - 75%) of the total accounts payable at December 31, 2002.

11.	Financial Instruments
	Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from its financial instruments. The fair values of its financial instruments approximate their carrying values unless otherwise noted.
	Balances denominated in United States funds (expressed in Canadian dollars) that are considered financial instruments are as follows:

		2002		2001
Bank overdraft	$	238,356	$	286,298
Accounts payable		295,043		329,563
Revolving US$ demand loan		-		1,610,000

The Canadian equivalent year end exchange rate used was 1.58 (2001 - 1.61).

12.	Pension Plan
	The Company maintains a defined contribution pension plan and the cost of annual contributions is charged to income. The pension expense for the year was $39,121 (2001 - $51,661).
	There have been no significant changes during the year that would affect the comparability of the pension expense for the current and prior years.

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Ertel and Syzygy Business
Notes to Combined Financial Statements
(Expressed in Canadian Dollars)

December 31, 2002 and 2001

13.	Change in Accounting Policy
	Effective January 1, 2002 the Company adopted the new recommendations of the Canadian Institute of Chartered Accountants pertaining to the accounting for income taxes. Under the new recommendations, income taxes are recognized using the liability method of tax allocation, whereby future tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities, and measured using the substantively enacted tax rates and laws expected to be in effect when the differences are realized.
	The adoption of these recommendations has been applied retroactively with no effect on prior year figures.

14.	Subsequent Event
	On March 27, 2003, 100 percent of the outstanding shares of Ertel and Syzygy were sold to Hastings, Inc., a Canadian subsidiary of U.S.-based Hastings Manufacturing Company.

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EX-99

EXHIBIT 99.2

HASTINGS MANUFACTURING COMPANY

Pro Forma Condensed Combined Statements of Operations
(Unaudited)

          On March 27, 2003, Hastings Manufacturing Company (the "Company"), through its Canadian subsidiary, Hastings, Inc., acquired 100 percent of the outstanding shares of Ertel Manufacturing Corporation of Canada, Ltd. ("Ertel") and Syzygy Auto Distribution Inc. ("Syzygy"), both Canadian corporations. Ertel and Syzygy are referred to herein collectively as the "Acquired Companies." The purchase price payable to the sellers was $6,979,220, including $4,083,000 of cash and $2,896,220 of secured term notes payable issued to the sellers. The total purchase price, for accounting purposes, including estimated acquisition and restructuring costs, amounted to $7,695,303. The final purchase price (for accounting purposes) will change as actual acquisition and restructuring costs are determined.

          The following unaudited pro forma condensed combined statements of operations for the year ended December 31, 2002 and the quarter ended March 31, 2003, give effect to the acquisitions of the Acquired Companies as if they had occurred as of January 1, 2002. An unaudited pro forma condensed combined balance sheet has not been presented because the effects of the acquisitions have been included in the Company's consolidated balance sheet as of March 31, 2003. The unaudited pro forma information presented herein is based on the historical financial statements of the Company and the historical combined financial statements of the Ertel and Syzygy Business (as defined in Item 2 of the Form 8-K/A to which this Exhibit 99.2 is attached), which include the historical carve-out financial statements of Ertel combined with the historical financial statements of Syzygy. The unaudited pro forma information should be read in conjunction with the Company's historical financial statement s and notes thereto, including the Company's Annual Report on Form 10-K for the year ended December 31, 2002 and the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, both as filed with the Securities and Exchange Commission, and the Combined Financial Statements of the Ertel and Syzygy Business as of and for the years ended December 31, 2002 and 2001, included in Exhibit 99.1.

          The unaudited pro forma condensed combined statements of operations are presented for informational purposes only and are not necessarily indicative of the future results of operations of the combined company after the acquisitions, or the results of operations of the combined company that would have actually occurred had the acquisitions been effective as of January 1, 2002. Management believes the pro forma adjustments, as described more fully in the accompanying notes, are reasonable and inclusive of all adjustments necessary for the fair presentation of the pro forma condensed combined statements of operations. The pro forma results do not include adjustments for reduced costs, such as duplicative executive salaries, in the Company's Canadian operations expected to result from economies of scale and operational synergies.

          The statement of operations data for the Ertel and Syzygy Business have been translated from Canadian dollars to U.S. dollars using the weighted average exchange rates of $.6363 and $.6599 for the year ended December 31, 2002 and quarter ended March 31, 2003, respectively.

HASTINGS MANUFACTURING COMPANY

Pro Forma Condensed Combined Statement of Operations
For the Year Ended December 31, 2002
(Unaudited)

	Hastings Historical		Ertel/ Syzygy Historical		Pro Forma Adjustments				Pro Forma Combined
NET SALES	$	35,827,001	$	16,759,828	$	(122,071	)	(a)	$	52,464,758
COST OF SALES		25,004,385		12,194,877		(92,889	)	(a) (b) (d)		37,106,373
Gross profit		10,822,616		4,564,951		(29,182	)			15,358,385
OPERATING EXPENSES
Advertising		234,308		75,365		-				309,673
Selling		3,204,396		1,205,744		-				4,410,140
General and administrative		6,177,807		2,187,837		212,895		(c) (d)		8,578,539
		9,616,511		3,468,946		212,895				13,298,352
OPERATING INCOME		1,206,105		1,096,005		(242,077	)			2,060,033
OTHER EXPENSES
Interest expense		380,882		254,520		352,393		(e)		987,795
Loss on sale of property and equipment		7,954		-		-				7,954
Other, net		22,511		-		-				22,511
		411,347		254,520		352,393				1,018,260
INCOME BEFORE INCOME
TAX EXPENSE		794,758		841,485		(594,470	)			1,041,773
INCOME TAX EXPENSE		290,000		307,731		(214,604	)	(f)		383,127
NET INCOME	$	504,758	$	533,754	$	(379,866	)		$	658,646
EARNINGS PER SHARE OF
COMMON STOCK
Basic	$	0.68							$	0.88
Diluted	$	0.67							$	0.88
WEIGHTED AVERAGE NUMBER
COMMON SHARES OUTSTANDING
Basic		745,046								745,046
Diluted		751,345								751,345

See accompanying notes to pro forma condensed combined statements of operations.

HASTINGS MANUFACTURING COMPANY

Pro Forma Condensed Combined Statement of Operations
For the Three Months Ended March 31, 2003
(Unaudited)

	Hastings Historical			Ertel/ Syzygy Historical			Pro Forma Adjustments				Pro Forma Combined
NET SALES	$	8,375,014		$	3,728,932		$	(28,765	)	(a)	$	12,075,181
COST OF SALES		5,859,376			2,772,668			(28,095	)	(a) (d)		8,603,949
Gross profit		2,515,638			956,264			(670	)			3,471,232
OPERATING EXPENSES
Advertising		32,836			3,455			-				36,291
Selling		817,037			340,377			-				1,157,414
General and administrative		1,588,362			645,520			55,198		(c) (d)		2,289,080
		2,438,235			989,352			55,198				3,482,785
OPERATING INCOME (LOSS)		77,403			(33,088	)		(55,868	)			(11,553	)
OTHER EXPENSES
Interest expense		89,479			-			106,855		(e)		196,334
Other, net		675			60,413			-				61,088
		90,154			60,413			106,855				257,422
INCOME (LOSS) BEFORE INCOME
TAX EXPENSE		(12,751	)		(93,501	)		(162,723	)			(268,975	)
INCOME TAX EXPENSE (BENEFIT)		(1,000	)		(29,696	)		(58,743	)	(f)		(89,439	)
NET INCOME (LOSS)	$	(11,751	)	$	(63,805	)	$	(103,980	)		$	(179,536	)
EARNINGS (LOSS) PER SHARE OF
COMMON STOCK
Basic	$	(0.02	)								$	(0.24	)
Diluted	$	(0.02	)								$	(0.24	)
WEIGHTED AVERAGE NUMBER
COMMON SHARES OUTSTANDING
Basic		745,046										745,046
Diluted		745,046										745,046

See accompanying notes to pro forma condensed combined statements of operations.

HASTINGS MANUFACTURING COMPANY

Notes to Pro Forma Condensed Combined Statements of Operations
(Unaudited)

Note 1 - Purchase Price Allocation

The total purchase price of the Acquired Companies, for accounting purposes, including estimated acquisition and restructuring costs, amounted to $7,695,303. Acquisition costs have been estimated at $139,946 and estimated costs relating to restructuring efforts, as discussed below, amounted to $576,137. The final purchase price will change as actual acquisition and restructuring costs are determined. The following is an allocation of the total estimated purchase price:

Current assets	$	7,178,157
Property and equipment		335,250
Intangible assets		1,937,384
Goodwill		5,690,599
Total assets acquired		15,141,390
Current liabilities		2,235,536
Deferred income taxes		678,160
Long-term debt		4,532,391
Total liabilities assumed		7,446,087
	$	7,695,303

Intangible assets of $1,937,384 were independently valued by a third party and include a trademark and customer contract with estimated fair market values of $1,801,964 and $135,420, respectively. The trademark has an estimated useful life of 20 years while the customer contract is in effect through June 2005.

In connection with the acquisitions, the Company incurred an estimated $576,137 of restructuring costs as a result of severance of workforce, lease termination costs associated with the elimination of duplicate leased distribution centers and other contract terminations. These restructuring costs, which are expected to be paid within the next 12 months, consisted of $401,747 of employee termination benefits for approximately 20 salaried employees and $174,390 related to lease and other contract terminations.

Note 2 -- Pro Forma Adjustments

The following pro forma adjustments have been made to the historical financial statements of the Company and the Ertel and Syzygy Business based upon assumptions made by management for the purpose of preparing the unaudited pro forma combined statements of operations.

(a)	To eliminate the effect of sales made by the Company to the Ertel and Syzygy Business.
(b)	To record cost of sales relating to the adjustment of inventory to fair market value.
(c)	To record amortization expense for acquired intangible assets.
(d)	To record depreciation expense for the adjustment of property and equipment acquired to fair market value.
(e)	To record additional interest expense attributable to borrowings used to complete the acquisitions.
(f)	To record tax expense, at 36.1%, related to the above adjustments.

Note 3 -- Pro Forma Earnings Per Share

Basic and diluted earnings (loss) per share are computed based on the Company's historical weighted average number of shares outstanding during the periods presented, as no shares were issued as part of the acquisitions.