10-Q

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended

June 30, 2003 Commission File Number

1-3574

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

Michigan (State or other Jurisdiction of Incorporation or Organization)	38-0633740 (I.R.S. 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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of 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 (2) has been subject to such filing requirements for the past 90 days.

Yes    X   No       

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes        No       

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class	Outstanding at August 8, 2003
Common stock, $2 par value	762,446 shares

Hastings Manufacturing Company and Subsidiaries

Contents

				Page
FORWARD-LOOKING STATEMENTS				3
PART I - FINANCIAL INFORMATION
	Item 1 - Financial Statements:
		Report on Review by Independent Certified Public Accountants		4
		Condensed Consolidated Balance Sheets -
			June 30, 2003 and December 31, 2002	5-6
		Condensed Consolidated Statements of Income -
			Three Months and Six Months Ended June 30, 2003 and 2002	7
		Condensed Consolidated Statements of Cash Flows -
			Six Months Ended June 30, 2003 and 2002	8
		Notes to Condensed Consolidated Financial Statements		9-14
		Review by Independent Certified Public Accountants		15
	Item 2 - Management's Discussion and Analysis of Financial
			Condition and Results of Operations	16-22
	Item 3 - Quantitative and Qualitative Disclosures About Market Risk			22
	Item 4 - Controls and Procedures			23
PART II - OTHER INFORMATION
	Item 4 - Submission of Matters to a Vote of Security Holders			23
	Item 6 - Exhibits and Reports on Form 8-K			24-26

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FORWARD-LOOKING STATEMENTS

With the exception of historical matters, the matters discussed in this Form 10-Q include forward-looking statements that describe plans, objectives, goals, expectations or projections of the Company. These forward-looking statements are identifiable by words or phrases indicating that the Company or management "expects," "anticipates," "projects," "plans" or "believes" that a particular event or result "may occur," "should occur," "will likely occur" or "may possibly occur" in the future, or that an event or result is "probable," "more likely than not" or "less likely than not," or similar statements. In addition to other risks and uncertainties described in connection with the forward-looking statements contained in this Form 10-Q, there are many important factors that could cause actual results to be materially different from the Company's current expectations.

Anticipated future sales are subject to competitive pressures from many sources. As an example, future sales could be affected by consolidation within the automotive replacement parts industry, whereby the Company could lose sales due to a competitor purchasing all of the assets of a current customer of the Company. Future sales could also be affected by current and future political and economic factors in the foreign markets where the Company conducts business.

Cost of sales and operating expenses may be adversely affected by unexpected costs associated with various issues. For example, future cost of sales could be affected by unexpected expenses related to the future maintenance of a lean manufacturing environment. Future operating expenses could also be affected, for example, by such items as unexpected large claims within the Company's self-funded group health insurance plan or bad debt expenses related to deterioration in the credit worthiness of a customer or customers. Furthermore, the economies of scale and operating results actually realized from the Company's March 2003 acquisitions of Ertel and Syzygy may not be at the level anticipated by the Company.

The foregoing is intended to provide meaningful cautionary statements of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The foregoing should not be construed as an exhaustive list of all economic, competitive, governmental and technological factors that could adversely affect the Company's expected consolidated financial position, results of operations or liquidity. The Company disclaims any obligation to update its forward-looking statements to reflect subsequent events or circumstances.

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Report on Review by Independent Certified Public Accountants

Board of Directors
Hastings Manufacturing Company
Hastings, Michigan

We have reviewed the accompanying condensed consolidated balance sheets of Hastings Manufacturing Company and subsidiaries as of June 30, 2003, and the related condensed consolidated statements of income for the three-month and six-month periods ended June 30, 2003 and 2002, and cash flows for the six-month periods ended June 30, 2003 and 2002, included in the accompanying Securities and Exchange Commission Form 10-Q for the period ended June 30, 2003. These condensed consolidated financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying condensed consolidated financial statements for them to be in conformity with generally accepted accounting principles.

We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet as of December 31, 2002, and the related consolidated statements of income, stockholders' equity and cash flows for the year then ended (not presented herein). In our report dated February 28, 2003, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2002, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

/s/BDO Seidman, LLP

BDO Seidman, LLP
Grand Rapids, Michigan
August 14, 2003

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PART I - FINANCIAL INFORMATION

Item 1.     Financial Statements

Hastings Manufacturing Company and Subsidiaries

Condensed Consolidated Balance Sheets

Assets (Notes 2 and 3)		June 30, 2003		December 31, 2002
Current Assets
Cash	$	364,484	$	956,660
Accounts receivable, less allowance           for possible losses of $680,000           and $325,000		9,837,240		5,159,586
Refundable income taxes		128,918		72,734
Inventories:
Finished products		13,002,867		8,482,586
Work in process		346,554		345,418
Raw materials		1,634,969		1,405,092
Prepaid expenses and other assets		209,373		121,732
Future income tax benefits		1,896,457		1,860,457
Total Current Assets		27,420,862		18,404,265
Property and Equipment
Land and improvements		678,558		607,720
Buildings		5,709,232		5,453,033
Machinery and equipment		22,461,209		21,847,270
		28,848,999		27,908,023
Less accumulated depreciation		22,554,286		21,701,776
Net Property and Equipment		6,294,713		6,206,247
Future Income Tax Benefits		6,516,499		6,379,240
Goodwill		6,540,481		-
Intangible Assets		2,059,633		-
Other Assets		80,922		134,070
	$	48,913,110	$	31,123,822

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Hastings Manufacturing Company and Subsidiaries

Condensed Consolidated Balance Sheets

Liabilities and Stockholders' Equity (Notes 2 and 3)		June 30, 2003			December 31, 2002
Current Liabilities
Notes payable to banks	$	14,032,000		$	4,200,000
Accounts payable		4,621,753			2,575,242
Accruals:
Compensation		377,710			477,009
Taxes other than income		203,271			162,472
Restructuring		554,632			-
Miscellaneous		133,846			107,750
Current portion of postretirement benefit obligation		1,282,903			1,282,903
Current maturities of long-term debt		2,291,716			800,000
Total Current Liabilities		23,497,831			9,605,376
Deferred Income Taxes		946,837			-
Long-Term Debt, less current maturities		4,371,046			1,135,000
Pension and Deferred Compensation Obligations,      less current portion		6,135,610			6,283,739
Postretirement Benefit Obligation, less current portion		10,453,289			11,145,381
Total Liabilities		45,404,613			28,169,496
Stockholders' Equity
Preferred stock, $2 par value, authorized and           unissued 500,000 shares		- -			- -
Common stock, $2 par value, 1,750,000 shares authorized;           762,446 shares issued and outstanding		1,524,892			1,524,892
Additional paid-in capital		202,499			202,499
Retained earnings		8,077,741			8,049,428
Accumulated other comprehensive income (Note 5):
Cumulative foreign currency translation adjustment		(556,190	)		(1,074,522	)
Derivative adjustment		-			(7,526	)
Pension liability adjustment		(5,740,445	)		(5,740,445	)
Total accumulated other comprehensive income		(6,296,635	)		(6,822,493	)
Total Stockholders' Equity		3,508,497			2,954,326
	$	48,913,110		$	31,123,822

See accompanying independent accountants' review report and notes to condensed consolidated financial statements.

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Hastings Manufacturing Company and Subsidiaries

Condensed Consolidated Statements of Income

	Three months ended						Six months ended
June 30,		2003			2002			2003			2002
Net Sales	$	12,435,286		$	9,891,351		$	20,810,300		$	19,223,180
Cost of Sales		8,870,080			6,680,920			14,729,456			13,060,221
Gross profit		3,565,206			3,210,431			6,080,844			6,162,959
Operating Expenses
Advertising		44,080			51,138			76,916			109,327
Selling		1,068,469			754,944			1,885,506			1,511,228
General and administrative		2,263,919			1,660,826			3,852,281			3,184,227
		3,376,468			2,466,908			5,814,703			4,804,782
Operating income		188,738			743,523			266,141			1,358,177
Other Expense (Income)
Interest expense		296,454			95,443			385,933			208,769
Net gain on foreign currency         transactions		(182,186	)		(3,057	)		(188,423	)		(4,951	)
Other, net		12,406			(10,915	)		19,318			(5,336	)
		126,674			81,471			216,828			198,482
Income before income tax expense		62,064			662,052			49,313			1,159,695
Income Tax Expense		22,000			262,000			21,000			464,000
Net Income	$	40,064		$	400,052		$	28,313		$	695,695
Basic Earnings Per Share of      Common Stock (Note 4)		$.05			$.54			$.04			$.93
Diluted Earnings Per Share of      Common Stock (Note 4)		$.05			$.53			$.04			$.93

See accompanying independent accountants' review report and notes to condensed consolidated financial statements.

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Hastings Manufacturing Company and Subsidiaries
Condensed Consolidated Statements of Cash Flows

Six months ended June 30,		2003			2002
Operating Activities
Net income	$	28,313		$	695,695
Adjustments to reconcile net income to net cash from
operating activities:
Depreciation and amortization		710,654			683,061
Gain on sale of equipment		(9,000	)		-
Net gain on foreign currency transactions		(188,423	)		(4,951	)
Deferred income taxes		8,000			408,000
Change in net retirement and postretirement benefit obligations		(819,939	)		(56,925	)
Changes in operating assets and liabilities, net of amounts             acquired from business acquisitions:
Accounts receivable		(1,930,089	)		(1,623,247	)
Refundable income taxes		(4,500	)		(38,227	)
Inventories		432,070			(526,726	)
Prepaid expenses and other current assets		11,901			57,477
Other assets		33,115			(9,463	)
Accounts payable and accruals		318,356			1,363,384
Net cash from (for) operating activities		(1,409,542	)		948,078
Investing Activities
Capital expenditures		(230,913	)		(346,734	)
Proceeds from sale of property and equipment		9,535			59,228
Acquisitions, net of cash received		(4,441,661	)		-
Net cash for investing activities		(4,663,039	)		(287,506	)
Financing Activities
Proceeds from issuance of notes payable to banks		11,361,929			4,000,000
Principal payments on notes payable to banks		(7,375,521	)		(4,100,000	)
Proceeds from mortgage payable		1,890,089			-
Principal payments on long-term debt		(455,977	)		(725,000	)
Net cash from (for) financing activities		5,420,520			(825,000	)
Effect of Exchange Rate Changes on Cash		59,885			20,204
Net Decrease in Cash		(592,176	)		(144,224	)
Cash, beginning of period		956,660			578,695
Cash, end of period	$	364,484		$	434,471
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest	$	267,206		$	201,118
Income taxes, net of refunds		29,360			38,134

See accompanying independent accountants' review report and notes to condensed consolidated financial statements.

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Hastings Manufacturing Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Note 1 - Basis of Presentation

In the opinion of the management of Hastings Manufacturing Company and subsidiaries (the "Company"), the accompanying unaudited condensed consolidated financial statements include all normal recurring adjustments considered necessary to present fairly the financial position as of June 30, 2003, and the results of operations for the three months and six months ended June 30, 2003 and 2002, and cash flows for the six months ended June 30, 2003 and 2002.

The results of operations for the six months ended June 30, 2003 are not necessarily indicative of the expected results for all of 2003.

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances, transactions and stockholdings have been eliminated.

The accompanying consolidated financial statements are condensed and do not contain all of the information and footnote disclosures required by generally accepted accounting principles in a complete set of financial statements.

Acquisitions

As discussed in Note 2, the accompanying condensed consolidated balance sheet as of June 30, 2003 includes the accounts of acquired businesses. The accompanying condensed consolidated statements of income reflect the results of operations of the acquired businesses beginning with the second quarter of 2003.

Stock Compensation

The Company has decided to continue to account for stock-based employee compensation using the intrinsic value method under APB Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations, as permitted under Statement of Financial Accounting Standards No. 148, Accounting for Stock Based Compensation -- Transition and Disclosure (SFAS No. 148). Because the exercise price of the Company's stock options equals the market price of the underlying stock on the date of grant, no compensation expense is recognized at the date of issuance. Historically, the Company's stock options are 100% vested on the date of grant and, since inception of the plan, have been granted in the fourth quarter of each year. There were no stock option grants in the first half of 2003 or the first half of 2002 and, therefore, there is no pro forma effect on net income and earnings per share during these periods.

Note 2 - Acquisitions

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 below collectively as the "Acquired Companies." The accompanying condensed consolidated balance sheet as of June 30, 2003 includes the accounts of the Acquired Companies. The operating results of the Acquired Companies are included in the accompanying condensed consolidated statements of income beginning in the second quarter of 2003. Prior to being acquired, Ertel's and Syzygy's net sales for the

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year ended December 31, 2002 were approximately $16,235,000 and $149,000, respectively. (All amounts set forth in this Note 2 are in U.S. dollars.)

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.

Prior to the acquisitions, the Acquired Companies were closely related parties. For the purpose of this note, the purchase transactions were aggregated. 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. The acquisitions were accounted for under the purchase method of accounting with allocated goodwill and other intangible assets of $6,034,162 and $1,937,384, respectively, none of which will be deductible for tax purposes. The purchase price payable to the sellers was $6,944,710, including $4,083,000 of cash and $2,861,710 of secured term notes payable issued to the sellers (see Note 3). The total purchase price, for accounting purposes, including estimated acquisition and restructuring costs, amounted to $8,038,866. Through June 30, 2003, the Company incurred acquisition costs of $518,019. Total acquisition costs increased by $378,073 in the secon d quarter of 2003, in comparison to the acquisition costs of $139,946 recorded at March 31, 2003. This increase represents additional legal and professional fees associated with the acquisition. Costs related to restructuring efforts, as discussed below, are $576,137, and have not changed from the original March 31, 2003 estimate. The Company does not anticipate any significant change to the purchase price, for accounting purposes, in future periods. The following is an allocation of the total estimated purchase price:

Current assets	$	7,178,157
Property and equipment		335,250
Goodwill		6,034,162
Intangible assets		1,937,384
Total assets acquired		15,484,953
Current liabilities		2,235,536
Deferred income taxes		678,160
Long-term debt		4,532,391
Total liabilities assumed		7,446,087
	$	8,038,866

Intangible assets of $1,937,384 were independently valued by a third party and include a trademark and a 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.

The above acquisition amounts reflect the U.S. dollar equivalent of the Canadian dollar acquisition costs, translated at the U.S.-Canadian exchange rate in effect as of the March 27, 2003 acquisition date. These amounts differ from the amounts reflected in the June 30, 2003 condensed consolidated balance sheets, as the current balance sheet amounts reflect the U.S.-Canadian exchange rate in effect as of June 30, 2003.

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The following unaudited pro forma financial information presents results as if the acquisitions had occurred at the beginning of the respective periods:

Six months ended June 30,		2003			2002
Net sales	$	24,658,496		$	27,937,837
Net income (loss)		(143,133	)		806,848
Basic earnings (loss) per share		(.19	)		1.08
Diluted earnings (loss) per share		(.19	)		1.08

These pro forma results have been prepared for comparative purposes only and include certain adjustments such as additional depreciation and amortization expense as a result of adjustments to property and equipment and intangible assets arising from the acquisitions, and from interest expense on acquisition debt. The pro forma results are not necessarily indicative either of the results of operations that actually would have resulted had the acquisitions occurred at the beginning of the respective periods or of future results. They 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.

In connection with the acquisitions, the Company accrued an estimated $576,137 of restructuring costs, consisting of $401,747 of employee termination benefits for approximately 19 salaried employees and $174,390 related to lease and other contract terminations. Since the acquisition date, $21,505 of the restructuring costs have been paid, leaving a June 30, 2003 accrual balance of $554,632, which is expected to be paid within the next nine months.

Note 3 - Short-Term and Long-Term Debt

In connection with the acquisitions discussed in Note 2, the Company restructured its U.S. and Canadian loan agreements. The Company's U.S. secured short-term line with its primary lender was increased from $4,250,000 to $7,000,000. This short-term line increase was the result of a sixth amendment to the Company's loan agreement. In addition to the short-term line increase, this latest amendment resulted in the following changes to the primary terms of the U.S. loan agreement: (1) an adjustment to the maximum limitation on permitted short-term borrowings equal to a "borrowing base" amounting to the sum of 75% of the value of eligible accounts receivable, 35% of the value of eligible finished goods and raw materials inventories and 20% of the inventory LIFO reserve, all related to U.S. accounts receivable and inventory, (2) a revision of the maturity date on the short-term line to April 30, 2004, (3) a revision to the effective interest rates, as discussed below, and (4) the addition of, and adjustment to, certain affirmative and negative covenants contained in the agreement. Required principal payments related to the Company's U.S. term loan remained unchanged. Borrowings under the short-term line and the term loan are secured by all U.S. accounts receivable, inventory, furniture and equipment, personal property, a mortgage lien on the Company's U.S. real property and the pledge of 65% of the capital stock of all foreign subsidiaries and are guaranteed by the Company's domestic subsidiary.

Interest for both the U.S. short-term and long-term borrowings is based on two different pricing options: a Eurodollar rate plus a factor and a floating rate (greater of the federal funds rate plus a factor, or the prime rate). As amended, the effective Eurodollar rate on the short-term line is increased by a margin rate ranging from 2.50% to 3.25%. The effective floating rate on the short-term line is the prime rate adjusted by a margin rate ranging from (.25%) to .25%. The effective Eurodollar rate on the long-term

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borrowings is increased by a margin rate of 2.65%. The effective floating rate on the long-term borrowings is the prime rate. The margin rates are based upon certain consolidated performance parameters. The Company is also subject to a fee on the unused portion of the short-term line at a rate of .25%.

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. Maximum borrowings under the short-term line are limited to a "borrowing base" computed as described above for the Company's U.S. loan agreement (except for inventory, which is eligible for up to 40% of its value) relating to the U.S. short-term line, as applied to Canadian accounts receivable and inventory. 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. This term loan is payable in 60 equal principal payments through March 2008, plus interest at prime plus 1.75%.

Interest for the Canadian short-term line is based on two different pricing options, a cost of funds rate (the bank's base rate for fixed rate loans) plus a factor and a floating rate (the prime rate) plus a factor. The effective cost of funds rate is increased by a margin rate ranging from 2.50% to 3.25%. The effective floating rate is the prime rate increased by a margin rate ranging from 1.00% to 1.75%. The margin rates are based upon certain consolidated performance parameters. The Company is also subject to a fee on the unused portion of the short-term line at a rate of .25%.

With this new borrowing capacity, the Company financed the $4,083,000 of cash paid in the acquisitions described in Note 2. The $2,861,710 secured notes payable to the sellers, as discussed in Note 2, are comprised of two notes. The first note is for $2,215,720 and payable in 16 equal quarterly principal payments through March 2007, plus interest at prime plus 1.5%. The second note is for $645,990 and payable as a balloon payment in June 2005 with monthly interest payments at prime plus 1.5%. The notes payable to the sellers are secured by all assets of Hastings, Inc. and are subordinate to a first position by the Company's primary lender. The Canadian loan agreement and the sellers' term loan require the Company to maintain certain financial balances and ratios consistent with those required by the Company's U.S. loan agreement.

The above debt amounts regarding the acquisition reflect the U.S. dollar equivalent of the Canadian dollar, translated at the U.S.-Canadian exchange rate in effect as of the March 27, 2003 acquisition date.

Of the total $15,270,000 short-term lines available to the Company at June 30, 2003, $1,238,000 was unused.

Effective July 14, 2003, the Company's $1,500,000 unsecured short-term line with its secondary lender was replaced with a secured $2,000,000 short-term line with the same lender. This new line is secured by all U.S. accounts receivable and inventory and is subordinate to a first position by the Company's primary lender. The interest rate on this new short-term line is the prime rate less .50%. The increase of this line was included in the availability amounts discussed above.

The term loan agreement requires the Company to maintain certain financial balances and ratios. At June 30, 2003, the Company was in violation of certain covenants and is currently seeking a waiver of the violations or an amendment of the covenants. As a result, the related long-term portion of the debt outstanding under the agreement, amounting to $735,000, has been reclassified as current at June 30, 2003.

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Note 4 - Earnings Per Share

A reconciliation of the numerators and denominators used in the "basic" and "diluted" earnings per share (EPS) calculations follows:

	Three months ended				Six months ended
June 30,	2003		2002		2003		2002
Numerator:
Net income used for both basic and diluted      EPS calculation	$	40,064	$	400,052	$	28,313	$	695,695
Denominator:
Weighted average shares outstanding      for the period - used for basic EPS calculation		745,046		745,046		745,046		745,046
Dilutive effect of stock options and contingently      issuable shares		3,264		6,782		5,251		4,943
Weighted average shares outstanding      for the period - used for diluted EPS calculation		748,310		751,828		750,297		749,989

Note 5 - Comprehensive Income

Comprehensive income and its components consist of the following:

	Three months ended				Six months ended
June 30,	2003		2002		2003		2002
Net income	$	40,064	$	400,052	$	28,313	$	695,695
Other comprehensive income, net of tax:
Foreign currency translation adjustments		280,564		158,346		518,332		151,817
Derivative adjustment		2,557		3,963		7,526		18,072
Minimum pension liability adjustment		-		-		-		-
Other comprehensive income		283,121		162,309		525,858		169,889
Comprehensive income	$	323,185	$	562,361	$	554,171	$	865,584

The above $2,557 and $7,526 other comprehensive income, net of tax related to the derivative adjustment for the three months and six months ended June 30, 2003, are made up of the following components:

	Three months ended						Six months ended
June 30, 2003	Before Tax			Net of Tax			Before Tax			Net of Tax
Change in fair value of derivative	$	(13	)	$	(9	)	$	(74	)	$	(50	)
Reclassification adjustment to expense		3,887			2,566			11,478			7,576
Other comprehensive income	$	3,874		$	2,557		$	11,404		$	7,526

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The above $3,963 and $18,072 other comprehensive income, net of tax related to the derivative adjustment for the three months and six months ended June 30, 2002, are made up of the following components:

	Three months ended						Six months ended
June 30, 2002		Before Tax			Net of Tax			Before Tax			Net of Tax
Change in fair value of derivative	$	(10,452	)	$	(6,898	)	$	(8,411	)	$	(5,551	)
Reclassification adjustment to expense		16,456			10,861			35,793			23,623
Other comprehensive income	$	6,004		$	3,963		$	27,382		$	18,072

The Company's interest rate swap agreement expired on June 30, 2003. The Company is not a party to any derivative financial instrument agreements as of June 30, 2003, nor does it use such instruments for trading purposes.

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Hastings Manufacturing Company and Subsidiaries

Review by Independent Certified Public Accountants

The June 30, 2003 and 2002 condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been reviewed by BDO Seidman, LLP, Independent Certified Public Accountants, in accordance with established professional standards and procedures for such a review.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

RESULTS OF OPERATIONS

NET SALES

2003 Compared to 2002

Net sales in the second quarter of 2003 increased $2,543,935, or 25.7%, from $9,891,351 in the second quarter of 2002, to $12,435,286. This increase reflects the inclusion of $4,397,486 in sales of acquired businesses in the second quarter of 2003, offset by decreases in sales of products manufactured by the Company and commission revenues of $1,780,624 and $72,927, respectively. Net sales for the first half of 2003 increased $1,587,120, or 8.3%, from $19,223,180 in the first half of 2002, to $20,810,300. This increase reflects the inclusion of $4,397,486 of second quarter 2003 sales of acquired businesses (results of operations of the required businesses were reflected in consolidated results beginning in the second quarter), combined with a slight increase in commission revenue of $54,098, offset by a decrease in sales of products manufactured by the Company of $2,864,464.

The net sales increase pertaining to acquired businesses in the second quarter of 2003 reflects the net sales acquired through the Company's purchase of Ertel and Syzygy, as described in Note 2 to the accompanying condensed consolidated financial statements. The net sales decrease in manufactured products in the second quarter of 2003 reflects volume decreases in the original equipment, private brand and export markets and the domestic and Canadian aftermarkets. The decrease in the original equipment volume reflects the decreased production volume of the domestic and light-duty truck manufacturers during the second quarter of 2003. The decrease in the private brand volume reflects decreases in sales to specific customers in that market. The decrease in the export volume reflects reduced volume in several of the Company's export markets resulting from the economic and political instability present in those markets. The decrease in the domestic and Canadian aftermarkets reflects a prolonged industry-wide so ftness in the automotive replacement parts industry, combined with the loss of $144,000 of sales, in the second quarter of 2003 as compared to the second quarter of 2002, from several production engine rebuilders who went out of business in the fourth quarter of 2002. In response to the prolonged industry-wide softness in the automotive replacement parts industry, the Company implemented cost-containment measures in March 2003. These cost-containment measures are described in the "Liquidity and Capital Resources" section below. The slight decrease in commission revenues, which the Company earns in exchange for providing marketing and distribution services for various engine component manufacturers, primarily reflects the industry-wide softness described earlier.

For the first six months of 2003, the net sales pertaining to acquired businesses are described above. The increase in commission revenues for the first half of 2003 reflects volume growth in the first quarter of 2003, slightly offset by volume decreases in the second quarter of 2003 resulting from the industry-wide softness noted above. For the first half of 2003, net sales of manufactured products decreased in the original equipment, private brand and export markets and the domestic and Canadian aftermarkets, as a result of the items noted above. The closing of several production engine rebuilders in the fourth quarter of 2002 resulted in a loss of $258,000 of domestic and Canadian aftermarket sales for the first half of 2003 in comparison to the same period of 2002.

2002 Compared to 2001

Net sales in the second quarter of 2002 decreased $20,769, or 0.2%, from $9,912,120 in the second quarter of 2001, to $9,891,351. Included in this net sales decrease was an increase in commission

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revenues of $314,874 in the second quarter of 2002 in comparison to the same period in 2001. Excluding this commission revenue increase, net sales of product manufactured by the Company decreased $335,643, or 3.4%, from $9,790,767 in the second quarter of 2001, to $9,455,124. Net sales for the first half of 2002 increased $656,163, or 3.5%, from $18,567,017 in the first half of 2001, to $19,223,180. Included in this net sales increase was an increase in commission revenues of $584,878 in the first half of 2002 in comparison to the same period in 2001. Net of this commission revenue increase, net sales of product manufactured by the Company increased $71,285, or 0.4%, from $18,375,950 in the first half of 2001, to $18,447,235.

The net sales decrease in manufactured products in the second quarter of 2002 reflected volume decreases in the domestic and Canadian aftermarkets, partially offset by volume increases in the original equipment and export markets. Net sales in the private brand market were relatively flat in the second quarter of 2002 in comparison to the same period in 2001. The net sales decrease in the domestic and Canadian aftermarkets reflected continued industry-wide softness in the automotive replacement parts industry. In addition, net sales volume in the second quarter of 2001 included significant sales of products to a major customer when that customer built inventory to expand the line of products that it offered. The increase in the original equipment volume reflected the improved production volume experienced by domestic automotive and light-duty truck manufacturers. The increase in the export volume reflected the continued broadening of the Company's customer base into new export markets. The increase in com mission revenues reflected the volume growth observed in marketing and distributing engine component products for other companies.

For the first six months of 2002, net sales of manufactured products increased in the original equipment and export markets. However, these increases were partially offset by net sales decreases in the domestic and Canadian aftermarkets. Net sales in the private brand market were relatively flat in the first half of 2002 in comparison to the same period in 2001. The volume variances for these various markets in the first half of 2002 were due to the items noted in the above discussion related to the first quarter of 2002. Commission revenues for the first half of 2002 increased in comparison to the first half of 2001, as discussed above.

COST OF SALES AND GROSS PROFIT

2003 Compared to 2002

Cost of sales in the second quarter of 2003 increased $2,189,160, or 32.8%, from $6,680,920 in the second quarter of 2002, to $8,870,080. For the first half of 2003, cost of sales increased $1,669,235, or 12.8%, from $13,060,221 in the first half of 2002, to $14,729,456. The gross profit margin on net sales decreased in the second quarter of 2003, from 32.5% in the second quarter of 2002, to 28.7%. For the first half of 2003, the gross profit margin on net sales also decreased, from 32.1% in the first half of 2002, to 29.2%. The increase in cost of sales and the corresponding decrease in the gross profit margin on net sales for the second quarter of 2003 reflect the direct costs associated with the net sales increase pertaining to acquired businesses, combined with increased group health insurance, overhead and shipping and distribution costs, slightly offset by reduced cost of sales associated with the lower net sales of manufactured products. The increased shipping and distribution costs primarily refle ct the increased costs associated with distributing products of the acquired businesses. The gross profit margin on net sales for the second quarter of 2003 was also negatively affected by the decrease in commission revenues in comparison to the same period in 2002. The increase in cost of sales and the decrease in the gross profit margin on net sales for the first half of 2003 primarily reflect the items noted above, with the exception of the slight increase in commission revenues in the first half of 2003, which had the effect of slightly offsetting the decreased gross profit margin on net sales for the period.

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2002 Compared to 2001

Cost of sales in the second quarter of 2002 decreased $41,572, or 0.6%, from $6,722,492 in the second quarter of 2001, to $6,680,920. For the first half of 2002, cost of sales increased $170,874, or 1.3%, from $12,889,347 in the first half of 2001, to $13,060,221. The gross profit margin on net sales increased slightly for the second quarter of 2002, from 32.2% for the second quarter of 2001, to 32.5%. For the first half of 2002, the gross profit margin on net sales also increased, from 30.6% in the first half of 2001, to 32.1%. The decrease in cost of sales and the corresponding increase in the gross profit margin on net sales for the second quarter of 2002 reflected a decrease in net sales of manufactured products, partially offset by a change in the sales mix of manufactured products and increased shipping and distribution costs. Based on the decrease in net sales of manufactured products noted above, a larger decrease in cost of sales would have been expected. However, as discussed above, the Company experienced net sales increases in the original and export markets, which traditionally have carried a lower gross margin (higher cost of sales as a percentage of net sales) than domestic sales due to the lower level of operating expenses that are required to service those volumes. The increased shipping and distribution costs primarily reflected the additional costs incurred to distribute other manufacturers' engine component products. The effect of these additional costs and the effect of the sales mix change on cost of sales, however, were more than offset by the commission revenue generated from the distribution of these products, and thus contributed to the increased gross profit margin. The increase in cost of sales and the increase in the gross profit margin for the first half of 2002 primarily reflected the increased net sales of manufactured products as discussed above, combined with the effects of the sales mix change and the increased shipping and distribution costs and the increased commission re venue noted above. There was a minimal effect on the gross profit margin from changes made to the Company's individual inventory cost factors (material, labor and overhead) during the first half of 2002.

OPERATING EXPENSES

2003 Compared to 2002

Total operating expenses for the second quarter of 2003 increased $909,560, or 36.9%, from the second quarter of 2002. For the first half of 2003, total operating expenses increased $1,009,921, or 21.0%, from the first half of 2002. Advertising costs for the second quarter of 2003 decreased $7,058, or 13.8%, from the second quarter of 2002. For the first half of 2003, advertising costs decreased $32,411, or 29.6%, from the first half of 2002. These decreases primarily reflect decreases in advertising support and printed material costs. There were no significant advertising costs related to the acquired businesses in the second quarter and first half of 2003. Selling costs for the second quarter of 2003 increased $313,525, or 41.5%, from the second quarter of 2002. For the first half of 2003, selling costs increased $374,278, or 24.8%, from the first half of 2002. These increases reflect increased agents' commissions, sales personnel and sales support costs related to the acquired businesses, slightly offs et by decreases in these same costs associated with remaining operations. The increase in selling costs, for both periods noted, also reflects approximately $15,000 of expense related to the amortization of the Company's customer contract associated with the acquired businesses. General and administrative costs for the second quarter of 2003 increased $603,093, or 36.3%, from the second quarter of 2002. For the first half of 2003, general and administrative costs increased $668,054, or 21.0%, from the first half of 2003. These increased costs primarily reflect increases in general personnel and related support costs associated with the additional personnel required to administer the acquired businesses, partially offset by decreases in these same costs associated with remaining operations. The increase in general and administrative expenses, for both 2003 periods, also reflects an increase in the provision for doubtful accounts receivable combined with additional amortization expense of approximately $59,000 related to the Company's trademark and capital assets associated with the acquired businesses. These increases in general and administrative expenses for the second quarter and first half of 2003 were slightly offset by a

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net reduction in severance costs of $27,000 (from $89,000 to $62,000) and $60,000 (from $122,000 to $62,000), respectively, when compared to the same periods in 2002.

2002 Compared to 2001

Total operating expenses for the second quarter of 2002 increased $242,138, or 10.9%, from the second quarter of 2001. For the first half of 2002, total operating expenses increased $317,409, or 7.1%, from the first half of 2001. Advertising costs for the second quarter of 2002 increased $6,587, or 14.8%, from the second quarter of 2001. For the first half of 2002, advertising costs increased $4,293, or 4.1%, from the first half of 2001. These increases reflected an increase in advertising support costs partially offset by decreases in printed material costs. Selling costs for the second quarter of 2002 decreased $60,033, or 7.4%, from the second quarter of 2001. For the first half of 2002, selling costs decreased $92,639, or 5.8%, from the first half of 2001. These decreases reflected declines in agents' commissions and various sales support costs, partially offset by increases in sales personnel costs and industry trade show expenses. General and administrative costs for the second quarter of 2002 incre ased $295,584, or 21.7%, from the second quarter of 2001. For the first half of 2002, general and administrative costs increased $405,755, or 14.6%, from the first half of 2001. These increases reflected increases in general personnel costs, property insurance, legal and professional fees and various general personnel support costs, offset slightly by decreases in group health insurance costs and the provision for doubtful accounts receivable. The second quarter increase also reflected approximately $89,000 in severance payments to terminated employees, bringing the total severances paid through the first half of 2002 to approximately $122,000.

OTHER EXPENSES

2003 Compared to 2002

Other expenses netted to $126,674 for the second quarter of 2003, compared to a net expense of $81,471 for the second quarter of 2002. This increase reflects a significantly higher interest expense, a higher gain on foreign currency transactions and increased other, net expenses. The increase in interest expense reflects the increased short-term and long-term debt obligations that the Company utilized to finance the purchase of Ertel and Syzygy, as discussed in Note 2 to the accompanying condensed consolidated financial statements. The increase in the gain on foreign currency transactions reflects the Company's increased exposure to Canadian currency fluctuations, relative to the U.S. dollar, associated with the acquired businesses, combined with the effect of the strengthening Canadian dollar compared to the U.S. dollar, in the second quarter of 2003. These items are discussed in Item 3 below. The other, net item primarily reflects the loss (income) derived from the Company's investment in its Casite joi nt venture. For the first half of 2003, other expenses netted to $216,828 versus a net expense of $198,482 in the first half of 2002. The increases in interest expense, gain on foreign currency transactions and other, net expenses in the first half of 2003 reflect the items discussed above.

2002 Compared to 2001

Other expenses netted to $81,471 for the second quarter of 2002, compared to a net expense of $184,747 for the second quarter of 2001. This decrease reflected a significantly lower interest expense, combined with a lower other, net expense in 2002. The decrease in interest expense reflected the reduced short-term interest rates in effect in 2002 compared to 2001, combined with reduced interest expense on the amortization of the Company's long-term debt. The other, net item primarily reflected the loss (income) derived from the Company's investment in its Casite joint venture. For the first half of 2002, other expenses netted to $198,482, compared to a net expense of $296,565 in the first half of 2001. The decrease in interest expense reflected the items discussed above. The other, net item reflected the income derived from the Casite joint venture, combined with the inclusion, in 2001, of a gain recognized on the

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sale of stock holdings received from one of the Company's pension fund administrators. These holdings were received when the administrator converted from a mutual structure to a stock-based structure.

TAXES ON INCOME

The 2003 and 2002 year-to-date effective tax rates of 42.6% and 40.0%, respectively, are higher than the domestic statutory federal tax rate of 34.0% due primarily to the impact of various state income taxes and the impact of a higher statutory rate applicable to the Company's Canadian subsidiary.

As of June 30, 2003, the Company recorded net deferred income tax assets of $7,466,119. The major components of these assets are the tax effects of the net operating loss carryforwards and net accrued retirement and postretirement benefit obligations. The realization of these recorded benefits is dependent upon the generation of future taxable income. Management believes that it is more likely than not that adequate levels of future taxable income will be generated to absorb the net operating loss carryforwards, the deductible amounts related to the retirement and postretirement benefit obligations and the remaining net deductible temporary differences. However, based on the net operating loss carryforwards at June 30, 2003 (which must be utilized before foreign tax credit carryforwards can be utilized), management believes that it is more likely than not that the foreign tax credits will go unutilized prior to their expiration. As a result, a valuation allowance has been recorded for the total foreign ta x credits of $45,576 at June 30, 2003.

LIQUIDITY AND CAPITAL RESOURCES

In March 2003, the Company implemented cost-containment measures in response to a prolonged volume decrease in the domestic and Canadian piston ring aftermarkets. The Company has observed a decline in net piston ring sales volume in the domestic and Canadian aftermarkets since the third quarter of 2000. This aftermarket volume decrease, combined with an early 2001 decline in original equipment volume, resulted in earlier cost-containment measures implemented in February 2001, as described in the Company's Form 10-K for the year ended December 31, 2000. Since that time, the domestic and Canadian aftermarket volumes have continued to decline. Therefore, in March 2003 the Company determined that additional cost-containment measures were necessary in order to align its operating expenses with current market conditions and improve its profitability and cash position. The cost-containment measures consist of voluntary and involuntary layoffs in the salaried and hourly work forces, salaried payroll reductions an d identification of reductions in various non-payroll expenses. In April 2003, the Company recognized approximately $62,000 of severance costs related to additional cost-containment measures implemented during the second quarter of 2003.

The Company's primary cash requirements continue to be for operating expenses such as labor costs and for funding accounts receivable and long-term debt service, including the additional debt service relating to the Company's March 2003 acquisitions of Ertel and Syzygy, as discussed below. Historically, the Company's primary sources of cash have been from operations and from bank borrowings. These sources of cash depend on attaining future positive financial results. In March and April 2003, in response to a prolonged volume decrease in the domestic and Canadian piston ring aftermarkets, the Company implemented cost-containment measures, as described above. The Company believes that these cost-containment measures, combined with the income derived from the sale of manufactured products, the anticipated future positive financial impact of the Ertel and Syzygy acquisitions and the Company's marketing and distribution agreements with various engine component manufacturers, should allow it to generate suffici ent cash from operations to assist it in satisfying the Company's future cash requirements. The additional funding provided under the Company's U.S. and Canadian loan agreements, restructured in March 2003 in connection with the Ertel and Syzygy acquisitions, combined with the additional funding obtained from the restructuring of the Company's short-term line with its secondary U.S. lender on July 14, 2003, both of which are discussed in Note 3 to the accompanying

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condensed consolidated financial statements, should also assist the Company in satisfying its future cash requirements.

The Company's short-term and long-term debt represents its primary contractual obligations as of June 30, 2003. The Company is also a party to various lease commitments and other contractual obligations. The Company has no off-balance sheet arrangements. Total short-term lines available to the Company as of June 30, 2003 totaled $15,270,000, of which $1,238,000 was unused. The increase in the Company's short-term line, resulting from the July 14, 2003 restructuring of its short-term line with its secondary lender, as discussed in Note 3, is included in the availability amounts noted above. A significant portion of the Ertel and Syzygy acquisitions was funded with short-term debt established for the sole purpose of the purchase transaction. Additional economies of scale are anticipated as the Company continues to integrate the acquired operations. As those economies of scale mature, it is the Company's intent to address its current financing arrangements, with the likely prospect of converting certain of t hose obligations into long-term financing vehicles.

The Company's short-term and long-term term loan agreement with its primary lender requires it to maintain certain financial balances and ratios. At June 30, 2003, the Company was in violation of certain covenants and is currently seeking a waiver of the violations or an amendment of the covenants. As a result, the related long-term portion of the debt outstanding under the agreement, amounting to $735,000, has been reclassified as current at June 30, 2003.

The following commentary is based on the condensed consolidated statements of cash flows, which reflect the changes in operating assets and liabilities net of amounts acquired from business acquisitions. During the first half of 2003, the Company used $1,409,542 of cash for operating activities. The increase in accounts receivable, combined with a decrease in the net retirement and postretirement benefit obligations and the net gain on foreign currency transactions, were partially offset by the realized net income and depreciation and amortization, combined with a decrease in inventories and an increase in accounts payable and accruals. The increase in accounts receivable primarily reflects the terms associated with the Company's various marketing and distribution agreements, as discussed below, combined with increased accounts receivable exposure relating to the credit terms associated with the acquired businesses, beginning in the second quarter of 2003. The decrease in the net retirement and postretir ement benefit obligations reflects the excess of actual postretirement benefit claims paid over the actuarially determined annual expense, combined with effect of the required quarterly funding of one of the Company's retirement plans to certain limits. The net gain on foreign currency transactions reflects the Company's increased exposure to Canadian currency fluctuations relative to the U.S. dollar, associated with the acquired businesses, combined with the effect of the strengthening Canadian dollar compared to the U.S. dollar, in the second quarter of 2003, as discussed in Item 3 below. The decrease in inventories primarily reflects the Company's efforts to bring inventory levels more in-line with customer demand. The increase in accounts payable and accruals primarily reflects the timing of certain large purchases from vendors prior to June 30, 2003, slightly offset by a reduction in the workers' compensation accrual, reflecting the required funding of workers' compensation claims to certain levels. The investing activities for the first half of 2003 primarily reflect the cash used for the acquisition of Ertel and Syzygy, as discussed in Note 2 to the accompanying condensed consolidated financial statements. The financing activities for the first half of 2003 reflect the working capital requirements that were needed to fund the operating activities noted above, combined with the financing utilized to purchase Ertel and Syzygy. The financing activities also reflect the principal payments required under the Company's various long-term debt agreements.

During the first half of 2002, the Company generated $948,078 of net cash from operating activities. The realized net income and depreciation and amortization, combined with a decrease in deferred income taxes and an increase in accounts payable and accruals, were partially offset by increases in accounts receivable and inventories, and a decrease in the postretirement benefit obligation. The decrease in

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deferred income taxes reflected the utilization of a portion of the net operating loss carryforward based on first half earnings. The increase in accounts payable and accruals and the increase in accounts receivable primarily reflected the terms associated with the marketing and distribution agreements noted above. Under the terms of the agreements, the Company bills the customer and records a receivable for the gross sales amount of the product covered under the agreement. The Company is responsible for collecting the gross sales amount. The Company then nets the gross sales amount down to the earned commission amount that it receives for performing the marketing and distribution services by recording a payable to the engine component manufacturers that are parties to those agreements. The change in the accounts payable and accruals also reflected a decrease in the miscellaneous accrual offset by an increase in the compensation accrual. The decrease in the miscellaneous accrual reflected a large payment mad e during the first half of the year for the December 31, 2001 workers' compensation liability, slightly offset by the reclassification of the fair value of the Company's interest rate swap agreement (which expired on June 30, 2003.) The increase in the compensation accrual primarily reflected the accrual for additional general personnel costs. The increase in inventories reflected a planned increase in the Company's inventory to certain levels. The decrease in the postretirement benefit obligation reflected the excess of actual postretirement benefit claims paid over the actuarially determined annual expense. The investing activities for the first half of 2002 reflected the Company's continued support of its lean manufacturing environment, as well as capital expenditures for the modernization of the Company's main distribution center. The investing activities also reflected proceeds from the sale of excess plant equipment. The financing activities for the first half of 2002 reflected the working capital requ irements that were primarily needed to fund the operating activity items noted above. The financing activities also reflected the principal payments required under the Company's term loan agreement, combined with a required $325,000 prepayment of long-term debt borrowings, during the first quarter of 2002, pertaining to the sale of the Company's non-business related real property in November 2001.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to market risks, which include changes in interest rates and changes in the foreign currency exchange rate as measured against the U.S. dollar.

The Company's interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower its overall borrowing costs. The Company is exposed to interest rate changes primarily as a result of its variable rate lines of credit and its variable rate long-term borrowings. Of the $15,270,000 total short-term lines available to the Company at June 30, 2003 (which includes the $500,000 increase in availability with the Company's secondary lender, as discussed in Note 3 to the accompanying condensed consolidating financial statements), $14,032,000 was outstanding. The Company's interest rate swap agreement expired on June 30, 2003. As of June 30, 2003, the Company is not a party to any derivative financial instrument agreements, nor does it use such instruments for trading purposes. As described in the "Liquidity and Capital Resources" section of Item 2 above, management is currently reviewing its short-term and long-term financing options. As a part of this review, management will review the Company's anticipated future interest rate exposure to determine if the Company will utilize interest rate swap agreements in the future. Management believes that it is not likely that fluctuations in interest rates in the near future will have a material impact on the Company's consolidated financial statements taken as a whole. However, the possibility for such impacts has increased recently with the significant addition of variable rate borrowings.

The Company has a manufacturing/distribution facility in Canada and, as previously discussed, acquired Ertel and Syzygy, two Canadian distribution companies, in March 2003. These entities' sales are denominated in Canadian dollars, thereby creating exposures to changes in exchange rates. Due to the strengthening of the Canadian dollar versus the U.S. dollar during the second quarter of 2003, the Company's Canadian subsidiary recorded a $188,423 net gain on foreign currency transactions for the six months ended June 30, 2003, as detailed in the accompanying condensed consolidated statements of

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operations. With the acquisition of Ertel and Syzygy, the Company is now exposed to increased Canadian-originated third party and intercompany transactions that settle in U.S. dollars. In addition, the Company's $2,375,000 intercompany term note related to the acquisitions, which is eliminated upon consolidation, further exposes the Company to Canadian/U.S. dollar currency fluctuations. Future changes in the Canadian/U.S. exchange rate may positively or negatively affect the Company' sales, gross margins and net income. The Company attempts to minimize foreign currency exposure through working capital management. The Company does not formally hedge its exposure to transaction and translation gains and losses relating to foreign currency exposures.

Item 4. Controls and Procedures

The Company's Chief Executive Officer and its Vice-President, Finance, after evaluating the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of June 30, 2003, have concluded that, as of June 30, 2003, the Company's disclosure controls and procedures were adequate and effective to ensure that material information relating to the Company and its consolidated subsidiaries would be made known to them by others within those entities, particularly during the period in which this Quarterly Report on Form 10-Q was being prepared.

There were no significant changes in the Company's internal controls over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II - OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders

The Company's 2003 annual meeting of shareholders was held on May 20, 2003. The purposes of the meeting were to (1) elect three directors to three-year terms expiring in 2006 and elect one director to a one-year term expiring in 2004 and (2) to transact any other business that may have properly come before the meeting.

The name of each director elected at the meeting (along with the number of votes cast for, against or authority withheld) and the name of each other director whose term of office as a director continued after the meeting is set forth below. There were no broker non-votes with respect to the election of directors.

Elected Director	For	Against	Authority withheld
Three-year terms
Mark R.S. Johnson	707,015	-	4,200
Dale W. Koop	707,015	-	4,200
Douglas A. DeCamp	707,015	-	4,200
One-year term
Christopher J. Fluke	707,015	-	4,200

Directors who continue to serve

Andrew F. Johnson

William R. Cook

Neil A. Gardner

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Item 6. Exhibits and Reports on Form 8-K

          (a)     Exhibits

Exhibit Number
2(a)	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., filed as an exhibit to the Form 10-K Annual Report for the year ended December 31, 2002, is here incorporated by reference.
2(b)	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., filed as an exhibit to the Form 10-K Annual Report for the year ended December 31, 2002, is here incorporated by reference.
2(c)	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, filed as an exhibit to the Form 10-K Annual Report for the year ended December 31, 2002, is here incorporated by reference.
2(d)	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., filed as an exhibit to the Form 8-K Current Report filed April 11, 2003, is here incorporated by reference.
3(a)	Amended Articles of Incorporation of Hastings Manufacturing Company, filed as an exhibit to the Form 10-Q Quarterly Report for the period ended June 30, 1998, are here incorporated by reference.
3(b)	Bylaws of Hastings Manufacturing Company, as amended to date, filed as an exhibit to the Form 10-K Annual Report for the year ended December 31, 2000, are here incorporated by reference.
4(a)	NBD Bank Amended and Restated Letter Agreement for $6,600,000 Term Loan and $3,000,000 Credit Authorization to Make Revolving Credit Loans and Issue Letters of Credit dated August 28, 1998, filed as an exhibit to the Form 10-Q Quarterly Report for the period ended September 30, 1998, is here incorporated by reference.
4(b)	First Amendment to Amended and Restated Letter Agreement, dated November 11, 1999 between Hastings Manufacturing Company and Bank One, Michigan (formerly NBD Bank), filed as an exhibit to the Form 10-Q Quarterly Report for the period ended September 30, 1999, is here incorporated by reference.
4(c)	Second Amendment to Amended and Restated Letter Agreement, dated March 30, 2000, between Hastings Manufacturing Company and Bank One (formerly NBD), filed as exhibit to the Form 10-Q Quarterly Report for the period ended March 31, 2000, is here incorporated by reference.

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4(d)	Third Amendment to Amended and Restated Letter Agreement, dated October 31, 2000, between Hastings Manufacturing Company and Bank One (formerly NBD), filed as exhibit to the Form 10-K Annual Report for the year ended December 31, 2000, is here incorporated by reference.
4(e)	Fourth Amendment to Amended and Restated Letter Agreement, dated March 21, 2001, between Hastings Manufacturing Company and Bank One (formerly NBD), filed as exhibit to the Form 10-K Annual Report for the year ended December 31, 2000, is here incorporated by reference.
4(f)	Fifth Amendment to Amended and Restated Letter Agreement, dated May 31, 2002, between Hastings Manufacturing Company and Bank One (formerly NBD), filed as exhibit to the Form 10-Q Quarterly Report for the period ended June 30, 2002, is here incorporated by reference.
4(g)	Sixth Amendment to Amended and Restated Letter Agreement, dated March 25, 2003, between Hastings Manufacturing Company and Bank One (formerly NBD Bank), filed as an exhibit to the Form 10-K Annual Report for the year ended December 31, 2002, is here incorporated by reference.
4(h)	Loan Agreement, dated as of March 26, 2003, between Hastings, Inc. and Bank One, NA, Canada Branch, filed as an exhibit to the Form 10-Q Quarterly Report for the period ended March 31, 2003, is here incorporated by reference.
4(i)	Business Loan Agreement, dated July 14, 2003, between Hastings Manufacturing Company and Hastings City Bank.
4(j)	Preferred Stock Purchase Rights Plan, filed as an exhibit to Form 8-A filed February 15, 1996, is here incorporated by reference.
15	Letter Regarding Unaudited Interim Financial Information.
31(a)	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31(b)	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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          (b)     The Company filed the following Current Reports on Form 8-K and Form 8-K/A during the quarter ended June 30, 2003.

Date of Report	Filing Date	Item(s) Reported
March 27, 2003	April 11, 2003	Under Item 2, this Form 8-K reported the Company's purchase of Ertel Manufacturing Corporation of Canada, Ltd., and Syzygy Auto Distribution Inc., effective March 27, 2003.
May 7, 2003	May 7, 2003	Under Items 9 and 12, this Form 8-K included a press release that reported the Company's financial results for the quarter ended March 31, 2003. The press release included condensed consolidated statements of operations for the periods ended March 31, 2003 and March 31, 2002. This Form 8-K is considered to have been "furnished" but not "filed" with the Securities and Exchange Commission.
March 27, 2003	June 9, 2003	This Form 8-K/A was an amendment to the Form 8-K filed on April 11, 2003. It was filed for the purpose of including the financial information required by Items 2 and 7 of Form 8-K relating to the Company's acquisition of Ertel and Syzygy. This filing included the combined financial statements of Ertel and Syzygy for the periods ended December 31, 2002 and December 31, 2001, as well as the pro forma condensed combined statements of operations for the periods ended March 31, 2003 and December 31, 2002, and notes thereto.

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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.

	HASTINGS MANUFACTURING COMPANY
Date:  August 19, 2003	/s/ Thomas J. Bellgraph
	Thomas J. Bellgraph Vice-President, Finance (Principal Financial and Accounting Officer)

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EXHIBIT INDEX

Exhibit Number
2(a)	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., filed as an exhibit to the Form 10-K Annual Report for the year ended December 31, 2002, is here incorporated by reference.
2(b)	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., filed as an exhibit to the Form 10-K Annual Report for the year ended December 31, 2002, is here incorporated by reference.
2(c)	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, filed as an exhibit to the Form 10-K Annual Report for the year ended December 31, 2002, is here incorporated by reference.
2(d)	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., filed as an exhibit to the Form 8-K Current Report filed April 11, 2003, is here incorporated by reference.
3(a)	Amended Articles of Incorporation of Hastings Manufacturing Company, filed as an exhibit to the Form 10-Q Quarterly Report for the period ended June 30, 1998, are here incorporated by reference.
3(b)	Bylaws of Hastings Manufacturing Company, as amended to date, filed as an exhibit to the Form 10-K Annual Report for the year ended December 31, 2000, are here incorporated by reference.
4(a)	NBD Bank Amended and Restated Letter Agreement for $6,600,000 Term Loan and $3,000,000 Credit Authorization to Make Revolving Credit Loans and Issue Letters of Credit dated August 28, 1998, filed as an exhibit to the Form 10-Q Quarterly Report for the period ended September 30, 1998, is here incorporated by reference.
4(b)	First Amendment to Amended and Restated Letter Agreement, dated November 11, 1999 between Hastings Manufacturing Company and Bank One, Michigan (formerly NBD Bank), filed as an exhibit to the Form 10-Q Quarterly Report for the period ended September 30, 1999, is here incorporated by reference.
4(c)	Second Amendment to Amended and Restated Letter Agreement, dated March 30, 2000, between Hastings Manufacturing Company and Bank One (formerly NBD Bank), filed as an exhibit to the Form 10-Q Quarterly Report for the period ended March 31, 2000, is here incorporated by reference.
4(d)	Third Amendment to Amended and Restated Letter Agreement, dated October 31, 2000, between Hastings Manufacturing Company and Bank One (formerly NBD Bank), filed as an exhibit to the Form 10-K Annual Report for the year ended December 31, 2000, is here incorporated by reference.

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4(e)	Fourth Amendment to Amended and Restated Letter Agreement, dated March 21, 2001, between Hastings Manufacturing Company and Bank One (formerly NBD Bank), filed as an exhibit to the Form 10-K Annual Report for the year ended December 31, 2000, is here incorporated by reference.
4(f)	Fifth Amendment to Amended and Restated Letter Agreement, dated May 31, 2002, between Hastings Manufacturing Company and Bank One (formerly NBD Bank), filed as an exhibit to the Form 10-Q Quarterly Report for the period ended June 30, 2002, is here incorporated by reference.
4(g)	Sixth Amendment to Amended and Restated Letter Agreement, dated March 25, 2003, between Hastings Manufacturing Company and Bank One (formerly NBD Bank), filed as an exhibit to the Form 10-K Annual Report for the year ended December 31, 2002, is here incorporated by reference.
4(h)	Loan Agreement, dated as of March 26, 2003, between Hastings, Inc. and Bank One, NA, Canada Branch, filed as an exhibit to the Form 10-Q Quarterly Report for the period ended March 31, 2003, is here incorporated by reference.
4(i)	Business Loan Agreement, dated July 14, 2003, between Hastings Manufacturing Company and Hastings City Bank.
4(j)	Preferred Stock Purchase Rights Plan, filed as an exhibit to Form 8-A filed February 15, 1996, is here incorporated by reference.
15	Letter Regarding Unaudited Interim Financial Information.
31(a)	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31(b)	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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EX-4

EXHIBIT 4(i)

BUSINESS LOAN AGREEMENT

Principal $2,000,000.00	Loan Date 07-14-2003	Maturity 07-24-2004	Loan No	Call/Coll 18	Account	Officer DVK	Initials NA
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "***" has been omitted due to text length limitations.

Borrower: Hastings Manufacturing Company
325 N. Hanover
Hastings, MI 49058 Lender: Hastings City Bank
Main Office
150 W. Court St.
Hastings, MI 49058
(616) 945-2401

THIS BUSINESS LOAN AGREEMENT dated July 14, 2003, is made and executed between Hastings Manufacturing Company ("Borrower") and Hastings City Bank ("Lender") on the following terms and conditions. Borrower has received prior commercial loans from Lender or has applied to Lender for a commercial loan or loans or other financial accommodations, including those which may be described on any exhibit or schedule attached to this Agreement ("Loan"). Borrower understands and agrees that: (A) in granting, renewing, or extending any Loan, Lender is relying upon Borrower's representations, warranties, and agreements as set forth in this Agreement, and (B) all such Loans shall be and remain subject to the terms and conditions of this Agreement.

TERM. This Agreement shall be effective as of July 14, 2003, and shall continue in full force and effect until such time as all of Borrower's Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys' fees, and other fees and charges, or until such time as the parties may agree in writing to terminate this Agreement.

ADVANCE AUTHORITY. The following person currently is authorized to request advances and authorize payments under the line of credit until Lender receives from Borrower, at Lender's address shown above, written notice of revocation of his or her authority: Thomas J. Bellgraph

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial Advance and each subsequent Advance under this Agreement shall be subject to the fulfillment to Lender's satisfaction of all of the conditions set forth in this Agreement and in the Related Documents.

Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the Note; (2) Security Agreements granting to Lender security interests in the Collateral; (3) financing statements and all other documents perfecting Lender's Security Interests; (4) evidence of insurance as required below; (5) together with all such Related Documents as Lender may require for the Loan; all in form and substance satisfactory to Lender and Lender's counsel.

Borrower's Authorization. Borrower shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing the execution and delivery of this Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such other resolutions, authorizations, documents and instruments as Lender or its counsel, may require.

Payment of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and payable as specified in this Agreement or any Related Document.

Representations and Warranties. The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or certificate delivered to Lender under this Agreement are true and correct.

No Event of Default. There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or under any Related Document.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists:

Organization. Borrower is a corporation for profit which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the State of Michigan. Borrower is duly authorized to transact business in all other states in which Borrower is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which Borrower is doing business. Specifically, Borrower is, and at all times shall be, duly qualified as a foreign corporation in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition. Borrower has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. Borrower maintains an office at 325 N. Hanover, Hastings, MI 49058. Unless Borrower has designated otherwise in writing, the principal office is the office at which Borrower keeps its books and records including its records concerning the Collateral. Borrower will notify Lender of any change in the location of Borrower's state of organization or any change in Borrower's name. Borrower shall do all things necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to Borrower and Borrower's business activities.

Assumed Business Names. Borrower has filed or recorded all documents or filings required by law relating to all assumed business names used by Borrower. Excluding the name of Borrower, the following is a complete list of all assumed business names under which Borrower does business: None.

Authorization. Borrower's execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of Borrower's articles of incorporation or organization, or bylaws, or any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower's properties.

Financial Information. Each of Borrower's financial statements supplied to Lender truly and completely disclosed Borrower's financial condition as of the date of the statement, and there has been no material adverse change in Borrower's financial condition subsequent to the date of the most recent financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed in such financial statements.

Legal Effect. This Agreement constitutes, and any instrument or agreement Borrower is required to give under this Agreement when delivered will constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms.

Properties. Except as contemplated by this Agreement or as previously disclosed in Borrower's financial statements or in writing to Lender and as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title to all of Borrower's properties free and clear of all Security Interests, and has not executed any security documents or financing statements relating to such properties. All of Borrower's properties are titled in Borrower's legal name, and Borrower has not used or filed a financing statement under any other name for at least the last five (5) years.

Hazardous Substances. Except as disclosed to and acknowledged by Lender in writing, Borrower represents and warrants that: (1) During the period of Borrower's ownership of Borrower's Collateral, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from any of the Collateral. (2) Borrower has no knowledge of, or reason to believe that there has been (a) any breach or violation of any Environmental Laws; (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Collateral by any prior owners or occupants of any of the Collateral; or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters. (3) Neither Borrower nor any tenant, contractor, agent or other authorized user of any of the Collateral shall use, generate, manufacture, store, treat, dispos e of or release any Hazardous Substance on, under, about or from any of the Collateral; and any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations, and ordinances, including without limitation all Environmental Laws. Borrower authorizes Lender and its agents to enter upon the Collateral to make such inspections and tests as Lender may deem appropriate to determine compliance of the Collateral with this section of the Agreement. Any inspections or tests made by Lender shall be at Borrower's expense and for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Borrower or to any other person. The representations and warranties contained herein are based on Borrower's due diligence in investigating the Collateral for hazardous waste and Hazardous Substances. Borrower hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Borrower becom es liable for cleanup or other costs under any such laws, and (2) agrees to indemnify and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Agreement or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release of a hazardous waste or substance on the collateral. The provisions of this section of the Agreement, including the obligation to indemnify, shall survive the payment of the Indebtedness and the termination, expiration or satisfaction of this Agreement and shall not be affected by Lender's acquisition of any interest in any of the Collateral, whether by foreclosure or otherwise.

Litigation and Claims. No litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower is pending or threatened, and no other event has occurred which may materially adversely affect Borrower's financial condition or properties, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Lender in writing.

BUSINESS LOAN AGREEMENT
(Continued)
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Taxes. To the best of Borrower's knowledge, all of Borrower's tax returns and reports that are or were required to be filed, have been filed, and all taxes, assessments and other governmental charges have been paid in full, except those presently being or to be contested by Borrower in good faith in the ordinary course of business and for which adequate reserves have been provided.

Lien Priority. Unless otherwise previously disclosed to Lender in writing, Borrower has not entered into or granted any Security Agreements, or permitted the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment of Borrower's Loan and Note, that would be prior or that may in any way be superior to Lender's Security Interests and rights in and to such Collateral.

Binding Effect. This Agreement, the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers thereof, as well as upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long as this Agreement remains in effect, Borrower will:

Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all material adverse changes in Borrower's financial condition, and (2) all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any Guarantor.

Financial Records. Maintain its books and records in accordance with GAAP, applied on a consistent basis, and permit Lender to examine and audit Borrower's books and records at all reasonable times.

Financial Statements. Furnish Lender with the following:

Annual Statements. As soon as available, but in no event later than ninety (90) days after the end of each fiscal year, Borrower's balance sheet and income statement for the year ended, audited by a certified public accountant satisfactory to Lender.

All financial reports required to be provided under this Agreement shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Borrower as being true and correct.

Additional Information. Furnish such additional information and statements, as Lender may request from time to time.

Insurance. Maintain fire and other risk insurance, public liability insurance, and such other insurance as Lender may require with respect to Borrower's properties and operations, in form, amounts, coverages and with insurance companies acceptable to Lender. Borrower, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least ten (10) days prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Borrower or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest for the Loans, Borrower will provide Lender with such lender's loss payable or other endorsements as Lender may require.

Insurance Reports. Furnish to Lender, upon request of Lender, reports on each existing insurance policy showing such information as Lender may reasonably request, including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the properties insured; (5) the then current property values on the basis of which insurance has been obtained, and the manner of determining those values; and (6) the expiration date of the policy. In addition, upon request of Lender (however not more often than annually), Borrower will have an independent appraiser satisfactory to Lender determine, as applicable, the actual cash value or replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower.

Other Agreements. Comply with all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any other party and notify Lender immediately in writing of any default in connection with any other such agreements.

Loan Proceeds. Use all Loan proceeds solely for Borrower's business operations, unless specifically consented to the contrary by Lender in writing.

Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes, governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower's properties, income, or profits.

Performance. Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents, and in all other instruments and agreements between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default in connection with any agreement.

Operations. Maintain executive and management personnel with substantially the same qualifications and experience as the present executive and management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable and prudent manner.

Environmental Studies. Promptly conduct and complete, at Borrower's expense, all such investigations, studies, samplings and testings as may be requested by Lender or any governmental authority relative to any substance, or any waste or by-product of any substance defined as toxic or a hazardous substance under applicable federal, state, or local law, rule, regulation, order or directive, at or affecting any property or any facility owned, leased or used by Borrower.

Compliance with Governmental Requirements. Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the conduct of Borrower's properties, businesses and operations, and to the use or occupancy of the Collateral, including without limitation, the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Collateral are not jeopardized. Lender may require Borrower to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest.

Inspection. Permit employees or agents of lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower's other properties and to examine or audit Borrower's books, accounts, and records and to make copies and memoranda of Borrower's books, accounts, and records. If Borrower now or at any time hereafter maintains any records (including without limitation computer generated records and computer software programs for the generation of such records) in the possession of a third party, Borrower, upon request of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any records it may request, all at Borrower's expense.

Compliance Certificates. Unless waived in writing by Lender, provide Lender at least annually, with a certificate executed by Borrower's chief financial officer, or other officer or person acceptable to Lender, certifying that the representations and warranties set forth in this Agreement are true and correct as of the date of the certificate and further certifying that, as of the date of the certificate, no Event of Default exists under this Agreement.

Environmental Compliance and Reports. Borrower shall comply in all respects with any and all Environmental Laws; not cause or permit to exist, as a result of an intentional or unintentional action or omission on Borrower's part or on the part of any third party, on property owned and/or occupied by Borrower, any environmental activity where damage may result to the environment, unless such environmental activity is pursuant to and in compliance with the conditions of a permit issued by the appropriate federal, state or local governmental authorities; shall furnish to Lender promptly and in any event within thirty (30) days after receipt thereof a copy of any notice, summons, lien, citation, directive, letter or other communication from any governmental agency or instrumentality concerning any intentional or unintentional action or omission on Borrower's part in connection with any environmental activity whether or not there is damage to the environment and/or other natural resources.

Additional Assurances. Make, execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security agreements, assignments, financing statements, instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and to perfect all Security Interests.

LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Borrower fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower's failure to discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any Related Documents, Lender on Borrower's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on any Collateral and paying all costs for insuring, maintaining and preserving any Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Borrower. All such expenses will become a part of the Indeb tedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of Lender:

BUSINESS LOAN AGREEMENT
(Continued)
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Indebtedness and Liens. (1) Except for trade debt incurred in the normal course of business and indebtedness to Lender contemplated by this Agreement, create, incur or assume indebtedness for borrowed money, including capital leases, (2) sell, transfer, mortgage, assign, pledge, lease, grant a security interest in, or encumber any of Borrower's assets (except as allowed as Permitted Liens), or (3) sell with recourse any of Borrower's accounts, except to Lender.

Continuity of Operations. (1) Engage in any business activities substantially different than those in which Borrower is presently engaged, (2) cease operations, liquidate, merge, transfer, acquire or consolidate with any other entity, change its name, dissolve or transfer or sell Collateral out of the ordinary course of business, or (3) pay any dividends on Borrower's stock (other than dividends payable in its stock), provided, however, that notwithstanding the foregoing, but only so long as no Event of Default has occurred and is continuing or would result from the payment of dividends, if Borrower is a "Subchapter S Corporation" (as defined in the Internal Revenue Code of 1986, as amended), Borrower may pay cash dividends on its stock to its shareholders from time to time in amounts necessary to enable the shareholders to pay income taxes and make estimated income tax payments to satisfy their liabilities under federal and state law which arise solely from their status as Shareholders of a Subchapter S Corporation because of their ownership of shares of Borrower's stock, or purchase or retire any of Borrower's outstanding shares or alter or amend Borrower's capital structure.

Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or assets, (2) purchase, create or acquire any interest in any other enterprise or entity, or (3) incur any obligation as surety or guarantor other than in the ordinary course of business.

Agreements. Borrower will not enter into any agreement containing any provisions which would be violated or breached by the performance of Borrower's obligations under this Agreement or in connection herewith.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under the terms of this Agreement or any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse change in Borrower's financial condition, in the financial condition of any Guarantor, or in the value of any Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any other loan with Lender.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right to setoff in all Borrower's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the debt against any and all such accounts.

DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:

Payment Default. Borrower fails to make any payment when due under the Loan.

Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.

False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.

Defective Collateralization. This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Loan. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default.

Change in Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.

Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Loan is impaired.

Right to Cure. If any default, other than a default on Indebtedness, is curable and if Borrower or Grantor, as the case may be, has not been given a notice of a similar default within the preceding twelve (12) months, it may be cured (and no Event of Default will have occurred) if Borrower or Grantor, as the case may be, after receiving written notice from Lender demanding cure of such default: (1) cure the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiate steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continue and complete all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise provided in this Agreement or the Related Documents, all commitments and obligations of Lender under this Agreement or the Related Documents or any other agreement immediately will terminate (including any obligation to make further Loan Advances or disbursements), and, at Lender's option, all Indebtedness immediately will become due and payable, all without notice of any kind to Borrower, except that in the case of an Event of Default of the type described in the "Insolvency" subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall have all the rights and remedies provided in the Related Documents or available at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of Lender's rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude purs uit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower or of any Grantor shall not affect Lender's right to declare a default and to exercise its rights and remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement:

Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment.

Attorneys' Fees; Expenses. Borrower agrees to pay upon demand all of Lender's costs and expenses, including Lender's reasonable attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's reasonable attorneys' fees and legal expenses whether or not there is a lawsuit, including reasonable attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Borrower also shall pay all court costs and such additional fees as may be directed by the court.

Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement.

Consent to Loan Participation. Borrower agrees and consents to Lender's sale or transfer, whether now or later, of one or more participation interests in the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other matter relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect to such matters. Borrower additionally waives any and all notices of sale of participation interests, as well as all notices of any repurchase of such participation interests. Borrower also agrees that the purchasers of any such participation interests will be considered as the absolute owners of such interests in the Loan and will have all the rights granted under the participation agreement or agreements governing the sale of such participation interests. Borrower further waives all rights of offset or counterclaim that it may have now or later against Lender or against any purchaser of such participation interest and unconditionally agrees that either Lender or such purchaser may enforce Borrower's obligation under the Loan irrespective of the failure or

BUSINESS LOAN AGREEMENT
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insolvency of any holder of any interest in the Loan. Borrower further agrees that the purchaser of any such participation interests may enforce its interests irrespective of any personal claims or defenses that Borrower may have against Lender.

Governing Law. This Agreement will be governed by, construed and enforced in accordance with federal law and the laws of the State of Michigan. This Agreement has been accepted by Lender in the State of Michigan.

Choice of Venue. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Barry County, State of Michigan.

No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Borrower, or between Lender and any Grantor, shall constitute a waiver of any of Lender's rights or of any of Borrower's or any Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.

Notices. Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower's current address. Unless otherwise provided or required by law, if there is more than one Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all Borrowers.

Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement.

Subsidiaries and Affiliates of Borrower. To the extent the context of any provisions of this Agreement makes it appropriate, including without limitation any representation, warranty or covenant, the word "Borrower" as used in this Agreement shall include all of Borrower's subsidiaries and affiliates. Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender to make any Loan or other financial accommodation to any of Borrower's subsidiaries or affiliates.

Successors and Assigns. All covenants and agreements contained by or on behalf of Borrower shall bind Borrower's successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have the right to assign Borrower's rights under this Agreement or any interest therein, without the prior written consent of Lender.

Survival of Representations and Warranties. Borrower understands and agrees that in extending Loan Advances, Lender is relying on all representations, warranties, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender under this Agreement or the Related Documents. Borrower further agrees that regardless of any investigation made by Lender, all such representations, warranties and covenants will survive the extension of Loan Advances and delivery to Lender of the Related Documents, shall be continuing in nature, shall be deemed made and redated by Borrower at the time each Loan Advance is made, and shall remain in full force and effect until such time as Borrower's Indebtedness shall be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last to occur.

Time is of the Essence. Time is of the essence in the performance of this Agreement.

DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code. Accounting words and terms not otherwise defined in this Agreement shall have the meanings assigned to them in accordance with generally accepted accounting principles as in effect on the date of this Agreement:

Advance. The word "Advance" means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower's behalf on a line of credit or multiple advance basis under the terms and conditions of this Agreement.

Agreement. The word "Agreement" means this Business Loan Agreement, as this Business Loan Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Business Loan Agreement from time to time.

Borrower. The word "Borrower" means Hastings Manufacturing Company, and all other persons and entities signing the Note in whatever capacity.

Collateral. The word "Collateral" means all property and assets granted as collateral security for a Loan, whether real or personal property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, collateral mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise.

Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto.

Event of Default. The words "Event of Default" mean any of the Events of Default set forth in this Agreement in the default section of this Agreement.

GAAP. The word "GAAP" means generally accepted accounting principles.

Grantor. The word "Grantor" means each and all of the persons or entities granting a Security Interest in any Collateral for the Loan, including without limitation all Borrowers granting such a Security Interest.

Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Loan.

Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note.

Hazardous Substances. The words "Hazardous Substances" means that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos.

Indebtedness. The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other indebtedness and costs and expenses for which Borrower is responsible under this Agreement or under any of the Related Documents.

Lender. The word "Lender" means Hastings City Bank, its successors and assigns.

Loan. The word "Loan" means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however evidenced, including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule attached to this Agreement from time to time.

Note. The word "Note" means the Note executed by Hastings Manufacturing Company in the principal amount of $2,000,000.00 dated July 14, 2003, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement.

Permitted Liens. The words "Permitted Liens" mean (1) liens and security interests securing indebtedness owed by Borrower to Lender; (2) liens for taxes, assessments, or similar charges either not yet due or being contested in good faith; (3) liens of materialmen, mechanics, warehousemen, or carriers, or other like liens arising in the ordinary course of business and securing obligations which are not yet delinquent; (4) purchase money liens or purchase money security interests upon or in any property acquired or held by Borrower in the ordinary course of

BUSINESS LOAN AGREEMENT
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business to secure indebtedness outstanding on the date of this Agreement or permitted to be incurred under the paragraph of this Agreement titled "Indebtedness and Liens"; (5) liens and security interests which, as of the date of this Agreement, have been disclosed to and approved by the Lender in writing; and (6) those liens and security interests which in the aggregate constitute an immaterial and insignificant monetary amount with respect to the net value of Borrower's assets.

Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Loan.

Security Agreement. The words "Security Agreement" mean and include without limitation any agreements, promises, covenants, arrangements, understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security Interest.

Security Interest. The words "Security Interest" mean, without limitation, any and all types of collateral security, present and future, whether in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law, contract, or otherwise.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED JULY 14, 2003.

BORROWER:

HASTINGS MANUFACTURING COMPANY


By: /s/Thomas J. Bellgraph

      Thomas J. Bellgraph, Vice President of Hastings
      Manufacturing Company

LENDER:


HASTINGS CITY BANK



By: /s/Dan King    Authorized Signer

EX-15

EXHIBIT 15

August 19, 2003

Hastings Manufacturing Company
Hastings, Michigan

We have reviewed, in accordance with standards established by the AICPA, the unaudited interim financial information of Hastings Manufacturing Company and subsidiaries for the periods ended June 30, 2003 and 2002 as indicated in our report dated August 8, 2003. Because we did not perform an audit, we expressed no opinion on that information. We are aware that our report referred to above, which was included in your quarterly report on Form 10-Q, is being incorporated by reference in a Registration Statement (File No. 333-74489).

We also are aware that our report referred to above, under Rule 436(c) under the Securities Act of 1933, is not considered a part of the registration statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of the Securities Act.

/s/BDO Seidman, LLP

Grand Rapids, Michigan

EX-31

EXHIBIT 31(a)

I, Mark R.S. Johnson, certify that:
1.	I have reviewed this quarterly report on Form 10-Q of Hastings Manufacturing Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(c)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 19, 2003	/s/ Mark R.S. Johnson
	Mark R.S. Johnson Chief Executive Officer

EX-31

EXHIBIT 31(b)

I, Thomas J. Bellgraph, certify that:
1.	I have reviewed this quarterly report on Form 10-Q of Hastings Manufacturing Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(c)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 19, 2003	/s/ Thomas J. Bellgraph
	Thomas J. Bellgraph Vice-President, Finance (Principal Financial and Accounting Officer)

EX-32

EXHIBIT 32

CERTIFICATION

Solely for the purpose of complying with 18 U.S.C. § 1350, each of the undersigned hereby certifies in his capacity as an officer of Hastings Manufacturing Company (the "Company") that the Quarterly Report of the Company on Form 10-Q for the quarter ended June 30, 2003 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in such report fairly presents, in all material respects, the financial condition of the Company at the end of such period and the results of operations of the Company for such period.

Dated:  August 19, 2003	/s/ Mark R.S. Johnson
	Mark R.S. Johnson Chief Executive Officer
Dated:  August 19, 2003	/s/ Thomas J. Bellgraph
	Thomas J. Bellgraph Vice-President, Finance (Chief financial officer)

A signed original of this written statement has been provided to Hastings Manufacturing Company and will be retained by Hastings Manufacturing Company and furnished to the Securities and Exchange Commission or its staff upon request.