EX-13 3 a2074466zex-13.txt ANNUAL REPORT [MORTON LOGO] 1021 W. Birchwood Street Morton, Illinois 61550 P 309 263-263-3300 F 309 263-3216 www.mortongroup.com MORTON INDUSTRIAL GROUP, INC. [MORTON LOGO] [GRAPHIC] MORTON INDUSTRIAL GROUP, INC. FULL SERVICE CONTRACT MANUFACTURING MORTON INDUSTRIAL GROUP, INC. M I S S I O N Morton Industrial Group, Inc.'s mission is to own and operate highly respected contract manufacturing suppliers who have significant relationships with industrial original equipment manufacturers. POSITIONING FOR THE FUTURE Manufacturing has been challenged by the longest economic constriction since the Great Depression of 1928. Faced with economic uncertainty and global competitive pressures, American industry has responded by adopting new technology, lean manufacturing techniques and aligning with only the most efficient members of the supply network. Morton Industrial Group, Inc. has maintained and grown market share with our prestigious customer base because, like them, we have aggressively eliminated non-value added costs while pursuing new technologies and manufacturing techniques. [GRAPHIC] SHAREHOLDER INFORMATION "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This annual report contains "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements containing the words "anticipates," "believes," "intends," "estimates," "expects," "projects" and similar words. The forward looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from any future results expressed or implied by such forward looking statements. Such factors include, among others, the following: the loss of certain significant customers; the cyclicality of our construction and agricultural sales; risks associated with our acquisition strategy; general economic and business conditions, both nationally and in the markets in which we operate or will operate; competition; and other factors referenced in the Company's reports and registration statements filed with the Securities and Exchange Commission. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward looking statements. The forward looking statements contained herein speak only of the Company's expectation as of the date of this annual report. We disclaim any obligations to update any such factors or publicly announce the result of any revisions to any of the forward looking statements contained herein to reflect future events or developments. CORPORATE OFFICES Morton Industrial Group, Inc. 1021 W. Birchwood Street Morton, Illinois 61550 Phone: (309) 263-3300 Fax: (309) 263-3216 STOCK LISTING The common stock of Morton Industrial Group, Inc. is quoted on The Nasdaq Small Cap Market under the ticker symbol MGRP. ANNUAL MEETING The Annual Meeting of the Shareholders of Morton Industrial Group, Inc. will be held at the Bertha Frank Performing Arts Center, located at 350 N. Illinois Avenue in Morton, Illinois on Tuesday, June 11, 2002 at 10:00 a.m. (CDT). STOCK TRANSFER AGENT AND REGISTRAR For inquiries about stock transfers or address changes, Shareholders may contact: American Stock Transfer & Trust Co. 59 Maiden Lane New York, New York 10007 Phone: (800) 937-5449 INVESTOR RELATIONS Shareholders and prospective investors are welcome to call or write with questions or requests for additional information. Please direct inquiries to: Kehoe, White, Van Negris & Company, Inc. 766 Madison Avenue New York, New York 10021 Phone: (212) 396-0606 Fax: (212) 396-9025 INDEPENDENT AUDITORS KPMG LLP, Indianapolis, Indiana COUNSEL Husch & Eppenberger LLC Peoria, Illinois ANNUAL REPORT ON FORM 10-K Additional copies of this Annual Report and the Annual Report on Form 10-K may be obtained without charge by writing to the Company at the address listed above. These reports are also available to the public on request as required by the Securities and Exchange Commission (SEC). These statements have not been reviewed or confirmed for accuracy or relevance by the SEC. MORTON METALCRAFT CO. LOCATIONS [GRAPHIC] [MORTON LOGO] M O R T O N I N D U S T R I A L G R O U P , I N C . is a contract manufacturer of highly engineered components and sub-assemblies for industrial original equipment manufacturers. Its products include metal fabrications, thermoformed and injection molded components and assemblies for a broad range of industry segments which include the construction equipment, agricultural equipment, aerospace, home appliance, computer equipment and recreational vehicle industries. Morton's superior competitive strengths have resulted in strong, focused relationships with its prestigious customer base. Its twelve manufacturing facilities are strategically located in the Midwestern and Southeastern United States in close proximity to its customers' manufacturing and assembly facilities. Morton's principal customers include B/E Aerospace, Caterpillar Inc., Compaq Computer Corporation, Deere & Company, EMC Corp., General Electric Company and Honda. [GRAPHIC] 1021 W. Birchwood Street MIDWEST DIVISION Morton, Illinois 61550 Phone: (309) 266-7176 Fax: (309) 263-1866 400 Detroit Avenue Morton, Illinois 61550 Phone: (309) 263-3299 Fax: (309) 263-1854 2223 W. Altorfer Drive Peoria, Illinois 61615 Phone: (309)589-8550 Fax: (309)589-8581 2080 E. Williams Street SOUTHEAST DIVISION Apex, North Carolina 27502 Phone: (919) 363-1630 Fax: (919) 363-1103 835 Salem Road Welcome, North Carolina 27374 Phone: (336) 731-5700 Fax: (336) 731-8005 534 Corbin Road Honea Path, South Carolina 29654 Phone: (864) 369-1800 Fax: (864) 369-9022 MORTON CUSTOM PLASTICS LOCATIONS [GRAPHIC] [MORTON LOGO] 2360 Grand Avenue, PO Box 65337 MIDWEST DIVISION West Des Moines, Iowa 50265 Phone: (515) 225-6707 Fax: (515) 225-9673 7301 Caldwell Road SOUTHEAST MOLDING Harrisburg, North Carolina 28075 DIVISION Phone: (704) 454-1278 Fax: (704) 454-1311 130 Morton Drive, PO Box 378 St. Matthews, South Carolina 29135 Phone: (803) 655-6000 Fax: (803) 655-5678 5685 Hwy. 49 South, PO Box 579 FABRICATION DIVISION Harrisburg, North Carolina 28075 Phone: (704) 455-5191 Fax: (704) 455-5025 4287 Stough Road Concord, North Carolina 28075 Phone: (704) 455-5191 Fax: (704) 455-5025 655 Industrial Drive, PO Box 1160 CENTRAL DIVISION Lebanon, Kentucky 40033 Phone: (270) 692-0901 Fax: (270) 692-0411 OUR TWELVE MANUFACTURING FACILITIES IN THE MIDWESTERN AND SOUTHEASTERN UNITED STATES ARE STRATEGICALLY LOCATED NEAR OUR CUSTOMERS' MANUFACTURING AND ASSEMBLY FACILITIES. BOARD OF DIRECTORS WILLIAM D. MORTON, 54, served as Chairman, Chief Executive Officer and President of Morton Metalcraft Co. from 1989 until its merger into Morton Industrial Group, Inc. in 1998. At that time, he became Chairman, Chief Executive Officer and President of Morton Industrial Group, Inc. FRED W. BROLING, 66, served as Chairman of the Board and Chief Executive Officer of US Precision Glass Company since 1998. He served as Chairman of the Board and Chief Executive Officer of Plastics Specialties and Technologies, Inc. from 1983 to 1998 and PureTec Corporation from 1995 to 1998. Mr. Broling became a director of Morton Metalcraft Co. in 1989, and upon conclusion of the merger, a Morton Industrial Group, Inc. director and is a member of the Compensation and Stock Option Committee and is a member of the Audit Committee of the Board. MARK W. MEALY, 45, has been a Managing Director and currently serves as Head of Commercial & Industrial Corporate Finance and Mergers & Acquisition Group at Wachovia Securities, Inc. Mr. Mealy became a director of Morton Metalcraft Co. in 1995, and upon conclusion of the merger, a Morton Industrial Group, Inc. director. WILLEM F.P. DE VOGEL, 51, has been President since 1982 of Three Cities Research, Inc., a firm engaged in the investment and management of private capital. Mr. de Vogel became a Morton Industrial Group, Inc. director in 1998 and is a member of the Audit Committee of the Board. MANAGEMENT TEAM BRIAN R. DOOLITTLE, Vice President of Sales & Engineering, Morton Metalcraft Co. BRIAN L. GEIGER, Vice President of Operations, Morton Metalcraft Co. ROBERT J. JANECZKO, PH.D., President & Chief Operating Officer, Morton Metalcraft Co. HASKELL G. KNIGHT, President & Chief Operating Officer, Morton Custom Plastics THOMAS D. LAUERMAN, Chief Financial Officer, Treasurer and Vice President of Finance of Morton Industrial Group, Inc. DARYL R. LINDEMANN, Secretary, Morton Industrial Group, Inc. and Vice President of Finance & Support Services, Morton Metalcraft Co. WILLIAM D. MORTON, Chairman and Chief Executive Officer, Morton Industrial Group, Inc., Morton Metalcraft Co. and Morton Custom Plastics CRUGAR B. TUTTLE, General Manager and Vice President, Morton Custom Plastics TO OUR SHAREHOLDERS AND EMPLOYEES [PHOTO OF WILLIAM D. MORTON] After surviving the 1999 agricultural depression, the 2000 construction recession, and the 2001 general economic downturn, we found ourselves, our customers, and our country responding to the national crisis resulting from the 9/11/01 terrorist attacks on New York City and Washington D.C. and our corresponding "War on Terrorism". Customers have had, in almost all cases, reduced demand for their products. Overall, this economic softening has resulted in our 2001 revenues being off from 2000 by 15% instead of an expected increase of about the same amount. In the years prior to this current environment of uncertainty, (during 1998, 1999 and 2000), we expanded our production capacity in response to major customer opportunities and sought attractive strategic acquisitions. Today we find ourselves with excellent but underutilized assets which are well positioned to respond to the economic recovery anticipated in late 2002. Across our organization, we have made dramatic improvements in the efficiencies of our operations. The management structure has been flattened, staffing has been reduced from a peak of 3,000 full-time equivalents in early 2000 to a current level below 1,850. At the same time, facilities are being consolidated in both our metals and plastics businesses. Each of our factories has engaged outside resources to lean out their respective manufacturing activities with improvements at varying stages of implementation. We have utilized Value Added Supply Team (VAST) methodology to implement a results oriented cultural change in our Midwest locations, lowering our cost structures dramatically. We are now implementing 6 Sigma at all company locations which will continue to help drive us to world class standards during 2002 and beyond. Competing in a global economy will continue to be challenging in 2002. But we continue to manage for the long term and will emerge from the recession with a strong market position, a lower cost structure, a talented work force and a superior supplier network. The business strategies we are pursuing today will put us in a solid position to grow profitably and provide attractive returns for our stakeholders. We appreciate your support during this very difficult year. /s/ William D. Morton --------------------- William D. Morton Chairman and Chief Executive Officer