EX-13 7 c03848exv13.txt ANNUAL REPORT EXHIBIT 13 [MORTON LOGO] MORTON INDUSTRIAL GROUP, INC. 2005 ANNUAL REPORT [IMAGE] "...significantly adding value to our prestigious customers, the industries they serve and to each one of our lives as employees." Bill Morton Chairman, President and CEO LETTER TO SHAREHOLDERS [PICTURE] STATE OF THE COMPANY 2005 was a very important year in the history of Morton Industrial Group, Inc. and its operating company, Morton Metalcraft Co. The general economy was strong with the Construction, Agricultural, and Commercial capital goods industries we serve quite robust. Our prestigious customers, in particular Caterpillar Inc. and Deere & Co., achieved record shipping and profitability levels. Their strength throughout the year provided a stable environment from which Morton Metalcraft Co. could continue its quest to achieve operating excellence using 6 Sigma methodologies. The result was very good performance for our company as well. KEY ACCOMPLISHMENTS OF 2005 During 2004, we worked hard to add sufficient capacity to meet the dramatic increase in demand experienced by our customers. Throughout 2005, we were able to focus on creating efficiencies utilizing the new manpower, machines and materials we had put in place to support the higher levels of customer shipping requirements. While we were expanding our capacity for our customers, we were also achieving lower cost targets. While we were achieving improved safety results for our employees, we were also increasing their incentive compensation participation. While we were lowering our overall debt to financial institutions, we were investing significantly in new assets throughout our factories. From nearly all perspectives, Morton Metalcraft Co. had a very progressive year in 2005! OUTLOOK FOR 2006 Most industry experts suggest that the Construction and Commercial capital goods segments will remain strong in 2006, while the Agricultural segment appears to be softening modestly. Overall, our customer demand appears that it will be higher again this year. And, we are very excited that we have been able to introduce JLG Industries, Inc. as the newest member of our prestigious customer base during the early part of this year. During 2006 we intend to successfully meet our customers' delivery and cost objectives and to improve our quality performance even further. We intend to successfully meet our employees' safety and incentive compensation objectives and to improve the working environments of each of our factories even further. IN CONCLUSION To provide an appropriate capital structure to support our growth, we have announced our intention to take Morton Industrial Group, Inc. private in a transaction led by Brazos Private Equity Partners, LLC. The recapitalization (details included in our enclosed 10-K) will result in our shareholders receiving a significant premium over the historic trading values for our stock. Shareholders are encouraged to read all relevant documents that we have filed and will file with the Securities and Exchange Commission regarding this recapitalization. As many of you have been shareholders for years, please let me thank you for your loyal support. We appreciate the ownership investment you have made in our Company and extend our best wishes to each of you in your future endeavors. Finally, and most importantly, I'd like to express my appreciation to each of our dedicated employees. Together, you are doing your individual jobs better than many others who serve our marketplace. As a result, Morton Metalcraft Co. has become a company that stands above the performance of most of our competitors. By remaining focused on continuing to improve each aspect of our company's performance, we will again find that we are significantly adding value to our prestigious customers, the industries they serve and to each one of our lives as employees. May 2006 be another good year for everyone involved with Morton Metalcraft Co. /s/ WILLIAM D. MORTON [PHOTO OF WILLIAM D. MORTON] William D. Morton Chairman, President and Chief Executive Officer CELEBRATE 05 [PICTURE] OPTIMISTIC ECONOMIC OUTLOOK Morton Industrial Group, Inc. operates Morton Metalcraft Co., a highly respected contract fabrication supplier who has significant relationships with a diverse group of industrial original equipment manufacturers. The Construction, Agricultural, and Commercial capital goods industries served by Morton Metalcraft Co. strengthened significantly in 2005 and are projected to be even stronger in 2006. Our continued internal operating focus, using 6 Sigma methodologies, has allowed us to efficiently add the necessary capacity to respond to our improved customer order board. We celebrate with our customers the positive economic environment and look forward to the benefit they and our shareholders will have as a result. LOCATIONS MIDWEST AND SOUTHEAST OPERATIONS [ILLINOIS AND NORTH CALIFORNIA IMAGE] (PHOTO OF 1021 W. BIRCHWOOD (PHOTO OF DEROIT STREET LOCATION) AVENUE LOCATION) 1011 W. Birchwood Street 400 Detroit Avenue Morton, Illinois 61550 Morton, Illinois 61550 309.266.7176 309.263.3299 Fax: 309.263.1866 Fax: 309.263.1854 (PHOTO OF CORBIN ROAD (PHOTO OF SALEM ROAD (PHOTO OF E. WILLIAM LOCATION) LOCATION) STREET LOCATION) 534 Corbin Road 835 Salem Road 2080 E. Williams Street Honea Path, South Welcome, North Carolina 27374 Apex, North Carolina 27502 Carolina 29654 336.731.5700 919.363.1630 864.369.1800 Fax 336.731.8005 Fax 919.363.1103 Fax: 864.369.9022
STRATEGIC [PICTURE] Morton Metalcraft Co. is a manufacturer of highly engineered components and sub-assemblies for industrial original equipment manufacturers. Our products include metal fabrications and assemblies for a broad range of industry segments, which include the Construction, Agricultural and Commercial capital goods industries. Our superior competitive strengths have resulted in strong, focused relationships with our prestigious customer base. Our five manufacturing facilities are strategically located in the Midwestern and Southeastern United States in close proximity to our customers' manufacturing and assembly facilities. Our principal customers include Caterpillar Inc., Deere & Co., JLG Industries, Inc. and Kubota Corporation. EXPERIENCE BOARD OF DIRECTORS [PHOTO OF WILLIAM D. MORTON] William D. Morton Chairman, President and Chief Executive Officer Morton Industrial Group, Inc. and Morton Metalcraft Co. A University of Illinois Mechanical Engineering and Caterpillar Inc. Co-op graduate that led the 1989 buyout of Morton Metalcraft Co. from its founders and has overseen the growth of the business to its current level. The Morton Metalcraft Co./MLX merger formed Morton Industrial Group, Inc. At that time Mr. Morton, in addition to being President and CEO of Morton Metalcraft Co., became Chairman, President and CEO of Morton Industrial Group, Inc. He oversees the Company providing strategic leadership including selecting and managing Morton Metalcraft Co.'s key managers, participates actively with customers and our banking relationships and serves as Chairman of the Board of Directors. [PHOTO OF MARK W. MEALY] Mark W. Mealy Director Mark W. Mealy is a private investor. He was formerly Managing Director and Group Head of Mergers and Acquisitions at Wachovia Securities. Mr. Mealy became a director of Morton Metalcraft Co. in 1995 and upon conclusion of its merger into Morton Industrial Group, Inc. in 1998, a Morton Industrial Group, Inc. director. He is a member of the Compensation and Stock Option Committee and of the Audit Committee of the Board. [PHOTO OF FRED W. BROLING] Fred W. Broling Director Fred W. Broling retired as Chairman of the Board and Chief Executive Officer of US Precision Glass Company in 2002. Mr. Broling became a director of Morton Metalcraft Co. in 1989, and upon conclusion of its merger into Morton Industrial Group, Inc. in 1998, a Morton Industrial Group, Inc. director. He is a member of the Compensation and Stock Option Committee and of the Audit Committee of the Board. SENIOR MANAGEMENT TEAM [PHOTO OF BRIAN R. DOOLITTLE] Brian R. Doolittle Senior Vice President Sales & Engineering Morton Metalcraft Co. A Purdue University Business graduate that joined the Company in 1992 and serves as our Senior Vice President of Sales & Engineering. Mr. Doolittle's focus is on customer base development and engineering and his responsibilities include coordinating customer, employee and board event functions. [PHOTO OF BRIAN L. GEIGER] Brian L. Geiger Senior Vice President Operations Morton Metalcraft Co. Brian L. Geiger was the 9th employee at Morton Metalcraft Co. holding down numerous jobs until he was named a Vice President in 1979. Mr. Geiger serves as Senior Vice President of Operations for Morton Metalcraft Co. He oversees Morton Metalcraft Co.'s five manufacturing facilities in the Midwest and the Southeast. [PHOTO OF DARYL R. LINDEMANN] Daryl R. Lindemann Chief Financial Officer Morton Industrial Group, Inc. Senior Vice President Finance Morton Metalcraft Co. A University of Illinois Accounting graduate and CPA that joined the Company in 1989, Mr. Lindemann has functioned as Chief Financial Officer of Morton Metalcraft Co. since joining the Company handling all accounting, information technology and human resource functions and our relationships with our auditors and bankers. [PHOTO OF RODNEY B. HARRISON] Rodney B. Harrison Vice President Finance Morton Industrial Group, Inc. An Illinois State University Accounting graduate and CPA joined Morton Industrial Group, Inc. in 1998 serving as Director of Finance. Mr. Harrison was named Vice President of Finance and Treasurer of the Company in 2003. He is responsible for financial reporting including SEC compliance, our relationship with our independent auditors and financial institutions and oversees risk management matters for the Company. SHAREHOLDER INFORMATION [PICTURE] CORPORATE OFFICES Morton Industrial Group, Inc. 1021 W. Birchwood Street Morton, Illinois 61550 Phone: 309.266.7176 Fax: 309.263.1866 STOCK LISTING The common stock of Morton Industrial Group, Inc. is quoted on the OTC Market (OTC:MGRP). 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: Van Negris & Company 1120 Avenue of the Americas, Suite 4100 New York, New York 10036 Phone: 212.759.0290 Fax: 646.416.6318 Email: vn@vnegris.com INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 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. All of the Company SEC Filings can be viewed from the Company's website www.mortongroup.com and "clicking" SEC Offsite Filings. "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES REFORM LITIGATION 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 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; THE AVAILABILITY OF WORKING CAPITAL; 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. [MORTON LOGO] Morton Industrial Group, Inc. www.mortongroup.com 1021 W. Birchwood Street Morton, Illinois 61550 Phone: 309.266.7176 Fax: 309.263.1866 (C) 2006 Morton Industrial Group, Inc.