<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED APRIL 3, 1999
OR
/ / TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD
FROM ______________ TO ______________
COMMISSION FILE NUMBER 0-13198
------------------------
MORTON INDUSTRIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
GEORGIA 38-0811650
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
1021 W. BIRCHWOOD, MORTON, ILLINOIS 61550
(Address of principal executive offices)
(309) 266-7176
(Registrant's telephone number, including area code)
------------------------
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 / /
<TABLE>
<CAPTION>
OUTSTANDING AS
OF
MAY 6, 1999
----------------
<S> <C>
Class A Common Stock, $.01 par value............................................................ 3,867,573
Class B Common Stock, $.01 par value............................................................ 200,000
</TABLE>
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<PAGE>
PART I--FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MORTON INDUSTRIAL GROUP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED APRIL 3, 1999 AND APRIL 4, 1998
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Net sales............................................................................. $ 39,359 $ 30,672
Cost of sales......................................................................... 33,703 25,956
------------ ------------
Gross profit.......................................................................... 5,656 4,716
------------ ------------
Operating expenses
Selling expenses.................................................................... 1,325 767
Administrative expenses............................................................. 3,482 2,395
------------ ------------
Total operating expenses.......................................................... 4,807 3,162
------------ ------------
Operating income.................................................................. 849 1,554
------------ ------------
Other income (expense)
Interest expense.................................................................... (1,582) (546)
Miscellaneous....................................................................... 7 22
------------ ------------
Total other income (expense)...................................................... (1,575) (524)
------------ ------------
Income (loss) before income taxes and cumulative effect of accounting change...... (726) 1,030
Income taxes.......................................................................... (46) 72
------------ ------------
Income (loss) before cumulative effect of accounting change........................... (680) 958
Cumulative effect of accounting change................................................ (1,074) --
------------ ------------
Net income (loss)..................................................................... $ (1,754) $ 958
------------ ------------
------------ ------------
Earnings (loss) per Share
Basic............................................................................... $(0.43) $0.24
------------ ------------
------------ ------------
Diluted............................................................................. $(0.43) $0.20
------------ ------------
------------ ------------
Weighted average number of shares
Basic............................................................................... 4,067,573 4,001,944
------------ ------------
------------ ------------
Diluted............................................................................. 4,422,215 4,687,917
------------ ------------
------------ ------------
</TABLE>
These consolidated condensed financial statements should be read only in
connection with the
accompanying notes to consolidated condensed financial statements.
2
<PAGE>
MORTON INDUSTRIAL GROUP, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
APRIL 3, 1999 AND DECEMBER 31, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
APRIL 3
1999 DECEMBER 31
(UNAUDITED) 1998
----------- ------------
<S> <C> <C>
ASSETS
Current Assets
Cash................................................................................. $ 736 $ 1,125
Accounts, notes and other receivables, less allowance for doubtful accounts of $289
in 1999 and $314 in 1998........................................................... 16,100 15,890
Inventories.......................................................................... 14,678 14,483
Prepaid expenses..................................................................... 1,094 1,263
Refundable income taxes.............................................................. 681 1,040
Deferred income taxes................................................................ 1,900 1,900
----------- ------------
Total current assets............................................................... 35,189 35,701
----------- ------------
Deferred income taxes.................................................................. 4,646 4,646
----------- ------------
Property, plant and equipment, net of accumulated depreciation......................... 45,482 45,644
----------- ------------
Other, primarily goodwill, at amortized cost........................................... 12,908 13,132
----------- ------------
Tax escrow funds....................................................................... 1,610 1,605
----------- ------------
$ 99,835 $ 100,728
----------- ------------
----------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Note payable to bank................................................................. $ 14,400 $ 11,700
Current installments of long-term debt, obligations under capital leases and
covenants payable.................................................................. 5,473 5,311
Accounts payable..................................................................... 16,490 16,995
Other accrued expenses............................................................... 4,192 4,137
----------- ------------
Total current liabilities.......................................................... 40,555 38,143
----------- ------------
Long-term debt, excluding current installments......................................... 51,664 53,281
----------- ------------
Other.................................................................................. 2,502 2,436
----------- ------------
Total liabilities...................................................................... 94,721 93,860
----------- ------------
Stockholders' Equity
Class A common stock................................................................. 39 39
Class B common stock................................................................. 2 2
Additional paid-in capital........................................................... 19,937 19,937
Retained earnings (deficit).......................................................... (14,864) (13,110)
----------- ------------
Total stockholders' equity......................................................... 5,114 6,868
----------- ------------
$ 99,835 $ 100,728
----------- ------------
----------- ------------
</TABLE>
These consolidated condensed financial statements should be read only in
connection with the
accompanying notes to consolidated condensed financial statements.
3
<PAGE>
MORTON INDUSTRIAL GROUP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
FOR THE QUARTERS ENDED APRIL 3, 1999 AND APRIL 4, 1998
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
--------- ----------
<S> <C> <C>
Net cash provided by (used in) operating activities......................................... $ (308) $ (6,379)
--------- ----------
Cash flows from investing activities
Capital expenditures...................................................................... (1,387) (2,097)
Carroll George Inc. acquisition........................................................... -- (5,568)
Cash received in merger with MLX Corp..................................................... -- 16,241
Other..................................................................................... -- 250
--------- ----------
Net cash provided by (used in) investing activities................................... (1,387) 8,826
--------- ----------
Cash flows from financing activities
Proceeds from issuance of note payable to bank............................................ 2,700 29,800
Principal payments on note payable to bank................................................ -- (19,811)
Cash received on exercised options........................................................ -- 358
Proceeds from issuance of long-term debt.................................................. -- 15,000
Principal payments on long-term debt...................................................... (1,455) (26,765)
Other..................................................................................... 61 (98)
--------- ----------
Net cash provided by (used in) financing activities................................... 1,306 (1,516)
--------- ----------
Net increase in cash........................................................................ (389) 931
Cash at beginning of period................................................................. 1,125 138
--------- ----------
Cash at end of period....................................................................... $ 736 $ 1,069
--------- ----------
--------- ----------
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest................................................................................ $ 1,475 $ 1,637
--------- ----------
--------- ----------
Income taxes............................................................................ $ 46 $ --
--------- ----------
--------- ----------
</TABLE>
These consolidated condensed financial statements should be read only in
connection with the
accompanying notes to consolidated condensed financial statements.
4
<PAGE>
MORTON INDUSTRIAL GROUP, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED APRIL 3, 1999 AND APRIL 4, 1998
(UNAUDITED)
(1) NATURE OF BUSINESS--The Company, operating through its subsidiaries, is a
contract manufacturer and supplier of high-quality fabricated sheet metal and
plastic components and subassemblies for construction, agricultural, and
industrial equipment manufacturers located primarily in the Midwestern and
Southeastern United States.
(2) INTERIM FINANCIAL DATA--The Consolidated Condensed Financial Statements at
April 3, 1999, and April 4, 1998, and for the quarters then ended are unaudited
and reflect all adjustments which are, in the opinion of management, necessary
for a fair presentation of the financial position, operating results, and cash
flows for the interim periods indicated. The Company's fiscal quarters end on a
Saturday (nearest to a quarter end) except for the fourth quarter which ends on
December 31. For the quarter ended April 3, 1999, there were 65 shipping days,
compared to 66 shipping days in the quarter ended April 4, 1998. Results of
operations for the interim periods are not necessarily indicative of the results
of operations for the full fiscal year. The consolidated condensed financial
statements should be read in connection with the consolidated financial
statements and notes thereto, together with management's discussion and analysis
of financial condition and results of operations of Morton Industrial Group,
Inc. contained in the Company's Form 10-K for the year ending December 31, 1998.
(3) INCOME TAXES--The Company has not recorded any federal income taxes for the
quarter ended April 3, 1999. The additional net operating loss carryforward
created in the quarter has been offset by an increase in the existing valuation
allowance. The Company has recorded a benefit for state income taxes.
(4) ACQUISITIONS--On March 30, 1998, the Company acquired all of the outstanding
shares of common stock of Carroll George Inc.
On April 8, 1998, the Company acquired all of the outstanding shares of
common stock of B&W Metal Fabricators, Inc.
On May 29, 1998, the Company acquired all of the outstanding shares of
common stock of Mid-Central Plastics, Inc.
On June 1, 1998 the Company acquired substantially all of the assets of SMP
Steel Corporation, a privately held company.
All of the above acquisitions have been described in more detail in previous
SEC filings, including the Company's Form 10-K for the year ending December 31,
1998.
Results of operations from the above acquisitions is included in the first
quarter, 1999 data contained in this Form 10-Q. No results of operations
resulting from these acquisitions for the first quarter, 1998 are reflected in
Consolidated Condensed Statements of Operations included in this Form 10-Q.
5
<PAGE>
MORTON INDUSTRIAL GROUP, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
FOR THE THREE MONTHS ENDED APRIL 3, 1999 AND APRIL 4, 1998
(UNAUDITED)
(5) The Company's inventory, in thousands of dollars, as of April 3, 1999, and
December 31, 1998, is summarized as follows:
<TABLE>
<CAPTION>
APRIL 3, DECEMBER 31,
1999 1998
--------- ------------
<S> <C> <C>
Raw materials, purchased parts and manufactured components........... $ 7,039 $ 7,161
Work-in-process...................................................... 2,882 2,299
Finished goods....................................................... 4,757 5,023
--------- ------------
Total.............................................................. $ 14,678 $ 14,483
--------- ------------
--------- ------------
</TABLE>
(6) EARNINGS PER SHARE--the following reflects the reconciliation of the
numerators and denominators of the earnings per share and the earnings per share
assuming dilution computations:
<TABLE>
<CAPTION>
QUARTER ENDED APRIL 3, 1999 QUARTER ENDED APRIL 4, 1998
------------------------------------ -------------------------------------
(LOSS) SHARES PER SHARE INCOME SHARES PER SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT (NUMERATOR) (DENOMINATOR) AMOUNT
---------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Basic income (loss)
per share........... $(1,754,000) 4,067,573 $ (.43) $ 958,000 4,001,944 $ .24
----- -----
Effect of dilutive
securities, stock
options............. 354,642 685,973
----------- -----------
Diluted income (loss)
per share........... 4,422,215 $ (.43) 4,687,917 $ .20
----------- ----- ----------- -----
</TABLE>
The first quarter, 1999 net (loss) includes a cumulative effect of
accounting change, net of state income tax benefit, of $(1,074). The following
table reflects the impact on basic (loss) per share of the cumulative effect of
accounting change:
<TABLE>
<S> <C>
(Loss) before cumulative effect of accounting change................. $ (.17)
Cumulative effect of accounting change............................... (.26)
---------
Net (loss)........................................................... $ (.43)
---------
</TABLE>
(7) SEGMENT REPORTING--The Company has two reportable segments, contract metal
fabrication and contract plastic fabrication. The contract metal fabrication
segment provides full service fabrication of parts and sub-assemblies for the
construction, agricultural and industrial equipment industry. The contract
plastic fabrication segment provides full-service vacuum formed and
injected-molded parts and sub-assemblies for the construction, agricultural and
industrial equipment industry. Prior to March 30,
6
<PAGE>
1998, the Company operated in only one reportable segment, contract metal
fabrication. The following segment data is for the first quarter, 1999:
<TABLE>
<CAPTION>
CONTRACT CONTRACT
METAL PLASTIC
FABRICATION FABRICATION TOTAL
----------- ----------- ---------
<S> <C> <C> <C>
Revenues from external customers.............................................. $ 26,939 $ 12,434 $ 39,359
Segment operating income...................................................... 675 174 849
</TABLE>
(8) SUBSEQUENT EVENT--On April 15, the Company acquired three manufacturing
facilities which produce plastic components for construction and industrial
original equipment manufacturers.. This transaction, described in more detail in
Form 8-K filed with the SEC on April 29, 1999, involved the issuance of
preferred stock by the Company, resulted in the payment of certain of the
Company's term debt at Harris Trust & Savings Bank, and resulted in a financing
package with General Electric Capital Corporation.
7
<PAGE>
PART II--OTHER INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis describes changes in the Company's
financial condition since December 31, 1998. The analysis of results of
operations compares the quarters ended April 3, 1999 and April 4, 1998.
RESULTS OF OPERATIONS
FIRST QUARTER, 1999 VERSUS FIRST QUARTER, 1998
Revenues for the first quarter, 1999 were $39.4 million compared to $30.7
million for the first quarter of 1998, an increase of $8.7 million, or 28.3%. As
described in note 4 of Part I, the Company made acquisitions during 1998 that
have provided incremental revenue during the first quarter, 1999, of
approximately $15.9 million. A revenue reduction of approximately $7.2 million
from the facilities owned in the first quarter of both years is attributable
primarily to a reduced demand for agricultural components that began late in
1998.
Sales to Deere & Company and Caterpillar Inc., were approximately 79% and
94% of the Company's revenues for the first quarters, 1999 and 1998,
respectively.
The Company's gross profits for the first quarter, 1999 increased by
approximately $.9 million versus the same three months in 1998, an increase of
20%. The overall gross profit percentage declined from 15.4% for the first
quarter of 1999 to 14.4% for the first quarter of 1999. The incremental gross
profits from acquisitions were approximately $2.1 million. For the locations
existing in the first quarters of both year, a decline in gross profit of
approximately $1.2 million and the gross profit percentage decline for the
quarter, resulted primarily from the reduced demand for agricultural components.
Selling and administrative expenses for the first quarter, 1999 amounted to
$4.8 million, or 12.2% of net sales compared to $3.2 million, or 10.3% of net
sales for the first quarter of 1998. The increase is related primarily to the
acquired entities. The increase in administrative expenses is attributable to
costs associated with the acquired entities, and approximately $575,000 of costs
written-off during the first quarter, 1999, consisting of costs associated with
a suspended high-yield financing and the discontinuance of negotiations to
acquire Midland Partners.
Interest expense for the first quarter, 1999 was $1.6 million, an increase
of $1.0 million compared to the first quarter of 1998. This increase was due
primarily to significantly higher average amounts of outstanding debt related to
the 1998 acquisitions, as well as a higher interest rate during the first
quarter of 1999.
The Company incurred a charge of $1,074, net of a state income tax benefit,
for the cumulative effect of adopting AICPA Statement of Position 98-5 related
to start-up activities and organization costs.
An state income tax benefit of approximately $46,000 was provided on a
pre-tax loss of $(.7) million. For the first quarter of 1998, income taxes of
approximately $72,000 were provided on pre-tax income of $1 million, for an
effective tax rate of approximately 7%, reflecting the use of net operating loss
carryforwards for Federal income tax purposes.
LIQUIDITY AND CAPITAL RESOURCES
The Company's consolidated working capital at April 3, 1999 was $(5.4)
million compared to $(2.4) million at December 31, 1998, the Company's preceding
fiscal year end. This represents a decrease in working capital of approximately
$3.0 million. This change was due primarily to the net loss for the quarter and
cash required for capital expenditures.
8
<PAGE>
On May 28, 1998, the Company entered into a new credit agreement with Harris
Trust and Savings Bank, as Agent. The credit agreement is a $90 million facility
with the following components: (i) a $35 million secured revolving credit
facility with a $10 million sub limit for letters of credit; (ii) a $25 million
secured term loan that matures 5 years from the date of the credit agreement
closing; and (iii) a $30 million secured term loan that matures 7 years from the
date of the credit agreement closing. Both term loans are fully amortized over
their respective terms with quarterly payments. The interest rates on the loans,
at the Company's option, are (i) Harris Trust and Savings Bank Rate (which is
the greater of the prime rate or the Federal Funds Rate plus .5%) or (ii) the
reserve adjusted LIBOR margin, fixed for 30, 60, 90 or 180 day period, plus an
interest rate margin that is determined by the Company's cash flow leverage
ratio. The proceeds under the facility have been used to refinance the then
existing indebtedness, to finance the acquisitions, and general corporate
purposes.
On March 26, 1999, the Company and Harris Trust and Savings Bank, as Agent,
entered into a First Amendment to the Credit Agreement dated May 29, 1998. The
purpose of the amendment was to adjust certain terms and conditions, effective
January 1, 1999, of the 1998 agreement.
On April 15, 1999, the Company retired $4.25 million of the Harris Trust and
Savings Bank term debt in connection with the financing of the acquisition
described in Part I, note 8.
At April 3, 1999, the Company had two fixed interest rate swap agreements
with a commercial bank (the "counter party"). The first agreement has a notional
principal amount of $12.4 million and a termination date of May 31, 2003. The
second agreement has a notional principal amount of $14.9 million and a
termination date of June 30, 2003. The notional principal amount declines over
the term of both agreements based upon a defined amortization schedule. The
counter party has the unilateral right to cancel both agreements as of June 30,
2001.
The Company incurred $1.4 million of capital expenditures during the first
three months, 1999, primarily for purchases of manufacturing equipment.
The Company currently anticipates making approximately $4.0 million of
capital expenditures during the remaining three quarters of calendar year 1999.
These expenditures will be funded from the cash flow provided by operations and
funds available under the Company's line-of-credit facility. Planned
expenditures include the purchase of fabrication equipment, including presses,
pressbrakes and other new equipment. The Company expects to re-evaluate its
capital expenditure budget from time-to-time to respond to changes in sales
levels, and the needs of its operating subsidiaries.
The Company believes that it can meet its current operating liquidity
requirements from cash generated from operations and borrowing under its
existing bank facility. As of April 3, 1999, the Company had additional
availability of approximately $4.1 million under its revolving credit facility.
As indicated in Part I, note 8, the Company acquired certain manufacturing
facilities from Worthington Custom Plastics, Inc. on April 15, 1999.
Concurrently, the Company entered into a financing agreement with General
Electric Capital Corporation (GECC). This agreement was filed as an exhibit to
Form 8-K filed on April 29, 1999. It is anticipated that the agreement with GECC
will provide the necessary long-term and revolving financing, and along with
cash flows from operations, will provide the necessary levels of liquidity to
operate the newly acquired operations.
YEAR 2000 READINESS
We rely upon computer hardware and software to maintain financial and
business records. All of our subsidiaries use computer and related technology in
their manufacturing processes, including embedded microprocessor technology. All
hardware, software and embedded technologies are susceptible to Year 2000
issues. Unresolved Year 2000 issues could make it difficult and costly for us
and our subsidiaries to conduct business.
9
<PAGE>
We have dedicated our information services staff to addressing various Year
2000 issues. In 1998 and 1999 we used these personnel as well as outside
consultants to conduct assessments of our technology and recommend steps to
attain Year 2000 readiness. These steps included establishing project
milestones, testing and certifying all micro-controllers, and upgrading or
replacing business system hardware, software and telephone equipment. Through
April 3, 1999, we have expended approximately $60,000 in our Year 2000 readiness
effort. We believe that our continuing efforts will achieve an acceptable level
of Year 2000 readiness no later than October 31, 1999. Certain minor remedial
efforts may extend into 2000, but we do not believe that these efforts will
adversely affect our ability to conduct business in 2000. We believe that our
additional Year 2000 expenditures will be approximately $330,000, with the more
significant costs relating to upgrading embedded microprocessor technology. We
do not believe that the total costs of Year 2000 readiness will be material to
our financial position or results of operations.
We are surveying our customers' and suppliers' Year 2000 readiness. Based on
responses received to date, there is no indication that our major customers and
suppliers will not be Year 2000 ready by the end of 1999. Our major customers
are large international corporations, and we are aware of their aggressive
efforts to become Year 2000 ready. We may choose from a broad range of suppliers
of our basic raw materials, and we believe that if one supplier proves not to be
Year 2000 ready, there will be others who are. If, however, these major
customers and suppliers do not become Year 2000 ready, or if other third parties
such as public utilities or financial institutions that serve us fail to achieve
readiness, we could experience material and adverse financial results.
Since we believe that we will be Year 2000 ready, and that our major
customers and suppliers will also be Year 2000 ready, we have not developed
contingency plans. If our beliefs prove incorrect or it otherwise becomes
evident that contingency plans are advisable, we will develop the appropriate
plans.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Baord issued Statement No.
133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. The company
expects to adopt the new Statement effective January 1, 2000. The Statement will
require the Company to recognize all derivatives on the balance sheet at fair
value. The Company does not anticipate that the adoptioin of this Statement will
have a significant effect on its results of operations or financial position.
FORWARD LOOKING STATEMENTS
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995. This Form 10-Q 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, but not limited to, statements related to the
Company's beliefs, expectations or intentions. These statements involve risk and
uncertainties that may cause the Company's actual results to differ
significantly from those expected, suggested or projected. Factors that could
contribute to such differences include, but are not limited to, competition with
other fabricators, the risks associated with the Company's acquisition strategy,
including unanticipated problems, difficulties in integrating acquired
businesses, diversion of management's attention from daily operations, possible
increased interest costs, and possible adverse effects on earnings resulting
from increased goodwill amortization, introduction of new technologies that
require significant capital expenditures and general economic and business
conditions.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
10
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
<TABLE>
<C> <S>
2. None.
3. None.
10. None.
11. The computation can be determined from this report.
15. None.
18. None.
19. None.
22. None.
23. None.
24. None.
27. Financial data schedule.
</TABLE>
(B) Reports on Form 8-K and Form 8-K/A
1. Filed Form 8-K on February 18, 1999, announcing the selection of KPMG
LLP to serve as the Company's independent accountants.
2. Filed Form 8-K on April 29, 1999, announcing the acquisition of three
manufacturing facilities from Worthington Custom Plastics, Inc. and a
financing agreement with General Electric Capital Corporation.
11
<PAGE>
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.
<TABLE>
<S> <C> <C>
Dated: May 18, 1999 MORTON INDUSTRIAL GROUP, INC.
By: /s/ THOMAS D. LAUERMAN
-----------------------------------------
Thomas D. Lauerman
VICE PRESIDENT OF FINANCE
</TABLE>
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> APR-03-1999
<CASH> 736
<SECURITIES> 0
<RECEIVABLES> 16,389
<ALLOWANCES> (289)
<INVENTORY> 14,678
<CURRENT-ASSETS> 35,189
<PP&E> 74,446
<DEPRECIATION> 28,964
<TOTAL-ASSETS> 99,835
<CURRENT-LIABILITIES> 40,555
<BONDS> 51,664
0
0
<COMMON> 41
<OTHER-SE> 5,073
<TOTAL-LIABILITY-AND-EQUITY> 99,835
<SALES> 39,359
<TOTAL-REVENUES> 39,359
<CGS> 33,703
<TOTAL-COSTS> 33,703
<OTHER-EXPENSES> 4,807
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,575
<INCOME-PRETAX> (726)
<INCOME-TAX> (46)
<INCOME-CONTINUING> (680)
<DISCONTINUED> 0
<EXTRAORDINARY> (1,074)
<CHANGES> 0
<NET-INCOME> (1,754)
<EPS-PRIMARY> (.43)
<EPS-DILUTED> (.43)
</TABLE>
