Maxco 10-Q 2002 Q1 Quarterly report

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

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

For the Quarter Ended June 30, 2001

Commission File Number 0-2762

MAXCO, INC.
(Exact Name of Registrant as Specified in its Charter)

Michigan	38-1792842
(State or other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)
1118 Centennial Way Lansing, Michigan	48917
(Address of principal executive offices)	(Zip Code)

Registrant’s Telephone Number, including area code:   (517) 321-3130

Indicate by check mark whether the registrant (1) has filed all annual, quarterly and other reports required to be filed by Section 12 or 15 (d) of the Securities Exchange Act of 1934 during the preceding twelve months and (2) has been subject to the filing requirements for at least the past 90 days.

Yes              No   

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

Class	Outstanding at July 31, 2001
Common Stock	3,101,195 shares

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TABLE OF CONTENTS

PART I

FINANCIAL INFORMATION

CONSOLIDATED BALANCE SHEETS
Maxco, Inc. and Subsidiaries

			June 30,			March 31,
			2001			2001
			(Unaudited)
			(in thousands)
ASSETS
CURRENT ASSETS
	Cash and cash equivalents		$	588		$	968
	Accounts and notes receivable, less allowance of
		$573,000 ($570,000 at March 31, 2001)		31,431			19,998
	Advances to affiliate			3,008			3,008
	Inventories—Note 2			6,675			6,493
	Prepaid expenses and other			1,082			795
	Income taxes receivable			948			1,343
TOTAL CURRENT ASSETS				43,732			32,605
MARKETABLE SECURITIES—LONG TERM—Note 3				449			1,511
PROPERTY AND EQUIPMENT
	Land			732			732
	Buildings			12,144			12,144
	Machinery, equipment, and fixtures			54,414			53,728
				67,290			66,604
	Allowances for depreciation			(21,467	)		(19,945	)
				45,823			46,659
OTHER ASSETS
	Investments			8,349			8,224
	Notes and contracts receivable and other, less allowance
		of $335,000		4,403			4,411
	Intangibles			3,629			3,753
	Deferred income taxes			603			287
				16,984			16,675
			$	106,988		$	97,450

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				June 30,			March 31,
				2001			2001
				(Unaudited)
				(in thousands)
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
	Notes payable—Note 8			$	42,914		$	17,088
	Accounts payable				23,980			19,632
	Employee compensation				2,621			2,741
	Taxes, interest, and other liabilities				2,160			1,906
	Current maturities of long-term obligations				1,298			3,480
TOTAL CURRENT LIABILITIES					72,973			44,847
LONG-TERM OBLIGATIONS, less current maturities					6,639			24,831
CONTINGENT LIABILITIES					955			938
STOCKHOLDERS’ EQUITY
	Preferred stock:
		Series Three: 10% cumulative redeemable, $60 face
			value; 14,784 shares issues and outstanding		678			678
		Series Four: 10% cumulative redeemable, $51.50 face
			value; 46,414 shares issues and outstanding		2,390			2,390
		Series Five: 10% cumulative redeemable, $120 face
			value; 6,648 shares issues and outstanding		798			798
		Series Six: 10% cumulative callable, $160 face
			value; 20,000 shares authorized, issued — none
	Common stock, $1 par value; 10,000,000 shares
		authorized, 3,101,195 shares issued and outstanding			3,101			3,101
	Net unrealized losses				(1,856	)		(1,140	)
	Retained earnings				21,310			21,007
					26,421			26,834
				$	106,988		$	97,450

See notes to consolidated financial statements

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CONSOLIDATED STATEMENTS OF OPERATIONS (Condensed)
Maxco, Inc. and Subsidiaries

		Three Months Ended June 30,
		2001			2000
		(Unaudited)			(Unaudited)
		(in thousands, except per share data)
Net sales		$	44,573		$	48,454
Costs and expenses:
	Cost of sales and operating expenses		35,441			37,914
	Selling, general and administrative		6,238			7,347
	Depreciation and amortization		1,730			1,479
			43,409			46,740
Operating Earnings			1,164			1,714
Other income (expense)
	Investment and interest income		434			162
	Interest expense		(1,108	)		(1,040	)
Income Before Federal Income Taxes and Equity
in Earnings of Affiliates			490			836
Federal income tax expense			173			309
Income Before Equity in Earnings of Affiliates			317			527
Equity in earnings (loss) of affiliates, net of tax			87			(325	)
Net Income			404			202
Less preferred stock dividends			(102	)		(102	)
Net Income Applicable to Common Stock		$	302		$	100
Net Income Per Common Share — Basic		$	0.10		$	0.03
Net Income Per Common Share — Assuming Dilution		$	0.10		$	0.03

See notes to consolidated financial statements

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Condensed)
Maxco, Inc. and Subsidiaries

			Three Months Ended June 30,
			2001			2000
			(Unaudited)			(Unaudited)
			(in thousands)
Operating Activities
Net Income			$	404		$	202
Adjustments to reconcile net income to net cash provided
	by (used in) operating activities:
		Depreciation and other non-cash items		1,643			1,908
		Changes in operating assets and liabilities		(7,310	)		2,010
Net Cash Provided By (Used In) Operating Activities				(5,263	)		4,120
Investing Activities
	Purchases of property and equipment			(774	)		(4,011	)
	Redemption of marketable securities						1,434
	Investment in affiliates						(794	)
	Distributions from affiliates						375
	Other			37			6
Net Cash Used In Investing Activities				(737	)		(2,990	)
Financing Activities
Net proceeds from (repayments on) lines of credit				7,000			(350	)
Proceeds from other debt obligations							1,246
Repayments on other debt obligations				(1,278	)		(754	)
Dividends paid on preferred stock				(102	)		(102	)
Net Cash Provided By Financing Activities				5,620			40
Increase (Decrease) in Cash and Cash Equivalents				(380	)		1,170
Cash and Cash Equivalents at Beginning of Period				968			542
Cash and Cash Equivalents at End of Period			$	588		$	1,712

See notes to consolidated financial statements

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Maxco, Inc. and Subsidiaries
June 30, 2001
(Unaudited)

NOTE 1 — Basis of Presentation and Significant Accounting Policies

The accompanying unaudited, condensed, consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation of the results of the interim periods covered have been included. For further information, refer to the consolidated financial statements and notes thereto included in Maxco’s annual report on Form 10-K for the year ended March 31, 2001.

The results of operations for the interim periods presented are not necessarily indicative of the results for the full year. Maxco’s sales and operating results have varied substantially from quarter to quarter. Net sales are typically lower in the third and fourth quarters. The most significant factors affecting these fluctuations are the seasonal buying patterns of the Company’s customers due to inclement weather and the reduced number of business days during the holiday season. In addition, the timing of acquisitions or the occasional sale of corporate investments may cause substantial fluctuations of operating results from quarter to quarter. Maxco expects its net sales and operating results to continue to fluctuate from quarter to quarter.

Certain other amounts in the consolidated financial statements have been reclassified to conform to the current presentation.

NOTE 2 — Inventories

The major classes of inventories, at the dates indicated were as follows:

	June 30,		March 31,
	2001		2001
	(in thousands)
Raw materials	$	454	$	531
Finished goods and work in progress		778		1,293
Purchased products for resale		5,443		4,669
	$	6,675	$	6,493

NOTE 3 — Marketable Securities

The Company classifies its investments in equity securities with readily determinable fair values as securities available for sale under FASB 115, Accounting for Certain Investments in Debt and Equity Securities. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported as a separate component of stockholders’ equity. Application of this method resulted in an unrealized loss, net of deferred tax, of approximately $1.8 million being reported as part of stockholders’ equity at June 30, 2001.

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NOTE 4 — Investment in Integral Vision, Inc. (Formerly Medar, Inc.)

The following table summarizes the operating results of Integral Vision, Inc., Maxco’s 25% owned affiliated company:

	Three Months Ended
	June 30,
	2001			2000
	(in thousands)
Net Sales	$	669		$	1,785
Gross Margin		(328	)		(132	)
Net Loss		(1,608	)		(1,854	)

At March 31, 2001, the Company adjusted the carrying value of its investment in Integral Vision, Inc. to its estimated fair value as the Company determined that the investment was impaired. Since management’s estimate of the fair value of this investment at June 30, 2001 has not changed, the Company did not recognize any gain or loss on the investment.

NOTE 5 — Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:

			Three Months Ended June 30,
			2001			2000
			(in thousands, except per share data)
NUMERATOR:
	Net Income		$	404		$	202
	Preferred stock dividends			(102	)		(102	)
Numerator for basic and diluted earnings per
	share—income available to common stockholders			302			100
DENOMINATOR:
	Denominator for basic earnings per share—weighted
		average shares		3,101			3,101
Effect of dilutive securities:
	Employee stock options			—			6
Dilutive potential common shares				—			6
Denominator for diluted earnings per share—adjusted
	weighted average shares and assumed conversions			3,101			3,107
BASIC EARNINGS PER SHARE			$	0.10		$	0.03
DILUTED EARNINGS PER SHARE			$	0.10		$	0.03

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NOTE 6 — Comprehensive Income

The components of comprehensive income for the three months ended June 30, 2001 and 2000 are as follows:

	Three Months Ended
	June 30,
	2001			2000
	(in thousands)
Net earnings	$	404		$	202
Unrealized losses on marketable securities		(701	)		(355	)
Unrealized loss on swap agreement		(15	)		—
	$	(312	)	$	(153	)

The components of accumulated comprehensive income, net of related tax at June 30, 2001 and March 31, 2001 are as follows:

	June 30,			March 31,
	2001			2001
	(in thousands)
Unrealized losses on marketable securities	$	(1,841	)	$	(1,140	)
Unrealized loss on swap agreement		(15	)		—

NOTE 7 — INDUSTRY SEGMENT INFORMATION

The following summarizes Maxco’s industry segment information:

			June 30,		March 31,
			2001		2001
			(in thousands)
Identifiable assets:
	Construction supplies		$	45,037	$	32,759
	Heat treating			33,130		34,714
	Packaging products			5,540		5,538
	Corporate and other			14,932		16,215
	Investments and advances			8,349		8,224
		Total Identifiable Assets	$	106,988	$	97,450

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NOTE 7 — INDUSTRY SEGMENT INFORMATION – Continued

			Three Months Ended
			June 30,
			2001			2000
			(in thousands)
Net sales:
	Construction supplies		$	32,133		$	33,891
	Heat treating			9,038			10,361
	Packaging products			3,320			4,120
	Corporate and other			82			82
		Total Net Sales	$	44,573		$	48,454
Operating earnings (loss):
	Construction supplies		$	907		$	1,631
	Heat treating			750			904
	Packaging products			(44	)		(105	)
	Corporate and other			(449	)		(716	)
		Total Operating Earnings	$	1,164		$	1,714
Depreciation and amortization expense:
	Construction supplies		$	741		$	565
	Heat treating			731			605
	Packaging products			181			192
	Corporate and other			77			117
		Total Depreciation and Amortization Expense	$	1,730		$	1,479
Capital expenditures:
	Construction supplies		$	329		$	1,431
	Heat treating			415			2,527
	Packaging products			30			53
	Corporate and other			—			—
		Total Capital Expenditures	$	774		$	4,011

Accounting policies of the business segments are consistent with those described in the summary of significant accounting policies (see Note 1).

Identifiable assets are those assets that are used in Maxco’s operations in each industry segment. Corporate assets are principally cash, notes receivable, investments, and corporate office properties.

Maxco has no significant foreign operations, export sales, or inter-segment sales.

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NOTE 8 — DEBT

The Company is currently in default of certain covenants as required by loan agreements with its principal lenders. As such the outstanding balance on these borrowings ($41.3 million at June 30, 2001) has been classified as current in the accompanying financial statements. However, there are ongoing negotiations with the lenders to obtain waivers of default and amendments to these covenants. Management anticipates that the negotiations will be completed by September 2001.

The accompanying financial statements have been prepared on the basis that the Company will continue as a going concern. The Company’s ability to meet its short term and long term debt service and other obligations (including compliance with financial covenants) will be dependent upon its future operating performance and the successful renegotiation of its credit facilities. These dependencies will be subject to financial, business and other factors, certain of which are beyond the Company’s control, such as prevailing economic conditions. There can be no assurance that, in the event the Company were to require additional financing, such additional financing would be available on satisfactory terms. The Company believes that funds generated by its operations and funds available under its credit facilities, will be sufficient to finance short term capital needs, as well as to fund existing operations for the foreseeable future. However, in the event that the Company is unable to successfully renegotiate its credit facilities, the Company has liquid long term equity investments that could be used to meet its short term and long term debt service requirements and fund operating cash flows.

NOTE 9 — FEDERAL INCOME TAXES

The Company’s effective tax rate varied from the statutory rate of 34% due to certain expenses, which are not deductible for tax purposes.

NOTE 10 — INTEREST RATE SWAP AGREEMENTS

The Company uses interest rate swap agreements to reduce the risk of rising interest rates. Statement of Financial Accounting Standards No. 133 (SFAS No. 133),Accounting for Derivative Instruments and Hedging Activities,was adopted by the Company effective April 1, 2001. SFAS No. 133 requires that all derivatives be recognized on the balance sheet at fair value.

The adoption of Statement No. 133 on April 1, 2001 resulted in a pre-tax charge of $42,000 in other comprehensive income. During the quarter ended June 30, 2001, changes in the fair value of the interest rate swap agreement were recognized in other comprehensive income and amounted to a $27,000 gain. The Company has recorded a $15,000 liability on the balance sheet to record the fair value of the swap agreements at June 30, 2001.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Maxco, Inc. and Subsidiaries
June 30, 2001

MATERIAL CHANGES IN FINANCIAL CONDITION

Cash used in operating activities amounted to $5.3 million for the quarter. Individual working capital component levels increased over the March 31, 2001 level, primarily from the increased sales activity by the Company’s construction supplies unit (Ersco) over the traditional slower fourth quarter of the prior year.

Cash was used in investing activities during the quarter to purchase additional equipment for Maxco’s heat-treating unit (Atmosphere Annealing), and Ersco.

Net proceeds from lines of credit were used primarily to fund the increase in working capital components.

At June 30, 2001, the Company classified certain of its borrowings as short term due to the Company being in default of certain covenants. However, there are ongoing negotiations with the lenders to obtain waivers of default and amendments to these covenants. Management anticipates that these negotiations will be completed by September 2001.

The Company’s ability to meet its short term and long term debt service and other obligations (including compliance with financial covenants) will be dependent upon its future operating performance and the successful renegotiation of its credit facilities. These dependencies will be subject to financial, business and other factors, certain of which are beyond the Company’s control, such as prevailing economic conditions. There can be no assurance that, in the event the Company were to require additional financing, such additional financing would be available on satisfactory terms. The Company believes that funds generated by its operations and funds available under other credit facilities will be sufficient to finance short term capital needs, as well as to fund existing operations for the foreseeable future. However, in the event that the Company is unable to successfully renegotiate its credit facilities, the Company has liquid long term equity investments that could be used to meet its short term and long term debt service requirements and fund operating cash flows.

At June 30, 2001, the 2,240,605 shares of Integral Vision (formerly Medar) common stock that Maxco owns had an aggregate market value of approximately $403,000 ($605,000 at August 9, 2001). Maxco’s investment in Integral Vision is reflected in Maxco’s financial statements under the equity method for all periods presented, as the Company owns greater than 20% of Integral Vision’s outstanding stock.

At June 30, 2000, the 249,230 shares of Provant common stock that Maxco owns had an aggregate market value of approximately $449,000 ($406,000 at August 9, 2001). Maxco’s investment in Provant is reflected in Maxco’s financial statements under the cost method as an available-for-sale security as the Company owns less than 20% of Provant’s outstanding stock.

The Company is currently in negotiations on a sale and leaseback of equipment for Ersco. This transaction will generate approximately $3.0 million in cash that will be used to provide additional working capital for Ersco. This transaction is expected to close in the second quarter.

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MATERIAL CHANGES IN RESULTS OF OPERATIONS
Three Months Ended June 30, 2001 Compared to 2000

Net sales decreased to $44.6 million compared to $48.5 million in last year’s first quarter. First quarter results reflect operating earnings of $1.2 million compared to $1.7 million for the comparable period in 2000. Net income was $404,000 or $.10 per share assuming dilution compared to last year’s $202,000 or $.03 per share assuming dilution.

Sales and operating earnings for the three months ending June 30, 2001 and 2000 by each of the company’s segments were as follows:

	Three Months Ended					Three Months Ended
	June 30, 2001					June 30, 2000
			Operating					Operating
			Earnings					Earnings
	Sales		(Loss)			Sales		(Loss)
			(in thousands)
Construction supplies	$	32,133	$	907		$	33,891	$	1,631
Heat treating		9,038		750			10,361		904
Packaging products		3,320		(44	)		4,120		(105	)

The decrease in sales at the Company’s construction supplies unit (Ersco) was due to reduced sales from inventory as a result of a slower than usual seasonal start-up coming out of the severe winter and a slower economy compared to the first quarter of the prior year. To a lesser extent, product sales to highway contractors on a direct shipment basis from the manufacturers increased over the prior year quarter. The decrease in sales at the Company’s heat treating unit (Atmosphere Annealing) was due to a slowdown in the automotive industry. Lower sales at its packaging products unit (Pak Sak) were primarily due to the general economic slowdown.

Consolidated gross profit (net sales less cost of sales and operating expenses) decreased to $9.1 million or 20.5% of sales from $10.5 million or 21.8% of sales. The decrease in gross profit was primarily the result of the reduced sales from inventory at Ersco. The increased proportion of sales at Ersco on a direct shipment basis, which generally have a lower margin compared to sales from inventory, was the primary reason for the reduction in the overall margin. Although margin as a percentage of sales improved at Atmosphere Annealing and Pak Sak, gross profit decreased due to lower sales volume.

Selling, general, and administrative expenses (SG&A) decreased $1.1 million to $6.2 million from $7.3 million. The decrease primarily resulted at Ersco due to reduced selling expenses and reduced costs as a result of an expense reduction program.

Depreciation and amortization expense for the three months ended June 30, 2001 increased as a result of the additional depreciation resulting from the purchases of property and equipment by Atmosphere Annealing and Ersco since the first quarter of the prior year.

As a result of the above, operating earnings decreased to approximately $1.2 million from $1.7 million in last year’s comparable period.

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Net interest expense increased from the prior year quarter due to additional short-term and long-term borrowings, the proceeds of which were used for additional purchases of property and equipment. In the first quarter, the Company recognized approximately $273,000 in investment income from the proceeds from the sale of stock.

Equity in earnings of affiliates increased approximately $412,000 from a loss of $325,000 to income of $87,000. This was primarily the result of the Company’s investment in Integral Vision, Inc. At March 31, 2001, the Company adjusted the carrying value of its investment in Integral Vision, Inc. to its estimated fair value as the Company determined that the investment was impaired. Since management’s estimate of the fair value of this investment at June 30, 2001 has not changed, the Company did not recognize any gain or loss on the investment. Maxco’s share of Integral Vision’s net loss for the three months ended June 30, 2000 was $460,000.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company’s variable interest expense is sensitive to changes in the general level of United States interest rates. Some of the Company’s interest expense is fixed through long-term borrowings to mitigate the impact of such potential exposure. Additionally, the Company entered into an interest rate swap agreement based on a notional amount of $5.0 million to manage its exposure to interest rate changes. The swap involves the exchange of fixed and variable interest payments without changing the notional principal amount. The Company had total outstanding variable rate short and long term borrowings of $44.8 million at June 30, 2001. A 1% increase from the prevailing interest rates at June 30, 2001 on the unhedged variable rate portion of the Company’s short and long-term borrowings would increase interest expense on an annualized basis by approximately $409,000 based on principal balances at June 30, 2001.

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PART II

OTHER INFORMATION

Item 1.	Legal Proceedings
	None
Item 2.	Changes in Securities
	None
Item 3.	Defaults Upon Senior Securities
	The Company is currently in default of certain covenants as required by its $18 million and $5 million lines of credit with its two principal lenders.
Item 4.	Submission of Matters to a Vote of Security Holders
	None
Item 5.	Other Information
	None
Item 6(a)	Exhibits
3	Restated Articles of Incorporation are hereby incorporated from Form 10-Q dated February 13, 1998.
3.1	By-laws are hereby incorporated by reference from Form S-4 dated November 4, 1991 (File No. 33-43855).
4.2	Resolution establishing Series Three Preferred Shares is hereby incorporated by reference from Form S-4 dated November 4, 1991 (File No. 33-43855).
4.3	Resolution authorizing the redemption of Series Two Preferred Stock and establishing Series Four Preferred Stock and the terms of the subordinated notes is hereby incorporated by reference from Form 10-Q dated February 14, 1997.
4.4	Resolution establishing Series Five Preferred Shares is hereby incorporated by reference from Form 10-K dated June 5, 1997.
4.5	Resolution establishing Series Six Preferred Shares is hereby incorporated by reference from Form 10-K dated June 23, 1999.

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10.1	Incentive stock option plan adopted August 15, 1983, including the amendment (approved by shareholders August 25, 1987) to increase the authorized shares on which options may be granted by two hundred fifty thousand (250,000), up to five hundred thousand (500,000) shares of the common stock of the company is hereby incorporated by reference from the registrant’s annual report on Form 10-K for the fiscal year ended March 31, 1988.
10.9	Asset purchase agreement — Wright Plastic Products, Inc. is hereby incorporated by reference from Form 10-Q dated November 14, 1996.
10.10	Amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated September 30, 1996 is hereby incorporated by reference from Form 10-Q dated November 14, 1996.
10.11	Asset purchase agreement for the purchase of Atmosphere Annealing, Inc. is hereby incorporated by reference from Form 8-K dated January 17, 1997.
10.12	Asset purchase agreement — Axson North America, Inc. is hereby incorporated by reference from Form 10-Q dated February 14, 1997.
10.13	Loan agreement between Michigan Strategic Fund and Atmosphere Annealing, Inc. is hereby incorporated by reference from Form 10-Q dated February 13, 1998.
10.14	Loan agreement between LAM Funding, L.L.C. and borrower including Guaranty-Maxco, Inc. is hereby incorporated by reference from Form 10-Q dated February 13, 1998.
10.15	First Amendment to amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated August 1, 1997, is hereby incorporated by reference from Form 10-K dated June 24, 1998.
10.16	Second amendment to amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated June 24, 1998 is hereby incorporated by reference from Form 10-K dated June 24, 1998.
10.17	Third amendment to amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated September 24, 1998, is hereby incorporated by reference from Form 10-Q dated November 12, 1998.
10.18	Maxco, Inc. 1998 Employee Stock Option Plan is hereby incorporated by reference from Form 10-Q dated November 12, 1998.
10.19	Fourth amendment to amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated June 22, 1999, is hereby incorporated by reference from Form 10-K dated June 23, 1999.
10.20	Fifth amendment to amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated September 1, 1999 is hereby incorporated by reference from Form 10-Q dated November 12, 1999.

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10.21	Sixth amendment to amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated July 12, 2000 is hereby incorporated by reference from Form 10-K dated July 14, 2000.
10.22	Seventh amendment to amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated January 11, 2000 is hereby incorporated by reference from Form 10-Q dated February 14, 2001.
10.23	Eighth amendment to amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated March 19, 2001 is hereby incorporated by reference from Form 10-K dated July 13, 2001.
Item 6(b)	Reports on Form 8-K
	None

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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.

		MAXCO, INC.
Date:	August 14, 2001	/S/ VINCENT SHUNSKY
		Vincent Shunsky, Vice President-Finance
		and Treasurer (Principal Financial and
		Accounting Officer)

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