SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]

FOR THE FISCAL YEAR ENDED MARCH 31, 1996

COMMISSION FILE NUMBER 0-9607

CENTRUM INDUSTRIES, INC.
------------------------
(Exact name of registrant as specified in its charter)

DELAWARE 45-0341067
- ------------------------------- -------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

WATERPLACE SOUTH, 6135 TRUST DRIVE, SUITE 104A, HOLLAND, OH 43528
- ----------------------------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (419) 868-3441
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
- ----------------------------- ------------------------
NONE NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

COMMON CAPITAL STOCK, $.05 PAR VALUE
- --------------------------------------------------------------------------------
(TITLE OF CLASS)

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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. []

Aggregate market value of voting stock held by non-affiliates of the registrant
at May 31, 1996 (computed by reference to actual trades during the preceding
12-month period): $8,832,486.

Number of shares outstanding of common stock, $.05 par value, as of May 31,
1996: 6,508,527.

CENTRUM INDUSTRIES, INC.
ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED MARCH 31, 1996

TABLE OF CONTENTS

PART I PAGE

Item I. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

PART II

Item 5. Market for Centrum's Common Stock and Related Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . 11

Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . 13

Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . . . 21

PART III

Item 10. Directors and Executive Officers of Centrum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Item 12. Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . . . . . . . . . . . . . . . 52

Item 13. Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . 53

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PART I
ITEM 1. BUSINESS
(a) General Development of Business

FORMATION AND HISTORY OF THE HOLDING COMPANY AND THE BOARD OF DIRECTORS

Centrum Industries, Inc. ("Centrum", the "Company" or the "Company and its
subsidiaries") is a Delaware corporation based, since 1989, in Northwest, Ohio,
which has undergone considerable change over the past five years. (In this
document, years reflect the fiscal year ended March 31, unless otherwise
noted.)

Centrum was incorporated in North Dakota in 1977 under the name "Energy
Resources of North Dakota, Inc." From 1977 until 1989, Centrum's principal
business was the purchase and resale of oil and gas leases and the exploration
and development of oil and gas properties. In 1988, when Energy Resources
Limited Partnership acquired 1,175,000 shares (61.9%) of Centrum's issued and
outstanding common stock, the reorganized Board of Directors determined it
would be in the shareholders' best interest to change Centrum's business
strategy and to move Centrum's principal place of business to Sylvania, Ohio.
In August 1988, Centrum sold all of its producing interests in oil and gas to
Aspen Exploration Corporation ("Aspen") in exchange for 850,000 shares of Aspen
common stock. In December 1994, Centrum sold its shares in Aspen stock for
$34,000.

Since 1989, Centrum has operated as a holding company, with ownership, from
time to time, of both portfolio securities and stock of operating companies.

In November 1990, Centrum's shareholders approved the recapitalization and
reincorporation of Centrum in the State of Delaware. In the merger, the
shareholders of Energy Resources of North Dakota and old Centrum received one
share of common stock of new Centrum in exchange for each share of common stock
held.

In September 1992, Centrum's Board of Directors adopted a restructuring plan.
In October 1992, William C. Davis was elected Chairman of the Board and Chief
Executive Officer and George H. Wells was elected President and Chief Operating
Officer by the Board. The Board also appointed Mr. Wells to the Board of
Directors. Mr. Wells has significant experience operating large manufacturing
corporations, having served as a senior executive with National Forge
Corporation and Doehler-Jarvis for a combined period of 12 years.

In May 1995, Mr. Wells was appointed President and Chief Executive officer.
Mr. Davis was named Vice President.

HISTORY OF ACQUISITIONS - CONTINUING OPERATIONS

In August 1990, Centrum formed a wholly-owned subsidiary known as LaSalle
Exploration, Inc. ("LaSalle"), which acquired an 87.5% leasehold interest for
all mineral rights in a 308.5 acre plot located in Chatham Township in Medina
County, in Northeastern Ohio (the "Techno-Chatham Project") for a purchase
price of $78,691. LaSalle also purchased, as part of the same transaction,
$21,309 in drilling and miscellaneous equipment. LaSalle has been and is
continuing to explore for oil through a shallow sand waterflood project on
eight acres of land at the Techno-Chatham Project. However, this project has
been essentially dormant since March 1992.

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4

In November 1990, LaSalle entered into a management contract for the
Techno-Chatham Project with F. Michael Syring, which resulted in the March 1992
issuance of 70,000 shares of Centrum's participating preferred stock with a
liquidation value of $10 per share. The preferred shares entitle the holders
to participate in a 20% net working interest in the Techno-Chatham project once
Centrum's gross investment is recovered.

On May 17, 1993, all the outstanding common stock of Micafil, Inc. "(Micafil"),
a Delaware corporation, was purchased by Centrum from Asea Brown Boveri, Inc.
("ABB"). Micafil designs and manufacturers armature winding machines for
motors primarily used in the automotive industry and in industrial
applications. The purchase method of accounting was used to account for this
business combination. The total purchase price of approximately $1,750,000 was
paid in the form of two promissory notes issued to the seller. The terms of
the notes were as follows: a promissory note in the amount of $1,650,000 plus
interest at 8%, principal and interest payable in 60 monthly installments of
$33,456; and a promissory note in the amount of $100,000 plus interest at 8%
with a $52,533 principal interest payment due December 30, 1993 and the final
principal and interest payment due March 31, 1994. The principal amount of the
second note included $84,000 relating to a five year non-competition agreement
with the seller. During 1995, the Company repaid the remainder of the $100,000
note and reached an agreement to restructure the $1,650,000 note.

On September 2, 1993, the Company purchased the stock of American Handling,
Inc. ("AH") through a subsidiary merger. AH is engaged in the business of
designing, manufacturing and installing material handling equipment. AH became
a wholly-owned subsidiary of Centrum, and holders of issued and outstanding
shares of AH common stock received an aggregate amount of 2,681,620 shares of
Centrum's restricted common stock with a fair market value, estimated by the
management of Centrum, of $2,294,000. Additionally, four employees of AH
converted existing options in AH for 241,828 shares of Centrum's common stock
having an option exercise price of $.372 per share.

On March 8, 1996, the Company purchased all of the outstanding stock of McInnes
Steel Company ("McInnes") through a subsidiary merger. McInnes, with operating
subsidiaries located in Northwestern Pennsylvania, produces open die steel
forgings for the power generation, compressor and other industrial markets.
McInnes also produces seamless steel rolled rings for bearing and special
machine manufacturers and nonferrous castings for the glass container
manufacturers and pump and valve industries. Sales of McInnes' products are
made to both domestic and international customers. The purchase method of
accounting was used to account for this business combination. The total
purchase price of approximately $12.3 million was financed primarily in the
form of new debt agreements and the sale of the Company's common stock. The
first agreement consists of a promissory note issued to a commercial bank for
$2,850,000, payable monthly at 1.25% above the prime rate, and a line-
of-credit for the lesser of $15,500,000 or "borrowing base," as defined in the
agreement. The second debt agreement is a Note and Warrant Purchase Agreement
which provides for $2,500,000 aggregate principal amount of 11% convertible
debt with warrants for the purchase of 1,250,000 shares of the Company's common
stock for $2 per share. Additional funds to finance the acquisition were
obtained through the sale of 485,500 shares of the Company's common stock for
net proceeds of $637,050. The remaining funds were provided by the issuance of
$1,239,000 aggregate principal amount of term notes which bear interest at 2%
per month to certain of the Company's shareholders and directors.
Additionally, two employees of McInnes received options to purchase 110,333
shares of Centrum's common stock for $.64 per share in exchange for certain
options to purchase McInnes stock.

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Centrum's management has been exploring other potential acquisitions of
manufacturing companies consistent with its long-term strategy.

History of Acquisitions - Discontinued Operations

In March 1989, Centrum formed a wholly-owned subsidiary known as J.R.'s
Marketplace, Inc. ("JR's"), which owned and operated a retail supermarket
located in Middletown, Ohio. The assets were purchased from Cardinal Foods,
Inc. on April 3, 1989. Due to negative economic changes in Middletown and
increased competition, JR's did not generate sufficient cash flow to cover
operations and expenses. In May 1991, Centrum sold all of JR's assets to
Cardinal Foods, Inc. and JR's ceased to do business.

In May 1991, a wholly-owned subsidiary, Acme Quality Products, Inc. ("Acme"),
was incorporated under the laws of Delaware. Such subsidiary purchased the
tire hardware division of Acme Quality Products, Inc., a Michigan corporation.
The assets were purchased for cash, notes and the assumption of liabilities
aggregating approximately $3.5 million. The assets acquired included the
machinery and equipment used in the manufacture of tire hardware for the
automotive aftermarket. Primary products included tire gauges, tire valves,
valve extensions, fitting chucks and tire repair products. On July 31, 1992,
Acme voluntarily surrendered its assets to the secured creditor and ceased
operations.

(b) Financial Information about Industry Segments

Information relating to the amounts of revenue, operating profit or loss and
identifiable assets attributable to each of the Company's industry segments for
1994-1996 is included in Note 13 to the Consolidated Financial Statements.

Oil and Gas
LaSalle is engaged in the Techno-Chatham Project on eight of its 308.5 acres
under lease in Medina County, in Northeastern Ohio. This waterflood project
involves four injection wells and four recovery wells. As of this date, the
project has not progressed beyond the pilot stage. LaSalle has no full-time
employees.

During 1994, due to continued uncertainties regarding the timing of future
commercial production and potential future cash flows, management determined
that the aforementioned factors have resulted in economic impairment. As a
result, management recorded a $240,338 provision to write the properties down
to their estimated fair market value.

Motor Production Systems
Micafil designs and manufactures armature and stator winding machines and
complete production systems for small fractional horsepower electric motors
used primarily in the automotive and consumer durable goods markets. Micafil's
sales are made directly to the end users of the products. In addition to the
sale of machines and machining lines, revenue is also generated from rebuilding
and retrofitting existing machines and selling replacement parts. Micafil's
business is not dependent on any single customer, although Micafil services a
relatively small number of customers in a given year, only some of which may
place orders in any year.

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6

The material used in the production process generally consists of steel and
aluminum and purchased electrical and mechanical components such as valves,
cylinders and motors. Micafil has local sources for its production material
and there is ready availability for all components although some items require
longer lead time due to machining or special order items.

Micafil is one of four major suppliers of small fractional horsepower motor
equipment in the world. No single competitor has a dominant position.
Competition is based upon product performance, price, delivery time, and local
plant preference. Management believes that Micafil has a strong reputation for
product performance but in some cases is at a competitive disadvantage in terms
of pricing due to the high quality of product produced compared to its
competitors for the same or similar applications.

As of May 31, 1996, the backlog in firm orders was valued at approximately $6.2
million, and production for all such orders is current. This backlog amount
represents a 188% increase from the backlog as of May 31, 1995 of approximately
$3.2 million.

At March 31, 1996, Micafil had 47 employees.

Material Handling Systems
AH is a full service provider of material handling systems and components to
companies with warehouse and distribution facilities. AH designs, supplies and
installs complete material handling systems directly to end users and original
equipment manufacturers. AH also sells material handling components through
its general products sales force, which includes catalog sales.

AH's principal market is the automotive aftermarket, although approximately 45%
of new business comes from new markets such as hardware, office products,
candy, tobacco, lawn and garden, catalog fulfillment and consumer electronics.
AH has multiple customers, many of which provide repeat business. During
fiscal 1996 and 1995, AH's sales to a customer in the automotive aftermarket
contributed approximately 13% and 12% of AH's sales, respectively. During
fiscal 1995, AH's sales to a customer in the sporting goods industry
contributed 12% of AH's sales. Loss of any one or a few customers may have a
significant impact on AH's results of operations.

Raw materials are purchased to manufacture mezzanines and consist mainly of raw
steel. Other material handling products, such as shelving, rack and conveyor,
are purchased from multiple suppliers. Raw materials and material handling
products are readily available from many different suppliers.

The industry and AH have minimal working capital requirements due to the large
amount of revenues derived from drop shipped goods. Generally, all goods drop
shipped are special orders enabling AH to maintain minimal inventory levels and
still meet customer demand. AH does not provide extended payment terms to
customers and sales invoice terms are generally net ten days.

The material handling equipment industry competes primarily on price, product
performance guarantees and the extent of services which can be provided.
Management believes that AH has a reputation for leadership in facilities
planning and system design, inventory analysis and determination of equipment
needs, procurement and installation of equipment, and coordinated relocation of
customer inventory. There are few direct

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competitors of AH which provide the turnkey service provided by AH.
Competition is primarily in the individual phases of the work performed by AH.
For example, a competitor may provide construction and installation services or
design services, but few competitors provide the range of services provided by
AH. The competitors of AH compete primarily on price.

Because of its expertise, guarantee of product performance and its commitment
to service, AH has a premier reputation as a leader in serving the automotive
aftermarket industry and is known for its ability to sustain a high level of
customer satisfaction. AH's strategy for growth is to pursue market expansion
in those market areas where AH's expertise can command a premium margin.

As of May 31, 1996, the backlog of firm orders is valued at approximately $6.2
million, and production for all such orders is current. This backlog
represents a 5% increase from the backlog as of May 31, 1995 of approximately
$5.9 million.

At March 31, 1996, AH had 87 employees.

Metal Forming Operations
On March 8, 1996, Centrum acquired all of the outstanding common stock of
McInnes, a Pennsylvania corporation for approximately $12.3 million through a
subsidiary merger. McInnes, headquartered in Corry, Pennsylvania, is comprised
of three distinct business units, two of which operate under the tradenames
McInnes Steel Company ("MSC") and McInnes Rolled Rings ("MRR"). The third
business unit, Erie Bronze and Aluminum Company ("EBA"), and Eballoy Glass
Products Company ("Eballoy"), whose operations are located in Erie,
Pennsylvania, are wholly-owned subsidiaries of McInnes Services, Inc.
Approximately 85% of the Metal Forming Operations' sales are made domestically.

MSC, which accounts for approximately 60% of the Metal Forming Operations'
sales, is a leading supplier of open die steel forgings. Major markets served
by MSC include power generation, compressor, and miscellaneous commercial
forgings. A majority of MSC's sales are made to a small number of customers
including General Electric and Westinghouse. Loss of either of these customers
could have a significant impact on MSC's results of operations. Approximately
one-half to three-fourths of MSC's customers provide repeat business. Sales
are made through MSC's direct sales force. MSC generally enters into fixed
price transactions with its customers using "cost plus" pricing procedures
based on MSC's estimated manufacturing costs plus a markup which is designed to
cover administrative costs and provide a profit margin. Because of this
arrangement, MSC is subject to both positive and negative exposure relative to
significant fluctuations in the price of steel.

MRR, located in Erie, Pennsylvania, was established in 1992 upon the
construction of an $8 million state-of-the-art, fully automated seamless ring
rolling mill and accounts for approximately 20 - 25% of the Metal Forming
Operations' sales. In addition, MRR is currently in the process of expanding
its operations to include heat treating. It is expected that gross margins
will improve as MRR will be able to eliminate certain services currently
performed by outside processors. MRR's customers include various bearing and
special machine manufacturers.

EBA, located in Erie Pennsylvania, accounts for approximately 15 - 20% of the
Metal Forming Operations' sales and is a leading producer of nonferrous
castings for the glass container, and pump and valve industries, as well

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as for a variety of other commercial applications. EBA is capable of producing
castings ranging in a size from one ounce to 1,000 pounds in either bronze or
aluminum. Eballoy produces finished machined components for EBA's sales to the
glass container industry.

The primary raw material used by the group consists of steel, which is
purchased from both regional and national suppliers. Orders are placed with
these suppliers for both stock material and to satisfy specific customer
requirements. There are currently no long-term contracts for the purchase of
steel.

McInnes is required to maintain an inventory of stock materials due to the
variety of its products and customer demands regarding lead times.

As of May 31, 1996, the backlog in firm orders of the Metal Forming Operations
was valued at approximately $16 million and production for all such orders is
current.

At March 31, 1996, McInnes had 300 employees. Approximately 125 employees at
MSC are represented by a collectively bargained agreement which expires on
October 1, 1997. Approximately 55 employees at EBA are represented by a
collectively bargained agreement which expires on August 1, 1997.
Approximately 8 employees at Eballoy are represented by a collectively
bargained agreement which expires on October 2, 1996. Management believes that
it has good relations with its employees.

(d) Compliance with Environmental Regulations

The Company's continuing compliance with existing federal, state and local
provisions dealing with the protection of the environment is not expected to
have a material effect upon the Company's capital expenditures, earnings,
competitive position or liquidity.

EBA is a direct defendant in two governmental cost recovery actions and other
related private party actions at a waste disposal site. With regard to the
most significant cost recovery action, EBA has negotiated a settlement which
has been approved in federal court. In addition, EBA and other parties are
responsible for performing certain cleanup work at the site pursuant to a
government order.

Private party suits and actual cleanup costs in excess of governmental
estimates can affect the reliability of the Company's loss estimates. In
addition, unasserted claims are not reflected in the Company's cost estimates.
Pursuant to the environmental statutes, the Company may be found jointly and
severally liable to the government for cleanup costs; however, management
believes that the current status of government settlements and group cleanup
participation at the site indicates that the liability will be shared by
responsible parties. Currently, there are at least 14 parties participating in
various settlements of the cost recovery actions, and 18 parties participating
in a pro rata cost sharing arrangement with respect to the site cleanup work.
The Company has negotiated an insurance settlement which requires the carrier
to reimburse the Company for site expenses, subject to a ceiling. At March 31,
1996, the Company has recorded liabilities of $695,800, of which $350,000 is
recorded as a current liability. At March 31, 1996, the Company has recorded a
receivable from its insurance carrier which is included in current assets.
Funds are expected to be paid over approximately three years. The total
anticipated site costs and private suits are not expected to materially exceed
the recorded accruals and insurance settlement.

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ITEM 2. PROPERTIES

Centrum's principal facilities are set forth in the table below:

Location Use Size Leased/Owned
- -------- --- ---- ------------

CORPORATE OFFICES

Holland, Ohio Corporate Office 400 Sq. Feet Leased

MATERIAL HANDLING SYSTEMS

Cleveland, Ohio Administration/Sales Office 13,000 Sq. Feet Leased (1)
Production/Warehousing 27,000 Sq. Feet Leased (1)

Cleveland, Ohio Warehousing 1,000 Sq. Feet Leased

Cleveland, Ohio Warehousing 10,000 Sq. Feet Leased

MOTOR PRODUCTION SYSTEMS

Englewood, Ohio Administration/Sales Office 10,000 Sq. Feet Owned
Production/Warehousing 33,000 Sq. Feet Owned

OIL AND GAS

Medina County, Ohio Oil & Gas Exploration 308.5 acres Leased (2)

Metal Forming Operations

Corry, Pennsylvania Administration/Sales Office
Production/Warehousing 180,000 Sq. Feet Owned

Fairview, Pennsylvania Administration/Sales Office
Production/Warehousing 60,000 Sq. Feet Owned

Erie, Pennsylvania Administration/Sales Office
Production/Warehousing 49,000 Sq. Feet Owned

Erie, Pennsylvania Production 11,000 Sq. Feet Leased

(1) In February 1996, AH exercised an option to purchase this space for
approximately $1,150,000. The terms of this deal are currently being
negotiated.
(2) Represents mineral rights.

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ITEM 3. LEGAL PROCEEDINGS

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

This item is not applicable.

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PART II

ITEM 5. MARKET FOR CENTRUM'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS

Centrum's common stock was quoted on the National Association of Securities
Dealers Automatic Quotation System (NASDAQ) (Symbol-CIII) for the period April
2, 1981 through May 1992. Centrum was delisted from the NASDAQ in May 1992,
because it did not maintain net worth of $3 million, as required by NASDAQ
rules which became effective in early 1992. Stock trades between May 1992 and
September 1995 were primarily made through Continental Capital, Inc. generally
at a quoted price of between $0.75 and $1 per share. Continental Capital, Inc.
is a shareholder of the Company and its Chairman and Chief Executive Officer
was, from 1988 to 1995, Centrum's Chairman of the Board and Chief Executive
Officer and, since June 1995, was a Director and Vice President of Centrum and,
since December 1995, is a Director, Vice President and Secretary of Centrum.
See Item 10 "Directors and Executive Officers of Centrum," and Item 12
"Security Ownership of Certain Beneficial Owners and Management." Since
September 1995, the Company has been quoted on the Over-the-Counter market
(OTC) on what is called the Bulletin Board. The market maker for Centrum is
Hill Thompson, located in New York City. The trading symbol remains CIII.
Since becoming quoted on the Bulletin Board, there have been trades ranging
from a low of $.25 per share in September 1995 to a high of $2.25 in March
1996. Approximately 58,600 shares of common stock have been traded on the
Bulletin Board. As of March 31, 1996 and 1995, there were approximately 1,000
shareholders of record. Shareholders are entitled to receive dividends when
and as declared by the Board of Directors. However, Centrum has never paid a
dividend, and intends to retain any earnings to finance the development of its
business and, accordingly, does not anticipate payment of any dividends in the
foreseeable future. Furthermore, any proposed dividends must be approved, in
advance, by both Huntington National Bank, the lender for Centrum's bank line
of credit, and the holders of the 11% convertible, unsecured notes payable.

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ITEM 6. SELECTED FINANCIAL DATA

The following five-year selected financial data should be read in conjunction
with the Consolidated Financial Statements that appear elsewhere in this
report.

As of and for the Years Ended March 31,
---------------------------------------
1996 1995 1994 1993 1992
SUMMARY OF OPERATIONS:

Net sales $27,525,702 $18,292,696 $ 8,760,667
Other income (expense) (402,520) (270,912) (483,599) $ (132,258) $ (230,008)
Income (loss) from continuing
operations before income taxes
and extraordinary items 1,063,054 386,927 (1,112,897) (436,780) (372,780)
Provision for income taxes 257,814 223,679
----------- ----------- ----------- ---------- -----------
Income (loss) from continuing
operations 805,240 163,248 (1,112,897) (436,780) (372,780)
Loss from discontinued
operations (12,060) (635,417)
Extraordinary item 32,017
----------- ----------- ----------- ---------- -----------
Net income (loss) $ 805,240 $ 163,248 $(1,112,897) $ (416,823) $(1,008,197)
=========== =========== =========== ========== ===========

PER SHARE DATA:
Income (loss) from continuing
operations $ .13 $ .03 $ (.26) $ (.21) $ (.20)
Loss from discontinued
operations (.01) (.33)
Extraordinary item .02
----------- ----------- ----------- ---------- -----------
Net income (loss) $ .13 $ .03 $ (.26) $ (.20) $ (.53)
=========== =========== =========== ========== ===========

FINANCIAL POSITION:
Current assets $23,195,165 $ 5,393,369 $ 3,450,374 $ 231,910 $ 24,632
Current liabilities 24,219,677 4,432,101 5,810,033 508,600 823,502
Working capital (deficiency) (1,024,512) 961,268 (2,359,659) (276,690) (798,870)
Total assets 40,611,748 9,547,336 7,941,039 697,504 557,683
Long-term liabilities 12,809,079 3,609,487 1,035,499 325,000 7,954
Shareholders' equity
(deficiency) 3,582,992 1,505,748 1,095,507 (136,096) (273,773)

OTHER DATA:
Common shares and common
share equivalents:
Weighted average
outstanding during the year 6,086,981 5,850,005 4,280,741 2,078,658 1,898,102
Outstanding at year end 6,170,860 5,745,360 5,473,056 2,611,436 1,898,102

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

The discussion and analysis of Centrum Industries, Inc.'s financial condition
and results of operations should be read together with the consolidated
financial statements and notes thereto which begin on page 22.

OVERVIEW

Centrum is a publicly traded holding company that acquires and operates
companies that have strong niche positions in their industries. During 1996,
Centrum completed its third and largest acquisition in three years. As a
holding company, the Company's long-range strategy is to own and acquire
control of companies in basic manufacturing industries located primarily in the
Great Lakes region, which the Company can increase in value in the public
market. All of the Company's present manufacturing subsidiaries were acquired
subsequent to April 1993.

RESULTS OF OPERATIONS

The Company's operations subsequent to March 8, 1996, have been classified into
five business segments: material handling systems, motor production systems,
metal forming operations, oil and gas, and corporate office. The material
handling systems segment was established with the acquisition of American
Handling, Inc. ("AH") on September 2, 1993, and consists of the design,
manufacture and installation of material handling equipment for warehouse and
distribution applications. The motor production system segment was established
with the acquisition of Micafil, Inc. ("Micafil") on May 17, 1993, and consists
of the manufacture of armature winding machines and complete production systems
for numerous complex manufacturing processes. The metal forming operations
segment was established on March 8, 1996 with the acquisition of McInnes Steel
Company, and consists of open die forging, bronze and aluminum casting and
rolled ring operations. The oil and gas segment was established in August 1990
with the purchase of a leasehold interests and miscellaneous equipment to
explore for oil through a shallow sand waterflood project on eight acres of
land. The Corporate office segment does not generate sales but functions to
oversee the operating divisions and pursue future acquisitions.

Year ended March 31, 1996 compared to March 31, 1995.

Consolidated results
Net sales for 1996 increased by $9.2 million or 50% to $27.5 million. The
primary reason for the increase in sales was a $6.5 million increase at the
material handling segment. In addition, consolidated sales for 1996 include
sales by the metal forming operations segment of $2.5 million for the period
from March 8, 1996 (the date Centrum acquired McInnes) to March 31, 1996.
Gross margins of $7.2 million increased by $2.4 million from the prior year and
increased slightly to 26.2% from 26.1% of sales. Selling, general and
administrative expenses increased by $1.7 million to $5.8 million, reflecting
the increased level of operations, but decreased as a percent of sales from
22.5% for fiscal 1995 to 20.9% for the current year. Interest expense
increased by $.2 million to $.5 million primarily reflecting the increased
level of debt required to fund the McInnes acquisition. The 1996 consolidated
income tax provision of $258,000 increased over the prior year's provision of
$224,000. The slight increase was due to a higher current provision,
reflecting the improved profitability of the consolidated group, which was
somewhat offset by a deferred income tax benefit of $191,000. During 1996, net

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14

operating losses of approximately $820,000 were used to offset income taxes
payable. However, in accordance with Statement of Financial Standards No. 109,
"Accounting for Income Taxes" (FAS 109), utilization of net operation losses
(NOLs) relating to net operating losses of AH and Micafil which were fully
reserved at the time they were acquired resulted in a $192,000 decrease to
goodwill and other intangibles, rather than as a reduction of income tax
expense. See Note 9 to the Consolidated Financial Statements for further
information.

Results for each of the individual segments are as follows.

Material Handling Systems
Revenues for 1996 were $19.5 million, which was an increase of $6.5 million or
50% of the revenue generated in 1995. The primary reasons for the increase was
the continued repositioning of AH into leading-edge high tech systems
integration markets and the ongoing strength of the manufacturing sector
economies. Gross margins of $5.1 million, or 26.3% of sales for 1996,
reflected a slight decrease over the prior year's margin of 26.9%. Selling,
general and administrative expenses for 1996 were $3.7 million, which is an
increase of $1.0 million over 1995. The increase in selling, general and
administrative expenses is primarily due to increased wages, reflecting AH's
expanding operations, and increased bonus expense as a result of improved
profitability. As a percent of sales, the 1996 selling, general and
administrative expenses decreased to 19.1% of sales from 20.8% in 1995. The
decrease in 1996 is due to an increase in sales volume which covered a greater
proportion of fixed expenses. Interest expense decreased from $78,000 in 1995
to $49,000 in 1996 as a result of decreased borrowings.

Motor Production Systems
Revenues for 1996 were $5.5 million, which was an increase of $.2 million from
the prior year. The primary reason for the increase is the continued
improvement in the appliance and power tool markets. Gross margins of $1.4
million, or 24.9% of sales improved over the prior year's gross margin of
24.2%. The gross margin improvement is due to Micafil accepting a larger
proportion of higher margin contracts as a result of increased demand within
the industry. Selling, general and administrative expenses for 1996 were $.9
million or $.2 million higher than the previous year. As a percent of sales,
selling, general and administrative expenses increased from 16.1% in 1995 to
16.5% in 1996. The increase was primarily due to an increase in the number of
administrative personnel.

Oil and Gas
The oil and gas segment recorded a loss of $32,500 in 1996 as compared to a
loss of $26,500 in 1995. No significant improvements were made to the
properties during 1996 or 1995.

Corporate Office
During 1996, the corporate office recorded general and administrative expenses
of $.6 million, as compared to $.5 million in the prior year. The increase was
the result of an increase in payroll expense of $.2 million, primarily related
to bonuses and the additional wages of an executive officer appointed in 1996,
which was partially offset by a $.1 million decrease in expenses related to
acquisitions efforts which were not successful. Interest expense for 1996 was
$242,000 as compared to $130,000 in 1995. The increase in interest expense was
due to debt incurred primarily in connection with the acquisition of McInnes.

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15

YEAR ENDED MARCH 31, 1995 COMPARED TO MARCH 31, 1994

Consolidated results
Net sales for 1995 increased by $9.5 million or 109% to $18.3 million. The
reason for the increase is primarily due to 1995 being a full year of
operations whereas 1994 included the results of the material handling segment
and the motor production systems segment for seven and 10 1/2 months in 1994,
respectively. Gross margins of $4.8 million increased by $2.7 million from the
prior year and were 26.1% of sales as compared to 23.9% in 1994. Selling,
general and administrative expenses increased by $1.4 million to $4.1 million,
reflecting the increased level of operations, but decreased as a percent of
sales from 31.1% for fiscal 1994 to 22.5% for 1995. The improvements in gross
margin and selling, general and administrative expenses were primarily due to
cost cutting measures which were implemented in 1994 upon the acquisition of AH
and Micafil and the increase in sales, which covered a larger volume of fixed
overhead costs. Interest expense increased by $.1 million to $.3 million
primarily due to debt issued in connection with the Micafil acquisition being
outstanding for a full year. The income tax provision for 1995 was $224,000
and reflects the increased profitability of AH and Micafil. None of this
amount was payable due to the availability of NOLs at AH and Micafil. NOLs at
AH and Micafil represent preacquisition NOLs which were fully reserved at the
time AH and Micafil were acquired by Centrum. In accordance with FAS 109,
utilization of these preacquisition NOLs results in a reduction of goodwill and
other intangible assets, rather than a reduction of income tax expense. See
Note 9 to the Consolidated Financial Statements.

Results for each of the individual segments are as follows.

Material Handling Systems
Revenues for 1995 were $13.0 million, which was an increase of $7.0 million or
117% of the revenue generated in 1994. The primary reason for the increase is
due to 1995 being a full year of operations, as compared to approximately seven
months for fiscal 1994. Gross margins of $3.5 million, or 26.9% of sales for
1995 reflected a slight improvement over the prior year's margin of 26.7%.
Selling, general and administrative expenses for 1995 were $2.7 million, which
is an increase of $1.2 million over 1994. The increase in selling, general and
administrative expenses is primarily due to the current year reflecting a full
year of operations as compared to approximately seven months for 1994. As a
percent of sales, the 1995 selling, general and administrative expenses
decreased to 20.8% of sales from 25.0% in 1994. The decrease in 1995 is due to
an increase in sales volume which covered a greater proportion of fixed
selling, general, and administrative expenses. Interest expense increased from
$53,000 in 1994, to $78,000 in 1995 which represents a full year of interest
expense during 1995, as compared to approximately seven months in 1994 and is
somewhat offset by an overall reduction in the level of debt outstanding at AH.

Motor Production Systems
Revenues for 1995 were $5.3 million, which was an increase of $2.6 million from
the prior year. The primary reason for the increase is the resurgence of the
automotive industry, which is the segment's primary market, and continued
improvements in the appliance and power tool markets. Additionally, results
for 1995 represent a full year of operations, whereas 1994 represents only 10
1/2 months. Gross margins of $1.3 million or 24.2% of sales improved over the
prior year's gross margin percent of 18.5%. The gross margin improvement is
due to the greater volume of sales, which absorbed a larger amount of fixed
overhead and larger and more profitable contracts. Selling, general and
administrative expenses for 1995 were $.9 million or $.2 million higher than
the

15
16

previous year. As a percent of sales, selling, general and administrative
expenses decreased from 25.9% in 1994 to 17.0% in 1995. The decrease
represents both the reduction in staffing following Centrum's acquisition of
Micafil and the increase in sales volume which covered a greater proportion of
fixed selling, general and administrative expenses. Interest expense increased
from $113,000 in 1994 to $123,000 in 1995 due to the $1.7 million in debt used
to finance the acquisition of Micafil being outstanding for all of 1995 as
compared to 10 1/2 months in 1994.

Oil and Gas
The oil and gas segment recorded a loss of $26,500 in 1995 as compared to a
loss of $272,000 in 1994. During 1994, as a result of continued uncertainties
regarding the timing of future commercial production and potential future cash
flows, management determined that the aforementioned factors resulted in
economic impairment and recorded a $240,000 provision to write the oil and gas
properties down to approximately $89,000, which management believes to be their
fair market value. No significant improvements were made to the properties
during 1995 or 1994.

Corporate Office
During 1995 and 1994, the corporate office recorded general and administrative
expenses of $.5 million. Interest expense for 1995 and 1994 was $130,000 and
$72,000, respectively. The increase in interest expense represents a higher
level of debt outstanding during 1995, as compared to 1994.

LIQUIDITY AND CAPITAL RESOURCES

CASH PROVIDED BY OPERATING ACTIVITIES
Cash provided by operating activities for the year ended March 31, 1996 was
$510,000, which was an improvement from cash used for operating activities of
$131,000 and $351,000 for the years ended March 31, 1995 and 1994,
respectively. The improvement in operating cash flow reflects the increasing
profitability of the consolidated group. During 1996 and 1995, the primary use
of cash for operating activities was a $2.2 million and $1.8 million increase,
respectively, in accounts receivable, due to the increasing fourth quarter
revenues at AH and Micafil. The increases in accounts receivable were
partially offset by increases in accounts payable of $1.7 million and $.7
million at March 31, 1996 and 1995, respectively, which reflects the increased
level of operations at the operating subsidiaries. Net income for 1996, 1995
and 1994 included depreciation and amortization expense of $314,000, $260,000
and $161,000, respectively, and the recording of a non-cash income tax
provision of $191,000 and $224,000, during 1996 and 1995, respectively, for the
utilization of fully reserved, preacquisition net operating losses at AH and
Micafil. During 1994, a non-cash provision of $240,000 was recorded to write
down the assets at LaSalle. See Notes 4 and 9 to the Consolidated Financial
Statements.

CASH FLOWS FROM FINANCING AND INVESTING ACTIVITIES
To meet operating expenses and to finance acquisitions, during the period from
1994 through 1996, Centrum relied upon a combination of net proceeds from new
capital and debt. During 1996, Centrum initiated a Private Placement Offering
("Offering") for 2.4 million shares of its common stock. The stock is being
offered in Units of 12,000 shares at a cost of $18,000 per Unit. Through March
31, 1996, 485,500 shares of common stock have been sold for $637,050, which is
net of $91,200 in issuance costs and expenses. The Units are being

16
17

offered by Continental Capital, Inc. See Item 13, "Certain Relationships and
Related Transactions." During 1995, proceeds of $247,000 were generated from
the sale of stock to new and existing shareholders.

Centrum also obtained funds for operating expenses from the proceeds of several
private placements of debt. Beginning in March 1993, Centrum has offered up to
an aggregate amount of $2 million of debentures with common stock warrants for
a term of one year from date of sale. Centrum has the option to extend the
renewal date for one year periods for a maximum of three years. The attached
warrant permits the holder to purchase Centrum stock at $1 per share. Each
$10,000 of debt has a warrant for 1,000 shares while the debt is outstanding.
Under this private placement, $25,000 principal amount of debentures were sold
in 1996, $116,000 principal amount of debentures were sold in 1995, and
$493,000 were sold in 1994. During 1996, $75,000 of the debentures previously
sold in this private placement were repaid. Beginning in January 1995, Centrum
has offered unsecured five year term notes with attached warrants. The notes
bear interest at prime plus .5%. The warrants allow the note holder to
purchase 20,000 shares of the Company's common stock for each $50,000 of notes
held at a purchase price of $1 per share. There were $550,000 of notes sold in
1996 and $650,000 in 1995. The proceeds from these sales were used to fund
corporate office operations. During 1996, $83,000 of these notes were repaid.
No warrants were exercised in 1996, 1995, or 1994. Subsequent to December
1995, the debt private placements were terminated.

The acquisition of McInnes was primarily financed in the form of new debt
agreements and proceeds from the sale of the Company's common stock. The first
debt agreement consists of a promissory note issued to a commercial bank for
$2,850,000 payable in monthly installments at 1.25% above the prime rate and a
line-of-credit for the lesser of $15.5 million or "borrowing base," as defined
in the agreement. As of March 31, 1996, approximately $13.2 million in total
loans and commitments was available of which the Company had borrowed
$7,886,486 and had stand-by letters of credit issued of approximately $4.6
million. The second debt agreement is a Note and Warrant Purchase Agreement
which provides for $2.5 million aggregate principal amount of 11% convertible
debt with warrants for the purchase of 1,250,000 shares of the Company's common
stock for $2 per share. Additional funds to finance the acquisition were
obtained through the sale of 485,500 shares of the Company's common stock for
net proceeds of $637,050. The remaining funds were provided by the issuance of
$1,239,000 aggregate principal amount of term notes which bear interest at 2%
per month to certain of the Company's shareholders and directors and are to be
repaid by August 1996 from the anticipated proceeds of additional sales from
the Offering. The Company has an option to extend repayment on these notes for
one six month period.

The acquisition of AH was made through the issuance of common stock. At March
31, 1995, AH had borrowings of $285,000 under a secured line of credit which
permitted borrowings of up to a maximum of either $700,000 or a borrowing base,
as defined in the loan agreement. This agreement expired in September 1995.
AH also has $350,000 of term debt borrowings outstanding as of March 31, 1996
and 1995. These notes are for a term of one year and AH has the option to
extend the notes for an additional year.

The acquisition of Micafil was made through the issuance of two term notes to
the seller. These term notes were for a total of $1,750,000 and provided for
principal and interest payments to be made for a five year period. During
1995, the Company repaid the remainder of the $100,000 note and reached an
agreement to restructure the $1,650,000 note. See Note 7 to the Consolidated
Financial Statements.

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18

As further described under Item 1, LaSalle acquired a leasehold interest for
all mineral rights. LaSalle acquired the funds to pay the purchase price of
$78,691 for the leasehold project and the equipment purchase in the amount of
$21,309 from an investment by Centrum. Centrum's management believes that
continuance of the pilot program requires minimal additional operating
expenditures, and management does not anticipate that any material capital
expenditures will be required to determine whether sufficient oil can be
recovered to be marketable. LaSalle's ability to generate revenues is
dependent upon the recovery of oil reserves which have not been proven to date.

As of March 31, 1996, the Company has executed an option to purchase certain
warehousing and office space now being leased by AH for approximately
$1,150,000. The terms of this deal are still being negotiated. Centrum has no
other material commitments for capital expenditures. Additions to property,
plant and equipment were approximately $526,000 in 1996, $99,000 in 1995 and
$47,000 in 1994.

The financing provided by the commercial bank (Bank) for the acquisition (Bank
Loan) has been secured by substantially all the real and personal property of
Centrum and its direct and indirect subsidiaries and contains various
financial, operational and reporting covenants, including a prohibition on the
Company from incurring new secured debt or new unsecured debt in excess of
certain thresholds or from making any business acquisitions, unless a waiver is
first obtained from the Bank. The Bank permits certain management fees and
advances to be paid by certain of the Company's subsidiaries to Centrum, and
Centrum will use these advances primarily for payment of principal and interest
expense and for working capital purposes. Management believes that such
management fees and advances are permitted in amounts adequate to service
Centrum's financial obligations.

The 11% convertible subordinated debt (Notes) are convertible at any time at
the option of the holder (Holders) to shares of the Company's common stock at a
price of $2.00 per share. The warrants are exercisable at an initial exercise
price of $2.00 per share, subject to various anti-dilution adjustments
affecting the exercise price and/or the number of shares subject to the
warrants. The Notes are presently secured by the guarantees of two of the
Company's subsidiaries, American Handling, Inc. and Micafil, Inc., and the
Notes have been subordinated to the Bank Loan. The Notes agreement contains
various financial, operational, and reporting covenants and requirements
including a requirement that each of the Holders must approve certain financial
and operational transactions of the Company, including the incurrence of new
secured or unsecured debt, with certain exceptions, and any business
acquisitions. Additionally, the Company may not pay dividends or issue
additional shares of common stock (with certain exceptions), without the prior
approval of the Holders. The Company has also entered into an Equity Holders
Agreement, in which the Company has agreed to use its best efforts to cause two
persons designated by the Holders to be nominated to the Company's Board of
Directors, if requested by the Holders.

At March 31, 1996, the Company has $11.2 million in NOLs available which would
reduce income tax payable in future years. However, there are uncertainties
related to both the amount and ultimate realization of the NOLs. See Note 9 to
the Consolidated Financial Statements.

The Company is involved in routine litigation and various legal efforts
incidental to the normal operations of its business. In management's opinion,
none of these matters will have a materially adverse effects on the Company's
liquidity or results of operations. See also "Environmental Matters," below.

18
19

Centrum management believes that sufficient funds for future operations and
acquisitions can be raised from persons who are accredited investors in
accordance with the private offering requirements of federal and state
securities laws and through funds available under the line of credit agreement
and through cash flows generated by the operating subsidiaries.

ENVIRONMENTAL MATTERS

OUTLOOK

Operating revenues are expected to increase in 1997 due primarily to the
inclusion of McInnes' results for the full year. Backlogs for the Metal
Forming Operations have increased 29% to $16 million from December 1995 to
April 1996. Sales for this segment are expected to exceed $40 million during
1997. AH has achieved revenue growth of 50% and 29% for 1996 and 1995 (on an
annualized basis), respectively. However, AH may not be able to sustain the
significant revenue gains experienced over the past two years due to general
economic conditions as well as operational constraints. Operations at Micafil
are expected to be strong throughout 1997 given the backlogs which currently
exist. Interest expense for 1997 is expected to increase by approximately $1.4
million to $2 million, assuming consistent interest rates and amounts
outstanding, primarily due to the debt incurred with the acquisition of
McInnes. The Company has bonus programs in place which result in the granting
of 12 1/2% to 25% of each segment's pre tax profit, before intercompany
management charges, which

19
20

will reduce future profit improvements proportionally. Each segment is
considered to be a separate unit for profit sharing purposes. During 1997,
management will work to improve operating results at its existing subsidiaries
and to integrate the operations of McInnes. In addition, management will
continue to investigate potential acquisitions which operate in niche markets
and have strong barriers to entry.

This annual report on Form 10-K, including "Business" and "Management's
Discussion and Analysis of Results of Operations and Financial Condition,"
contains forward-looking statements within the meaning of the "safe-harbor"
provisions of the Private Securities Litigation Reform Act of 1995. Such
statements are based on management's current expectations and are subject to a
number of factors and uncertainties which could cause actual results to differ
materially from those described in the forward-looking statements. Such
factors and uncertainties include, but are not limited to: the impact of the
level of the Company's indebtedness; the impact of changes in interest rates on
the Company's variable rate borrowings; restrictive covenants contained in the
Company's various debt documents; general economic conditions; the Company's
dependence on a few large customers; price fluctuations in the raw materials
used by the Company, particularly steel; competitive conditions in the
Company's markets; and the impact of federal, state and local environmental
requirements (including the impact of current or future environmental claims
against the Company). As a result, the Company's operating results may
fluctuate, especially when measured on a quarterly basis.

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21

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements and Financial Statement Schedules

Financial Statements:
Page
----
Report of Independent Accountants 22

Consolidated Balance Sheet at March 31, 1996 and 1995 23

Consolidated Statement of Operations for the three
years ended March 31, 1996 24

Consolidated Statement of Changes in Shareholders' Equity
for the three years ended March 31, 1996 25

Consolidated Statement of Cash Flows for the
three years ended March 31, 1996 26-27

Notes to Consolidated Financial Statements 28-46

Financial Statement Schedule for the three years ended March 31, 1996

II - Valuation and Qualifying Accounts 47

All other schedules are omitted because they are not applicable or the required
information is shown in the consolidated financial statements or notes thereto.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

This item is not applicable.

21
22

Report of Independent Accountants

To the Board of Directors and Shareholders of
Centrum Industries, Inc.

In our opinion, the consolidated financial statements listed in the
accompanying index present fairly, in all material respects, the financial
position of Centrum Industries, Inc. and its subsidiaries at March 31, 1996 and
1995, and the results of their operations and their cash flows for each of the
three years in the period ended March 31, 1996, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.

As discussed in Note 2 to the consolidated financial statements, on March 8,
1996, the Company acquired McInnes Steel Company.

PRICE WATERHOUSE LLP
Toledo, Ohio
June 7, 1996

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23

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

March 31,
1996 1995

Assets
Current assets:
Cash and cash equivalents $ 2,100,749 $ 472,673
Accounts receivable, less allowance for doubtful
accounts of $93,761 and $60,658, respectively 10,979,166 3,273,719
Cost and estimated earnings in excess of
billings on uncompleted contracts 372,699 482,044
Inventories, net 9,395,244 1,111,196
Prepaid expenses and other 347,307 53,737
----------- ----------
Total current assets 23,195,165 5,393,369
----------- ----------
Oil and gas properties 88,908 88,908
----------- ----------
Property, plant and equipment, net 11,062,201 1,121,981
----------- ----------
Other assets:
Deferred income tax benefits 2,066,393
Goodwill, less accumulated amortization of
$404,494 and $286,510, respectively 2,439,616 2,786,891
Debt issuance costs 1,133,412 50,638
Other 626,053 105,549
----------- ----------
Total other assets 6,265,474 2,943,078
----------- ----------
Total assets $40,611,748 $9,547,336
=========== ==========

Liabilities and Shareholders' Equity
Current liabilities:
Bank line of credit $ 7,886,486 $ 285,000
Current portion of long-term debt 2,976,425 186,726
Accounts payable 9,506,022 2,433,680
Accrued employee costs 1,012,655 347,243
Accrued interest 138,055 274,471
Deposits 268,394 289,009
Income taxes payable 251,143
Deferred income taxes 122,974
Other accrued expenses 2,057,523 615,972
----------- ----------
Total current liabilities 24,219,677 4,432,101
----------- ----------
Long-term debt, less current portion 11,982,409 3,609,487
----------- ----------
Other liabilities 826,670
----------- ----------
Commitments and contingent liabilities (Note 10)

Shareholders' equity:
Preferred stock - $.05 par value, 1,000,000 shares
authorized, 70,000 issued and outstanding (liquidation
preference of $10 per share) 3,500 3,500
Common stock - $.05 par value, 15,000,000 shares
authorized, 6,170,860 and 5,745,360 issued and
outstanding at March 31, 1996 and 1995, respectively 308,543 287,268
Additional paid-in capital 5,318,767 4,068,038
Accumulated deficit (2,047,818) (2,853,058)
----------- ----------
Total shareholders' equity 3,582,992 1,505,748
----------- ----------
Total liabilities and shareholders' equity $40,611,748 $9,547,336
=========== ==========

The accompanying notes are an integral part of the consolidated financial
statements.

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24

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEARS ENDED
MARCH 31,
1996 1995 1994

Net sales $27,525,702 $18,292,696 $ 8,760,667
Cost of goods sold 20,306,567 13,516,489 6,668,265
----------- ----------- -----------
Gross profit 7,219,135 4,776,207 2,092,402
Selling, general and administrative
expenses 5,753,561 4,118,368 2,721,700
----------- ----------- -----------
Operating income (loss) 1,465,574 657,839 (629,298)
----------- ----------- -----------
Other income (expense):
Interest income 18,206 2,638 10,540
Interest expense (515,538) (331,287) (238,047)
Provision for impairment of oil and
gas properties (Note 4) (240,338)
Miscellaneous 94,812 57,737 (15,754)
----------- ----------- -----------
Total other expense (402,520) (270,912) (483,599)
----------- ----------- -----------
Income (loss) before income taxes 1,063,054 386,927 (1,112,897)
----------- ----------- -----------

Provision for income taxes:
Current 448,838
Deferred (191,024) 223,679
----------- ----------- -----------
Total provision for income taxes 257,814 223,679
----------- ----------- -----------

Net income (loss) $ 805,240 $ 163,248 $(1,112,897)
=========== =========== ===========

Net income (loss) per common share: $ .13 $ .03 $ (.26)
=========== =========== ===========

Weighted average number of common
and common equivalent shares 6,243,174 5,850,005 4,280,741
=========== =========== ===========

The accompanying notes are an integral part of the consolidated financial
statements.

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25

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

Preferred Stock Common Stock Additional
-------------------- --------------------- Paid-in Accumulated
Shares Amount Shares Amount Capital Deficit

Balance,
March 31, 1993 70,000 $3,500 2,611,436 $130,572 $1,683,741 $(1,903,409)
Issuance of common stock 2,861,620 143,081 2,150,919
Net loss for year (1,112,897)
------ ------ --------- -------- ---------- -----------

Balance,
March 31, 1994 70,000 3,500 5,473,056 273,653 3,834,660 (3,016,306)
Issuance of common stock 272,304 13,615 233,378
Net income for year 163,248
------ ------ --------- -------- ---------- -----------

Balance,
March 31, 1995 70,000 3,500 5,745,360 287,268 4,068,038 (2,853,058)

Purchase of stock (60,000) (3,000) (57,000)
Issuance of common stock 485,500 24,275 612,775
Issuance of warrants 600,000
Issuance of options 94,954
Net income for year 805,240
------ ------ --------- -------- ---------- -----------

Balance,
March 31, 1996 70,000 $3,500 6,170,860 $308,543 $5,318,767 $(2,047,818)
====== ====== ========= ======== ========== ===========

The accompanying notes are an integral part of the consolidated financial
statements.

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26

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED
MARCH 31,
1996 1995 1994

Cash flows from operating activities:
Net income (loss) $ 805,240 $ 163,248 $(1,112,897)
Adjustments to reconcile net income (loss) to
net cash provided by (used for) operating activities:
Depreciation 157,573 82,276 51,645
Amortization 156,711 177,557 108,953
Deferred income taxes (191,024)
Reduction of goodwill for utilization of
preacquisition net operating loss 190,564 223,679
Provision for impairment of oil and gas properties 240,338
Changes in assets and liabilities that provided
(used) operating cash, net of acquisitions:
Accounts receivable (2,216,194) (1,848,417) 46,922
Costs and estimated earnings in excess
of billings on uncompleted contracts 109,345 67,411 (370,196)
Inventories (111,597) 141,520 (72,754)
Accounts payable 1,664,084 731,367 747,988
Prepaid expenses and other (213,923) (31) 167,202
Accrued expenses and other 159,144 130,188 (158,433)
------------ ----------- -----------

Net cash provided by (used for)
operating activities 509,923 (131,202) (351,232)
------------ ----------- -----------

Cash flows from investing activities:
Purchase of McInnes, net of cash acquired (12,306,627)
Additions to oil and gas properties (8,671)
Purchase of property and equipment (525,940) (98,768) (38,350)
Proceeds from disposal of equipment 10,000
Payment received on note receivable 50,500
Proceeds from sale of marketable equity
securities 34,000
------------ ----------- -----------
Net cash provided by (used for)
investing activities $(12,822,567) $ (64,768) $ 3,479
------------ ----------- -----------

The accompanying notes are an integral part of the consolidated financial
statements.

26
27

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

FOR THE YEARS ENDED
MARCH 31,
1996 1995 1994

Cash flows from financing activities:
Proceeds from issuance of notes payable $ 6,386,136 $ 774,501 $ 565,902
Debt issue costs (884,501)
Repayments of notes payable (339,450) (331,000) (170,189)
Net proceeds (repayments) on short-term debt 7,601,485 (109,000) (125,200)
Proceeds from the issuance of common stock 637,050 246,993
Proceeds from issuance of warrants 600,000
Repurchase of common stock (60,000)
----------- --------- ----------

Net cash provided by financing
activities 13,940,720 581,494 270,513
----------- --------- ----------

Increase (decrease) in cash and cash equivalents 1,628,076 385,524 (77,240)

Cash and cash equivalents at beginning of year 472,673 87,149 164,389
----------- --------- ----------

Cash and cash equivalents at end of year $ 2,100,749 $ 472,673 $ 87,149
=========== ========= ==========

Supplemental disclosure of cash flow information:
Cash paid for interest $ 651,954 $ 282,635 $ 117,036
=========== ========= ==========

Supplemental disclosures of non-cash financing
and investing activities:
Issuance of options to purchase 110,333
shares of common stock at $.64 per share $ 94,954
===========
Issuance of 2,861,620 shares of common
stock in exchange for all of the outstanding
common stock of American Handling, Inc. $2,294,000
==========
Issuance of promissory notes for all of the
outstanding common stock of Micafil, Inc. $1,750,000
==========

The accompanying notes are an integral part of the consolidated financial
statements.

27
28

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS
Centrum Industries, Inc. (the Company) is a holding company. At March
31, 1996, the Company's subsidiaries included the following companies:

- McInnes Steel Company (McInnes or Metal Forming Operations) -
McInnes, with operating subsidiaries located in Northwestern
Pennsylvania, produces open die steel forgings for the power
generation, compressor and other industrial markets. McInnes also
produces seamless steel rolled rings for bearing and special
machine manufacturers and nonferrous castings for the glass
container manufacturers and pump and valve industries. Sales of
McInnes' products are made to both domestic and international
customers. McInnes was purchased by Centrum on March 8, 1996 (see
Note 2).

- American Handling, Inc. (AH or Material Handling Systems) - AH,
located in Cleveland, Ohio, designs, manufactures and installs
material handling equipment for various domestic manufacturing
companies.

- Micafil, Inc. (Micafil or Motor Production Systems) - Micafil,
located in Dayton, Ohio, manufactures armature winding machines
and completed production systems primarily for domestic customers
in the appliance and automotive industries.

- LaSalle Exploration, Inc. (LaSalle or Oil and Gas) - LaSalle was
formed to explore for oil through a shallow sand waterflood
project on eight acres in Northeastern Ohio.

CONSOLIDATION
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant
intercompany accounts and transactions are eliminated.

USE OF ESTIMATES
The preparation of these financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments are utilized by the Company to reduce
foreign exchange risks relating to export sales. The Company does not
hold or issue derivative financial instruments for trading purposes.

Gains or losses on contracts designated as hedges for identifiable
foreign currency firm commitments are deferred and included in the
measurement of the related foreign currency transaction.

28
29

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)

DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
At March 31, 1996, the Company had one forward exchange contract to
purchase German marks totaling approximately $362,000. The notional
value of the contract is equal to the sale of inventory, payment for
which is denominated in German marks. The contract expires on May 15,
1996. The counterparties to the Company's derivative financial
instrument contracts are multinational commercial banks or other
financial institutions. Neither the risks of counterparty
nonperformance nor the economic consequences of counterparty
nonperformance associated with these contracts are considered by the
Company to be material.

DEBT ISSUANCE COSTS
Debt issuance costs are deferred and amortized over the life of the
related note utilizing the interest method for debt with scheduled
principal payments, otherwise utilizing the straight-line method over
the life of the debt agreement. Accumulated amortization was $42,033
and $17,132 at March 31, 1996 and 1995, respectively.

ENVIRONMENTAL LIABILITIES AND EXPENDITURES
The Company expenses environmental expenditures related to existing
conditions resulting from past or current operations and from which no
current or future benefit is discernible. The Company determines its
liability on a site-by-site basis and records a liability at the time
when it is probable and can be reasonably estimated. Unasserted
claims are not included in the estimated liability. The Company's
estimated liability is reduced to reflect the anticipated
participation of other potentially responsible parties in those
instances where it is probable that such parties are legally
responsible and financially capable of paying their respective shares
of the relevant costs. The estimated liability of the Company is not
discounted or reduced for possible recoveries from insurance carriers.

INVENTORIES
Inventories are valued at the lower of cost or market. Inventory cost
at Micafil is principally determined by the specific identification
method. Effective April 1, 1995, to better match revenues and
expenses, the Company changed its method of accounting for
inventories, other than those held by Micafil, from the first in,
first out (FIFO) method to the last in, first out (LIFO) method. The
effect of the change was not material. At March 31, 1996,
approximately 94% of inventory is valued on the LIFO method.

29
30

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)

OIL AND GAS PROPERTIES
The Company uses the successful efforts method of accounting for oil
and gas producing activities. Costs to acquire mineral interests in
oil and gas properties and costs of uncompleted wells that find proved
reserves, including costs to drill and equip exploratory wells and to
drill and equip development wells are capitalized. Costs to drill
exploratory wells that do not find proved reserves and geological and
geophysical costs are charged to expense when incurred.

Unproved oil and gas properties that are individually significant are
periodically assessed for impairment of value, and a loss is
recognized at the time of impairment by providing an impairment
allowance. Support equipment and other property and equipment are
depreciated over their estimated useful lives.

GOODWILL
The Company has classified as goodwill the cost in excess of fair
value of the net assets acquired in the AH purchase transaction.
Goodwill is being amortized by the straight-line method over 20 years,
which is the period expected to be benefitted. Management reviews
goodwill and other long-lived assets for impairment whenever events
and circumstances indicate that recovery of the asset's carrying value
is unlikely. In performing the reviews for recoverability, management
compares the carrying value of the asset against the estimated future
cash flows expected to result from the use of the asset and its
eventual disposition. If the cash flows are less than the carrying
value, the asset is written down to its estimated fair market value.

PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at cost. Depreciation is
computed over the estimated useful lives using the straight-line
method for financial reporting purposes.

REVENUE RECOGNITION
Sales of products and services, primarily made by McInnes and AH, are
recognized as products are shipped and services are performed.

The estimated sales value of performance under significant contracts,
primarily relating to armature winding equipment and completed
production systems supplied by Micafil, is recognized under the
percentage-of-completion method of accounting measured by the contract
costs incurred to date as a percentage of total estimated contract
costs. Sales and gross profit are adjusted prospectively for
revisions in estimated total contract costs and contract values.
Contracts executed by Micafil generally have terms of less than one
year.

30
31

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)

FINANCIAL INSTRUMENTS
The carrying amount of the Company's financial instruments, which
include cash and cash equivalents, accounts receivable, marketable
equity securities, accounts payable and foreign exchange contracts
approximate their fair market values at March 31, 1996 and 1995.
Variable rate debt and debt maturing within one year with a carrying
value of $18,323,834 approximates its fair market value at March 31,
1996. Long-term, fixed rate debt with a carrying value of $4,521,486
had a fair market value of approximately $3,660,000 at March 31, 1996.
The carrying value of short and long-term debt approximated its fair
market value at March 31, 1995.

CONCENTRATIONS OF CREDIT RISK
Financial instruments which potentially expose the Company to
concentrations of credit risk consist primarily of trade accounts
receivable. The Company sells its products to distributors and
original equipment manufacturers in a variety of industries including
the automotive and consumer durable products industries. The Company
performs continuing credit evaluations of its customers and, in
certain circumstances, the Company may require letters of credit from
its customers. Historically, the Company has not experienced
significant losses related to receivables from individual customers or
groups of customers in any particular industry or geographic area.

PENSION PLANS
Annual net periodic pension costs under the Company's defined benefit
pension plans, arising from the acquisition of McInnes, are determined
on an actuarial basis. The Company's policy is to fund these costs as
accrued, including the amortization of obligations arising due to plan
amendments over the period benefited, through deposits with the
trustee. Benefits are determined based upon employees' length of
service.

POSTRETIREMENT BENEFITS OTHER THEN PENSIONS
Annual net postretirement benefits liability and expenses, arising
from the acquisition of McInnes, are determined on an actuarial basis.
The Company's current policy is to pre- fund these benefits to the
extent allowable under current IRS guidelines. Benefits are
determined primarily based upon employees' length of service and
include applicable employee cost sharing.

INCOME TAXES
Current tax liabilities and assets are recognized for the estimated
taxes payable or refundable on the tax returns for the current year.
Deferred tax liabilities or assets are recognized for the estimated
future tax effects attributable to temporary differences and
carryforwards that result from events that have been recognized in
either the financial statements or the tax returns, but not both. The
measurement of current deferred tax liabilities and assets is based on
provisions of enacted tax laws. Deferred tax assets are reduced, if
necessary, by the amount of any tax benefits that are not expected to
be realized.

31
32

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)

EARNINGS (LOSS) PER SHARE
Primary earnings (loss) per common and common equivalent share are
based on the weighted average number of shares of common stock and
common stock equivalents outstanding during the respective periods,
computed in accordance with the assumptions required by the treasury
stock method. Common equivalent shares include shares that would be
issuable upon the exercise of outstanding warrants and options reduced
by the number of shares that are assumed to be purchased by the
Company with the proceeds from the exercise of the warrants and
options. The shares purchased by the Company are assumed to be
purchased at the average market price existing during the respective
years and exclude options and warrants that are anti-dilutive.

STATEMENT OF CASH FLOWS
For purposes of the consolidated statement of cash flows, the Company
considers all cash and highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.

RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform to the
current year's presentation.

2. ACQUISITIONS

On March 8, 1996 the Company purchased all of the outstanding stock of
McInnes through a subsidiary merger. The purchase method of
accounting was used to account for this business combination. The
total purchase price of approximately $12,300,000 was financed
primarily in the form of new debt agreements and proceeds from the
sale of the Company's common stock. The first debt agreement consists
of a promissory note issued to a commercial bank for $2,850,000
payable monthly at 1.25% above the prime rate and a line-of- credit
for the lesser of $15,500,000 or "borrowing base," as defined in the
agreement. The second debt agreement is a Note and Warrant Purchase
Agreement which provides for $2,500,000 aggregate principal amount of
11% convertible debt with warrants for the purchase of 1,250,000
shares of the Company's common stock for $2 per share. Additional
funds to finance the acquisition were obtained through the sale of
485,500 shares of the Company's common stock for net proceeds of
$637,050. The remaining funds were provided by the issuance of
$1,239,000 aggregate principal amount of term notes which bear
interest at 2% per month to certain of the Company's shareholders and
directors.

32
33

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. ACQUISITIONS (CONTINUED)

On May 17, 1993, the Company agreed to purchase all of the outstanding
capital stock of Micafil. The purchase method of accounting was used
to account for this business combination. The total purchase price of
approximately $1,750,000 was in the form of two promissory notes
issued to the seller. The first promissory note, in the amount of
$1,650,000, has been restructured as discussed at Note 7. The second
promissory note was in the amount of $100,000 plus interest at 8% with
a $52,333 principal and interest payment due December 30, 1993 and the
final principal and interest payment due March 31, 1994. The second
note was repaid during 1995. The principal amount of the second note
includes $84,000 relating to a non-competition agreement.

On September 2, 1993, the Company purchased all of the outstanding
stock of AH through a subsidiary merger. The purchase method of
accounting was used to account for this business combination. AH
became a wholly-owned subsidiary of the Company, and holders of issued
and outstanding shares of AH common stock received an aggregate amount
of 2,861,620 shares of the Company's common stock with an estimated
fair market value of $2,294,000.

The operating results of each acquisition are included in the
Company's consolidated statement of operations from the respective
dates of acquisition.

The following unaudited information presents the Company's results of
operations for the years ended March 31, 1996 and 1995 as if the
acquisitions of McInnes had occurred at the beginning of each of the
periods presented. The pro forma information is not necessarily
indicative of the results of operations which would have actually been
obtained during such periods.

FOR THE YEARS ENDED
MARCH 31, MARCH 31,
1996 1995

(UNAUDITED)

Sales $62,248,000 $52,408,000
Net loss $(2,177,000) $(2,366,000)
Net loss per common share $ (.31) $ (.34)

Weighted average number of common
and common equivalent shares 6,937,750 6,997,550

33
34

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. INVENTORIES

Inventories consisted of the following at March 31:

1996 1995

Raw materials $5,035,001 $ 515,308
Work in process 4,332,492 248,297
Finished goods 305,798 455,176
---------- ----------
9,673,291 1,218,781
LIFO reserve 172,720
Reserve for excess of cost over market (450,767) (107,585)
---------- ----------
$9,395,244 $1,111,196
========== ==========

4. OIL AND GAS PROPERTIES

Oil and gas properties consist of the following at March 31, 1996 and 1995:

Mineral interests in oil and gas properties $ 78,691
Development costs 10,217
----------
$ 88,908
==========

The entire balance of the Company's oil and gas properties represents
one shallow sand waterflood project. As the project is still in the
development stage, no determination can presently be made as to the
extent of proved oil reserves, if any, that may be contained in the
project. During 1994, due to continued uncertainties regarding the
timing of future commercial production and potential future cash
flows, management determined that the aforementioned factors, as to
the timing or magnitude of future production, resulted in economic
impairment. As a result, management recorded a $240,338 provision to
write the properties down to $88,908, which management believes
approximates the fair market value at March 31, 1996 and 1995.

5. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following at March 31:

1996 1995

Land $ 298,679 $ 44,249
Building 3,038,821 675,697
Machinery and equipment 7,455,583 261,647
Furniture and fixtures 331,209 236,861
Vehicles 252,469 60,514
----------- ----------
Total 11,376,761 1,278,968
Less accumulated depreciation (314,560) (156,987)
----------- ----------
$11,062,201 $1,121,981
=========== ==========

34
35

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. BANK LINE OF CREDIT

In connection with the acquisition of McInnes, a new debt agreement
was entered into with Huntington National Bank (Huntington) which
permits the Company to borrow up to $15,500,000 on a revolving basis,
subject to available collateral, which consists of eligible accounts
receivable, equipment and inventory. Interest accrues on the unpaid
portion of the borrowings at the Huntington's prime rate (8.25% at
March 31, 1996) plus .75%. Borrowings under the agreement and
commitments for a stand by letter of credit are secured by all of
McInnes' cash, trade and other accounts receivable, inventory,
equipment and intangible assets. In addition, Huntington has either a
first or second secured interest in McInnes' real property. The total
carrying value of security at March 31, 1996, including second
mortgages, was $27,723,000. At March 31, 1996, approximately $13.2
million in total loans and commitments was available of which the
Company had borrowed $7,886,486 and had commitments relating to a
stand by letter of credit of approximately $4.6 million.

The agreement places, among other things, restrictions or limitations
on McInnes' ability to pay dividends, to pay management fees to other
affiliates or Centrum, and to make capital expenditures and incur rent
expense exceeding certain specified levels in any year. The agreement
requires McInnes to maintain minimum specified tangible net worth
levels, maintain a specified fixed charge coverage ratio and not
exceed a specified ratio of total liabilities to tangible net worth.
At March 31, 1996, McInnes was not in compliance with two of the
covenants. Huntington has waived compliance with respect to these
covenants through September 30, 1996 at which time management believes
McInnes will be in compliance.

The agreement also requires the Company to pay monthly collateral
administration and an annual facility fees aggregating $96,000 per
year and contains early termination fees of up to $370,000. The
agreement expires on February 28, 1999.

During 1995, AH had a secured bank line of credit in the maximum
amount of $700,000 or "borrowing base," as defined in the loan
agreement, if lower. At March 31, 1995, the entire line of credit was
available. Under the agreement, interest was payable monthly at the
bank's prime rate plus 2%. A commitment fee, computed at the rate of
1/2 of 1% per annum on the average daily unused amount of the total
bank commitment, was payable quarterly. This agreement terminated on
September 30, 1995.

7. LONG-TERM DEBT

Long-term debt consisted of the following at March 31:

1996 1995

Note payable to Huntington National
Bank in monthly installments of $39,584.
The note bears interest at the prime
rate (8.25% at March 31, 1996) plus
1.25%. Outstanding principal and
accrued interest are due on April 1,
1999. This note is secured by the
property specified by the Huntington
line of credit (see Note 6). $ 2,810,416

35
36

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. LONG-TERM DEBT (CONTINUED)

1996 1995

$2.5 million aggregate principal amount of 11% convertible, unsecured
subordinated notes and warrants. The notes are convertible for up to
1,250,000 shares of Centrum's common stock and include
warrants for the purchase of 1,250,000 shares of Centrum's common
stock at $2 per share. The notes are recorded net of $600,000
allocated to the warrants. The implicit interest rate on the note is
14.5% and the outstanding balance is due in March 2001. This
agreement places certain restrictions on the Company, including the
requirement that the holders of the notes approve, in advance, any
dividends, the incurrence of new debt (with certain exceptions), and
acquisitions.
$ 1,900,000

Industrial development revenue bonds payable in annual installments.
Interest is set at a daily variable rate (1996 weighted average rate
was 3.36%) and payable monthly. The bonds mature on November 1,
2001. McInnes pays an annual commitment fee of 3% on the amount
committed under a direct pay letter of credit issued by a bank as a
credit enhancement for the bonds. This note is secured by the
property specified by the Huntington line of credit (see Note 6). 4,500,000

Note payable to the former owner of Micafil, originally due in monthly
installments of $33,456 including interest at 8% per annum. The note
is secured by the land and building at Micafil. (Total carrying
value of the security was $736,830 at March 31, 1996). During 1995,
an agreement was reached to restructure this note. Under the revised
terms of the note, $50,000 in accrued interest was paid by the
Company and $146,948 in accrued interest was forgiven by the
creditor. The revised terms specify monthly installments of $13,346,
including interest at an implicit rate of 8.61% per annum, through
June 2005. A balloon payment of $1,452,384, with interest accruing
at 8.61% from the date of the restructuring, will be payable in June
2005. 1,671,361 $ 1,536,213

Unsecured notes payable to shareholders and directors
of the Company. The notes bear interest at 2% per
month. The notes are to be repaid by August 1996.
The notes can be extended by the Company for one six
month period. 1,239,000

36
37

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. LONG-TERM DEBT (CONTINUED)

1996 1995

Unsecured notes payable to individuals, including $405,000 and
$425,000 at March 31, 1996 and 1995, respectively, to certain
shareholders of the Company. The notes bear interest at 10% to 12%
with interest payable semi-annually. The notes are due one year
after being issued and may be renewed for an additional term of one
year at the Company's option. (A) $ 675,000 $ 745,000

Unsecured notes payable to individuals, including $275,000 and
$313,000 at March 31, 1996 and 1995, respectively, to certain
shareholders of the Company, with attached warrants. The notes are
for a term of one year at the rate of 10% per annum. Principal and
interest payments are due one year from the note date. The attached
warrants allow the note holders to purchase 1,000 shares of the
Company's common stock for each $10,000 of notes held at a purchase
price of $1 per share. (B) 659,000 709,000

Unsecured five year term notes payable to individuals, including
$555,000 and $500,000 at March 31, 1996 and 1995, respectively, to
certain shareholders of the Company, with attached warrants. The
notes bear interest at prime (8.25% at March 31, 1996) plus 0.5% to
1.0%. Principal and interest payments are due monthly. The attached
warrants allow the note holders to purchase 20,000 shares of the
Company's common stock for each $50,000 of notes held at a purchase
price of $1 per share. 1,117,348 650,000

City of Erie Enterprise Development Zone term note payable in monthly
principal and interest installments of $4,625. The note bears
interest at 3% per annum and matures on November 2, 2002. The note
is secured by specific property with a carrying value of $866,729 at
March 31, 1996. 330,709

Unsecured note payable to an individual with interest imputed at 8.66%
per annum. Payments under the note agreement are due as follows:
$100,000 in August 1995 and $56,000 in August 1996; with interest
applied at the prime lending rate.
56,000 156,000
----------- ----------
14,958,834 3,796,213
Less current maturities (2,976,425) (186,726)
----------- ----------
Noncurrent portion of long-term debt $11,982,409 $3,609,487
=========== ==========

37
38

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. LONG-TERM DEBT (CONTINUED)

(A) The unsecured notes payable to individuals contain an option that
permits the Company to extend the notes for one year. Management
intends to extend the notes that mature in fiscal 1997; accordingly,
such notes have been classified as noncurrent.

(B) The unsecured notes payable to individuals with attached warrants
contain an option that permits the Company to extend the notes for two
additional one year terms. Management intends to extend the notes
that mature in fiscal 1997; accordingly, such notes have been
classified as noncurrent.

The aggregate scheduled maturities of long-term debt for the fiscal
years subsequent to March 31, 1996 are as follows:

1997 $ 2,976,425
1998 2,767,204
1999 2,921,769
2000 1,128,219
2001 2,717,966
Thereafter 2,447,251
-----------
$14,958,834
===========

8. POSTEMPLOYMENT BENEFITS

PENSION PLANS
McInnes has two noncontributory defined benefit pension plans covering
substantially all of its hourly employees. Monthly benefits are based
upon a rate per year of service and vest upon the completion of five
years of service. The Company's funding policy is to contribute
amounts sufficient to satisfy ERISA funding requirements.

Following is a summarization of the funded status and amounts
recognized for the McInnes' defined benefit pension plans in the
consolidated balance sheet at March 31, 1996:

ASSETS ACCUMULATED
EXCEED BENEFITS
ACCUMULATED EXCEED
BENEFITS ASSETS

Projected benefits obligation $(3,752,913) $(338,046)
Plan assets at fair value, primarily
intermediate bonds and common stock 3,950,115 247,016
----------- ---------
Projected benefit obligation less than (in
excess of) plan assets 197,202 (91,030)
Unrecognized net (gain) loss 4,427 (15,568)
----------- ---------
Prepaid (accrued) pension cost $ 201,629 $(106,598)
=========== =========

38
39

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. POSTEMPLOYMENT BENEFITS (CONTINUED)

PENSION PLANS (CONTINUED)
At March 31, 1996, $3,577,873 of projected benefit obligations were
vested. Net pension cost for the defined pension plans for the period
from March 8, 1996 (the date the Company acquired McInnes) through
March 31, 1996 was not material.

The discount rates used in determining the actuarial present value of
the projected benefit obligations was 7.50% at March 31, 1996. The
expected long-term rate of return on plan assets was 8.0%.

McInnes, Micafil and AH also sponsor individual 401(k) profit sharing
plans covering substantially all salaried employees. The Company's
contributions to these plans in 1996, 1995 and 1994 were $50,900,
$33,600 and $37,900, respectively.

OTHER POSTEMPLOYMENT BENEFITS
Certain of the McInnes' employees are entitled to other postemployment
benefits (OPEBs), comprised primarily of health insurance benefits
under the terms of various agreements and based on a specified amount
per month. At March 31, 1996, OPEB liabilities, net of plan assets,
of $112,000 are included in the Other Liabilities caption of the
consolidated balance sheet.

The funded status of the plans at March 31, 1996 was as follows:

Actuarial present value of:
Fully eligible active participants $ (53,000)
Other active participants (128,000)
Retired participants (1,093,000)
-----------

Accumulated benefit obligation (1,274,000)
Plan assets at fair value 1,253,000
-----------
Unfunded status (21,000)
Unrecognized net loss (91,000)
-----------

Net postretirement benefit liability $ (112,000)
===========

The net periodic postretirement benefit cost for the period from March
8, 1996 through March 31, 1996 was not material.

Investments in these plans consist of investments in money market
funds, fixed income securities, investment contracts and equity mutual
funds.

As of March 31, 1996, the discount rate was 7.50%. A medical costs
trend rate of 6% per year is assumed up to a maximum benefit of $3,120
per year pre age 65 and $924 post age 64. An increase in the assumed
medical trend rate of 1% would increase the accumulated post
retirement benefit obligation as of March 31, 1996 by approximately
$7,000. The effect of an increase in the assumed medical trend rate
of 1% on the service and interest cost components for the period ended
March 31, 1996 would not be material.

39
40

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. INCOME TAXES

The difference between the total income tax provision computed using
the federal statutory income tax rates and the Company's effective tax
rate is as follows:

FOR THE YEAR ENDED
MARCH 31,
1996 1995 1994

Federal statutory rate 34.0% 34.0% (34.0)%

Amortization of intangibles 5.0 15.6 3.3
Utilization of fully reserved
preacquisition net operating losses 17.9 19.7
Change in valuation allowance (38.0) (16.4) 29.9
Other 5.4 4.9 0.8
---- ---- ----

Effective tax rate 24.3% 57.8% 0.0%
==== ==== ====

During 1996 and 1995, the Company reduced its income taxes payable by
$278,000 and $224,000, respectively, through the use of net
operating losses (NOLs). However, utilization of preacquisition NOLs
of $191,564 and $223,679 for 1996 and 1995, respectively, which were
fully reserved at the time of the acquisition, were recorded as a
reduction of goodwill and other intangibles, rather than as a reduction
of income tax expense.

Deferred income tax assets and liabilities are comprised of the
following at March 31:

1996 1995

Assets:
Environmental liabilities $ 217,957
Vacation 208,026 $ 25,991
Bonus 146,158 22,100
Consulting agreement 139,258
Other employee-related accruals 122,209
Other 141,858 153,773
Property, plant and equipment 417,435
Inventory 55,273
Net operating loss and alternative
minimum tax carryforwards 4,927,253 2,224,223
---------- ------------

Deferred tax assets before valuation allowance 5,902,719 2,898,795
Valuation allowance (3,286,184) (2,898,795)
---------- ------------
Deferred tax assets after valuation allowance 2,616,535 -
---------- ------------

Liabilities:
Inventory (471,460)
Property, plant and equipment (201,656)
---------- ------------

Deferred tax liabilities (673,116) -
---------- ------------

Net deferred tax asset $1,943,419 $ -
========== ============

40
41

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. INCOME TAXES (CONTINUED)

At March 31, 1996, the Company had approximately $11,955,000 in
federal and state net operating losses (NOLs) available which expire
in the years 2003 through 2010, and AMT credit carryforwards of
$862,500 which do not expire. Under Section 382 of the United States
Internal Revenue Code of 1986, as amended (the Code), the NOLs may be
subject to limitations. If certain stock ownership changes described
in the Code occur in the future, these restrictions would further
limit the Company's future use of its NOLs.

The Company has recorded a deferred tax asset of $4,927,253 reflecting
the federal and state tax benefit of loss carryforwards and
alternative minimum tax credits. Realization is dependent on
generating sufficient taxable income prior to the expiration of the
loss carryforwards. Although realization is not assured, management
believes that it is more likely than not that a portion of the
deferred tax asset relating to the federal loss carryforwards will be
realized. As a result, the 1996 tax provision was reduced by
$127,000. A valuation allowance has been established with respect to
the portion of deferred tax assets relating to state loss and income
tax credit carryforwards for which the Company is uncertain as to
future realization due to limitations on their use. The amount of the
valuation allowance could be increased or reduced in the near term if
estimates of future taxable income during the carryforward period
changes substantially.

10. COMMITMENTS AND CONTINGENT LIABILITIES

LITIGATION
The Company is involved in routine litigation and various legal
efforts incidental to the normal operations of its business. In
management's opinion, none of these matters will have a materially
adverse effect on the Company's consolidated financial position or
results of operations.

ENVIRONMENTAL
Erie Bronze (Erie), a subsidiary of McInnes, is a direct defendant in
two governmental cost recovery actions and other related private party
actions at a waste disposal site. With regard to the most significant
cost recovery action, Erie has negotiated a settlement which has been
approved in federal court. In addition, Erie and other parties are
responsible for performing certain cleanup work at the site pursuant
to a government order.

41
42

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)

ENVIRONMENTAL (CONTINUED)
Private party suits and actual cleanup costs in excess of governmental
estimates can affect the reliability of the Company's loss estimates.
In addition, unasserted claims are not reflected in the Company's cost
estimates. Pursuant to the environmental statutes, the Company may be
found jointly and severally liable to the government for cleanup
costs; however, management believes that the current status of
government settlements and group cleanup participation at the site
indicates that the liability will be shared by responsible parties.
Currently, there are at least 14 parties participating in various
settlements of the cost recovery actions, and 18 parties participating
in a pro rata cost sharing arrangement with respect to the site
cleanup work. The Company has negotiated an insurance settlement
which requires the carrier to reimburse the Company for site expenses
subject to a ceiling. At March 31, 1996, the Company has recorded
liabilities of $695,800, of which $350,000 was recorded as current
liabilities and has recorded a receivable from its insurance carrier
which is included in current assets. Funds are expected to be paid
over approximately three years. The total anticipated site costs and
private suits are not expected to materially exceed the recorded
liabilities.

LEASE COMMITMENTS
The Company leases an operating facility and office space for a base
annual rental of $230,000, plus increases based on the consumer price
index, under a lease agreement expiring in fiscal 1997. The Company
also leases certain equipment and vehicles under operating lease
agreements which expire at various dates through fiscal 2000. The
aggregate minimum commitments relating to these operating leases for
each of the five fiscal years following March 31, 1996 are set forth
below:

1997 $306,124
1998 139,885
1999 55,291
2000 16,768
2001 -
--------
$518,068
========

The Company also leases office space and additional warehouse space on
a month to month basis. Total rental expense under all of the above
agreements was $336,652, $358,642 and $380,000 for the years ended
March 31, 1996, 1995 and 1994, respectively.

LETTERS OF CREDIT
At March 31, 1996, McInnes had a $4.6 million letter of credit issued
as a credit enhancement for the Erie County Development Authority
bonds (see Note 7).

OTHER
During February 1996, AH exercised its option to purchase its main
office and manufacturing facility, which currently is being leased,
for approximately $1,150,000, of which $900,000 will be financed by
seller. The agreement was still being negotiated at March 31, 1996.

42
43

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. CAPITAL STOCK

The Company is a Delaware corporation with two classes of stock,
common stock and serial preferred stock.

The preferred stock is issuable in series and the Board of Directors,
at their discretion, may fix for each series (1) the rate of dividend,
(2) the price at and the terms and conditions on which shares may be
redeemed, (3) the amount payable per share in the event of voluntary
or involuntary liquidation, (4) sinking fund provisions, (5) the terms
and conditions on which shares may be converted, if a convertible
series, and (6) voting rights, if any.

In 1992, the Company exchanged 70,000 shares of participating
preferred stock for a 25% interest in the Techno-Chatham Project (the
Project) (a LaSalle investment). The preferred stock has no stated
coupon rate, redemption or convertible features, but has a liquidation
value of $10 per share. The Company is committed to paying dividends
based on 25% of the oil and gas revenue of the Project, net of
incurred expenses, after the Company has received the return of its
gross investment in the Project.

During 1996, the Company initiated a Private Placement Offering for
2.4 million shares of its common stock. The stock is being offered in
Units of 12,000 shares at a cost of $18,000 per Unit. Through March
31, 1996, 485,500 shares of common stock have been sold for $637,050,
which is net of $91,200 in issuance costs and expenses. The units are
being offered by Continental Capital Securities, Inc. (see Note 12).

During 1996, the Company repurchased 60,000 shares of its common stock
for $60,000.

During 1995, the Company issued 232,000 shares of common stock for
$232,000 in cash. In addition, options to acquire 40,304 shares of
common stock were exercised at $.372 per share.

In September 1993, the Company issued 2,861,620 shares of common stock
for all of the outstanding common stock of AH.

12. RELATED PARTIES

Continental Capital, Inc. (Continental) is a shareholder of the
Company and its Chairman and Chief Executive Officer was, during 1994
and 1995, the Company's Chairman and Chief Executive Officer and,
since June 1995, was a Director and Vice President of the Company and,
since December 1995, is a Director, Vice President and Secretary. In
1996, 1995 and 1994, the Company paid Continental $132,500, $15,000
and $58,000, respectively, for fees related to the issuance of stock
and debt.

43
44

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. RELATED PARTIES (CONTINUED)

At March 31, 1996 and 1995, the Company had unsecured notes payable to
certain of its shareholders as described in Note 7.

13. BUSINESS SEGMENT INFORMATION

At March 31, 1996, the Company's operations have been classified into
five business segments as described in Note 1.

Summarized financial information by business segment for fiscal 1996,
1995 and 1994 is as follows:

MATERIAL MOTOR METAL
HANDLING PRODUCTION FORMING OIL CORPORATE
1996 SYSTEMS SYSTEMS OPERATIONS AND GAS OFFICE TOTAL

Net sales to unaf-
filiated customers $19,451,267 $ 5,534,536 $ 2,539,899 $27,525,702
Operating profit (loss) 1,409,694 468,409 229,937 $ (33,200) $ (609,266) 1,465,574
Identifiable assets 8,236,864 3,016,597 27,624,426 115,349 1,618,512 40,611,748
Depreciation 59,496 31,094 63,373 3,044 566 157,573
Amortization 150,225 6,486 156,711
Capital expenditures 67,948 17,274 433,695 7,023 525,940

1995
Net sales to unaf-
filiated customers $12,969,997 $ 5,322,699 $18,292,696
Operating profit (loss) 739,397 434,827 $ (28,272) $ (488,113) 657,839
Identifiable assets 6,086,694 3,044,195 117,399 299,048 9,547,336
Depreciation 45,003 33,223 3,044 1,006 82,276
Amortization 160,654 16,903 177,557
Capital expenditures 88,702 10,066 98,768

1994
Net sales to unaf-
filiated customers $ 6,041,724 $ 2,718,943 $ 8,760,667
Operating profit (loss) 127,925 (231,961) $ (35,054) $ (490,208) (629,298)
Identifiable assets 5,347,393 2,405,392 122,021 66,233 7,941,039
Depreciation 19,399 25,831 3,044 3,371 51,645
Amortization 93,715 15,238 108,953
Capital expenditures 36,550 1,800 38,350

44
45

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. STOCK OPTIONS AND WARRANTS

During 1996, in connection with the acquisition of McInnes, two
officers of McInnes received options for 110,333 shares of common
stock having an exercise price of $.64 per share resulting in $94,954
in additional paid-in capital. In addition, during 1996, officers
and employees of the Company received options for 350,000 and 295,000
shares of the Company's common stock with exercise prices of $1.00
and $1.50, per share, respectively.

The following summarizes the stock option and warrant transactions
for the years ended March 31, 1996 and 1995:

NUMBER PER SHARE
OF SHARES OPTION PRICE

Outstanding at March 31, 1994 575,162 $.372-.75
Stock option activity for the year
ended March 31, 1995
Granted
Exercised 40,304 $.372
Cancelled
-----------
Outstanding at March 31, 1995 534,858 $.372-.75

Stock option activity for the year
ended March 31, 1996
Granted 755,333 $.64 - 1.50
Exercised
Cancelled
-----------
Outstanding at March 31, 1996 1,290,191 $.372 - 1.50
===========

During 1996, the Company issued 1,125,000 warrants to purchase its
common stock for $2 per share for a period of eight years. The
warrants, which were issued in connection with the 11% convertible
subordinated notes, have been valued at $600,000.

In addition, warrants to purchase 220,000 shares of the Company's
common stock for $1.00 per share were issued during 1996 in
connection with individual debt agreements with certain shareholders.

During 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 123,
"Accounting for Stock-Based Compensation." This statement sets forth
standards for accounting for stock-based compensation or allows
companies to continue to account for stock-based compensation under
the current requirements and make additional disclosure in the notes
to the financial statements. It is the Company's intention to
continue to account for stock-based compensation in accordance with
current requirements and provide the additional disclosure in the
notes to the financial statements in 1997.

45
46

CENTRUM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15. SALES TO MAJOR CUSTOMER

During fiscal 1996 and 1994, the Company's sales to its largest
customer totaled $3.5 and $1.2 million or 13% and 14% of sales,
respectively. All of these sales were recorded by the material
handling business segment to a customer engaged in the sale of
automotive parts.

46
47

Centrum Industries, Inc.
Schedule II - Valuation and Qualifying Accounts

Column A Column B Column C Column D Column E
- -------------------------- -------- ---------------------------- -------- --------
Additions
----------------------------
Balance at Charged to Charged to
Beginning Costs and Other Accounts Deductions Balance at
Description of Period Expenses -Describe -Describe End of Period
- -------------------------- --------- -------- ------------- ---------- -------------

Year ended March 31, 1996

Valuation allowance for
excess cost over market $107,585 $40,282 $ 316,202 (A) $ (13,302) (B) $ 450,767
Valuation allowance for
LIFO reserve (172,720) (A) (172,720)
Valuation allowance
for accounts receivable 60,658 19,491 56,403 (A) (42,791) (C) 93,761
Valuation allowance for
note receivable 24,733 24,733
Valuation allowance
for lease receivable 6,782 (6,782) (D)

Year ended March 31, 1995

Valuation allowance for
marketable equity
securities $337,875 $ (337,875) (E)
Valuation allowance
for obsolete inventory 186,121 (78,536) (B) $ 107,585
Valuation allowance
for accounts receivable 64,047 $47,265 (50,654) (C) 60,658
Valuation allowance
for note receivable 24,733 24,733
Valuation allowance
for lease receivable 6,782 6,782

Year Ended March 31, 1994

Valuation allowance
for marketable equity
securities $286,875 $51,000 $ 337,875
Valuation allowance
for obsolete inventory 197,699 $(11,578) (B) 186,121
Valuation allowance
for accounts receivable $ 64,047 (A) 64,047
Valuation allowance
for note receivable 24,733 24,733
Valuation allowance
for lease receivable 6,782 6,782

(A) - Valuation allowance was in the opening balance sheet of a company
acquired by Centrum.
(B) - Based on the physical inventory, the need for inventory obsolescence
allowance was reduced.
(C) - Allowance for doubtful accounts was reduced by the amount of accounts
written off.
(D) - Allowance for lease receivable was reduced by the amount of lease written
off.
(E) - The marketable equity securities were sold during 1995.

47
48

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF CENTRUM

The directors and executive officers of Centrum at March 31, 1996 were as
follows:

George H. Wells Age 52 Chief Executive Officer since May 1995. President and
Chief Operating Officer from 1992 to May 1995. Director
since 1992.

William C. Davis Age 50 Vice President and Secretary since December 1995. Vice
President since May 1995. Chief Executive Officer, from
1992 to May 1995. Director since 1988.

Thomas E. Seiple Age 50 Director, since 1988.

Robert J. Fulton Age 53 Director, since 1993.

David L. Hart Age 50 Director, since 1988.

John R. Ayling Age 51 Director, since 1988.

Anthony J. DiVita Age 41 Chief Financial Officer and Treasurer, since May 1995.

Anthony A. Montani Age 57 President and Chief Operating Officer, McInnes Steel
Company, since March 1996.

Timothy M. Hunter Age 33 Vice President, Chief Financial Officer, Secretary/Treasurer,
McInnes Steel Company, since March 1996.

Information concerning the backgrounds and occupations for directors and
executive officers is as follows:

George H. Wells has been Chief Executive Officer since June 1995 and President
and Chief Operating Officer from October 1992 to June 1995. From 1990 to
October, 1991, he served as President and Chief Executive Officer and Director
of Doehler Jarvis, a Toledo, Ohio based producer of die cast and semi-permanent
mold aluminum components utilized by the automotive industry and in general
industrial applications. From 1985 to 1989, he served as President and Chief
Operating Officer and as a Director of National Forge Company of Irvine,
Pennsylvania, which produced precision machined components.

William C. Davis is President, Chairman and Director of Continental Capital
Corporation, positions which he has held for over five years. From 1988 to
1995, he was the Chairman of the Board and Chief Executive Officer of Centrum.
Since 1995, he has been a Vice President and Secretary of Centrum.

Thomas E. Seiple has owned and operated United Roofing, a construction
business, for over five years.

48
49

Robert J. Fulton has been a director since 1993. From 1990 until December
1992, he served as Executive Vice President and Chief Operating Officer and a
Director of Doehler-Jarvis. From 1986 through 1990, he served as a Director
and Vice President in Charge of marketing and manufacturing of National Forge
Company.

David L. Hart has worked as a manufacturer's representative in the automotive
industry and has been President of his own firm, Lee Hart Associates, for over
five years.

John R. Ayling has worked as a registered representative in the stock brokerage
business since 1969. He is currently President of Continental Capital
Management, Inc., a majority owned subsidiary of Continental Capital
Corporation.

Anthony J. DiVita was appointed to the position of Chief Financial Officer and
Treasurer in June 1995 and has been Treasurer of American Handling, Inc. since
1991.

Anthony A. Montani has been President and Chief Operating Officer of McInnes
Steel Company since March 1996. He has been active in the forging industry
for over 30 years. He has been with McInnes Steel Company for over 5 years,
serving in his most recent capacity as Vice-President of Sales and Marketing,
and as a Director.

Timothy M. Hunter was appointed Vice-President, Chief Financial Officer and
Secretary/Treasurer of McInnes Steel Company in March 1996. He has been
with McInnes Steel Company since 1986 where he most recently served as
Treasurer and as a Director.

Section 16(a) Beneficial Ownership Reporting Deficiencies

During 1996, Moramerica Capital Corporation, First New England Capital Limited
Partnership, and North Dakota Small Business Investment Company were late in
filing their Reports on Form 3 in March 1996. David L. Hart was late in filing
his Report on Form 4 for the month of February 1996.

ITEM 11. EXECUTIVE COMPENSATION

The following table shows compensation paid or awarded by Centrum during the
fiscal years ended March 31, 1996, 1995, and 1994 to the current executive
officers of Centrum for services in all capacities. No compensation was
awarded to any other executive officers of Centrum.

49
50

SUMMARY COMPENSATION TABLE

Annual Compensation
---------------------------------------------------------
Name and Other annual All other
principal position Year Salary Bonus compensation compensation(2)
- -----------------------------------------------------------------------------------------------------

George H. Wells 1996 $ 175,000 $ 56,000 $ 6,860
1995 $ 175,000 $ 20,000 $ 11,094
1994 $ 175,000 $ 2,500

Robert J. Fulton 1996 $ $
(Effective April 1995 $ 42,799 $ 52,500(1) $ 7,655
1993) 1994 $ 7,500 $ 4,845

Anthony J. DiVita 1996 $ 82,824 $ 30,000 $ 5,030
1995 $ 68,912 $ 4,400
1994 $ 71,601 $ 4,065

Anthony A. Montani 1996 $ 106,769 $ 6,439
1995 $ 104,000 $ 6,439
1994 $ 100,462 $ 5,451

Timothy M. Hunter 1996 $ 64,523 $ 6,044
1995 $ 62,400 $ 5,051
1994 $ 60,277 $ 4,721
- -----------------------

(1) Consulting fees
(2) Automobile lease

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51

OPTION GRANTS IN 1996

Number of Percent of
securities total options
underlying granted to Exercise or
options employees in base price Expiration Grant date
granted fiscal year per share date(1) value (2)
------- --------------- ------------- --------------- ---------------

George H. Wells 150,000 19.9% $1.00 $75,000
William C. Davis 100,000 13.2% 1.00 50,000
Robert J. Fulton 100,000 13.2% 1.00 50,000
Anthony A. Montani 150,000 19.9% 1.50 90,000
Timothy M. Hunter 125,000 16.5% 1.50 75,000
- -----------------

(1) The options expire following termination of employment.
(2) Based on the Constant Elasticity Variance of the Black-Scholes model using
the following assumptions: (a) a five year option term; (b) 80%
volatility rate; and (c) 0% dividend yield. Actual gain, if any, is
dependent upon the actual performance of the shares of common stock
underlying these options. There is no assurance that the amounts shown in
this column will be achieved.

No options were exercised for the fiscal year ended March 31, 1996 by any of
the named executives included in the summary compensation table.

The directors of Centrum do not receive any compensation for their attendance
at Board meetings nor are they reimbursed for out-of-pocket expenses for travel
to and from Board meetings.

BOARD REPORT ON EXECUTIVE COMPENSATION

Compensation is determined by Centrum's Board of Directors, excluding
interested parties. The Board of Directors engaged Mr. Wells pursuant to an
Employment Agreement dated October 12, 1992 for an annual salary of $175,000,
commencing November 15, 1992. The Board also awarded Mr. Wells options to
purchase 166,667 shares of Centrum's common stock at an exercise price of $.75.
In addition, Mr. Wells purchased 166,667 share of stock for $125,000. The
Board reserved the right in the agreement to terminate Mr. Wells for cause. In
addition to his salary, Mr. Wells is entitled to receive a performance bonus
of 5% of Centrum's consolidated before tax profit beginning with Centrum's 1993
fiscal year and ending with the 1996 fiscal year. For the 1996 fiscal year,
Mr. Wells was awarded a bonus of $56,000. In hiring Mr. Wells and setting his
salary, the Board of Directors took into account Centrum's severe financial
situation and the need for an experienced, senior executive to obtain
improvement and to accomplish the Board's long-term goals.

51
52

By the Board of Directors
(excluding, when applicable,
those interested),

William C. Davis
Thomas E. Seiple
David L. Hart
John R. Ayling

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table shows beneficial ownership of Centrum as of March 31, 1996:

Number of shares of Centrum
common stock
beneficially owned % of class
------------------ ---------------

John R. Ayling 568,536 9.2%
Thomas E. Seiple 60,000 *
William C. Davis 100,000 1.6%
David L. Hart 163,333 2.6%
George H. Wells 483,334 7.8%
Robert J. Fulton 433,334 7.0%
Anthony A. Montani 216,200 3.5%
Timothy M. Hunter 169,133 2.7%

* Less than 0.1%

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Continental Capital, Inc. (Continental) is a shareholder of the Company and its
Chairman and Chief Executive Officer was, from 1998 to 1995, a Director and
Chief Executive Officer of the Company and has been a Vice President and
Director since June 1995 and has been a Director, Vice President and Secretary
since December 1995. In 1996 and 1995, the Company paid $47,500 and $15,000,
respectively, to Continental for fees relating to the issuance of debt. In
1996, the Company paid Continental $85,000 for fees relating to the issuance of
stock.

A Centrum shareholder, who, prior to 1993, was a director, provides certain
legal and consulting services to the Company. During 1996 and 1995, the
Company paid the shareholder $12,000 and $24,000, respectively, for such
services.

At March 31, 1996 and 1995, the Company had unsecured notes payable to certain
of its shareholders. See Note 7 to the Consolidated Financial Statements.

52
53

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) The following documents are filed as part of the report:

1. A list of the financial statements filed as part of this report is
submitted as a separate section, the index to which is located on
page 21.

2. A list of financial statement schedules required to be filed by
Item 8 is located on page 21.

3. Exhibits

The following exhibits are included in this report or are
incorporated herein by reference:

Exhibit No./Description of Exhibit

3.1 Certificate of Incorporation, as amended (filed herewith).

3.2 Bylaws (filed herewith).

3.3 Participating Preferred Agreement (filed herewith).

4.1 The instruments defining the rights of the holders of
debentures issued in calendar year 1995, with options at $1.00
per share are not being filed herewith, as permitted by
Regulation Section 229.601(b)(4)(iii), because such
securities do not exceed 10 percent of the total assets of the
Company and its consolidated subsidiaries. The Company hereby
agrees to furnish a copy of such agreements to the Commission
upon request.

4.2 The instruments defining the rights of the holders of certain
notes, styled as "Loans," issued in 1991-1993, are not being
filed herewith, as permitted by Regulation Section
229.601(b)(4)(iii), because such securities do not exceed 10
percent of the total assets of the Company and its
consolidated subsidiaries. The Company hereby agrees to
furnish a copy of such agreements to the Commission upon
request.

4.3 The instruments defining the rights of the holders of certain
subordinated notes originally issued by American Handling,
Inc. in 1991, are not being filed herewith, as permitted by
Regulation Section 229.601(b)(4)(iii), because such
securities do not exceed 10 percent of the total assets of the
Company and its consolidated subsidiaries. The Company hereby
agrees to furnish a copy of such agreements to the Commission
upon request.

4.4 The instruments defining the rights of the holders of certain
notes, styled as "Loans With Warrants," issued in 1993-1995,
are not being filed herewith, as permitted by Regulation
Section 229.601(b)(4)(iii), because such securities do not
exceed 10 percent of the total assets of the Company and its
consolidated subsidiaries. The Company hereby agrees to
furnish a copy of such agreements to the Commission upon
request.

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54

4.5 The 11% Convertible Subordinated Notes issued in March 1996 in
the aggregate principal amount of $2,500,000 (issued together
with warrants for 1,250,000 shares of the Company's common
stock) are not being filed herewith, as permitted by
Regulation Section 229.601(b)(4)(iii), because such
securities do not exceed 10 percent of the total assets of the
Company and its consolidated subsidiaries. The Company hereby
agrees to furnish a copy of such instruments to the Commission
upon request.

4.6 Certain subordination agreements executed in March 1996 by new
and existing noteholders of the Company are not being filed
herewith, as permitted by Regulation Section
229.601(b)(4)(iii), because such securities do not exceed 10
percent of the total assets of the Company and its
consolidated subsidiaries. The Company hereby agrees to
furnish a copy of such agreements to the Commission upon
request.

4.7 The instruments defining the rights of the holders of Bridge
Notes, issued in March 1996 in the aggregate principal amount
of $1,239,000, are not being filed herewith, as permitted by
Regulation Section 229.601(b)(4)(iii), because such
securities do not exceed 10 percent of the total assets of the
Company and its consolidated subsidiaries. The Company hereby
agrees to furnish a copy of such instruments to the Commission
upon request.

4.8 The instruments defining the rights of the holders of certain
debt incurred in the acquisition of Micafil, Inc., in May
1993, including the restatements of such original instruments,
are not being filed herewith, as permitted by Regulation
Section 229.601(b)(4)(iii), because such securities do not
exceed 10 percent of the total assets of the Company and its
consolidated subsidiaries. The Company hereby agrees to
furnish a copy of such instruments to the Commission upon
request.

4.9 Reimbursement Agreement, dated as of February 29, 1996, with
respect to a letter of credit issued by The Huntington
National Bank, relating to $6,000,000 Erie County Industrial
Development Authority Variable Rate Demand Industrial
Development Revenue Bonds (McInnes Steel Company Project)
(filed herewith).

4.10 Installment Sales Agreement, dated as of November 1, 1991,
relating to the loan of proceeds from the sale of
$6,000,000 Erie County Industrial Development Authority
Variable Rate Demand Industrial Development Revenue Bonds
(McInnes Steel Company Project) (filed herewith).

9.1 Equity Holders Agreement dated as of February 29, 1996,
effective as of March 8, 1996, by and among First New England
Capital Limited Partnership, Moramerica Capital Corp., North
Dakota Small Business Investment Company, Centrum Industries,
Inc. and certain shareholders of Centrum Industries, Inc.
(filed herewith).

10.1 Agreement and Plan of Reorganization by and among Centrum
Industries, Inc., Centrum Merging Corporation, and McInnes
Steel Company, dated as of December 7, 1995 (filed as
Exhibit 7(c) to the Company's Report on Form 8-K, filed
with the Commission on December 22, 1996, and incorporated
herein by reference.)

54
55

10.2 Agreement and Plan of Merger by and among Centrum Merging
Corporation and McInnes Steel Company, with Centrum
Industries, Inc., as a parent party, dated March 8, 1996
(filed as Exhibit 7(a) to the Company's Report on Form 8-K,
filed with the Commission on March 22, 1996, and
incorporated herein by reference.)

10.3 Note and Warrant Purchase Agreement dated as of February
29, 1996 and effective as of March 8, 1996, by and among
Moramerica Capital Corporation, First New England Capital
Limited Partnership, and North Dakota Small Business
Investment Company and Centrum Industries, Inc. with
respect to 11% convertible, subordinated notes and warrants
for the purchase of 1,250,000 shares of common stock
(filed herewith).

10.4 Common Stock Warrant dated as of February 29, 1996 and
effective as of March 8, 1996, issued to Moramerica Capital
Corporation for 627,445 shares of common stock (filed
herewith).

10.5 Common Stock Warrant dated as of February 29, 1996 and
effective as of March 8, 1996, issued to First New England
Capital Limited Partnership for 375,000 shares of common
stock (filed herewith).

10.6 Common Stock Warrant dated as of February 29, 1996 and
effective as of March 8, 1996, issued to First New England
Capital Limited Partnership and North Dakota Small Business
Investment Company for 247,555 shares of common stock
(filed herewith).

10.7 Put Agreement by and among Moramerica Capital Corporation,
First New England Capital Limited Partnership and North
Dakota Small Business Investment Company and Centrum
Industries, Inc. (filed herewith).

10.8 Registration Rights Agreement dated as of February 29,
1996, effective as of March 8, 1996, by and among
Moramerica Capital Corporation, First New England Capital
Limited Partnership and North Dakota Small Business
Investment Company and Centrum Industries, Inc. (filed
herewith).

10.9 Loan and Security Agreement dated as of February 29, 1996,
by and among The Huntington National Bank and McInnes Steel
Company, Eballoy Glass Products Company, Erie Bronze &
Aluminum Company and McInnes International, Inc. as
Borrowers, and Centrum Industries, Inc. and McInnes
Services, Inc. as Guarantors (filed herewith).

10.10 Continuing Guaranty Unlimited of Centrum Industries, Inc.,
dated as of February 29, 1996 (filed herewith).

10.11 Form of Common Stock Warrant, issued in connection with the
debt instruments referenced in Exhibits 4.5 above (filed
herewith).

10.12 Loan Agreement by and between the City of Erie by and
through the Enterprise Development Zone Revolving Loan Fund
and McInnes Steel Company dated as of November 2, 1995
(filed herewith).

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56

10.13 Employment Agreement with George H. Wells (filed as Exhibit
10.1 to the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1992, and incorporated herein
by reference.)

10.14 Employment Agreement with Anthony A. Montani (filed
herewith).

10.15 Employment Agreement with Timothy M. Hunter (filed
herewith).

10.16 Services Agreement with Stephen J. Mahoney (filed
herewith).

10.17 Stock Option Agreement with Anthony A. Montani (filed
herewith).

10.18 Stock Option Agreement with Anthony A. Montani (filed
herewith).

10.19 Stock Option Agreement with Timothy M. Hunter (filed
herewith).

10.20 Stock Option Agreement with Timothy M. Hunter (filed
herewith).

10.21 Bonus and Stock Option Plan of McInnes Steel Company and
its Subsidiaries (filed herewith).

10.22 Bonus and Stock Option Plan of Micafil, Inc. (filed
herewith).

10.23 Bonus and Stock Option Plan of American Handling, Inc.
(filed herewith).

11 Computation of earnings per share (filed herewith).

21 Subsidiaries (direct and indirect) of the Company (filed
herewith).

27 Financial Data Schedules

(b) Reports on Form 8-K

On March 22, 1996, the Company filed a Current Report on Form 8-K to
report on the completion of its acquisition of McInnes Steel Company.
No financial statements were filed with this Form 8-K.

56
57

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Centrum has duly caused this reported to be signed on its behalf
by the undersigned, thereunto duly authorized.

CENTRUM INDUSTRIES, INC.

By: /s/ George H. Wells
----------------------------------
George H. Wells
Chief Executive Officer

Date: June 20, 1996
-------------------------------

57
58

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of Centrum in
the capacities and on the dates indicated.

Signature Date

/s/ George H. Wells Principal June 20, 1996
-------------------------------------- Executive
George H. Wells Officer
Chief Executive Officer, Member -
Board of Directors

/s/ Anthony J. DiVita June 20, 1996
--------------------------------------
Anthony J. DiVita
Treasurer and Chief Financial Officer

/s/ William C. Davis June 20, 1996
--------------------------------------
William C. Davis
Vice President, Secretary

/s/ Thomas E. Seiple June 20, 1996
--------------------------------------
Thomas E. Seiple
Member - Board of Directors

/s/ David L. Hart June 20, 1996
--------------------------------------
David L. Hart
Member - Board of Director

/s/ Robert J. Fulton June 20, 1996
--------------------------------------
Robert J. Fulton
Member - Board of Directors

/s/ John R. Ayling June 20, 1996
--------------------------------------
John R. Ayling
Member - Board of Directors

58
59
Exhibit Index
-------------

Exhibit No. Description of Exhibit
- ----------- ----------------------

3.1 Certificate of Incorporation, as amended (filed herewith).

3.2 Bylaws (filed herewith).

3.3 Participating Preferred Agreement (filed herewith).

4.1 The instruments defining the rights of the holders of debentures
issued in calendar year 1995, with options at $1.00 per share
are not being filed herewith, as permitted by Regulation Section
229.601(b)(4)(iii), because such securities do not exceed 10
percent of the total assets of the Company and its consolidated
subsidiaries. The Company hereby agrees to furnish a copy of
such agreements to the Commission upon request.

4.2 The instruments defining the rights of the holders of certain
notes, styled as "Loans," issued in 1991-1993, are not being
filed herewith, as permitted by Regulation Section
229.601(b)(4)(iii), because such securities do not exceed 10
percent of the total assets of the Company and its consolidated
subsidiaries. The Company hereby agrees to furnish a copy of
such agreements to the Commission upon request.

4.3 The instruments defining the rights of the holders of certain
subordinated notes originally issued by American Handling, Inc.
in 1991, are not being filed herewith, as permitted by
Regulation Section 229.601(b)(4)(iii), because such securities
do not exceed 10 percent of the total assets of the Company and
its consolidated subsidiaries. The Company hereby agrees to
furnish a copy of such agreements to the Commission upon
request.

4.4 The instruments defining the rights of the holders of certain
notes, styled as "Loans With Warrants," issued in 1993-1995, are
not being filed herewith, as permitted by Regulation Section
229.601(b)(4)(iii), because such securities do not exceed 10
percent of the total assets of the Company and its consolidated
subsidiaries. The Company hereby agrees to furnish a copy of
such agreements to the Commission upon request.

4.5 The 11% Convertible Subordinated Notes issued in March 1996 in
the aggregate principal amount of $2,500,000 (issued together
with warrants for 1,250,000 shares of the Company's common
stock) are not being filed herewith, as permitted by Regulation
Section 229.601(b)(4)(iii), because such securities do not
exceed 10 percent of the total assets of the Company and its
consolidated subsidiaries. The Company hereby agrees to furnish
a copy of such instruments to the Commission upon request.

4.6 Certain subordination agreements executed in March 1996 by new
and existing noteholders of the Company are not being filed
herewith, as permitted by Regulation Section 229.601(b)(4)(iii),
because such securities do not exceed 10 percent of the total
assets of the Company and its consolidated subsidiaries. The
Company hereby agrees to furnish a copy of such agreements to
the Commission upon request.

4.7 The instruments defining the rights of the holders of Bridge
Notes, issued in March 1996 in the aggregate principal amount of
$1,239,000, are not being filed herewith, as permitted by
Regulation Section 229.601(b)(4)(iii), because such securities
do not exceed 10 percent of the total assets of the Company and
its consolidated subsidiaries. The Company hereby agrees to
furnish a copy of such instruments to the Commission upon
request.

4.8 The instruments defining the rights of the holders of certain
debt incurred in the acquisition of Micafil, Inc., in May 1993,
including the restatements of such original instruments, are not
being filed herewith, as permitted by Regulation Section
229.601(b)(4)(iii), because such securities do not exceed 10
percent of the total assets of the Company and its consolidated
subsidiaries. The Company hereby agrees to furnish a copy of
such instruments to the Commission upon request.

4.9 Reimbursement Agreement, dated as of February 29, 1996, with
respect to a letter of credit issued by The Huntington National
Bank, relating to $6,000,000 Erie County Industrial Development
Authority Variable Rate Demand Industrial Development Revenue
Bonds (McInnes Steel Company Project) (filed herewith).

4.10 Installment Sales Agreement, dated as of November 1, 1991,
relating to the loan of proceeds from the sale of $6,000,000
Erie County Industrial Development Authority Variable Rate
Demand Industrial Development Revenue Bonds (McInnes Steel
Company Project) (filed herewith).

10.1 Agreement and Plan of Reorganization by and among Centrum
Industries, Inc., Centrum Merging Corporation, and McInnes Steel
Company, dated as of December 7, 1995 (filed as Exhibit 7(c) to
the Company's Report on Form 8-K, filed with the Commission on
December 22, 1996, and incorporated herein by reference.)

10.2 Agreement and Plan of Merger by and among Centrum Merging
Corporation and McInnes Steel Company, with Centrum Industries,
Inc., as a parent party, dated March 8, 1996 (filed as Exhibit
7(a) to the Company's Report on Form 8-K, filed with the
Commission on March 22, 1996, and incorporated herein by
reference.)

10.3 Note and Warrant Purchase Agreement dated as of February 29,
1996 and effective as of March 8, 1996, by and among Moramerica
Capital Corporation, First New England Capital Limited
Partnership, and North Dakota Small Business Investment Company
and Centrum Industries, Inc. with respect to 11% convertible,
subordinated notes and warrants for the purchase of 1,250,000
shares of common stock (filed herewith).

10.4 Common Stock Warrant dated as of February 29, 1996 and effective
as of March 8, 1996, issued to Moramerica Capital Corporation
for 627,445 shares of common stock (filed herewith).

10.5 Common Stock Warrant dated as of February 29, 1996 and effective
as of March 8, 1996, issued to First New England Capital Limited
Partnership for 375,000 shares of common stock (filed herewith).

10.6 Common Stock Warrant dated as of February 29, 1996 and effective
as of March 8, 1996, issued to First New England Capital Limited
Partnership and North Dakota Small Business Investment Company
for 247,555 shares of common stock (filed herewith).

10.7 Put Agreement by and among Moramerica Capital Corporation, First
New England Capital Limited Partnership and North Dakota Small
Business Investment Company and Centrum Industries, Inc. (filed
herewith).

10.8 Registration Rights Agreement dated as of February 29, 1996,
effective as of March 8, 1996, by and among Moramerica Capital
Corporation, First New England Capital Limited Partnership and
North Dakota Small Business Investment Company and Centrum
Industries, Inc. (filed herewith).

10.9 Loan and Security Agreement dated as of February 29, 1996, by
and among The Huntington National Bank and McInnes Steel
Company, Eballoy Glass Products Company, Erie Bronze & Aluminum
Company and McInnes International, Inc. as Borrowers, and
Centrum Industries, Inc. and McInnes Services, Inc. as
Guarantors (filed herewith).

10.10 Continuing Guaranty Unlimited of Centrum Industries, Inc., dated
as of February 29, 1996 (filed herewith).

10.11 Form of Common Stock Warrant, issued in connection with the debt
instruments referenced in Exhibits 4.5 above (filed herewith).

10.12 Loan Agreement by and between the City of Erie by and through
the Enterprise Development Zone Revolving Loan Fund and McInnes
Steel Company dated as of November 2, 1995 (filed herewith).

10.13 Employment Agreement with George H. Wells (filed as Exhibit 10.1
to the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1992, and incorporated herein by reference.)

10.14 Employment Agreement with Anthony A. Montani (filed herewith).

10.15 Employment Agreement with Timothy M. Hunter (filed herewith).

10.16 Services Agreement with Stephen J. Mahoney (filed herewith).

10.17 Stock Option Agreement with Anthony A. Montani (filed herewith).

10.18 Stock Option Agreement with Anthony A. Montani (filed herewith).

10.19 Stock Option Agreement with Timothy M. Hunter (filed herewith).

10.20 Stock Option Agreement with Timothy M. Hunter (filed herewith).

10.21 Bonus and Stock Option Plan of McInnes Steel Company and its
Subsidiaries (filed herewith).

10.22 Bonus and Stock Option Plan of Micafil, Inc. (filed herewith).

10.23 Bonus and Stock Option Plan of American Handling, Inc. (filed
herewith).

11 Computation of earnings per share (filed herewith).

21 Subsidiaries (direct and indirect) of the Company (filed
herewith).

27 Financial Data Schedules