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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 10-K/A

(MARK ONE)

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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995

[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 0-828

BIRD CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

MASSACHUSETTS 04-3082903
(I.R.S. EMPLOYER IDENTIFICATION NO.)
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)

1077 PLEASANT STREET, NORWOOD, MA 02062
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (617) 551-0656

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

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

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

COMMON STOCK, PAR VALUE $1 PER SHARE
(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. [_]

The aggregate market value of common stock, par value $1 per share, held by
non-affiliates as of March 1, 1996 was $23,150,000. As of March 1, 1996 there
were 4,123,178 shares of Bird Corporation common stock, par value $1 per share,
outstanding.

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DOCUMENTS INCORPORATED BY REFERENCE

NONE

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PART I

ITEM 1. DESCRIPTION OF BUSINESS

As a result of the sale of its vinyl building products business, window
fabrication business and San Leon hydrocarbon waste recycling center (see
"Recent Business Developments" below), Bird Corporation's current manufacturing
operation consists of one primary business unit--roofing manufacturing and
sales and marketing. Products currently manufactured at Bird Corporation's
roofing facility include asphalt shingles and roll roofing for commercial and
residential use. These products are marketed through independent wholesalers,
including wholesalers whose primary customers are roofing contractors. All
references herein to the "Company" or "Bird" refer to Bird Corporation and its
subsidiaries unless otherwise indicated by the context.

RECENT BUSINESS DEVELOPMENTS

There have been a number of significant developments in the business of the
Company since December 31, 1994, including the following:

. The Company signed an Amended and Restated Agreement and Plan of Merger,
dated as of April 8, 1996 (the "Merger Agreement"), among the Company,
CertainTeed Corporation, a Delaware corporation ("CertainTeed"), and BI
Expansion Corp., a Massachusetts corporation and a wholly owned
subsidiary of CertainTeed ("Acquisition Sub"), pursuant to which
Acquisition Sub will be merged with and into the Company (the "Merger"),
with the Company surviving the Merger as a subsidiary of CertainTeed. In
the Merger, each share of the Company's common stock, par value $1 per
share ("Common Stock"), outstanding on the effective date of the Merger
and each share of the Company's $1.85 Cumulative Convertible Preference
Stock par value $1 per share ("Preference Stock"), outstanding on the
effective date of the Merger (other than shares held by CertainTeed or
Acquisition Sub, shares held in the Company's treasury and other than
shares held by stockholders who perfect their appraisal rights under
Massachusetts law) will be converted into the right to receive (in the
case of Common Stock) $7.50 per share of Common Stock and (in the case of
Preference Stock) $20 plus all accrued and unpaid dividends through the
effective date of the Merger per share of Preference Stock, in each case
in cash, without interest. All outstanding shares of the Company's 5%
Cumulative Preferred Stock, par value $100 per share (the "5% Stock"),
will remain issued and outstanding after the Merger and will be called
for redemption and retirement as soon as practicable following the Merger
at a price equal to $110 per share, plus all accrued and unpaid dividends
through the date of redemption and retirement.

The Merger is the second step in a two-part transaction, the purpose of
which is the acquisition of the Company by CertainTeed. On April 12,
1996, Acquisition Sub commenced a tender offer (the "Offer") to purchase
all outstanding shares of Common Stock and Preference Stock at a price of
$7.50 per share of Common Stock and $20 plus all accrued and unpaid
dividends through the expiration date of the Offer per share of
Preference Stock. The Offer is conditioned upon, among other things, (i)
there being validly tendered and not withdrawn prior to the expiration of
the Offer at least 66 2/3% of all outstanding shares of Common Stock
(determined on a fully diluted basis on the expiration of the Offer) and
(ii) either (x) there being validly tendered and not withdrawn prior to
the expiration of the Offer at least 66 2/3% of all outstanding shares of
Preference Stock or (y) Acquisition Sub having elected to require the
Company to redeem all outstanding shares of Preference Stock in
accordance with the Merger Agreement.

Pursuant to the Merger Agreement, upon the acquisition by Acquisition Sub
of at least a majority of the outstanding shares of Common Stock pursuant
to the Offer, Acquisition Sub shall be entitled to designate such number
of directors to be appointed to the Company's Board of Directors as is
required to constitute a majority of the members of the Company's Board
of Directors.

Completion of the transaction is subject to approval by Bird's
shareholders, appropriate governmental approvals and other customary
conditions.

. On November 29, 1995, the Company sold all of the outstanding capital
stock of Bird Environmental Gulf Coast, Inc. ("BEGCI") which owned the
Company's interest in the San Leon, Texas based hydrocarbon waste
recycling center, to GTS Duratek, Inc. ("Purchaser") for a purchase price
of $1.00. In addition, BETI agreed to pay the Purchaser the amount by
which BEGCI's current liabilities exceeded its current assets at August
31, 1995, which was approximately $1.3 million. The sale of the recycling
center completes the Company's withdrawal from the environmental
remediation and recycling industry. The resulting loss of $11,252,000 is
reflected as discontinued operations in the Company's consolidated
statements of operations.

. On September 26, 1994, the Company announced that it had signed a
definitive agreement to sell the assets of its vinyl building products
manufacturing operation located in Bardstown, Kentucky to Jannock, Inc.
("Jannock"). This transaction also included an option to purchase the
Company's interest in Kensington Partners ("Kensington"), a window
fabrication business. At a special meeting of the shareholders held in
Dedham, Massachusetts on March 7, 1995, the shareholders of the Company
voted to sell the assets of the Company's vinyl building products
operation to Jannock essentially in accordance with the terms and
conditions as outlined in the definitive agreement between the Company
and Jannock dated September 23, 1994. On March 8, 1995, the sale was
closed for a gross purchase price of $47.5 million which was reduced to
approximately $42.5 million by post- closing working capital adjustments
(the "Vinyl Sale"). The sale included the assumption by the purchaser of
certain specified liabilities of the vinyl business. Proceeds from the
sale were used to reduce bank debt. Net of adjustments, the Company's
gain on this sale totaled $20,579,000 million and is reflected as
discontinued business activity income in the consolidated statements of
operations.

. On June 2, 1995, the Company sold all of the outstanding capital stock of
Bird-Kensington Holding Corp. ("Bird-Kensington"), which owned the
Company's interest in Kensington to Jannock, Inc. The sale was
consummated pursuant to the exercise by Jannock of an option granted
under the Asset Purchase Agreement dated as of September 23, 1994 (as
amended by amendments dated as of January 24, 1995, January 31, 1995, and
April 27, 1995). The purchase price consisted of cash in the amount of
$2,780,000 and the assumption of certain liabilities related to the
Kensington business. Cash proceeds of $1 million were used to acquire the
minority partner's interest in Kensington. In addition, $4,090,000 was
invested by the Company in Bird-Kensington, as a condition of the sale,
to enable Kensington to pay certain liabilities and to meet equity
requirements as stipulated in the Asset Purchase Agreement. The sale
resulted in a loss of $1,959,000 and is reflected as discontinued
business activity expense in the Company's consolidated statements of
operations.

HOUSING GROUP

Asphalt roofing products are manufactured and sold at the Company's
facilities in Norwood, Massachusetts. Asphalt shingles and roll roofing are
produced by coating a fiberglass mat with a mixture of hot asphalt and crushed
rock filler and covering the coated mat with Company-manufactured roofing
granules. The Company's facilities include a roofing manufacturing facility, a
granule plant, a quarry, an asphalt plant and a private landfill for the
Company's use.

The Company's Housing Group produced vinyl siding products at its plant in
Bardstown, Kentucky prior to the sale of such facility in March 1995.
Additionally, the Company sold its interest in Kensington, its joint venture in
the replacement window fabrication business in June 1995. The Housing Group
also carried on a distribution business through wholesale building materials
distributors based in New England, New York, Kentucky, Texas, Louisiana, and
Arizona until such businesses were sold in August and November 1994.

Net sales of the components of the Housing Group as a percentage of
consolidated net sales of the Company were as follows: sales of asphalt roofing
products, 80% in 1995, 31% in 1994 and 23% in 1993; sales of vinyl products,
20% in 1995, 24% in 1994 and 20% in 1993; and sales through building materials
distribution centers (including roofing and vinyl products manufactured by the
Company), 45% in 1994 and 57% in 1993.

The principal geographic markets for the Company's manufactured roofing
products, due to limitations imposed by freight costs, are the northeastern
United States. The building materials business is seasonal to the extent that
outside repair and remodeling and new construction decline during the winter
months. To reduce the impact of this seasonal factor, the Company generally
employs what it believes to be an industry-wide practice of "winter dating",
pursuant to which extended or discounted payment terms are offered to
creditworthy customers who order and accept delivery of roofing products during
specified periods of time in the slow season.

Raw Materials

The principal raw materials used in the manufacture of asphalt roofing
products are fiberglass mat, asphalt saturants and coatings and crushed
granules. The Company's requirements for fiberglass mat are met primarily under
a Glass Mat Supply Agreement with one vendor which expires on December 31,
1996. Fiberglass mat is also generally available in adequate quantities from a
number of outside suppliers. Asphalt saturants and coatings were, until
recently, purchased from a major oil refinery. These materials are also
available from other sources at a higher delivered cost. After the refinery's
discontinuation of its production of asphalt in April 1994, the Company relied
on a number of alternative sources for this raw material. Since completion of
construction of an asphalt plant in January 1995, the Company has been able to
process asphalt at its roofing facility, thereby reducing its costs and
decreasing the potential for temporary interruptions in its manufacturing
operations. The Company believes that it can produce all of its current granule
requirements at its granule plant and quarry.

Backlog

Order backlog is not a meaningful measure of the Company's building materials
business because there are fewer sales during the last quarter of the fiscal
year and the order-to-shipment cycle is relatively short. Additionally, it is
very rare, at any time, to require more than 30 days from the receipt of a
product order to delivery of the product.

Competition

The building materials business is, to a large degree, a commodities-type
business and is highly competitive with respect to price, delivery terms and
consistent product quality. Many of the Company's competitors are larger and
financially stronger than the Company, but none is dominant in any of its
markets.

The strengths of the Company's asphalt roofing business arise, in part, from
the unique marketing programs the Company directs toward its indirect customer
base, professional roofing contractors, combined with an industry-wide
reputation for providing quality products with a high level of service. The
Company's comprehensive contractor marketing program is designed to support the
position of the Company's contractors in the industry. Such marketing programs
include a special system for in-home sales promotions. Pursuant to its
exclusive certification program, the Company also certifies contractors who
have recorded three (3) successful years in business, who provide the Company
with names of customers for quality checks, sign a letter of ethics, have a
good credit history, warrant their workmanship for two (2) years and attend
annual training meetings. Contractors must be recertified every two years.
Certified contractors are supplied with a wide array of marketing materials,
including customized sample cases, special mailers and custom job site signs.

Intellectual Property

The Company owns a number of trademarks, as well as significant technology
and know-how, which it utilizes in connection with its asphalt roofing
business. The Company believes that its trademarks are strong and well
recognized in the industry.

COMPLIANCE WITH CERTAIN ENVIRONMENTAL LAWS

The Company has expended, and expects to continue to expend, funds to comply
with federal, state and local provisions and orders which relate to the
environment. Based on the information available to the

Company at this time, the Company believes that the effect of compliance with
these provisions on the capital expenditures, earnings and competitive position
of the Company is not material. Litigation and other proceedings involving
environmental matters are described under the heading "Environmental Matters"
in Item 7, "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and in Item 3, "Legal Proceedings".

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

While the Company formerly operated in two major business segments, its
housing segment and its environmental segment, the Company no longer operates
its environmental segment. Financial information about the industrial segments
in which the Company operates, for the three years ended December 31, 1995,
appear in Note 12 of the Notes to Consolidated Financial Statements which are
included herein.

EMPLOYEES

At December 31, 1995, the Company employed 174 people.

ITEM 2. PROPERTIES

The Company's executive offices are located at its plant in Norwood,
Massachusetts. The Company believes that its plant and facilities, as described
below, are suitable and adequate for its current and anticipated business.
Operating capacity can be increased by additional man hours, changing product
mix, and/or minimal capital investment should the need arise. The Company's
facilities are well maintained, in sound operating condition, and in regular
use.

Roofing Manufacturing Facility

The Company owns its asphalt roofing manufacturing facility in Norwood,
Massachusetts. The Norwood plant includes the roofing manufacturing facility, a
granule plant and an asphalt plant. The Company's quarry is located in
Wrentham, Massachusetts, and its private landfill is located in Walpole,
Massachusetts. The Company leases an industrial laminator and certain other
equipment which were fabricated for use in its roofing plant. The laminator
lease expires in 1998. The Company completed the construction of an asphalt
oxidizer plant at the Norwood premises in January 1995 to ensure a continuous
supply of asphalt. The Company also leases an asphalt storage tank and terminal
facilities in Providence, Rhode Island.

ITEM 3. LEGAL PROCEEDINGS

On or about April 18, 1996 Bird Incorporated, a subsidiary of the Company,
received a grand jury subpoena issued upon application of the United States
Department of Justice, Antitrust Division, for the production of certain
documents. In addition, an executive officer and a senior manager of the
Company have received grand jury subpoenas requiring the production of certain
documents as well as their providing testimony before the grand jury. The
Company and such executive officer and senior manager are in the process of
evaluating the subpoena and intend to cooperate fully with the Department of
Justice. It appears that the subpoena relates to an investigation of the
roofing materials industry.

The Company monitors its compliance with environmental regulations on an
ongoing basis. The Company's general counsel receives environmental site
assessments from the operating managers responsible for site environmental
compliance. Appropriate action is undertaken where needed. When environmental
claims are asserted against the Company, the claims are evaluated by the
Company's general counsel and operating management in conjunction with external
legal counsel and environmental engineers as necessary, and action is taken
with respect to all known sites, as appropriate. The Company is currently
engaged in proceedings relating to or has received notice of the following
environmental matters:

On March 15, 1994 the Company received a draft of an Administrative Consent
Order and Notice of Noncompliance from the Massachusetts Department of
Environmental Protection ("DEP") concerning operations at its Norwood,
Massachusetts manufacturing facility and associated rock granule processing
facility. The draft alleges that the Company was not in compliance with
regulations of the DEP relating to air emissions, granule plant operation, and
labeling, handling and storage of certain hazardous waste. The draft proposes
certain corrective action on the part of the Company as well as payment of
civil administrative penalties. On June 10, 1994, the Company's roofing
division entered into an administrative consent order and notice of
noncompliance with respect to the alleged violations. The consent order
requires the Company to undertake certain modifications and corrective actions
with respect to certain hazardous waste handling and storage facilities at the
Norwood facility, to conduct an environmental audit of its operations at such
facility and to undertake various modifications of air pollution control
equipment. On May 13, 1994, the Company paid an administrative penalty of
$30,000. The Company estimated that the cost of corrective action to be taken
by it in accordance with the consent order would be approximately $100,000. The
majority of the corrective actions were completed in 1995.

On March 25, 1994, the Company received a notice from the United States
Environmental Protection Agency (the "EPA") regarding a site inspection
prioritization report prepared by the DEP. The notice alleges a potential
release of hazardous substances into the environment at the Company's former
mill site in East Walpole, Massachusetts. The EPA has reserved the right to
conduct further site tests on the location. A site assessment performed on the
mill site for the Company by its environmental consultants, GZA
GeoEnvironmental Inc. ("GZA"), showed no environmental cleanup was necessary.
This report was submitted to the DEP in July 1995. In the opinion of management
and based on management's and GZA's understanding that the alleged releases are
in de minimis quantities, this matter should not have a material adverse effect
on the Company's financial position or on the results of its operations.

On June 21, 1994, the Arizona Department of Environmental Quality ("ADEQ")
issued a notice of violation ("NV") to Southwest Roofing Supply, a previously
owned division of the Company ("Southwest"), which directed Southwest to
conduct a site investigation of property formerly leased by Southwest. A
consent order between the ADEQ and the Company was issued on September 23,
1994. Pursuant to the consent order, the Company agreed to submit a work plan
with a view to remediating the soil and groundwater that may have been
contaminated by leaks from an underground storage tank previously removed by
the Company. The Company's management believes that the remediation cost to the
Company will be in the range of $200,000 to $700,000. As of December 31, 1995,
the Company has provided a reserve of $450,000 for the estimated cost of
cleanup. The Company anticipates that $200,000 will be reimbursed to the
Company by the ADEQ in accordance with Arizona law and regulation.

In 1986, the Company, along with numerous other companies, was named by the
EPA and other governmental agencies responsible for regulation of the
environment as a Potentially Responsible Person ("PRP") pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. Paragraph 9601, et seq. ("CERCLA") in connection with
hazardous substances at a site known as the Fulton Terminal Superfund site
located in Fulton, Oswego County, New York. On September 28, 1990, the Company
and a number of other PRPs reached a negotiated settlement with the EPA
pursuant to which the settling PRPs agreed to pay the costs of certain expenses
in connection with the proceedings and to pay certain other expenses, including
the costs and expenses of administering a trust fund to be established by the
settling PRPs. The settlement agreement is embodied in a consent decree lodged
with the United States District Court for the Western District of New York and
fixed the Company's proportionate share of the total expenses. The ultimate
cost to the Company of the remedial work and other expenses covered by the
settlement agreement is estimated to be between $1 million to $2 million
payable over a period of 3 to 15 years (depending upon the duration of
remediation efforts). At December 31, 1995, the Company has provided a reserve
of approximately $1 million to cover the estimated cost of the Company's
remaining proportionate share (i.e., 17%) of the ultimate total cost of
cleanup. Under a cost-sharing arrangement set forth in a consent decree with
the EPA, the other PRPs have agreed to incur 83% of the aggregate cost of
remediation of this site.

The Company has been named as a PRP with respect to certain other sites which
are being investigated by federal or state agencies responsible for regulation
of the environment. As a consequence of its status as a PRP, the Company may be
jointly and severally liable for all of the potential monetary sanctions and
remediation costs applicable to each site. In assessing the potential liability
of the Company at each site, management has considered, among other things, the
aggregate potential cleanup costs of each site; the apparent involvement of the
Company at each site and its prospective share of the remediation costs
attributable thereto; the number of PRPs identified with respect to each site
and their financial ability to contribute their proportionate shares of the
remediation costs for such site; the availability of insurance coverage for the
Company's involvement at each site and the likelihood that such coverage may be
contested; and whether and to what extent potential sources of contribution
from other PRPs or indemnification by insurance companies constitute reliable
sources of recovery for the Company. Similar consideration has been given in
determining the exposure and potential liability of the Company in connection
with other significant legal proceedings to which the Company is a party. On
the basis of such consideration, management has determined that such
environmental matters will not have a material adverse effect on the Company's
financial position or results of operations. The Company has provided an
aggregate reserve amounting to approximately $300,000 for its estimated share
of the ultimate cost of clean-up for claims arising from other such sites
(without taking into account any potential indemnification or recovery from
third parties).

The Company's roofing facility at Norwood, Massachusetts is one of 4,000
sites on the DEP List of Confirmed Disposal Sites. The DEP significantly
revised the regulations that govern the reporting, assessment and remediation
of hazardous waste sites in Massachusetts. The new Massachusetts Contingency
Plan ("MCP") however, does not alter the ultimate liability for any remediation
that may be necessary at the Norwood facility. Under the new MCP, the roofing
facility was listed on the August 1993 "Transition List of Confirmed Disposal
Sites and Locations to be Investigated."

A site assessment of the Norwood facility was performed for the Company by
its environmental consultants GZA GeoEnvironmental, Inc. because the Company
was on the DEP List of Confirmed Disposal Sites. The Company was required to
complete certain additional remedial activities described in the new MCP on or
before August 2, 1996. The Phase I and Phase II plan was completed in 1995 and
submitted to the DEP in January 1996. In the opinion of management, no
additional material costs will be incurred.

Since 1981 Bird has been named as a defendant in approximately 550 product
liability cases throughout the United States by persons claiming to have
suffered asbestos-related diseases as a result of alleged exposure to asbestos
used in products manufactured and sold by Bird. Approximately 140 of these
cases are currently pending and costs of approximately $2 million in the
aggregate have been incurred in the defense of these claims since 1981.
Employers Insurance of Wausau ("Wausau") has accepted the defense of these
cases under an agreement for sharing of the costs of defense, settlements and
judgments, if any. At December 31, 1995, the Company has recorded a reserve of
$950,000 to cover the estimated cost of these claims. In light of the nature
and merits of the claims alleged, in the opinion of management, the resolution
of these remaining claims will not have a material adverse effect on the
results of operations or financial condition of the Company.

In 1992, a subsidiary of the Company, Bird Atlantic Corporation, formerly
Atlantic Building Products Corporation ("ABPCO"), commenced an action against a
former vendor, alleging violation of an exclusive distributorship without
adequate and fair compensation to ABPCO. A jury trial was held in November 1995
in the Superior Court of Plymouth County, Massachusetts. The jury found in
favor of ABPCO and judgement was entered on January 26, 1996 in the principal
amount of approximately $1.8 million. The award, with interest accruing at 12%
per annum, is expected to be in excess of $3 million and will not be reported
as income until collected. The defendant has appealed the judgement.

Insurance and Product Liability Claims

On April 16, 1996 Paul Lindholm filed a class action suit in the Superior
Court of the Commonwealth of Massachusetts for Norfolk County against Bird
Incorporated. The complaint alleges that Bird

Incorporated has knowingly manufactured, distributed and falsely advertised
defectively designed fiber glass based roofing shingles. The complaint lists
claims of fraud, negligent misrepresentation, negligence and breach of express
and implied warranty. The Company is currently in the process of evaluating the
complaint.

On June 1, 1993, Wausau commenced action in the Superior Court for Norfolk
County, Massachusetts, against Bird seeking a declaratory judgment that certain
built-up roofing and glass shingle claims made against Bird were not covered by
liability insurance policies issued by Wausau. Bird asserts that the claims are
covered and has answered the complaint. A trial is scheduled for 1997. In the
opinion of management, the above matter will not have a material adverse effect
on the Company's financial position or results of operations.

The Company is also exposed to a number of other asserted and unasserted
potential claims encountered in the normal course of business. In the opinion
of management, the resolution of such claims will not have a material adverse
effect on the Company's financial position or results of operations.

The Company is a defendant in a number of suits alleging product defects, the
outcome of which management believes will not in the aggregate have a material
impact on the Company's financial position or results of operations.

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

There were no matters submitted to a vote of security holders during the
quarter ended December 31, 1995.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS

COMMON STOCK INFORMATION

The Company had 2,123 common shareholders of record at December 31, 1995.

The common stock is quoted in the National Market System under the NASDAQ
symbol BIRD. The range of high and low prices for the common stock as reported
by NASDAQ for the periods indicated is set forth below.

1995 1994
----------- ------------
QUARTER HIGH LOW HIGH LOW
------- ----- ----- ------ -----

First............................................. 9 7 3/4 12 1/4 8
Second............................................ 8 5/8 6 1/4 11 1/4 8 1/2
Third............................................. 8 1/2 5 7/8 10 1/2 7
Fourth............................................ 6 5/8 4 1/2 10 8

The Company paid no cash dividends on its common stock during 1995 or 1994.

Under the terms of the Loan Agreement between the Company and Fleet Capital,
the Company has agreed that it will refrain from paying cash dividends on its
common stock or its $1.85 cumulative preference stock, without prior approval
from the Bank.

The Company is in arrears in the payment of four dividends on its preference
stock. The Articles of Organization of the Company provide that as long as any
arrearage on the payment of dividends on the Company's 5% preferred stock
exists, no dividends may be declared or paid on any other class of stock of the
Company and further provides that in the event that full cumulative dividends
on the preference stock have not been declared and paid, the Company may not
declare or pay any dividends or make any distributions on, or purchase, redeem,
or otherwise acquire, its common stock until full cumulative dividends on the
preference stock have been declared and paid or set aside for payment.

ITEM 6. SELECTED FINANCIAL DATA

The following tables set forth certain financial data and are qualified in
their entirety by the more detailed Consolidated Financial Statements and
information included elsewhere herein:

SELECTED CONSOLIDATED STATEMENT OF OPERATIONS DATA

YEAR ENDED DECEMBER 31,
------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Net sales.................... $ 54,180 $167,886 $187,745 $164,202 $137,059
-------- -------- -------- -------- --------
Costs and expenses:
Cost of sales.............. 48,007 136,878 151,664 128,371 107,226
Selling, general and
administrative expenses... 11,817 28,786 32,716 27,811 23,023
Interest expense........... 927 4,782 2,472 1,506 1,026
Discontinued business
activities (income)....... (17,570) (1,313) 268 178 189
Other (income) expense..... 372 4,680 5,903 (197) (331)
-------- -------- -------- -------- --------
Earnings (loss) from
continuing operations before
income taxes................ 10,627 (5,927) (5,278) 6,533 5,926
Provision (benefit) for
income taxes................ 11,424 (7,010) (637) 869 498
-------- -------- -------- -------- --------
Earnings (loss) from
continuing operations before
cumulative effect of
accounting change........... (797) 1,083 (4,641) 5,664 5,428
-------- -------- -------- -------- --------
Discontinued operations:
Gain (loss) from operations
of discontinued
businesses, net of taxes.. 0 1,245 (15,414) (2,573) (249)
Loss on disposal of
businesses, net of taxes.. (11,252) (6,011) (11,000) 0 0
-------- -------- -------- -------- --------
Net loss from discontinued
operations.................. (11,252) (4,766) (26,414) (2,573) (249)
-------- -------- -------- -------- --------
Cumulative effect of
accounting change........... 0 0 2,733 0 0
-------- -------- -------- -------- --------
Net earnings (loss).......... $(12,049) $ (3,683) $(28,322) $ 3,091 $ 5,179
======== ======== ======== ======== ========
Primary earnings (loss) per
common share:
Continuing operations...... $ (0.57) $ (0.11) $ (1.51) $ 1.00 $ 1.01
Discontinued operations.... (2.74) (1.20) (6.45) (0.62) (0.06)
Cumulative effect of
accounting change......... 0.00 0.00 0.67 0.00 0.00
-------- -------- -------- -------- --------
Net earnings (loss) per
common share................ $ (3.31) $ (1.31) $ (7.29) $ 0.38 $ 0.95
======== ======== ======== ======== ========
Cash dividend per common
share....................... $ 0.00 $ 0.00 $ 0.15 $ 0.20 $ 0.20
======== ======== ======== ======== ========
Book value per common share.. $ 1.45 $ 5.07 $ 5.75 $ 12.83 $ 12.61
======== ======== ======== ======== ========

SELECTED CONSOLIDATED BALANCE SHEET DATA

DECEMBER 31,
-----------------------------------------
1995 1994 1993 1992 1991
------- ------- -------- -------- -------
(IN THOUSANDS)

Total assets......................... $43,703 $85,705 $123,229 $119,075 $99,904
Working capital...................... $ 5,978 $ 5,627 $ 30,090 $ 43,782 $34,179
Long-term debt, excluding current
portion............................. $ 4,869 $12,504 $ 43,127 $ 30,374 $12,150
Stockholders' equity................. $24,416 $37,718 $ 40,561 $ 69,101 $68,602

BIRD CORPORATION AND SUBSIDIARIES

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

TENDER OFFER AND PROPOSED MERGER

The Company signed an Amended and Restated Agreement and Plan of Merger,
dated as of April 8, 1996 (the "Merger Agreement"), among the Company,
CertainTeed Corporation, a Delaware corporation ("CertainTeed"), and BI
Expansion Corp., a Massachusetts corporation and a wholly owned subsidiary of
CertainTeed ("Acquisition Sub"), pursuant to which Acquisition Sub will be
merged with and into the Company (the "Merger"), with the Company surviving the
Merger as a subsidiary of CertainTeed. In the Merger, each share of the
Company's common stock, par value $1 per share ("Common Stock"), outstanding on
the effective date of the Merger and each share of the Company's $1.85
Cumulative Convertible Preference Stock par value $1 per share ("Preference
Stock"), outstanding on the effective date of the Merger (other than shares
held by CertainTeed or Acquisition Sub, shares held in the Company's treasury
and other than shares held by stockholders who perfect their appraisal rights
under Massachusetts law) will be converted into the right to receive (in the
case of Common Stock) $7.50 per share of Common Stock and (in the case of
Preference Stock) $20 plus all accrued and unpaid dividends through the
effective date of the Merger per share of Preference Stock, in each case in
cash, without interest. All outstanding shares of the Company's 5% Cumulative
Preferred Stock, par value $100 per share (the "5% Stock"), will remain issued
and outstanding after the Merger and will be called for redemption and
retirement as soon as practicable following the Merger at a price equal to $110
per share, plus all accrued and unpaid dividends through the date of redemption
and retirement.

The Merger is the second step in a two-part transaction, the purpose of which
is the acquisition of the Company by CertainTeed. On April 12, 1996,
Acquisition Sub commenced a tender offer (the "Offer") to purchase all
outstanding shares of Common Stock and Preference Stock at a price of $7.50 per
share of Common Stock and $20 plus all accrued and unpaid dividends through the
expiration date of the Offer per share of Preference Stock. The Offer is
conditioned upon, among other things, (i) there being validly tendered and not
withdrawn prior to the expiration of the Offer at least 66 2/3% of all
outstanding shares of Common Stock (determined on a fully diluted basis on the
expiration of the Offer) and (ii) either (x) there being validly tendered and
not withdrawn prior to the expiration of the Offer at least 66 2/3% of all
outstanding shares of Preference Stock or (y) Acquisition Sub having elected to
require the Company to redeem all outstanding shares of Preference Stock in
accordance with the Merger Agreement.

Pursuant to the Merger Agreement, upon the acquisition by Acquisition Sub of
at least a majority of the outstanding shares of Common Stock pursuant to the
Offer, Acquisition Sub shall be entitled to designate such number of directors
to be appointed to the Company's Board of Directors as is required to
constitute a majority of the members of the Company's Board of Directors.

Completion of the transaction is subject to approval by the Company's
shareholders and appropriate governmental authorities. The Merger is not
subject to a financing contingency. The Company's Board of Directors has
received a fairness opinion from its investment bankers regarding the Merger.
The closing of the Merger is anticipated at the end of the second quarter,
following distribution of proxy materials to the Company's shareholders and
approval at a special meeting.

FINANCIAL CONDITION

Prior to November 30, 1994, the Company's external financial needs were
satisfied by borrowing under the Second and Third Amended Credit Agreements
with The First National Bank of Boston, Philadelphia National Bank incorporated
as Corestates Bank, N.A. and The Bank of Tokyo Trust Company.

Corporation. At the end of the three year period, the Loan Agreement will be
automatically renewed for successive one year periods unless terminated
specifically in writing. The Loan Agreement consisted of a $24 million
revolving credit commitment and two equal term loans (Term loan A and Term loan
B, as defined in the Loan Agreement) totaling $15 million. On March 8, 1995 the
Company sold the assets of its vinyl siding operation to Jannock, Inc. for
$47.5 million which was reduced to approximately $42.5 million by post-closing
working capital adjustments. The proceeds from the sale were used to reduce
bank debt. Concurrent with the sale, Fleet Capital executed the First Amendment
to the Loan Agreement amending the amount of the facility to $20 million
consisting of a $15 million revolving credit commitment and a $5 million term
loan. At December 31, 1995, $5 million of debt was outstanding. On January 10,
1996, the Company paid down the term loan so that the outstanding principal
balance equaled $2.5 million. Up to $5 million of the revolving credit facility
can be used for letters of credit. Letters of credit outstanding as of December
31, 1995 totaled $2,233,000 compared to $2,927,000 as of December 31, 1994.

Borrowings by Bird Incorporated under the Loan Agreement are guaranteed by
the Company and the Company's other subsidiaries and are secured by
substantially all of the assets of the Company and its subsidiaries. The
revolving credit line availability is determined with reference to a percentage
of accounts receivable and inventory which are pledged to the lender. During
the period January 1 through April 30, the Loan Agreement provides a $2 million
over advance on accounts receivable and inventories in order to assist the
Company in assuring adequate funding of any seasonal build up of accounts
receivable which may occur under sales programs offered during the winter
months. Currently, the availability calculation does not allow borrowings to
the full extent of the revolving credit commitment, due to the seasonality of
the building materials manufacturing business. As of March 15, 1996, an
aggregate of $7,683,000 was available to the Company under the terms of the
revolving credit facility under the Loan Agreement.

The Loan Agreement contains financial and operating covenants which, among
other things, (i) require the Company to maintain prescribed levels of tangible
net worth, net cash flow and working capital and (ii) place limits on the
Company's capital expenditures. The Loan Agreement also contains restrictions
on indebtedness, liens, investments, distributions (including payment of common
and preference dividends), mergers, acquisitions and disposition of assets. As
of September 30, 1995, the Company was in default under Section 8.3.3 of the
Loan Agreement as a result of failing to achieve a stated level of cash flow
for the third quarter of 1995. As a result of the weak remodeling market during
1995, sales volume and earnings were less than anticipated, negatively
impacting cash flow. At the request of the Company, Fleet Capital waived the
cash flow requirements for the third quarter without penalty and amended this
and other financial covenants for subsequent periods based on a review of the
Company's financial condition and future projections. As of December 31, 1995,
the Company was in compliance with all covenants.

Interest on the revolving credit commitment under the First Amended Loan
Agreement accrues at the Fleet Capital base rate (as specified in such
Agreement) or the London Interbank Offering Rate ("LIBOR") plus 2 3/4% at the
Company's election on all borrowings plus the greater of $25,000 per annum or
1/4% on any unused portion of the commitment payable monthly in arrears. The
interest on the term loan accrues at the base rate or the LIBOR rate plus 2
3/4% at the Company's election. The interest rate on outstanding borrowings at
December 31, 1995 was 8.69%. The repayment of the principal on the term loan is
at the rate of $62,500 per month through November 1996 and $71,417 per month
thereafter with a final principal payment of $3,455,800 due on November 30,
1997. Proceeds in excess of $100,000 from the sale of fixed assets may, at
Fleet Capital's discretion, be applied to the outstanding principal payments of
the term loan.

In order to control its cost and supply of asphalt, the Company constructed
an asphalt oxidizer plant at its roofing facility in Norwood, Massachusetts.
Construction was completed during January 1995. The Company's decision to build
the oxidizer was triggered by the decision of Exxon (the only remaining
supplier of asphalt in New England) to exit the New England market. The cost of
this plant expansion was approximately $5.5 million.

On March 8, 1995, the Company sold substantially all of the assets of its
vinyl siding operation to Jannock, Inc. for $47.5 million in cash subject to
certain downward adjustments which totaled $4,962,000. Net of adjustments, the
gain on the sale of the vinyl business totaled $20,579,000.

On June 2, 1995, the Company sold all of the outstanding capital stock of
Bird-Kensington Holding Corp. ("Bird-Kensington"), which owned the Company's
interest in Kensington Partners ("Kensington"), to Jannock, Inc. ("Jannock").
The sale was consummated pursuant to the exercise by Jannock of an option
granted under an Asset Purchase Agreement related to the sale of the Company's
vinyl business dated as of September 23, 1994 (as amended by amendments dated
as of January 24, 1995, January 31, 1995, and April 27, 1995, the "Asset
Purchase Agreement"). The purchase price consisted of cash in the amount of
$2,780,000 and the assumption of certain liabilities related to the Kensington
business. Cash proceeds of $1 million were used to acquire the minority
partner's interest in Kensington. In addition, $3,692,000 was invested by the
Company in Bird-Kensington, as a condition of the sale, to enable Kensington to
pay certain liabilities and to assure that the equity of Kensington was not
less than $1,150,000 at the time of closing as stipulated in the Asset Purchase
Agreement.

Following the closing date, Jannock presented to the Company financial
statements of Kensington as of June 2, 1995, indicating that net equity was
$471,000 less than the amount required by the Asset Purchase Agreement. The
Company had established a reserve for the full amount of the shortfall at June
30, 1995 and subsequently paid to Jannock $398,000 in full settlement of the
terms of the Asset Purchase Agreement. Net of certain purchase price
adjustments, the loss on the sale of Kensington was $1,959,000.

One June 18, 1994, the Company agreed to cause the sale of its 80% interest
in Bird Environmental Gulf Coast, Inc. ("BEGCI") to the minority shareholders
thereof, subject to financing, resulting in the complete withdrawal from the
environmental business. During 1995, the minority partner became unable to
finance the purchase of the facility and efforts to attract another purchaser
were unsuccessful. In July 1995, the Company's Board of Directors suspended
further funding of the facility. As a result of this action, during the second
quarter of 1995, the Company's remaining investment of $8.6 million was
written-off and a $3 million reserve was established for the costs associated
with the closure of the facility. On November 29, 1995, the Company caused the
sale all of the outstanding capital stock of BEGCI to GTS Duratek, Inc. for a
purchase price of $1.00. In addition, the Company agreed to pay the purchaser
the amount by which BEGCI's current liabilities exceeded its current assets at
August 31, 1995 which was approximately $1.3 million. Of the $3 million reserve
established in the second quarter of 1995, $2,050,000 was utilized, while
$650,000 remains at December 31, 1995 for future claims against discontinued
operations.

Net cash and cash equivalents increased during fiscal 1995 by $3.4 million
primarily due to cash received from the sale of the vinyl business. The cash
used by continuing operations for the fiscal period ended December 31, 1995
increased $6.7 million, from $11.6 million to $18.3 million. In 1995, the
Company recorded a gain of $20.6 million on the sale of its vinyl business.
This gain was offset by charges of $11.3 million and $2 million related to the
disposal of the environmental and window fabrication businesses, respectively.
Cash used by operations in 1995 was also attributable to several significant
changes in the balance sheet such as a reversal of future tax benefits of $11.3
million, a decrease of $3.1 million in trade accounts receivable, a decrease of
$14.3 million in liabilities not relating to financing activities and an
increase of $2.7 million relating to inventories.

Additionally, the vinyl and window fabrication business activities which were
discontinued in 1995 had a significant impact on the changes in the balance
sheet accounts between December 31, 1994 and December 31, 1995. As a result of
these sales, inventory decreased $6.3 million, accounts and notes receivable
decreased $11 million, and current liabilities decreased $9 million. In
addition, assets held for sale decreased $7.5 million due to the write-off of
the Company's interest in Bird Environmental Gulf Coast, Inc. ("BEGCI").

The Company had approximately $47.3 million of net cash provided from
investing activities for the period ended December 31, 1995 as compared to a
total of approximately $19.4 million for the period ended December 31, 1994.
The change is primarily the result of $50.7 million of cash receipts from the
proceeds of the sale of certain of the Company's assets (primarily, the sale of
the assets of the vinyl and window fabrication businesses to Jannock, Inc. in
March and June 1995, respectively), offset by cash used for capital
expenditures of the roofing business and additional investments in discontinued
operations. In the prior comparable period, net cash provided by investing
activities resulted primarily from the proceeds of the sale of the Company's
distribution business to Wm. Cameron & Co., offset by cash used for capital
expenditures.

The net cash resulting from financing activities changed by $11 million from
the prior year. Cash used in financing activities during 1995 resulted from the
net repayment of debt of $24 million and $1.6 million of dividend payments, as
compared to 1994 when the Company had net repayments of debt of approximately
$16 million and made minimal dividend payments.

ENVIRONMENTAL MATTERS

On March 25, 1994, the Company received a notice from the United States
Environmental Protection Agency (the "EPA") regarding a site inspection
prioritization report prepared by the DEP. The notice alleges a potential
release of hazardous substances into the environment at the Company's former
mill site in East Walpole, Massachusetts. The EPA has reserved the right to
conduct further site tests on the location. A site assessment performed on the
mill site in East Walpole for the Company by its environmental consultants,
GZA, showed no environmental cleanup was necessary. This report was submitted
to the DEP in July 1995. In the opinion of management and based on management's
and GZA's understanding that the alleged releases are in de minimis quantities,
this matter should not have a material adverse effect on the Company's
financial position or on the results of its operations.

amended, 42 U.S.C. Paragraph 9601, et seq. ("CERCLA") in connection with
hazardous substances at a site known as the Fulton Terminal Superfund site
located in Fulton, Oswego County, New York. On September 28, 1990, the Company
and a number of other PRPs reached a negotiated settlement with the EPA
pursuant to which the settling PRPs agreed to pay the costs of certain expenses
in connection with the proceedings and to pay certain other expenses, including
the costs and expenses of administering a trust fund to be established by the
settling PRPs. The settlement agreement is embodied in a consent decree lodged
with the United States District Court for the Western District of New York and
fixed the Company's proportionate share of the total expenses. The ultimate
cost to the Company of the remedial work and other expenses covered by the
settlement agreement is estimated to be between $1 million to $2 million
payable over a period of 3 to 15 years (depending upon the duration of
remediation efforts). At December 31, 1995, the Company has provided a reserve
of approximately $1 million to cover the estimated cost of the Company's
remaining proportionate share (i.e., 17%) of the ultimate total cost of
cleanup. Under a cost-sharing arrangement set forth in a consent decree with
the EPA, the other PRPs have agreed to incur 83% of the aggregate cost of
remediation of this site.

A site assessment of the Norwood facility was performed for the Company by
its environmental consultants GZA GeoEnvironmental, Inc. because the Company
was on the DEP List of Confirmed Disposal Sites. The Company must complete
certain additional remedial activities described in the new MCP on or before
August 2, 1996. The Phase I and Phase II plan was completed and submitted to
the DEP in January 1996. In the opinion of management, no additional material
costs will be incurred.

nature and merits of the claims alleged, in the opinion of management, the
resolution of these remaining claims will not have a material adverse effect on
the results of operations or financial condition of the Company.

INSURANCE AND PRODUCT LIABILITY CLAIMS

On April 16, 1996 Paul Lindholm filed a class action suit in the Superior
Court of the Commonwealth of Massachusetts for Norfolk County against Bird
Incorporated. The complaint alleges that Bird Incorporated has knowingly
manufactured, distributed and falsely advertised defectively designed fiber
glass based roofing shingles. The complaint lists claims of fraud, negligent
misrepresentation, negligence and breach of express and implied warranty. The
Company is currently in the process of evaluating the complaint.

LEGAL MATTERS

On or about April 18, 1996 Bird Incorporated received a grand jury subpoena
issued upon application of the United States Department of Justice, Antitrust
Division, for the production of certain documents. In addition, an executive
officer and a senior manager of the Company have received grand jury subpoenas
requiring the production of certain documents as well as their providing
testimony before the grand jury. The Company and such executive officer and
senior manager are in the process of evaluating the subpoena and intend to
cooperate fully with the Department of Justice. It appears that the subpoena
relates to an investigation of the roofing materials industry.

In 1992, a subsidiary of the company, Bird Atlantic Corporation, formerly
Atlantic Building Products Corporation ("ABPCO"), commenced an action against a
former vendor, alleging violation of an exclusive distributorship without
adequate and fair compensation to ABPCO. A jury trial was held in November 1995
in the Superior Court of Plymouth County, Massachusetts. The jury found in
favor of ABPCO and judgement was entered on January 26, 1996 in the principal
amount of approximately $1.8 million. The award, with interest accruing at 12%
per annum, is expected to be in excess of $3 million and will not be reported
as income until collected. The defendant has appealed the judgement.

RESULTS OF OPERATIONS

The Company's future prospects and sales are tied solely to one line of
business (roofing manufacturing) which is dependent upon the economy in the
northeastern United States. The Company produces all of its output at a single
plant which relies on one major supplier for glass mat, a critical raw
material. Nevertheless, the Company believes it has significant competitive
advantages in this business. These advantages stem from, and are expected to
continue in light of the Company's leading market share, its low cost
production abilities resulting from a state-of-the-art plant, its internal
supply of granules from its own quarry and granule plant and its asphalt
oxidizing plant.

1995 Compared With 1994

Earnings from continuing operations before income taxes in fiscal 1995 were
$10,627,000 compared to losses of $5,927,000 in fiscal 1994. Net sales from
continuing operations decreased 67.7% from $167,886,000

to $54,180,000 as compared to 1994, primarily due to the sale of the Company's
distribution and vinyl products business units. Sales from the roofing
manufacturing business decreased $10,857,000 or 19.9% due to price weakness and
a decline in volume. The decreased volume was attributable to a weak re-roofing
market in the northeast caused by a mild 1994/1995 winter followed by a hot,
dry summer. The Company is expanding its sales territories to include areas
bordering the northeastern United States in an effort to replace lost volume.

Cost of sales in 1995 was $48,007,000 as compared to $136,878,000 in 1994,
constituting a decrease of 64.9%. The decline was primarily a result of the
sale of the Company's distribution and vinyl products business units. Cost of
sales for the roofing business decreased 18.4% or $8,662,000 due primarily to
decreased manufacturing costs related to a decrease in sales volume. Although
the Company experienced raw material price increases in glass mat and dry felt,
the cost of asphalt, along with related freight, was reduced significantly as a
result of the newly constructed asphalt oxidizer, which produces asphalt
saturant and coatings. The oxidizer became operational in February 1995. From
November 1995 through mid-February 1996, the oxidizer was temporarily shut down
for repairs as a result of a fire within the tank farm area of the plant.

Cost of sales, stated as a percentage of net sales, was 88.6% in fiscal 1995
as compared to 81.5% in fiscal 1994. Roofing manufacturing cost of sales, as a
percentage of sales, increased 1.6% from 86.2% to 87.8% in 1995. Increases in
raw material costs and decreases in sales prices contributed to the percentage
increase.

Selling, general and administrative ("SG&A") expenses for fiscal 1995
decreased 59% from $28,786,000 to $11,817,000. The decrease was primarily
attributable to the sale of the Company's distribution and vinyl products
business units. However, SG&A expenses, as a percentage of sales, increased
approximately 5% from year-to-year. The increase was due primarily to the
amortized refinancing costs associated with the 1994 refinancing of an earlier
credit agreement, additional charges related to environmental remediation and
costs associated with closing the Company's corporate office. The decrease in
sales in the roofing business without a corresponding decline in certain fixed
costs also contributed to the increase as a percentage of sales.

Interest expense was $927,000 in 1995 as compared to $4,782,000 in 1994, an
80.6% decrease. The decrease resulted from the reduction of debt which occurred
through the use of proceeds from the sale of the vinyl products and
distribution business units.

Discontinued business activities income in 1995 reflects primarily the gain
of $20,579,000 on the sale of the vinyl manufacturing business, the loss of
$1,959,000 on the sale of the window fabrication business and a charge of
$1,500,000 for costs associated with the Company's employee benefit plans and
future product liability claims, both related to former roofing operations.
Fiscal 1994 discontinued business activities income reflects primarily the gain
of $2,727,000 on the sale of all of the Company's building materials
distribution businesses reduced by the loss of $1,261,000 on the sale of the
Company's 40% interest in Mid-South Building Supply, Inc.

Equity losses from the Company's partnership in the Kensington window
fabrication business amounted to $372,000 for the period January 1, through
February 28, 1995 as compared to $4,680,000 for the twelve month period ended
December 31, 1994.

A provision for income taxes from continuing operations amounting to
$11,424,000 was recorded in 1995 compared to a benefit of $7,010,000 in 1994.
The Company's decision to reverse $4 million of the valuation reserve in 1994
and subsequent decision to increase the reserve to $15.1 million in 1995 is the
primary reason the effective tax rates differ from the statutory rate. At
December 31, 1995 the Company's net deferred tax asset is approximately $19.1
million less a valuation reserve of $15.1 million. As required under FAS 109,
this valuation reserve was determined based upon the Company's review of all
available evidence including projections of future taxable income. During 1995,
the Company disposed of Bird-Kensington Holding Corporation and Bird
Environmental Gulf Coast, Inc. resulting in losses not anticipated at the end
of the previous year. In addition, the lower overall demand and price weakness
in the northeast caused by a mild 1994/1995 winter followed by a hot, dry
summer negatively impacted profits of the roofing operations.

During the second quarter of 1995, the Company's remaining investment in
BEGCI of $8.6 million was written-off to discontinued operations and a $3
million reserve was established for additional costs associated with the
closure and disposition of the facility (see Note 9 to Consolidated Financial
Statements). In November 1995, the Company caused the sale of all the
outstanding capital stock of BEGCI to GTS Duratek, Inc. for a purchase price of
$1.00. Of the $3 million reserve established in the second quarter of 1995,
$2,050,000 was utilized, while $650,000 remains at December 31, 1995 for future
claims against discontinued operations.

In connection with the Board of Director's 1994 decision to withdraw from the
off-site environmental business and the Company's agreement on June 18, 1994 to
cause the sale of its shares in BEGCI to the minority stockholders on or before
February 28, 1995, subject to financing, the Company reclassified the
environmental business results as discontinued operations as of June 30, 1994
and adjusted the book value associated with BEGCI, resulting in an aggregate
charge for the twelve months ended December 31, 1994 of $11,586,000.

In 1993, in connection with its decision to withdraw from the "on-site"
environmental remediation business, the Company charged the results of
operations for the write-down of assets, the expected loss from operations and
general expenses related to closing of such "on-site" remediation business (see
notes to Consolidated Financial Statements). Based upon the actual outcome of
the sale of assets and results of operations, excess costs of $3,861,000
charged in 1993 were reversed and recorded as discontinued operations in the
consolidated statement of operations for the year ending December 31, 1994.

1994 Compared With 1993

Losses from continuing operations before income taxes in 1994 were
approximately $5.9 million compared to losses of approximately $5.3 million in
1993. Net sales from continuing operations decreased 10.6% from $187,745,000 in
1993 to $167,886,000 in 1994. Sales from the Company's roofing manufacturing
business and its vinyl business increased 14.9% and 5.9%, respectively.
Improved weather conditions and renewed strength in the remodeling market
caused by low interest rates and a generally favorable economy contributed to
the improvement in these businesses. However, a decrease in sales volume due to
the sale of substantially all of the Company's building materials distribution
businesses in August and November of 1994 significantly offset the improvement
attained by the roofing and vinyl businesses.

The Company's cost of sales from continuing operations in 1994 as compared to
1993 decreased 9.7% from $151,664,000 to $136,878,000. Cost of sales from
continuing operations in the roofing and vinyl manufacturing businesses
increased 15.4% and 7.9%, respectively, due to increased manufacturing costs
related to volume, higher raw material costs related to the increase in resin
prices for the vinyl business and higher asphalt prices for the roofing
manufacturing business. The increase was more than offset by the decline in
cost of sales due to the August and November 1994 sales of the Company's
building materials distribution businesses.

Cost of sales stated as a percentage of net sales was 81.5% in 1994 as
compared to 80.8% in 1993. The roofing manufacturing business cost of sales as
a percentage of sales increased .3% from 85.9% to 86.2% in 1994. The vinyl
business cost of sales as a percentage of sales for fiscal 1994 increased from
76.0% to 77.5% or 1.5% over fiscal 1993. The major factor in such percentage
increase was the increased cost of raw materials.

Selling, general and administrative ("SG&A") expenses for fiscal 1994
decreased 12.0% from $32,716,000 in 1993 to $28,786,000 in 1994. The decrease
was primarily attributable to the sale of the Company's building materials
distribution businesses. The SG&A expenses of the Company's roofing and vinyl
manufacturing businesses, on a combined basis, decreased 7.2% from year-to-
year. However, SG&A expenses, as a percentage of sales remained relatively
constant at approximately 17%.

Interest expense was $4,782,000 in 1994 as compared to $2,472,000 in 1993,
constituting a 93% increase. The increased interest expense reflects the nearly
$10 million increased debt level and higher overall interest costs in 1994.
Between April 11, 1994 and November 30, 1994 the Company was required to pay a
default

interest rate of 4% above the rate otherwise applicable to the revolving credit
and term loans, compared to an approximate rate of 4.5% to 5% for 1993. Default
interest expense totaled $1,032,000 during fiscal 1994.

Discontinued business activities income in 1994 reflects primarily the gain
of $2,727,000 on the sale of all of the Company's building materials
distribution businesses reduced by the loss of $1,261,000 on the sale of the
Company's 40% interest in Mid-South Building Supply, Inc.

Other non-recurring expenses totalled $4,680,000 in 1994 as compared to
$5,903,000 in 1993. Kensington continued to experience operations problems and
incurred losses of $4,680,000 and $2,625,000 in 1994 and 1993, respectively.

A higher tax benefit from continuing operations was recorded in 1994 compared
to the benefit booked in 1993. The Company's decision to record a $9 million
valuation reserve in 1993 and subsequent decision to reverse $4 million in 1994
is the primary reason the effective tax rates differ from the statutory rate.

In connection with the Board of Director's decision to withdraw from the
environmental business and the Company's agreement on June 18, 1994 to cause
the sale of its shares in BEGCI to the minority stockholders on or before
February 28, 1995, subject to financing, the Company reclassified BEGCI results
as a discontinued operation as of June 30, 1994 and adjusted its book value,
resulting in an aggregate charge for the twelve months ended December 31, 1994
of $11,586,000. The Company intended to operate the San Leon Facility until the
sale of its interest in BEGCI was consummated.

Due to the Company's decision to exit the off-site environmental business by
selling its interest in the San Leon Facility as described above, the Company
completely withdrew from the environmental business. As a result, historical
results of operations for all of the environmental businesses have been
classified as discontinued operations. In 1993, in connection with its decision
to withdraw from the "on-site" environmental remediation business, the Company
recorded a charge for the write-down of assets, the expected loss from
operations and general expenses related to the closing of such "on-site"
remediation business (see notes to Consolidated Financial Statements). Based
upon the outcome of the sales of assets and results of operations, excess costs
of $3,861,000 charged in 1993 were reversed and recorded as discontinued
operations in the consolidated statement of operations for the year ending
December 31, 1994.

INFLATION

The Company is continually seeking ways to deal with raw material cost
increases by productivity improvements and cost reduction programs. In recent
years, the Company has not always been able to pass on increased raw material
costs to customers by increasing selling prices because of intense competitive
pressures. The Company has an ongoing program of updating productive capacity
to take advantage of improved technology, and although the cumulative impact of
inflation has resulted in higher costs for replacement of plant and equipment,
these costs have been offset, in part, by productivity savings.

NEW ACCOUNTING PRONOUNCEMENTS

During 1995, the Financial Accounting Standards Board issued "Statement of
Financial Accounting Standards No. 123 Accounting For Stock Based Compensation"
("FAS 123"). The Company intends to adopt FAS 123 through disclosure only in
1996.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements and schedules of the Company are
included in a separate section of this report and are incorporated herein by
reference.

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

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The table below sets forth certain information with respect to the current
Board of Directors and executive officers of the Company.

EXPIRATION
POSITION WITH THE COMPANY; FIRST OF PRESENT
PRINCIPAL OCCUPATION AND ELECTED OR TERM OF
NAME AND AGE OTHER BUSINESS AFFILIATIONS(1) APPOINTED(2) OFFICE
------------ --------------------------------- ------------ ----------

Frank S. Anthony, 49........ Vice President, General Counsel 1984 N/A
and Corporate Secretary of the
Company since May 1984; Attorney;
formerly served in the law
department of Westinghouse
Electric Corporation from 1976 to
1983
Robert P. Bass, Jr., 72(3).. Director; Attorney, Counsel to 1961 1997
Cleveland, Waters and Bass, P.A.,
Concord, NH; Director of Bank of
New Hampshire Corp., Manchester,
NH
Charles S. Bird, III, 71(3). Director; Trustee of family 1962 1998
trusts
Francis J. Dunleavy, 81..... Director; Retired Vice Chairman 1982 1997
of ITT Corporation; formerly
President, Chief Operating
Officer and Member of Executive
Committee of ITT Corporation;
Director of AEL Industries, Inc.,
Crown Cork & Seal Company, Inc.,
Quaker Chemical Corporation,
Scan-Graphics, Inc., and Selas
Corp. of America
John T. Dunlop, 80.......... Director; The Lamont University 1984 1996
Professor, Emeritus of Harvard
University, Cambridge, MA;
Harvard Community Health Plan
Chair; Commission on the Future
of Worker/Manager Relations;
formerly Secretary of the U.S.
Department of Labor
Guy W. Fiske, 70............ Director; Chairman of the Board 1984 1996
of Directors of the Company from
May 1994 to April 1995; Chairman
and President, Fiske Associates,
Inc., Hobe Sound, FL, (private
investment firm); formerly
Executive Vice President and
Director of General Dynamics
Corporation, Undersecretary of
the U.S. Department of Energy,
and Deputy Secretary of the U.S.
Department of Commerce; Director,
Graphic Controls Corporation,
Buffalo, NY; Director, Gunther
International and Vice Chairman
and Director, Educational
Publishing Corporation of Oak
Lawn, IL

Richard C. Maloof, 51....... Director; President and Chief 1995(4) 1998
Operating Officer of the Company
since April 1995; Vice President
and Chief Operating Officer of
the Company from April 1994 to
April 1995; Vice President of the
Company and President, Roofing
and Distribution Groups of the
Company for more than five years
prior thereto
Joseph D. Vecchiolla, 40.... Director; Executive Vice 1993 1997
President--Corporate Finance of
S. N. Phelps & Company and
affiliates since May 1995;
Chairman of the Board of
Directors of the Company since
April 1995; President and Chief
Executive Officer of the Company
from January 1994 to May 1995;
President, Chief Operating
Officer, Chief Financial Officer
and Acting Chief Executive
Officer of the Company from
November 1993 to January 1994;
Vice President and Chief
Financial Officer of the Company
from June 1993 to November 1993;
formerly Vice President and Chief
Financial Officer of Horizon
Cellular Telephone Company,
Malvern, PA and Executive Vice
President and Chief Financial
Officer of Educational Publishing
Corporation of Oak Lawn, IL
Loren R. Watts, 61.......... Director; Retired Managing 1991 1998
Partner, Management Consultant
Services, Coopers & Lybrand
(certified public accountants)

- --------
(1) Includes business experience during past five years.
(2) At the 1990 annual meeting, the stockholders approved a reorganization
pursuant to which the then stockholders of Bird Incorporated became
stockholders of Bird Corporation, a newly organized Massachusetts
corporation, and Bird Incorporated became a wholly owned subsidiary of Bird
Corporation. This column indicates the date as of which a person was first
elected a director or appointed an officer of the Company or of Bird
Incorporated.
(3) Robert P. Bass, Jr. and Charles S. Bird, III are first cousins.
(4) Date first elected director.

COMPLIANCE WITH SECTION 16(A) OF EXCHANGE ACT

Section 16(a) of the Exchange Act requires the Company's directors and
executive officers and persons who hold more than 10% of the Company's Common
Stock to file with the SEC reports of ownership and changes in ownership of the
Company's equity securities. Based on reports received by the Company and
representations of certain reporting persons that no Forms 5 were required, the
Company believes that all filing requirements applicable to its officers,
directors, and greater than 10% beneficial owners with respect to fiscal year
1995 were complied with.

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth information concerning the compensation paid
or accrued for services in all capacities to the Company during each of the
last three fiscal years to each person who served as chief executive officer
during 1995 and to each of the other four most highly compensated executive
officers of the Company who served as such during 1995.

SUMMARY COMPENSATION TABLE

LONG TERM COMPENSATION
------------------------
ANNUAL
COMPENSATION OTHER
------------------ ANNUAL RESTRICTED SECURITIES ALL OTHER
NAME AND COMPEN- STOCK UNDERLYING STOCK LTIP COMPEN-
PRINCIPAL POSITION YEAR SALARY($) BONUS($) SATION($) AWARDS OPTIONS/SARS(#) PAYOUTS(1) SATION($)
- ------------------ ---- --------- -------- --------- ---------- ---------------- ---------- ---------

Joseph D. Vecchiolla.... 1995 87,692 227,222 -- -- -- -- 663,781(2)
President and 1994 229,077 240,000 -- -- 50,000 37,449(3)
Chief Executive 1993 91,903 50,000 -- -- 100,000 39,912
Officer(4)
Richard C. Maloof....... 1995 195,962 46,416 -- -- 50,000 81,938 0
Vice President and 1994 180,223 45,450 17,992(5) -- 25,000 7,843(3)
Chief Operating 1993 161,629 11,300 8,873 -- -- 10,784
Officer(6)
William C. Kinsey....... 1995 29,600 36,919 -- -- -- 45,885 411,754(2)
Vice President; 1994 148,000 43,000 10,076(5) -- -- 9,986(3)
President, Bird 1993 138,792 10,000 5,460 -- -- 18,159
Vinyl Products(7)
Frank S. Anthony........ 1995 135,000 27,509 -- -- -- 49,163 150,000(2)
Vice President and 1994 141,750 30,000 10,795(5) -- -- 8,496(3)
General Counsel 1993 128,350 5,000 5,850 -- -- 11,381
Joseph M. Grigelevich,
Jr..................... 1995 46,069 31,476 -- -- -- -- 213,048(2)
Vice President Finance 1994 96,192 36,700 -- -- 20,000 5,943(3)
and Administration(8)

- --------
(1) In 1995 restrictions on all stock held in escrow pursuant to the Company's
Long Term Incentive Plan ("LTIP") lapsed as a result of the Vinyl Sale and
shares were distributed to each of the persons named in the table except Mr.
Vecchiolla and Mr. Grigelevich.
(2) Represent severance payments received in connection with the "change in
control" which occurred pursuant to the Vinyl Sale. Also includes, in the
case of Mr. Vecchiola, $47,300 representing additional incentive
compensation related to the Vinyl Sale, the amount of which was deducted
from a severance payment which he received as a result of the Vinyl Sale.
(3) Represents contributions by the Company to the Savings Plan or in Mr.
Anthony's case to a separate trust established by the Company with a bank
trustee to which amounts in excess of those permitted to be contributed to
the Savings Plan under limits imposed by the Internal Revenue Code of
1986, as amended (the "Code") are contributed. Also includes, in the case
of Mr. Vecchiolla, $31,825 representing additional incentive compensation
related to asset sales, the amount of which was deducted from a severance
payment which Mr. Vecchiolla received as a result of the change in control
of the Company which was deemed to have occurred upon consummation of the
Vinyl Sale.
(4) Mr. Vecchiolla was hired as Vice President and Chief Financial Officer
effective June 1, 1993 and was elected President and Chief Operating
Officer in November 1993. He served as acting Chief Executive Officer
during November and December 1993 and was elected Chief Executive Officer
on January 25, 1994. He resigned as President on April 1, 1995 and on that
date was elected Chairman of the Board. He resigned his full-time
employment and his office as Chief Executive Officer on May 25, 1995.
(5) Represents reimbursement for withholding taxes arising from the lapse of
restrictions on restricted stock held by each officer in accordance with
provisions of the LTIP. Does not include perquisites and other personal
benefits, the cost of which to the Company was below the disclosure
thresholds established by the SEC.
(6) Mr. Maloof was elected Chief Operating Officer in April 1994 and President
in April, 1995. Prior to that time he served as Vice President and
President of the Company's Roofing and Distribution Groups.
(7) Mr. Kinsey's employment with the Company was terminated on March 8, 1995
as a result of the Vinyl Sale.
(8) Mr. Grigelevich first became an executive officer of the Company on March
21, 1994. Prior to that time he was treasurer of the Company. Mr.
Grigelevich's employment with the Company was terminated on May 31, 1995.

The following tables provide information concerning grants during 1995 to,
and exercises of stock options and stock appreciation rights ("SARs") during
1995 by, the executive officers named in the Summary Compensation Table above
and the value of unexercised stock options and SARs held by them at December
31, 1995.

OPTION/SAR GRANTS IN LASTS FISCAL YEAR

INDIVIDUAL GRANTS
--------------------------------------------------------------
NUMBER OF
SECURITIES
UNDERLYING PERCENT OF TOTAL EXERCISE GRANT DATE
OPTIONS OPTIONS GRANTED PRICE EXPIRATION PRESENT
NAME GRANTED(#) TO ALL EMPLOYEES ($/SHARE) DATE VALUE($)(1)
---- ---------- ---------------- --------- ------------ -----------

Richard C. Maloof....... 50,000(2) 100% 8.125 Apr. 3, 2005 $272,000

- --------
(1) This value was calculated using the Black-Scholes option pricing model and
the following assumptions, which were representative of conditions existing
when the options were granted: stock price volatility of 42.02%; risk free
rate of return of 7.32%; dividend yield of 0%; and time of exercise, ten
years. The actual value, if any, to be realized will depend on the excess of
the market price of the Company's Common Stock over the exercise price on the
date the option is exercised; there is no assurance that the value realized
will be at or near the value estimated by the Black-Scholes model.
(2) These options, which (when granted) were exercisable in five equal annual
installments commencing one year after the date of grant, will become
exercisable in full upon the consummation of the earlier of the Offer or the
Merger. The Company and Mr. Maloof have amended these options so that they
will be canceled upon the effective date of the Merger without payment of any
consideration.

AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES

NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT YEAR- IN-THE-MONEY OPTIONS/SARS
END(#) AT YEAR-END($)
-------------------------- -------------------------
SHARES VALUE
ACQUIRED ON REALIZED EXERCISABLE EXERCISABLE
NAME EXERCISE(#) ($)(1) (2) UNEXERCISABLE (2) UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------

Joseph D. Vechiolla..... 0 0 150,000 0 0 N/A
Richard C. Maloof....... 0 0 67,500 50,000 0 0
William C. Kinsey....... 2,000 6,500 0(3) 0 0 N/A
Frank S. Anthony........ 0 0 31,000 0 0 0
Joseph M. Grigelevich,
Jr. ................... 0 0 0(3) 0 0 N/A

- --------
(1) Based on the difference between the fair market value of the securities
underlying the options at date of exercise and the exercise price of the
options.
(2) Upon consummation of the Vinyl Sale on March 8, 1995, the vesting schedule
of all unvested options as of such date was accelerated and the holders
thereof became entitled to exercise such options in full or, in certain cases
in lieu of such exercise, cash out some or all of such options.
(3) Mr. Kinsey's and Mr. Grigelevich's employment with the Company terminated
as of March 8, 1995 and May 31, 1995, respectively. All options were
forfeited 90 days after termination of employment with the Company.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table lists the stockholders known to management to be the
beneficial owners of more than 5% of the outstanding Common Stock as of April
1, 1996 (except as otherwise noted).

AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS BENEFICIAL OF
OF BENEFICIAL OWNER OWNERSHIP CLASS
- ------------------- -------------- -------

The Entwistle Company .. 546,139 shares(1) 13.2%
Bigelow Street
Hudson, MA 01749
S.M. Lorusso & Sons,
Inc. .................. 332,121 shares(2) 8.1%
Antonio J. Lorusso, Jr.
James B. Lorusso
Samuel A. Lorusso
331 West Street
Walpole, MA 02081
Quest Advisory Corp. ... 329,950 shares(3) 8.0%
Charles M. Royce
1414 Avenue of the
Americas
New York, NY 10019
Mellon Bank Corporation
and its Subsidiaries .. 309,000 shares(4)(5) 7.5%
One Mellon Bank Center
Pittsburgh, PA 15258
Charles S. Bird, III ... 305,458 shares(5) 7.4%
13 Proctor Street
Manchester, MA 01944
FMR Corp. .............. 266,753 shares(6) 6.2%
Edward C. Johnson 3d
Abigail P. Johnson
82 Devonshire Street
Boston, MA 02109
Dimensional Fund
Advisors Inc. ......... 232,400 shares(7) 5.6%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
R. Keith Long .......... 208,500 shares(8) 5.1%
Financial Institutions
Insurance Group, Ltd.
Joan Greco and John Fyfe
Otter Creek Partners I,
L.P.
400 Royal Palm Way
Suite 400
Palm Beach, Florida
33480

- --------
(1) Based on information contained in an amended Schedule 13D filed with the
SEC on April 1, 1987. The Schedule 13D reports that The Entwistle Company
had sole voting and dispositive power with respect to all shares
beneficially owned, including 8,539 shares it had the right to acquire upon
conversion of shares of Preference Stock.
(2) Based on information contained in a Schedule 13D amended through January
23, 1996 filed with the SEC. The Schedule 13D reports that S.M. Lorusso &
Sons, Inc. ("Lorusso") had sole voting power and dispositive power with
respect to 230,121 shares. Antonio J. Lorusso, Jr., president, director and
a stockholder of Lorusso, had sole voting and dispositive power with
respect to 20,000 shares and had shared voting and dispositive power with
respect to 79,500 shares and James B. Lorusso, an officer,

director and a stockholder of Lorusso, had sole voting and dispositive power
over 1,000 shares and Samuel A. Lorusso, an officer, director and stockholder
of Lorusso, has shared voting and dispositive power with respect to 1,500
shares.
(3) Based on information contained in a Schedule 13G amended through February
14, 1996 filed with the SEC. The Schedule 13G reports that Quest Advisory
Corp. ("Quest") had sole voting and dispositive power with respect to
329,950 shares and that Charles M. Royce may be deemed a controlling person
of Quest and as such may be deemed to beneficially own the shares although
he disclaims such beneficial ownership.
(4) Based on information contained in a Schedule 13G amended through January
31, 1996 filed with the SEC. The Schedule 13G reports that Mellon Bank
Corporation had sole voting power with respect to 20,000 shares and sole
dispositive power with respect to 20,000 shares and that Mellon Bank
Corporation together with its subsidiaries, including Boston Safe Deposit
and Trust Company, had shared voting power with respect to 293,629 shares,
and shared dispositive power with respect to 289,000 shares, including
274,929 shares referred to in footnote (5), below.
(5) Includes 274,929 shares held in a trust of which Boston Safe Deposit and
Trust Company and Charles S. Bird, III are co-trustees with shared voting
and dispositive power. See footnote (3) to the table below.
(6) Based on information contained in a Schedule 13G amended through February
14, 1996 filed with the SEC. The Schedule 13G reports as follows: FMR Corp.
and Edward C. Johnson 3d, chairman of FMR Corp. (who, with other family
members including Abigail P. Johnson, forms a controlling group with
respect to FMR Corp.), had sole voting power with respect to 8,900 shares,
and FMR Corp., Edward C. Johnson 3d and certain investment companies (the
"Fidelity Funds"), which are subsidiaries of FMR Corp. (including Fidelity
Convertible Securities Fund), each had sole dispositive power with respect
to 257,853 shares. The sole power to vote the 257,853 shares owned by the
Fidelity Funds resides with the Fidelity Funds' Boards of Trustees.
Fidelity Management and Research Company, a wholly owned subsidiary of FMR
Corp., acts as investment advisor to the Fidelity Funds and carries out the
voting of the shares under written guidelines established by the Fidelity
Funds' Boards of Trustees. Of the 266,753 shares reported as beneficially
owned by FMR Corp., as of December 31, 1995, 192,853 shares could be
acquired upon conversion of Preference Shares.
(7) Based on information contained in a Schedule 13G amended through February
7, 1996 filed with the SEC. The Schedule 13G reports that Dimensional Fund
Advisors Inc. ("Dimensional"), a registered investment advisor, is deemed
to have beneficial ownership of 232,400 shares of Bird Corporation stock as
of December 31, 1995, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc. (the "Fund"), or in series of the DFA
Investment Trust Company, a Delaware business trust (the "Trust"), each an
open-end management investment company registered under the Investment
Company Act of 1940, or the DFA Group Trust and DFA Participation Group
Trust, investment vehicles for qualified employee benefit plans, all of
which Dimensional serves as investment manager. The Schedule 13G reports
that Dimensional had sole voting power with respect to 154,900 shares
(persons who are officers of Dimensional also serve as officers of the Fund
and the Trust and in their capacities as officers of the Fund and the
Trust, these persons vote 21,700 additional shares which are owned by the
Fund and 55,800 shares which are owned by the Trust) and sole dispositive
power with respect to 232,400 shares. Dimensional disclaims beneficial
ownership of all such shares.
(8) Based on information contained in a Schedule 13D filed on March 8, 1996
jointly by Otter Creek Partners I, L.P. ("Otter Creek"), and R. Keith Long
on his own behalf and on behalf of Financial Institutions Insurance Group,
Ltd. ("FIIG"), and Joan Greco and John Fyfe, joint tenants with rights of
survivorship ("Fyfe") (together, the "Reporting Persons"). The Schedule 13D
reports that Otter Creek Management Inc. ("OCM") is the sole general
partner and investment advisor of Otter Creek. Mr. Long is the sole
executive officer, sole director and sole shareholder of OCM and currently
serves as chairman of the Board of Directors of FIIG. Mr. Long also manages
discretionary stock trading accounts for FIIG and Fyfe. Additionally, the
Schedule 13D reports that each of Otter Creek, Mr. Long, FIIG and Fyfe had
sole voting and sole dispositive power with respect to 92,200, 20,000,
39,000 and 57,300 shares, respectively. The Reporting Persons indicated in
their Schedule 13D that they may, through one or more designees, seek
representation on the Board of Directors of the Company.

The tables below set forth information provided by the individuals named
therein as to the amount of the Company's Common Stock, Preference Stock and 5%
Stock beneficially owned by the directors and executive officers of the
Company, individually, and the directors and executive officers as a group, all
as of April 1, 1996 except as otherwise noted. Unless otherwise indicated in
the footnotes, each of the named persons and members of the group had sole
voting and investment power with respect to the shares shown.

COMMON
COMMON SHARES SHARES
BENEFICIALLY SUBJECT PERCENT
OWNED (EXCLUD- TO STOCK OF
NAME ING STOCK OPTIONS) OPTIONS(1) TOTAL CLASS
---- ------------------ ---------- ------- -------

Robert P. Bass, Jr............... 47,086(2) 17,500 64,586 1.6%
Charles S. Bird, III............. 292,858(3) 15,000 307,858 7.4%
Francis J. Dunleavy.............. 1,000(4) 22,500 23,500 *
John T. Dunlop................... 2,000(5) 20,000 22,000 *
Joseph D. Vecchiolla............. 0 150,000 150,000 3.5%
Guy W. Fiske..................... 6,000 22,500 28,500 *
Loren R. Watts................... 1,000 10,000 11,000 *
Frank S. Anthony................. 31,712(6) 31,000 62,712 1.5%
Joseph M. Grigelevich, Jr........ 6,726(7) 0 6,726 *
William C. Kinsey(8)............. 3,795 0 3,795 *
Richard C. Maloof................ 37,563(9) 77,500 115,063 2.7%
All directors and executive
officers as a group (11
persons)........................ 429,740(10) 366,000 795,740 19.1%

- --------
* Less than 1% of the outstanding Common Stock.
(1) Represents shares which the individual has a right to acquire by exercise
of stock options exercisable on April 1, 1996 or within 60 days thereafter.
(2) Includes 16,000 shares as to which Mr. Bass shares voting and investment
power and 2,696 shares which may be acquired upon conversion of Preference
Stock.
(3) Includes 274,929 shares as to which Mr. Bird shares voting and investment
power (see table on page A-6) and 3,595 shares which may be acquired upon
conversion of Preference Stock. Does not include 100 shares owned by his
wife, as to which he disclaims beneficial ownership.
(4) Does not include ten shares owned by a child of Mr. Dunleavy, as to which
he disclaims beneficial ownership.
(5) Represents shares as to which Mr. Dunlop shares voting and investment
power.
(6) Includes 2,136 shares allocated to Mr. Anthony's account under the
Company's Employees Savings and Profit Sharing Plan (the "Savings Plan")
as of December 31, 1995.
(7) Includes 45 shares which may be acquired upon conversion of Preference
Stock and 6,481 shares allocated to his account under the Savings Plan as
of December 31, 1995. Mr. Grigelevich was an executive officer of the
Company until May 31, 1995, when his employment with the Company
terminated.
(8) Mr. Kinsey was an executive officer of the Company until March 8, 1995,
when his employment with the Company terminated.
(9) Includes 2,551 shares allocated to his account under the Savings Plan as
of December 31, 1995 and 625 shares held jointly with members of his
family.
(10) Includes 293,554 shares as to which persons included in the group have
shared voting and investment power, 6,336 shares which may be acquired
upon conversion of Preference Stock, and 11,168 shares allocated to the
accounts of officers under the Savings Plan as of December 31, 1995.

PREFERENCE
SHARES PERCENT
BENEFICIALLY OF
NAME OWNED CLASS
---- ------------ -------

Robert P. Bass, Jr................................... 3,000 *
Charles S. Bird, III................................. 4,000 *
All directors and executive officers as a group (2
persons)............................................ 7,000 *

--------
* Less than 1% of the outstanding Preference Stock.

SHARES OF
5% STOCK PERCENT
BENEFICIALLY OF
NAME OWNED CLASS
---- ------------ -------

Charles S. Bird, III................................. 1,815 31%
All directors and executive officers as a group (1
person)............................................. 1,815 31%

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.

PART IV

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

(a) An Index of Financial Statements and Schedules is on page F1 of this
report. The Exhibit Index is on pages 27 through 29 of this report.

(b) Reports on Form 8-K--No reports on Form 8-K were filed during the last
quarter of the year ended December 31, 1995.

(d) Financial Statements of Kensington Partners are on Pages F-29 through F-
45 of this report.

ITEMS 14 (a)(3) AND (c)
EXHIBITS
BIRD CORPORATION
NORWOOD, MASSACHUSETTS

EXHIBIT INDEX

EXHIBIT SEQUENTIAL
NO. PAGE NO.
------- ----------

3(a) Articles of Organization (Filed as Appendix B to the
Company's Registration Statement on Form S-4,
Registration No 33-34440 and incorporated herein by
reference.)
3(b) By-laws of the Company as amended to date. (Filed as
Exhibit 3(b) to the Company's report on Form 10-K for
the year ended December 31, 1990 and incorporated herein
by reference.)
4(a)(1) Forbearance Agreement dated as of February 14, 1994 with
regard to the Revolving Credit Agreement dated as of
December 17, 1990, as amended. (Filed as Exhibit 4
(a)(3) to the Company's Form 10-K for the year ended
December 31, 1993 and incorporated herein by reference.)
4(a)(2) Third Amended and Restated Revolving Credit and Term
Loan Agreement dated as of March 4, 1994 (Filed as
Exhibit 4(a)(1) to the Company's Form 8-K dated March
14, 1994 and incorporated herein by reference.)
4(a)(3) Loan and Security Agreement dated as of November 30,
1994 (the "Loan Agreement") between Barclays Business
Credit, Inc. (now known as Fleet Capital Corporation)
and Bird Incorporated. (Filed as Exhibit 4(a)(3) to the
Company's Form 10-K for the year ended December 31, 1994
and incorporated herein by reference.)
4(a)(4) First Amendment dated as of March 8, 1995 to the Loan
Agreement between Shawmut Capital Corporation (now known
as Fleet Capital Corporation) and Bird Incorporated.
(Filed as Exhibit 4(a)(4) to the Company's Form 10-K for
the year ended December 31, 1994 and incorporated herein
by reference.)
4(a)(5) Rights Agreement dated as of November 25, 1986 between
the Company and the First National Bank of Boston, as
Rights Agent. (Filed as Exhibit 1 to Registration
Statement on Form 8-A dated December 5, 1986 and
incorporated herein by reference.)
4(a)(6) First Amendment dated May 24, 1990 to Rights Agreement
dated as of November 25, 1986. (Filed as Exhibit 4(b)(2)
to the Company's report on Form 10-K for the year ended
December 31, 1990 and incorporated herein by reference.)
10(a)* Plan for Assistance to Key Employees in Financing
Purchases of Company Stock (Filed as Exhibit 10(b) to
the Company's report on Form 10-K for the year ended
December 31, 1980 and incorporated herein by reference.)
10(b)* Plan for Deferring Payment of Senior Officer's
Compensation (Adopted December 22, 1975). (Filed as
Exhibit 10(c) to the Company's report on Form 10-K for
the year ended December 31, 1980 and incorporated herein
by reference.)
10(c)* 1975 Plan for Deferring Payment of Director's
Compensation (Adopted June 23, 1975). (Filed as Exhibit
10(d) to the Company's report on Form 10-K for the year
ended December 31, 1980 and incorporated herein by
reference.)
10(d)* Settlement Agreement dated as of July 7, 1994 between
Bird Corporation and George J. Haufler. (Filed as
Exhibit 10(d) to the Company's Form 10-K for the year
ended December 31, 1994 and incorporated herein by
reference.)
10(e)* Management Incentive Compensation Program adopted
January 25, 1983. (Filed as Exhibit 10(m) to the
Company's report on Form 10-K for the year ended
December 31, 1982 and incorporated herein by reference.)

EXHIBIT SEQUENTIAL
NO. PAGE NO.
------- ----------

10(f)* Bird Corporation 1982 Stock Option Plan as amended
through January 29, 1992. (Filed as Exhibit 10(f) to
the Company's report on Form 10-K for the year ended
December 31, 1991 and incorporated herein by
reference.)
10(g)* Bird Corporation 1992 Stock Option Plan. (Filed as
Exhibit 10(g) to the Company's report on Form 10-K for
the year ended December 31, 1992 incorporated herein
by reference.)
10(h)* Bird Corporation Non-Employee Director Stock Option
Plan. (Filed as Exhibit 10(h) to the Company's report
on Form 10-K for the year ended December 31, 1992
incorporated herein by reference.)
10(i)(1)* Form of severance agreement with eight key executive
employees of the Company. (Filed as Exhibit 10(n) to
the Company's report on Form 10-K for the year ended
December 31, 1984 and incorporated herein by
reference.)
10(i)(2)* Form of Amendment dated May 24, 1990 to form of
severance agreement. (Filed as Exhibit 10(g)(2) to the
Company's report on Form 10-K for the year ended
December 31, 1990 and incorporated herein by
reference.)
10(k) Glass Mat Supply Agreement dated as of February 20,
1985 between the Company, The Flintkote Company and
Genstar Roofing Company, Inc. (Filed as Exhibit 10(s)
to Amendment No. 1 to the Company's report on Form 10-
K for the year ended December 31, 1984 and
incorporated herein by reference.)
10(l) Equipment Acquisition Agreement dated May 25, 1990
between BancBoston Leasing Inc. and Bird Incorporated.
(Filed as Exhibit 10(j) to the Company's report on
Form 10-K for the year ended December 31, 1990 and
incorporated herein by reference.)
10(m) Equipment Acquisition Agreement dated July 23, 1986
between BancBoston Leasing Inc. and Bird Incorporated.
(Filed as Exhibit 10(s) to the Company's report on
Form 10-K for the year ended December 31, 1986 and
incorporated herein by reference.)
10(n)(1)* Long Term Incentive Compensation Plan dated June 28,
1988. (Filed as Exhibit 10(v) to the Company's report
on Form 10-Q for the quarter ended September 30, 1988
and incorporated herein by reference.)
10(n)(2)* Amendment dated May 24, 1990 to Long Term Incentive
Compensation Plan. (Filed as Exhibit 10(o)(2) to the
Company's report on Form 10-K for the year ended
December 31, 1990 and incorporated herein by
reference.)
10(o) Amendment dated February 1, 1994 to the First Amended
and Restated Partnership Agreement between Bird Vinyl
Products, Inc. and Kensington Manufacturing Company.
(Filed as Exhibit 10(o)(2) to the Company's report on
Form 10-K for the year ended December 31, 1993 and
incorporated herein by reference.)
10(p)* Employment Agreement dated as of December 1, 1993
between the Company and Joseph D. Vecchiolla. (Filed
as Exhibit 10(p) to the Company's report on Form 10-K
for the year ended December 31, 1993 and incorporated
herein by reference.)
10(q)* Severance Agreement dated as of December 21, 1993
between the Company and Joseph D. Vecchiolla. (Filed
as Exhibit 10(q) to the Company's report on Form 10-K
for the year ended December 31, 1993 and incorporated
herein by reference.)
10(r)* Settlement Agreement dated as of November 25, 1994
between Bird Corporation and William A. Krivsky.
(Filed as Exhibit 10(r) to the Company's Form 10-K for
the year ended December 31, 1994 and incorporated
herein by reference.)

EXHIBIT SEQUENTIAL
NO. PAGE NO.
------- ----------

10(s) Asset Purchase Agreement dated as of August 19, 1994
between Bird Incorporated, Atlantic Building Products
Corporation, Greater Louisville Aluminum, Inc., Southwest
Roofing Supply, Inc., Southwest Express, Inc., New York
Building Products, Inc., and Wm. Cameron & Co. (Filed as
Exhibit (1) to the Company's Form 8-K dated August 31,
1994 and incorporated herein by reference.)
10(t) Asset Purchase Agreement dated as of September 23, 1994
among Bird Corporation, Bird Incorporated, and Jannock,
Inc. (as amended by amendments dated as of January 27,
1995 and January 31, 1995). (Filed as Exhibit B to the
Company's proxy statement dated February 10, 1995 for the
special meeting of the stockholders to be held on March
7, 1995 and incorporated herein by reference.)
10(u)* Employment Agreement dated as of July 31, 1995 between
the Company and Frank S. Anthony. (Filed as Exhibit 10(u)
to the Company's Form 10-Q for the quarter ended
September 30, 1995 and incorporated herein by reference).
10(v)* Amended Employment Agreement dated August 21, 1995
between the Company and Richard C. Maloof. (Filed as
Exhibit 10(v) to the Company's Form 10-Q for the quarter
ended September 30, 1995 and incorporated herein by
reference).
10(w) Stock Purchase Agreement dated as of November 29, 1995 by
and among Bird Environmental Gulf Coast, Inc., Bird
Environmental Technologies, Inc., Bird Corporation, GTS
Duratek, Inc. and GTSD Sub II, Inc.
10(x) Amended Glass Mat Supply Agreement dated as of December
1, 1995 between the Company, Flintkote Company and
Genstar Roofing Company, Inc.
10(y) Amended and Restated Agreement and Plan of Merger by and
among CertainTeed Corporation, BI Expansion Corporation
and Bird Corporation dated as of April 8, 1996.
11 Statement regarding computation of per share earnings
(loss).
22 Significant subsidiaries.
23(a) Consent of Price Waterhouse LLP.
23(b) Consent of Alpern, Rosenthal and Company, independent
accountants for Kensington Partners.
24 Power of Attorney. (Immediately preceding the signature
page hereof.)
28 Annual report on Form 11-K of the Bird Employees' Savings
and Profit Sharing Plan for the fiscal year ended
December 31, 1995. (To be filed by amendment.)

- --------
* Indicates management contract or compensatory plan or arrangement

POWER OF ATTORNEY

We, the undersigned officers and Directors of Bird Corporation, hereby
severally constitute and appoint Richard C. Maloof and Frank S. Anthony, and
each of them severally, our true and lawful attorneys or attorney, with full
power to them and each of them to execute for us, and in our names in the
capacities indicated below, and to file with the Securities and Exchange
Commission the Annual Report on Form 10-K of Bird Corporation, for the fiscal
year ended December 31, 1995, and any and all amendments thereto.

IN WITNESS WHEREOF, we have signed this Power of Attorney in the capacities
indicated on March 21, 1996.

Principal Executive Officer:

/s/ Richard C. Maloof President, Director
- ------------------------------------- and Chief Operating
RICHARD C. MALOOF Officer

Principal Accounting Officer:

/s/ Donald L. Sloper, Jr. Corporate Controller
- -------------------------------------
DONALD L. SLOPER, JR.

Directors

/s/ Robert P. Bass, Jr. /s/ Francis J. Dunleavy
- ------------------------------------- -------------------------------------
ROBERT P. BASS, JR. FRANCIS J. DUNLEAVY

/s/ Charles S. Bird, Jr. /s/ John T. Dunlop
- ------------------------------------- -------------------------------------
CHARLES S. BIRD, JR. JOHN T. DUNLOP

/s/ Guy W. Fiske /s/ Joseph D. Vecchiolla
- ------------------------------------- -------------------------------------
GUY W. FISKE JOSEPH D. VECCHIOLLA

/s/ Loren R. Watts
- -------------------------------------
LOREN R. WATTS

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.

Bird Corporation (Registrant)

*
By __________________________________
RICHARD C. MALOOF PRESIDENT, COO

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.

SIGNATURE TITLE DATE

* President, Director, April 26, 1996
- ------------------------------------- and COO (Principal
RICHARD C. MALOOF Executive Officer)

* Corporate Controller April 26, 1996
- ------------------------------------- (Principal
DONALD L. SLOPER, JR. Accounting Officer)

* Director April 26, 1996
- -------------------------------------
JOSEPH D. VECCHIOLLA

* Director April 26, 1996
- -------------------------------------
ROBERT P. BASS, JR.

* Director April 26, 1996
- -------------------------------------
CHARLES S. BIRD, JR.

* Director April 26, 1996
- -------------------------------------
FRANCIS J. DUNLEAVY

* Director April 26, 1996
- -------------------------------------
JOHN T. DUNLOP

SIGNATURE TITLE DATE

* Director April 26, 1996
- -------------------------------------
GUY W. FISKE

* Director April 26, 1996
- -------------------------------------
LOREN R. WATTS

/s/ Frank S. Anthony
* By ________________________________
FRANK S. ANTHONY AS ATTORNEY-IN-
FACT

BIRD CORPORATION AND SUBSIDIARIES
FORM 10-K
ITEMS 14(A)(1) AND (2)

INDEX OF FINANCIAL STATEMENTS AND SCHEDULES

The following consolidated financial statements of the registrant and its
subsidiaries required to be included in Item 8 are listed below.

PAGE
----

Consolidated Financial Statements:
Reports of independent accountants.................................. F-2
Balance sheets at December 31, 1995 and 1994........................ F-4
Statements of operations for each of the three years in the period
ended December 31, 1995............................................ F-6
Statements of stockholders' equity for each of the three years in
the period ended December 31, 1995................................. F-7
Statements of cash flows for each of the three years in the period
ended December 31, 1995............................................ F-8
Notes to consolidated financial statements.......................... F-9

The following consolidated financial statement schedules of Bird Corporation
and its subsidiaries are included in Item 14(a)(2) and should be read in
conjunction with the financial statements included herein:

Schedule II--Valuation and qualifying accounts..................... F-28

All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission have been omitted because
they are not applicable or the required information is shown in the financial
statements or the notes thereto.

F-1

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
of Bird Corporation

We have audited the consolidated balance sheets of Bird Corporation and its
subsidiaries as of December 31, 1995 and 1994, and the related consolidated
statements of operations, of stockholders' equity and of cash flows for each of
the three years in the period ended December 31, 1995. 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 did not audit the financial statements of Kensington Partners,
which statements reflect total assets of $8.9 million at December 31, 1994, and
total net sales of $24.2 million and $21.2 million and net losses of $5.3
million and $5.2 million for the years ended December 31, 1994 and 1993,
respectively. Those statements were audited by other auditors whose report has
been furnished to us, and our opinion, insofar as it relates to the amounts
included for Kensington Partners, is based solely on the report of the other
auditors.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits and the report of the other
auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of the other auditors, the
consolidated financial statements listed in the index appearing under Item
14(a)(1) and (2) on Page F-1 present fairly, in all material respects, the
financial position of Bird Corporation and its subsidiaries as of December 31,
1995 and 1994, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 1995 in conformity
with generally accepted accounting principles.

As discussed in Note 4 to the consolidated financial statements, the Company
changed its method of accounting for income taxes in 1993 to comply with a new
pronouncement issued by the Financial Accounting Standards Board.

/s/ Price Waterhouse LLP

Boston, Massachusetts
March 15, 1996

F-2

INDEPENDENT AUDITORS' REPORT

To the Partners Kensington Partners and Affiliate Leechburg, Pennsylvania

We have audited the accompanying combined balance sheet of Kensington
Partners and Affiliate (Joint Venture Partnerships) as of December 31, 1994 and
the related combined statements of operations and changes in partners' capital
(deficit), and cash flows for the years ended December 31, 1994 and 1993. These
financial statements are the responsibility of the Partnerships' management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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. An audit
also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of Kensington Partners
and Affiliate as of December 31, 1994, and the results of their operations and
their cash flows for the years ended December 31, 1994 and 1993, in conformity
with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that
Kensington Partners and Affiliate will continue as going concerns. As discussed
in Note 2 to the financial statements, the Companies have incurred significant
operating losses and current liabilities exceed current assets. Those
conditions, among others, raise substantial doubt about the Companies' ability
to continue as going concerns. Management's plans regarding those matters are
also described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

/s/ Alpern, Rosenthal & Company

Pittsburgh, Pennsylvania
February 10, 1995

F-3

BIRD CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE, PAR VALUE, AND LIQUIDATION VALUE DATA)

DECEMBER 31,
---------------
1995 1994
------- -------

ASSETS
Current Assets:
Cash and equivalents......................................... $ 3,679 $ 321
Accounts and notes receivable, less allowances--$153 in 1995
and $3,137 in 1994.......................................... 5,461 19,644
Inventories.................................................. 4,701 8,371
Refundable income taxes...................................... 1,021 0
Prepaid expenses and other assets............................ 1,157 3,095
Deferred income taxes........................................ 435 6,836
------- -------
Total current assets....................................... 16,454 38,267
------- -------
Property, Plant and Equipment:
Land and land improvements................................... 2,810 3,145
Buildings.................................................... 7,184 11,742
Machinery and equipment...................................... 28,980 33,760
Construction in progress..................................... 672 5,705
------- -------
39,646 54,352
Less--Depreciation and amortization.......................... 16,127 24,323
------- -------
23,519 30,029
------- -------
Assets held for sale........................................... 0 7,500
Deferred income taxes.......................................... 3,631 8,662
Other assets................................................... 99 1,247
------- -------
$43,703 $85,705
======= =======

See accompanying notes to consolidated financial statements.

F-4

BIRD CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE, PAR VALUE, AND LIQUIDATION VALUE DATA)

DECEMBER 31,
----------------
1995 1994
------- -------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable.......................................... $ 3,394 $ 6,632
Accrued expenses.......................................... 5,881 7,039
Long-term debt, portion due within one year............... 1,113 18,071
Retirement plan contributions payable..................... 88 302
Income taxes payable...................................... 0 596
------- -------
Total current liabilities............................... 10,476 32,640
------- -------
Long-term debt, portion due after one year.................. 4,869 12,504
------- -------
Other liabilities........................................... 3,942 2,715
------- -------
Deferred income taxes....................................... 0 128
------- -------
Total liabilities....................................... 19,287 47,987
------- -------
Stockholders' Equity:
5% cumulative preferred stock, par value $100. Authorized
15,000 shares; issued 5,820 shares in 1995 and 1994
(liquidating preference $110 per share, aggregating
$640,000).................................................. 582 582
Preference stock, par value $1. Authorized 1,500,000 shares;
issued 814,300 shares of $1.85 cumulative convertible
preference stock in 1995 and 1994 (liquidating value $20
per share, aggregating $16,286,000)........................ 814 814
Common stock, par value $1. Authorized 15,000,000 shares;
4,395,162 shares issued in 1995 and 4,375,179 shares issued
in 1994.................................................... 4,395 4,375
Other capital............................................... 27,362 27,235
Retained earnings (deficit)................................. (5,746) 7,860
------- -------
27,407 40,866
Less--
Treasury stock, at cost, Common stock: 275,100 shares in
1995 and 1994............................................ (2,991) (2,991)
Unearned compensation..................................... 0 (157)
------- -------
24,416 37,718
------- -------
Commitments and contingencies (Note 11)
$43,703 $85,705
======= =======

See accompanying notes to consolidated financial statements.

F-5

BIRD CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

YEAR ENDED DECEMBER 31,
----------------------------------
1995 1994 1993
---------- ---------- ----------

Net sales.................................. $ 54,180 $ 167,886 $ 187,745
---------- ---------- ----------
Costs and expenses:
Cost of sales............................ 48,007 136,878 151,664
Selling, general and administrative
expense................................. 11,817 28,786 32,716
Interest expense......................... 927 4,782 2,472
Discontinued business activities (income)
expense................................. (17,570) (1,313) 268
Equity losses from partnership........... 372 4,680 2,625
Other expense............................ 0 0 3,278
---------- ---------- ----------
Total costs and expenses............... 43,553 173,813 193,023
---------- ---------- ----------
Earnings (loss) from continuing operations
before income taxes....................... 10,627 (5,927) (5,278)
Provision (benefit) for income taxes....... 11,424 (7,010) (637)
---------- ---------- ----------
Earnings (loss) from continuing operations
before cumulative effect of accounting
change.................................... (797) 1,083 (4,641)
---------- ---------- ----------
Discontinued operations (Note 9):
Income (loss) from operations of
discontinued businesses, net of taxes... 0 1,245 (15,414)
Loss on disposal of environmental
business, 1993 includes a provision of
$5,200,000 for operating losses during
phase out period, net of taxes.......... (11,252) (6,011) (11,000)
---------- ---------- ----------
Net loss from discontinued operations.... (11,252) (4,766) (26,414)
---------- ---------- ----------
Cumulative effect of accounting change..... 0 0 2,733
---------- ---------- ----------
Net loss before dividends.................. (12,049) (3,683) (28,322)
Preferred and preference stock cumulative
dividends................................. 1,536 1,536 1,536
---------- ---------- ----------
Net loss applicable to common stockholders. $ (13,585) $ (5,219) $ (29,858)
========== ========== ==========
Primary earnings (loss) per common share:
Continuing operations.................... $ (0.57) $ (0.11) $ (1.51)
Discontinued operations.................. (2.74) (1.20) (6.45)
Cumulative effect of accounting change... 0.00 0.00 0.67
---------- ---------- ----------
Net loss after dividends................... $ (3.31) $ (1.31) $ (7.29)
========== ========== ==========
Fully diluted earnings (loss) per common
share:
Continuing operations.................... $ (0.57) $ (0.11) $ (1.51)
Discontinued operations.................. (2.74) (1.20) (6.45)
Cumulative effect of accounting change... 0.00 0.00 0.67
---------- ---------- ----------
Net loss after dividends................... $ (3.31) $ (1.31) $ (7.29)
========== ========== ==========
Average number of shares used in earnings
per share computations.................... 4,104,965 3,992,251 4,097,999
========== ========== ==========

See accompanying notes to consolidated financial statements.

F-6

BIRD CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

$1.85
5% CUMULATIVE
CUMULATIVE CONVERTIBLE RETAINED COMMON TOTAL
PREFERRED PREFERENCE COMMON OTHER EARNINGS STOCK IN UNEARNED STOCKHOLDERS'
STOCK STOCK STOCK CAPITAL (DEFICIT) TREASURY COMPENSATION EQUITY
---------- ----------- ------ ------- --------- -------- ------------ -------------

Balance December 31,
1992................... $582 $814 $4,267 $25,401 $41,645 $(2,059) $(1,549) $69,101
Net loss................ (28,322) (28,322)
Cash dividends declared:
5% cumulative preferred
stock--$5 per share... (29) (29)
$1.85 cumulative
convertible preference
stock $1.85 per share. (1,130) (1,130)
Common stock $.15 per
share.................. (613) (613)
Common stock issued as
compensation--1,200
shares................. 1 13 14
Common stock issued for
contributions to
employees' saving
plan--19,119 shares.... 19 210 229
Common stock issued and
note repayment upon
exercise of stock
options--4,080 shares.. 4 210 214
Purchase of 10,119
shares of common stock. (120) (120)
Amortization of unearned
compensation........... 595 595
Cumulative effect of
accounting change...... 323 323
Tax effect of stock
options exercised...... 303 303
Cumulative foreign
currency translation... (4) (4)
---- ---- ------ ------- ------- ------- ------- -------
Balance December 31,
1993................... 582 814 4,291 26,456 11,551 (2,179) (954) 40,561
Net loss................ (3,683) (3,683)
Cash dividends declared:
5% cumulative preferred
stock--$1.25 per
share................. (8) (8)
Common stock issued as
compensation--1,426
shares................. 1 14 15
Common stock issued for
contributions to
employees' saving
plan--12,439 shares.... 13 110 123
Common stock issued upon
exercise of stock
options--69,750 shares
common and 15,000
shares treasury........ 70 609 109 788
Purchase of 248 shares
of common stock........ (3) (3)
L.T. Incentive
forfeitures--125,145
shares................. (910) 910 0
Common stock from
distribution business--
916 shares............. (6) (8) (14)
Amortization of unearned
compensation........... (113) (113)
Cumulative foreign
currency translation... 52 52
---- ---- ------ ------- ------- ------- ------- -------
Balance December 31,
1994................... 582 814 4,375 27,235 7,860 (2,991) (157) 37,718
Net loss................ (12,049) (12,049)
Cash dividends declared:
5% cumulative preferred
stock--$1.25 per
share................. (51) (51)
$1.85 cumulative
convertible preference
stock--$1.85 per
share................. (1,506) (1,506)
Common stock issued as
compensation--200
shares................. 1 1
Common stock issued for
contributions to
employees' saving
plan--17,783 shares.... 18 112 130
Common stock issued upon
exercise of stock
options--2,000 shares
common................. 2 14 16
Amortization of unearned
compensation........... 157 157
---- ---- ------ ------- ------- ------- ------- -------
Balance December 31,
1995................... $582 $814 $4,395 $27,362 $(5,746) $(2,991) $ 0 $24,416
==== ==== ====== ======= ======= ======= ======= =======

See accompanying notes to consolidated financial statements.

F-7

BIRD CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

YEAR ENDED DECEMBER 31,
-----------------------------------
1995 1994 1993
---------- ---------- ------------
(BRACKETS DENOTE CASH OUTFLOWS)

Cash flow provided (used) by operations:
Net loss................................. $ (12,049) $ (3,683) $ (28,322)
Adjustments to reconcile to net cash
provided by operations:
Writedown of assets to net realizable
value................................. 0 0 5,800
Depreciation and amortization.......... 2,861 4,317 8,714
Provision for losses on accounts
receivable............................ 26 905 2,162
Deferred income taxes.................. 11,304 (10,172) (1,044)
Cumulative effect of accounting change. 0 0 (2,733)
Gain on sale of vinyl business......... (20,579) 0 0
Loss on sale of window business........ 1,959 0 0
Gain on sale of distribution business.. 0 (1,466) 0
Loss (gain) on disposal of
environmental business................ 11,252 9,747 (858)
Changes in balance sheet items:
Accounts receivable.................... 3,120 (2,841) (8,199)
Inventories............................ (2,664) 1,423 4,538
Prepaid expenses....................... 712 203 (2,039)
Liabilities not related to financing
activities............................ (14,325) (6,867) 11,646
Liquidation reserve.................... 0 (5,398) 5,398
Other assets........................... 128 2,230 2,564
--------- ---------- ------------
Cash flow used by operations: (18,255) (11,602) (2,373)
--------- ---------- ------------
Cash flows from investing activities:
Acquisition of property, plant and
equipment, net........................ (1,590) (10,614) (16,251)
Proceeds from disposal of assets....... 50,680 31,296 9,141
Additional investments in discontinued
operations............................ (2,402) 0 0
Other investments...................... 651 (1,277) 159
--------- ---------- ------------
Net cash provided (used) in investing
activities.............................. 47,339 19,405 (6,951)
--------- ---------- ------------
Cash flows from financing activities:
Debt proceeds.......................... 16,627 159,139 1,286,500
Debt repayments........................ (40,942) (175,091) (1,270,987)
Dividends paid......................... (1,558) (8) (2,351)
Purchase of treasury stock............. 0 (11) (120)
Other equity changes................... 147 971 577
--------- ---------- ------------
Net cash provided (used) by financing
activities.............................. (25,726) (15,000) 13,619
--------- ---------- ------------
Net increase (decrease) in cash and
equivalents............................. 3,358 (7,197) 4,295
Cash and cash equivalents at beginning of
year.................................... 321 7,518 3,223
--------- ---------- ------------
Cash and cash equivalents at end of year. $ 3,679 $ 321 $ 7,518
========= ========== ============
Supplemental Disclosures:
Cash paid during the year for:
Interest............................... $ 1,501 $ 4,811 $ 2,160
Income taxes........................... $ 1,170 $ 363 $ 291

See accompanying notes to consolidated financial statements.

F-8

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES

Nature of Operations

Bird Corporation is a manufacturer of asphalt roofing products. Currently,
asphalt shingles and roll roofing are produced at the Company's plant in
Norwood, Massachusetts for commercial and residential use. These products are
marketed in the northeastern United States through independent wholesalers and
building material retailers whose primary customers are roofing contractors.

Basis of Consolidation

The accompanying consolidated financial statements include the accounts of
Bird Corporation and its majority-owned subsidiaries (the "Company"). All
material intercompany activity has been eliminated from the financial
statements. Investments in less than majority-owned companies are accounted for
by the equity method. Certain prior year amounts have been reclassified to
conform with the 1995 presentation.

Pervasiveness of Estimates

The preparation of 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 and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Concentration of Risk and Major Customers

The Company is dependent upon the economy in the northeastern United States
and sells its products primarily to independent wholesalers and building
material retailers for resale primarily to roofing contractors. One customer
accounted for slightly more than 10% of the Company's sales during 1995 and
accounts receivable at December 31, 1995.

Revenue Recognition

The Company recognizes revenue when products are shipped or services are
performed.

Statement of Cash Flows

The Company considers all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash equivalents.

Inventories

Inventories are valued at the lower of cost or market. Cost is determined for
a large portion of the inventories by the last-in, first-out (LIFO) method
computed using the dollar value method for natural business unit pools. The
cost of the remaining inventories is determined generally on a first-in, first-
out (FIFO) basis.

F-9

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Property, Plant and Equipment

Property, plant and equipment is stated at cost. Depreciation has been
provided in the financial statements primarily on the straight-line method at
rates, based on reasonable estimates of useful lives, which fall within the
following ranges for major asset classifications:

Land improvements.......................................... 10 to 20 years
Buildings.................................................. 20 to 40 years
Machinery and equipment.................................... 5 to 20 years

Depreciation expense for continuing operations for 1995, 1994 and 1993
amounted to $2,831,000, $3,644,000 and $3,757,000, respectively. Maintenance,
repairs and minor renewals are charged to earnings in the year in which the
expense is incurred. Additions, improvements and major renewals are
capitalized. The cost of assets retired or sold, together with the related
accumulated depreciation, are removed from the accounts, and any gain or loss
on disposition is credited or charged to earnings. The Company capitalizes
interest cost on construction projects while in progress. The capitalized
interest is recorded as part of the asset to which it is related and is
amortized over the asset's estimated useful life.

Retirement Plans

The Company has a defined contribution plan covering substantially all
eligible non-union salaried and non-union hourly employees. Annual
contributions are made to the plan based on rates identified in the plan
agreement.

Advertising

Advertising costs are charged to operations when incurred. The Company did
not incur any costs associated with direct response advertising in 1995, 1994
and 1993, and there were no capitalized advertising costs at December 31, 1995
and 1994. Advertising expense for 1995, 1994 and 1993 was $503,000, $1,023,000
and $1,230,000, respectively.

Earnings (Loss) per Common Share

Primary earnings (loss) per common share is determined after deducting the
dividend requirements of the preferred and preference shares and is based on
the weighted average number of common shares outstanding during each period
increased by the effect of dilutive stock options. Fully diluted earnings
(loss) per common share also give effect to the reduction in earnings per
share, if any, which would result from the conversion of the $1.85 cumulative
convertible preference stock at the beginning of each period if the effect is
dilutive.

Environmental Matters

The Company records a liability for environmental matters when it is probable
that a liability has been incurred and the amount of the liability can be
reasonably estimated based on the available evidence and site assessments. If
an amount is likely to fall within a range and no single amount within that
range can be determined to be a better estimate, the minimum amount of the
range is recorded. If there are other participants and the liability is joint
and several, the financial stability of the other participants is considered in
determining the Company's accrual. In addition, the liability excludes claims
for recoveries from insurance companies and other third parties until such
claims for recoveries are probable of realization at which point they would be
classified separately as a receivable.

F-10

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Warranty Costs

The Company warrants under certain circumstances that its building material
products meet certain manufacturing and material specifications. The warranty
policy is unique to each product, ranges from twenty to forty years, is
generally for the material cost and requires the owner to meet specific
criteria such as proof of purchase. The Company offers the original
manufacturer's warranty only as part of the original sale and at no additional
cost to the customer. In addition, for marketing considerations, the Company
makes elective settlements in response to customer complaints. The Company
records the liability for warranty claims and elective customer settlements
when it determines that a specific liability exists or a payment will be made.

2. INVENTORIES

The percentages of inventories valued on the LIFO method were 100% and 86% at
December 31, 1995 and 1994, respectively. It is not practical to separate LIFO
inventories by raw materials and finished goods components; however, the
following table (in thousands) presents these components on a current cost
basis with the LIFO reserve shown as a reduction.

DECEMBER 31,
--------------
1995 1994
------ -------

Current Costs:
Raw materials............................................... $1,202 $ 3,554
Finished goods.............................................. 4,217 6,924
------ -------
5,419 10,478
Less LIFO reserve........................................... 718 2,107
------ -------
$4,701 $ 8,371
====== =======

3. DEBT

At December 31, the Company's borrowings and debt obligations are summarized
as follows (in thousands):

1995 1994
------ -------

Long Term Debt:
Revolving Credit Agreement................................. $ 0 $13,937
Term Loans................................................. 5,000 15,000
Obligations under capital leases........................... 982 1,638
------ -------
5,982 30,575
Less--portion due within one year.......................... 1,113 18,071
------ -------
$4,869 $12,504
====== =======

On November 30, 1994, Bird Incorporated entered into a three year $39 million
Loan Agreement with Fleet Capital Corporation ("Fleet Capital"), previously
Barclays Business Credit, Inc. and Shawmut Capital Corporation. At the end of
the three year period, the Loan Agreement will be automatically renewed for

F-11

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
successive one year periods unless terminated specifically in writing. The Loan
Agreement consisted of a $24 million revolving credit commitment and two equal
term loans (Term loan A and Term loan B, as defined in the Loan Agreement)
totaling $15 million. On March 8, 1995 the Company sold the assets of its vinyl
siding operation to Jannock, Inc. for $47.5 million which was reduced to
approximately $42.5 million by post- closing working capital adjustments (see
Note 7). The proceeds from the sale were used to reduce bank debt. Concurrent
with the sale, Fleet Capital executed the First Amendment to the Loan Agreement
amending the amount of the facility to $20 million consisting of a $15 million
revolving credit commitment and a $5 million term loan. On January 10, 1996,
the Company paid down the term loan so that the outstanding principal balance
equaled $2.5 million. Up to $5 million of the revolving credit facility can be
used for letters of credit. Letters of credit outstanding as of December 31,
1995 totaled $2,233,000 compared to $2,927,000 as of December 31, 1994.

The weighted average interest rates on short term borrowings at December 31,
1995 and December 31, 1994 were 9.74% and 9.53%, respectively. The fair value
of the Company's total debt approximated the carrying value at December 31,
1995 and 1994, respectively. The fair value is based on management's estimate
of current rates available to the Company for similar debt with the same
remaining maturity.

F-12

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Maturities of long-term debt for each of the five years subsequent to
December 31, 1995 are as follows:

1996--$1,113,000; 1997--$4,614,000; 1998--$255,000; 1999--$0; 2000--$0. The
Company incurred net interest expense of $927,000 in 1995, $4,782,000 in 1994
(net of $257,000 capitalized interest), and $2,472,000 in 1993 (net of $345,000
capitalized interest).

4. INCOME TAXES

Earnings (loss) from continuing operations before income taxes and the
provision (benefit) for income taxes are shown below (in thousands):

YEAR ENDED DECEMBER 31,
------------------------
1995 1994 1993
------- ------- -------

Earnings (loss) from continuing operations before
income taxes........................................ $10,627 $(5,927) $(5,278)
======= ======= =======
Provision (benefit) for continuing operations:
Currently payable.................................. $ 120 $ 200 $ 765
Deferred........................................... 11,304 (7,210) (1,402)
------- ------- -------
$11,424 $(7,010) $ (637)
======= ======= =======

The provision (benefit) for income taxes on continuing operations varied from
the U.S. federal statutory rate for the following reasons:

1995 1994 1993
----- ------ -----

Continuing operations:
U.S. federal statutory rate............................. 34.0% (34.0)% (34.0)%
State income taxes...................................... 7.3 (6.5) 0.6
Corporate owned life insurance.......................... 2.5 (9.9) 0.0
Effect of valuation allowance........................... 63.7 (67.5) 22.3
Other................................................... 0.0 (0.4) (1.0)
----- ------ -----
107.5% (118.3)% (12.1)%
===== ====== =====

The net provision (benefit) for income taxes related to discontinued
operations amounted to $(2,962,000) and $304,000 for 1994 and 1993,
respectively.

F-13

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The deferred income tax asset recorded in the consolidated balance sheet
results from differences between financial statement and tax reporting of
income and deductions. A summary of the composition of the deferred income tax
asset at December 31, 1995 and 1994 is as follows (in thousands):

1995 1994
-------- -------

Deferred tax assets:
Bad debt reserves....................................... $ 66 $ 1,314
Compensation/pension accruals........................... 648 882
Investment in non-consolidated subsidiary............... 0 4,284
Net operating loss carryover............................ 14,810 9,129
Capital loss carryover.................................. 0 451
Investment tax credit carryover......................... 1,233 1,233
Minimum tax credit carryover............................ 1,091 1,091
Other reserves & accruals............................... 3,222 3,389
-------- -------
Total deferred tax assets............................. 21,070 21,773
Deferred tax liabilities:
Depreciation............................................ (1,942) (1,403)
-------- -------
Net deferred tax asset before valuation reserve........... 19,128 20,370
Less: Valuation reserve................................... (15,062) (5,000)
-------- -------
Net deferred tax asset.................................... $ 4,066 $15,370
======== =======

The Company has available for federal income tax purposes unused net
operating loss and investment tax credit carryforwards, which may provide
future tax benefits, expiring as follows (in thousands):

YEAR OF NET INVESTMENT
EXPIRATION OPERATING LOSS TAX CREDIT
---------- -------------- ----------

1996............................................ $ 0 $ 97
1997............................................ 0 317
1998............................................ 0 135
1999............................................ 0 212
2000............................................ 0 297
2001............................................ 0 175
2002............................................ 138 0
2008............................................ 9,898 0
2009............................................ 16,711 0
2010............................................ 16,229 0
------- ------
$42,976 $1,233
======= ======

Additionally, for federal income tax purposes, at December 31, 1995 the
Company had available for carryforward minimum tax credits with no expiration
aggregating $1,091,000. If certain substantial changes in the Company's
ownership should occur, there would be an annual limitation on the amount of
the carryforwards, including certain unrealized built-in losses, which can be
utilized for regular and alternative minimum tax purposes. (See Note 14
regarding proposed merger with CertainTeed Corporation.)

The Company adopted FAS 109 in 1993 and recorded the cumulative effect of the
change in accounting principle of approximately $2.7 million as a benefit in
the results of operations for the first quarter of 1993. This accounting change
also requires the recognition of a valuation reserve if it is more likely than
not that

F-14

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
the Company may not be able to realize the benefits of recorded deferred tax
assets. At December 31, 1995 the Company's net deferred tax asset is
approximately $19.1 million less a valuation reserve of $15.1 million. As
required under FAS 109, this valuation reserve was determined based upon the
Company's review of all available evidence including projections of future
taxable income. During 1995, the company disposed of Bird-Kensington Holding
Corporation and Bird Environmental Gulf Coast, Inc. (as disclosed in Notes 7
and 9, respectively) resulting in losses not anticipated at the end of the
previous year. In addition, the lower overall demand and price weakness in the
northeast caused by a mild 1994/1995 winter followed by a hot, dry summer
negatively impacted profits of the roofing operations. Based on the above
factors, the Company increased the valuation reserve by $10.1 million.

The Company expects to be profitable and with other tax planning strategies
expects to generate future taxable income. Realization of the $4,066,000 net
deferred tax asset is dependent on generating sufficient taxable income prior
to expiration of the loss carryforwards. Although realization is not assured,
management believes that it is more likely than not that the net deferred tax
asset will be realized. The amount of the net deferred tax asset considered
realizable, however, could be reduced in the near term if estimates of future
taxable income during the carryforward period are reduced.

5. STOCKHOLDERS' EQUITY

The $1.85 cumulative convertible preference stock is redeemable, in whole or
in part, at the option of the Company, at a redemption price of $20.00 per
share on and after May 15, 1993. The convertible preference stock has a
liquidation value of $20.00 per share and is convertible at the option of the
holder into common stock of the Company at a conversion price of $22.25 per
share, subject to adjustment in certain events. Dividends are cumulative from
the date of issue and are payable quarterly. There are four preference
dividends in arrears. The Company has the option to redeem the convertible
preference stock. The Company's 5% cumulative preferred stock ranks senior to
the convertible preference stock as to dividends and upon liquidation.

On June 18, 1992 the Company announced that its Board of Directors authorized
it to buy back, on the open market or in privately negotiated transactions, up
to 400,000 of its outstanding shares of common stock at prices available from
time to time that the Company deems attractive. Since this announcement the
Company has repurchased 248 shares in 1994, 5,364 shares in 1993 and 92,007
shares in 1992.

The Company is prohibited from purchasing its common stock as long as
dividends on the convertible preference stock are in arrears. Under the 1992
Stock Option Plan described in Note 6, 931,325 shares of common stock are
reserved for issuance upon exercise of options and stock appreciation rights at
December 31, 1995.

Restrictions on the payment of dividends on common and preference stock are
imposed by the terms of the Loan Agreement dated November 30, 1994. Payment of
dividends on the preferred stock are permitted under the Loan Agreement. As of
December 31, 1995, all dividends current and in arrears on the preferred stock
in the amount of $29,000 and $22,000 respectively, have been declared and paid
in full. Dividends are in arrears on the preference stock in the aggregate
amount of $1,506,000 for the four quarterly periods ended February 15, 1995 and
must be paid in full before any dividends could be declared and paid on the
common stock. The quarterly dividends on the preference stock due May 15,
August 15, and November 15, 1995 in the aggregate amount of $1,130,000, along
with one dividend in arrears in the amount of $377,000, have with the consent
of Fleet Capital, been declared and paid in full.

The Company has a Rights Agreement which, as amended, entitles certain common
stockholders to purchase shares of common stock of the Company or securities of
an acquiring entity in the event of certain

F-15

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
efforts to acquire control of the Company. The proposed merger with CertainTeed
Corporation (Note 14) will not trigger the exercisability of these rights.

6. EMPLOYEE BENEFIT PLANS

Retirement Plans

The Company's "Bird Employees' Savings and Profit Sharing Plan" provides for
a defined base contribution and profit sharing and savings contributions.

Defined Base Contribution

The Company contributes annually 2-7% of plan participants' basic
compensation depending upon their age and employment status as of December 31,
1984. Vesting accrues at 20% per year of service. Contributions for continuing
operations for the years ended December 31, 1995, 1994, and 1993 amounted to
$72,000, $203,000, and $352,000, respectively.

Profit Sharing Contribution

Profit sharing contributions are made annually, if earned, based upon certain
defined levels of return on equity by the Company and its business units. The
distribution of the contribution to the plan's participants is based upon
annual basic compensation. Contributions for continuing operations for the year
ended December 31, 1993 amounted to $145,000. No profit sharing contributions
were earned for 1995 or 1994.

Savings Contribution

The Company's savings plan provides that eligible employees may contribute to
the plan any whole percentage of their basic compensation varying from 2 to
15%. The Company may make discretionary matching contributions not exceeding 6%
of the participant's basic compensation during the plan year. Such matching
Company contributions are invested in shares of the Company's common stock. The
Company's contributions for continuing operations for the years ended December
31, 1995, 1994, and 1993 amounted to $124,000, $142,000, and $155,000,
respectively.

Post Retirement Benefits

Certain health care and life insurance benefits are provided for
substantially all of the Company's retired employees, except those covered
under union plans. Benefits are provided by the payment of premiums for life
insurance benefits and the reimbursement for eligible employees of a portion of
their health care premiums. The Company's cost for the years 1995, 1994, and
1993 amounted to $66,000, $79,000, and $71,000, respectively.

Employee Incentive Plans

Under the 1982 Stock Option Plan, as amended, options to purchase up to
900,000 shares of the Company's common stock may be granted to officers,
directors and key employees upon terms and conditions determined by a committee
of the Board of Directors which administers the plan. In 1993, the Company
adopted a new stock option plan which allows the issuance of up to 450,000
stock options in addition to the unissued shares approved for issuance under
the 1982 plan. The new plan will expire in 2002 and no further options will be
granted under the former plan. A Non-Employee Directors' Stock Option Plan was
also adopted in 1993 which will automatically provide grants of options to each
non-employee director serving on the Board of Directors at the time of such
grant. Each annual grant will cover 2,500 shares of common stock

F-16

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
and any recipient may not receive option grants exceeding a total of 30,000
shares. An aggregate of 100,000 shares of common stock are available for grants
under the Non-Employee Directors' Stock Option Plan.

Options granted by the committee may be designated as either incentive stock
options, as defined under the current tax laws, or non-qualified options. The
committee may also grant stock appreciation rights, either singly or in tandem
with stock options. A right entitles the holder to benefit from market
appreciation in the Company's common stock subject to the right between the
date of the grant and the date of exercise without any payment on the part of
the holder. Upon exercise of a right, the holder surrenders the option and
receives an amount of common stock (or, at the election of the committee, cash)
equal in value to the amount of such appreciation.

The exercise price of options specified by the committee must be at least
100% of the fair market value of the Company's common stock as of the date of
grant. All options and rights granted become exercisable at the rate of 20 to
25% per year, on a cumulative basis, beginning with the first anniversary of
the date of grant for options granted under the Stock Option Plan and in full
one year after grant for option granted under the Non-Employee Directors' Stock
Option Plan. In case of termination of employment, options and grants vested,
but not yet exercised, are subject to forfeiture under the Stock Option Plan
and are exercisable up to 90 days after termination for the Non-Employee
Directors' Stock Option Plan.

Transactions involving the Stock Option Plan are summarized as follows for
the year ended December 31, 1995:

STOCK OPTIONS
-------------

Outstanding January 1, 1995 ($5.00 to $17.50 per share)........ 500,650
Granted ($6.625 to $8.125 per share)........................... 65,000
Exercised ($5.00 per share).................................... (2,000)
Canceled ($5.50 to $17.50 per share)........................... (125,550)
--------
Outstanding December 31, 1995 ($5.00 to $17.50 per share)...... 438,100
========
Exercisable December 31, 1995 ($5.00 to $17.50 per share)...... 186,300
Shares available for granting options:
January 1, 1995................................................ 432,675
December 31, 1995.............................................. 493,225

In tandem with the stock options there are 9,500 stock appreciation rights at
December 31, 1995.

During 1995, the Financial Accounting Standards Board issued "Statement of
Financial Accounting Standards No. 123 Accounting for Stock Based Compensation"
("FAS 123"). The Company intends to adopt FAS 123 through disclosure only in
1996.

Long Term Incentive Compensation

Under the terms of a Long Term Incentive Compensation Plan, certain officers
and key management employees received common stock of the Company on a
restricted time lapse grant basis. These shares were to be released from escrow
and delivered to the plan's participants when the market price of the Company's
common stock achieved certain designated levels between $12 and $24 per share
for 30 consecutive days prior to June 28, 1994 or in any event if the
participant has remained in the continuous employ of the Company through June
2003. Certain market prices were achieved and maintained for the required 30-
day period during 1994 and 1993. Therefore, 40,670 and 45,630 shares of the
Company's common stock were released in June of 1994 and 1993, respectively, to
the plan's participants. Additionally, 30,000 shares were released

F-17

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
to the former Chief Executive Officer in 1994 as part of his Termination
Agreement. As a result of his termination and the termination of certain other
officer and key management personnel during 1994, 125,145 shares of restricted
stock valued at $910,000 were forfeited and returned to treasury stock. Upon
consummation of the vinyl sale, all restrictions on the remaining 23,560 shares
of common stock held under the plan automatically lapsed and such shares were
distributed to the intended recipients.

Amortization of unearned compensation under this agreement for the years 1995
and 1993 amounted to $157,000 and $595,000, respectively. In 1994 amortization
was reduced by $113,000 associated with the forfeiture of shares.

7. DISCONTINUED BUSINESS ACTIVITIES

The Company records income and expenses associated with former business
activities on the Consolidated Statement of Operations under the caption
"Discontinued Business Activities".

On March 8, 1995, the Company sold substantially all of the assets of its
vinyl business to Jannock, Inc. for $47.5 million in cash subject to certain
downward adjustments which totaled $4,962,000. Net of adjustments, the gain on
the sale of the vinyl business totaled $20,579,000. Sales of $6,365,000 were
recorded for the now discontinued vinyl business for the period ending March 7,
1995.

On June 2, 1995 the Company sold all of the outstanding capital stock of
Bird-Kensington Holding Corp., which owned the Company's interest in Kensington
Partners, to Jannock, Inc. The purchase price consisted of cash in the gross
amount of $2,780,000 and the assumption of certain liabilities related to the
Kensington window business. The sale resulted in a loss of $1,959,000. Sales of
$4,265,000 were recorded for this business for the period March 1, 1995 through
June 2, 1995.

On June 10, 1994, the Company's 40% interest in Mid-South Building Supply,
Inc. was redeemed for $1 million in cash resulting in a loss of $1,261,000.

On August 22, 1994, the Company sold the assets of substantially all of its
distribution businesses to Wm. Cameron & Co. for a purchase price consisting of
cash in the amount of $26,142,000, including $1 million held in escrow to pay
any indemnification claims arising under the purchase and sale agreement. The
sale resulted in a gain of $2,677,000. Sales of $67,089,000 were recorded for
these businesses for the period ending August, 22, 1994.

On November 28, 1994, the Company sold its last remaining building materials
distribution business, Southland Building Products, Inc., to Ashley Aluminum,
Inc. for a purchase price of $2,134,000. The sale resulted in a modest gain.
Sales of $9,092,000 were recorded for this business for the period ending
November 27, 1994.

The Company recorded other expenses related to discontinued business
activities of $1,050,000, $153,000, and $268,000, for the years 1995, 1994, and
1993, respectively. These charges against earnings include warranty claims and
other costs directly related to discontinued business activities. Expenses
incurred in 1995 also included $1.5 million in provisions relating to employee
benefit plans and product liability claims associated with former roofing
operations which were offset by a $602,000 crude oil refund from the Department
of Energy.

F-18

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
8. OTHER EXPENSE

Other expense was $3.3 million in 1993. A series of non-recurring items
developed at the end of 1993 that required a number of charges to results of
operations. The majority of these are outlined in the following paragraphs:

Accounting requirements associated with the responsible parties on an
environmental cleanup require the Company to maintain a reserve sufficient to
absorb the full cost of the Company's portion of the cleanup. Based on recent
site assessments, the Company increased the cleanup reserve by $500,000 based
on the Company's estimated share of the proportionate costs.

The Company had been considering the development of certain real property. As
a result of cash flow and bank covenant constraints, no further development was
possible. Based on the estimated net realizable value of the property, the
Company wrote-off its $1.3 million investment.

To satisfy the remaining portion of an outstanding receivable, the Company
previously accepted a $1.3 million note, collateralized by a secondary interest
in a mortgage portfolio. Because assessment of the portfolio and the bankruptcy
of the debtor indicated the note to be of no value it was written off.

The termination of the former Chief Executive Officer of the Company resulted
in a $850,000 reserve to cover a settlement under an employment agreement which
was paid in 1994.

The remainder of "Other Expense" is comprised of other miscellaneous
adjustments of a more typical nature and income of approximately $1.3 million
from a settlement with an insurance provider relating to product liability
claims.

9. DISCONTINUED OPERATIONS

Environmental Businesses

On June 18, 1994, the Company agreed to cause the sale of its 80% interest in
its "off-site" environmental business, Bird Environmental Gulf Coast, Inc.
("BEGCI") to the minority shareholders thereof, subject to financing, resulting
in the complete withdrawal from the environmental business. Accordingly, the
Company, as of June 30, 1994, recorded the operating results of BEGCI as a
discontinued operation for all years presented. In conjunction with this
decision, the Company recorded an aggregate charge of approximately $9 million,
to adjust its book value to approximate the net realizable value of $7.5
million at June 30, 1994. In June 1994, the Company estimated that the results
of operations from the "off-site" environmental business would be breakeven
through the disposal date and, accordingly, no liability for anticipated losses
from the measurement date to the disposal date was recorded. However, at
December 31, 1994, the Company had invested an additional $1,270,000 in BEGCI
which, based on the Company's assessment, would not be recoverable and was
accordingly written-off, thus maintaining the Company's investment at $7.5
million.

During 1995, the minority partner became unable to finance the purchase of
the facility and efforts to attract another purchaser were unsuccessful. In
July 1995, the Company's Board of Directors suspended further funding of the
facility. As a result of this action, during the second quarter of 1995, the
Company's remaining investment of $8.6 million was written off and a $3 million
reserve was established for additional expenses associated with the closure of
the facility. On November 29, 1995, the Company caused the sale of all of the
outstanding capital stock of BEGCI to GTS Duratek, Inc. for a purchase price of
$1.00. Of the $3 million reserve established in the second quarter of 1995,
$2,050,000 was utilized, while $650,000 remains at December 31, 1995 for future
claims against discontinued operations.

F-19

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
In 1993 the Company decided to close the "on-site" environmental remediation
business. This business involved environmental remediation projects such as the
processing of oily waste sites at a refinery, operations and management of
waste processing sites and the removal and remediation of sludge. The contracts
with customers were generally fixed price and usually for periods less than one
year. As a result of the decision to exit this business, the Company recorded a
provision totaling approximately $11 million. Included in this provision was a
$5.8 million write-down of certain assets to net realizable value, $2.1 million
for certain contracts including any additional amounts due to stipulated
buyouts, $635,000 for severance-related payments, $740,000 for inventory and
other assets, $1 million for the write-off of intangible assets and $700,000
for other expenses due to lease buyouts, fees and other general expenses.

Included in the 1993 environmental results is a restructuring reserve of $2
million relating primarily to the environmental business. Included in this
provision is $300,000 for severance and benefit payments, $700,000 for lease
buyouts, $650,000 for expected losses on exiting certain contracts, and
$350,000 of other costs. This charge was offset by a $858,000 gain on the sale
of the municipal sludge business. These amounts, including the operating
results, are recorded as discontinued operations. Based upon the actual results
of the environmental "on-site" remediation operations and the sale of its
assets, excess costs of $3,861,000 charged in 1993 were reversed and recorded
as discontinued operations in the consolidated statement of operations for the
twelve months ended December 31, 1994.

Net sales relating to these environmental businesses amounted to $2,848,000,
$3,715,000 and $24,681,000 for 1995, 1994 and 1993, respectively.

10. ACQUISITIONS

On July 1, 1992 the Company entered into a 50% joint venture with Kensington
Manufacturing Company to manufacture vinyl replacement windows through
Kensington Partners ("Kensington"). In 1993, Kensington experienced serious
cash needs which hampered production requirements. As a result of continuing
losses and the inability of Kensington to properly finance its operation,
Kensington's independent accountants issued "going concern" opinions at
December 31, 1994 and December 31, 1993. After negotiating with its partner,
Bird Corporation agreed to invest additional cash in return for temporarily
increasing its ownership in Kensington to 90%. The terms of the new agreement
allowed Kensington to return to an equal partnership if, before the later of
December 31, 1994 or six months following the Company's last investment (made
in August, 1994), its partner matched the additional investment made by the
Company. As of February 28, 1995, the minority partner did not match the
additional investment made by the Company. As a result, the Company's ownership
in the joint venture was permanently fixed at 90%, resulting in a change in
financial reporting from the equity method to consolidation beginning March 1,
1995 through June 2, 1995 when the operation was sold (see Note 7).

The Company recorded 50% of the joint venture's loss from operations under
the equity method from inception through January 31, 1994 and 90% for the
period February 1, 1994 through February 28, 1995. Equity losses from
Kensington are shown separately on the consolidated statements of operations.

F-20

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The following table represents summarized financial information for
Kensington Partners for the year ended December 31, 1994 (in thousands):

Current Assets.................................................... $ 5,040
Property and Equipment............................................ 3,137
Other Assets...................................................... 677
-------
Total Assets.................................................. $ 8,854
=======
Current Liabilities............................................... $ 9,722
Other Liabilities................................................. 1,288
-------
Total Liabilities............................................. $11,010
=======

The following table represents summarized financial information for the years
ended December 31, 1994 and December 31, 1993 and the two month period ended
February 28, 1995 (in thousands):

1995 1994 1993
------ ------- -------

Net Sales........................................ $1,774 $24,180 $21,169
Gross Profit (Loss).............................. $ (18) $ 1,317 $ 1,384
Net Loss......................................... $ (413) $(5,310) $(5,249)

11. COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company leases certain manufacturing, administrative, warehousing,
transportation equipment and other facilities. The leases generally provide
that the Company pay the taxes, insurance and maintenance expenses related to
the leased assets.

At December 31, 1995 minimum lease commitments under noncancelable operating
leases are as follows (in thousands):

YEAR
----

1996.............................................................. $ 986
1997.............................................................. 899
1998.............................................................. 740
1999.............................................................. 740
2000.............................................................. 740
Later years....................................................... 10,353
-------
$14,458
=======

Total rental expense for continuing operations, exclusive of taxes, insurance
and other expenses paid by the lessee related to all operating leases
(including those with terms of less than one year) was as follows (in
thousands):

YEAR AMOUNT
---- ------

1995............................................................... $1,059
1994............................................................... $2,883
1993............................................................... $3,202

F-21

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The following represents property under capital leases (in thousands):

DECEMBER 31,
-------------
1995 1994
------ ------

Machinery and equipment....................................... $2,456 $3,790
Less, accumulated depreciation................................ 903 1,495
------ ------
$1,553 $2,295
====== ======

At December 31, 1995 minimum lease commitments under capital leases are as
follows (in thousands):

YEAR AMOUNT
---- ------

1996.............................................................. $ 412
1997.............................................................. 406
1998.............................................................. 262
1999.............................................................. 0
2000.............................................................. 0
------
Total minimum lease payments...................................... 1,080
Imputed interest (@ rates ranging from 3.4% to 7.2%).............. (98)
------
Total future principal payments of lease obligations.............. $ 982
======

Litigation

Since 1981, the Company has been named as a defendant in approximately 550
product liability cases throughout the United States by persons claiming to
have suffered asbestos-related diseases as a result of alleged exposure to
asbestos in products manufactured and sold by the Company. Approximately 140 of
these cases are currently pending and costs of approximately $2 million in the
aggregate have been incurred in the defense of these claims since 1981. The
Company's insurance provider has accepted the defense of these cases under an
agreement for sharing of the costs of defense, settlements and judgements, if
any. The Company has provided a reserve amounting to $950,000 at December 31,
1995 for its estimated share of losses related to these claims. In light of the
nature and merits of the claims alleged, in the opinion of management, the
resolution of these remaining claims will not have a material adverse effect on
the results of operations or financial condition of the Company.

In 1986, the Company, along with numerous other companies, was named by the
United States Environmental Protection Agency ("EPA") as a Potentially
Responsible Party ("PRP") under the Comprehensive Environmental Response,
Compensation, and Liability Act, as amended, 42 U.S.C. Paragraph 9601, et seq.
("CERCLA"), in connection with the existence of hazardous substances at a site
known as the Fulton Terminal Superfund site located in Fulton, Oswego County,
New York. On September 28, 1990 the Company and a number of other PRPs reached
a negotiated settlement with the EPA pursuant to which the settling PRPs agreed
to pay the costs of certain expenses in connection with the proceedings, and to
pay certain other expenses including the costs and expenses of administering a
trust fund to be established by the settling PRPs. The settlement agreement is
embodied in a consent decree lodged with the United States District Court for
the Western District of New York. The ultimate cost to the Company of the
remedial work and other expenses covered by the settlement agreement is
estimated to be between $1 million to $2 million. This range is based, in part,
on an allocation of certain sites' costs which, due to the joint and several
nature of the liability, could increase if the other PRP's are unable to bear
their allocated share. The Company has provided a reserve of approximately $1
million at December 31, 1995 to cover the remaining proportionate share of the
estimated total remaining cost of cleanup, most of which will be paid in 1996.

F-22

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Based on information currently available to the Company, management believes
that it is probable that the major responsible parties will fully pay the cost
apportioned to them. Management believes that, based on its financial position
and the estimated accrual recorded, its remediation expense with respect to
this site is not likely to have a material adverse effect on its consolidated
financial position or results of operations of the Company.

The Company has been named as a PRP with respect to certain other sites which
are being investigated by federal or state agencies responsible for regulation
of the environment. Status as a PRP means that the Company may be jointly and
severally liable for all of the potential monetary sanctions and remediation
costs applicable to each site. In assessing the potential liability of the
Company at each site, management has considered, among other things, the
aggregate potential cleanup costs of each site; the apparent involvement of the
Company at each site and its prospective share of the remediation costs
attributable thereto; the number of the PRPs identified with respect to each
site and their financial ability to contribute their proportionate shares of
the remediation costs for such site; the availability of insurance coverage for
the Company's involvement at each site and the likelihood that such coverage
may be contested; and whether and to what extent potential sources of
contribution from other PRPs or indemnification by insurance companies
constitute reliable sources of recovery for the Company. On the basis of such
consideration, management has determined that such environmental matters will
not have a material affect on the Company's financial position or results of
operations. The Company has provided an aggregate reserve amounting to
approximately $300,000 at December 31, 1995 for its estimated share of the
ultimate cost of cleanup for such claims excluding any potential sources of
indemnification or recovery from third parties.

The Company is also exposed to a number of other asserted and unasserted
potential claims encountered in the normal course of business and unrelated to
environmental matters. In the opinion of management, the resolution of such
claims will not have a material adverse effect on the Company's financial
position or results of operations.

Warranty Obligations

The Company warrants under certain circumstances that its Housing Group's
products meet certain manufacturing and material specifications. In addition,
for marketing considerations, the Company makes elective settlements in
response to customer complaints. The Company records the liability for warranty
claims and elective customer settlements when it determines that a specific
liability exists or a payment will be made. During 1995, 1994 and 1993, the
Company recorded (exclusive of those claims included in discontinued business
activities) approximately $2,262,000, $2,687,000, and $3,196,000, respectively,
in warranty expenses and elective customer settlements. The warranty related
expense included in discontinued business activities for 1995, 1994 and 1993
amounted to approximately $94,000, $100,000 and $104,000, respectively. Based
upon analyses performed by the Company's management, a reasonably possible
range of potential liability from unasserted warranty obligations for all
products sold prior to December 31, 1995 is estimated to be between $3.5
million and $16.5 million. However, the Company has not recorded any liability

F-23

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
for these future unasserted claims or complaints because management has
concluded, based on such analyses, that no particular estimate within this
range is probable.

12. OPERATIONS IN DIFFERENT INDUSTRIES

The Company has had two business segments which it defined as the Housing
Group and the Environmental Group.

The Housing Group manufactures and markets residential and commercial roofing
products in the northeastern United States, including a full line of fiberglass
based asphalt shingles and roll roofing. The Group also manufactured vinyl
siding, window profiles, trim and accessories which were distributed
nationwide. In prior years, the Group operated distribution centers primarily
in the southeastern and southwestern markets for vinyl siding and in the
Arizona and northeastern markets for roofing and other building materials
products.

The Company's Environmental Group provided recycling, remediation, and
beneficial re-use services for applications as diverse as food processing waste
streams, oily waste recovery and the treatment of municipal wastes. Generally,
these on-site services recovered valuable constituents, removed wastes and
reduced the volume of materials which must be disposed of by other means. In
December 1993, the Company decided to close this portion of the environmental
segment and dedicate this group to operating BEGCI, the fixed site facility in
Texas. As discussed in Note 9, the Company sold its interest in BEGCI in
November 1995 to GTS Duratek, Inc.

Net sales represent sales to unaffiliated customers. Identifiable assets are
those that are used in the Company's operations in each industry segment.
Corporate assets are principally cash investments and equivalents and property
maintained for general corporate purposes. As discussed in Note 9, the results
of operations for the environmental group for the three years ended December
31, 1995 have been recorded as discontinued operations. Accordingly, net sales,
cost of sales and SG&A relating to this segment are not shown below.

F-24

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

YEAR ENDED DECEMBER 31,
---------------------------
1995 1994 1993
------- -------- --------

HOUSING GROUP
Net Sales........................................ $54,180 $167,886 $187,745
======= ======== ========
Earnings (loss) from continuing operations before
income taxes:
Housing group operating income................. $ 189 $ 6,126 $ 7,121
Other non-recurring income..................... 17,722 1,466 877
Interest expense............................... (927) (4,782) (2,472)
Corporate office expenses...................... (6,357) (8,737) (6,970)
Other write offs............................... 0 0 (3,834)
------- -------- --------
$10,627 $ (5,927) $ (5,278)
======= ======== ========
Identifiable assets:
Housing group.................................. $34,111 $ 57,282 $ 95,663
Environmental group............................ 75 7,874 23,250
Corporate office............................... 9,517 20,549 4,316
------- -------- --------
$43,703 $ 85,705 $123,229
======= ======== ========
Depreciation:
Housing group.................................. $ 2,759 $ 3,573 $ 3,670
Environmental group............................ 0 500 1,686
Corporate office............................... 72 71 87
------- -------- --------
$ 2,831 $ 4,144 $ 5,443
======= ======== ========
Capital expenditures:
Housing group.................................. $ 1,924 $ 9,446 $ 4,505
Environmental group............................ 0 1,283 12,251
Corporate office............................... 0 37 56
------- -------- --------
$ 1,924 $ 10,766 $ 16,812
======= ======== ========

F-25

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

13. QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly financial data for 1995 and 1994 is shown below:

THREE MONTHS ENDED
-----------------------------------------------------
MARCH 31 JUNE 30 SEPT. 30 DEC. 31
------------ ------------ ------------ -----------
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)

1995
Net Sales............... $ 16,623 $ 15,138 $ 12,170 $111110,249
Gross Profit............ $ 1,532 $ 2,621 $ 1,817 $ 203 (1)
Earnings (loss):
Continuing operations. $ 9,036 $ (4,066) $ (596) $ (5,171)
Discontinued
operations........... (236) (11,368) 0 352
----------- ------------ ----------- -----------
Net earnings (loss)..... $ 8,800 $ (15,434) $ (596) $ (4,819)
=========== ============ =========== ===========
Earnings per share data:
Primary earnings (loss)
per common share:
Continuing operations. $ 2.11 $ (1.08) $ (0.24) $ (1.35)
Discontinued
operations........... (0.06) (2.77) 0.00 0.09
----------- ------------ ----------- -----------
Net earnings (loss)... $ 2.05 $ (3.85) $ (0.24) $ (1.26)
=========== ============ =========== ===========
1994
Net sales............... $ 36,863 $ 58,486 $ 46,246 $222226,291
Gross profit............ $ 6,670 $ 10,943 $ 9,169 $ 4,226 (2)
Earnings (loss):
Continuing operations. $ (3,398) $ (1,480) $ 3,304 $ 2,657
Discontinued
operations........... (750) (5,708) (907) 2,599
----------- ------------ ----------- -----------
Net earnings (loss)..... $ (4,148) $ (7,188) $ 2,397 $ 5,256
=========== ============ =========== ===========
Earnings per share data:
Primary earnings (loss)
per common share:
Continuing operations. $ (0.92) $ (0.45) $ 0.76 $ 0.56
Discontinued
operations........... (0.18) (1.37) (0.24) 0.64
----------- ------------ ----------- -----------
Net earnings (loss)... $ (1.10) $ (1.82) $ 0.52 $ 1.20
=========== ============ =========== ===========

- --------
(1) Decrease in gross profit in the fourth quarter compared to the previous
quarter is due to sales price weakness and the decline in sales volume
attributable to a weak re-roofing market caused by a dry, hot summer.
(2) Decrease in gross profit in the fourth quarter compared to the previous
quarter is due primarily to increased raw material costs that could not be
passed on via price increases.

14. MERGER WITH CERTAINTEED CORPORATION

On March 14, 1996, the Company signed a definitive agreement with CertainTeed
Corporation, a subsidiary of Saint-Gobain Corporation, providing for
CertainTeed to acquire in a merger transaction all of the Company's outstanding
common, preferred and preference shares.

Upon the effective date of the merger, each share of the Company's
outstanding common stock, par value $1 per share, will be converted into the
right to receive an amount in cash equal to $7.50. The Company's outstanding 5%
cumulative preferred stock, par value $100 per share, will remain issued and
outstanding

F-26

BIRD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
upon the effective date of the merger and will be called for redemption and
retirement as soon as practicable thereafter at a price equal to $110, plus all
accrued and unpaid dividends thereon as of the date of redemption and
retirement. Each share of the Company's outstanding $1.85 cumulative
convertible preference stock, par value $1 per share, will be converted into
the right to receive $20 plus all accrued and unpaid dividends thereon as of
the effective date of the merger. All outstanding options to purchase common
stock under the 1982 Stock Option Plan, the 1992 Stock Option Plan, and the
1992 Non-Employee Directors' Stock Option Plan will be converted into the right
to receive an amount in cash equal to $7.50 per share less the exercise price
per share. Any option with an exercise price equal to or greater than $7.50
will be cancelled on the effective date of the merger without any payment to
the option holder.

Completion of the merger is subject to approval by the Company's shareholders
and appropriate governmental authorities. The merger is not subject to a
financing contingency. The Company's Board of Directors has received a fairness
opinion from its investment bankers regarding the merger. The closing of the
merger is anticipated at the end of the second quarter, following distribution
of proxy materials to the Company's shareholders and approval at a special
meeting.

F-27

SCHEDULE II

BIRD CORPORATION AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(IN THOUSANDS)

ADDITIONS
----------------------
BALANCE CHARGED TO CHARGED TO BALANCE
BEGINNING COST AND OTHER AT END
OF YEAR EXPENSES ACCOUNTS(A) DEDUCTIONS OF YEAR
--------- ---------- ----------- ---------- -------

Year Ended December 31,
1995:
Allowance for doubtful
accounts.............. $3,137 $ 26 $ 56 $(3,066)(c) $ 153
Valuation allowance for
deferred tax assets... $5,000 $10,789 $ 0 $ (727) $15,062
Year Ended December 31,
1994:
Allowance for doubtful
accounts.............. $4,273 $ 905 $100 $(2,141)(b) $ 3,137
Valuation allowance for
deferred tax assets... $9,000 $ 0 $ 0 $(4,000) $ 5,000
Year Ended December 31,
1993:
Allowance for doubtful
accounts.............. $2,978 $ 2,162 $ 47 $ (914)(b) $ 4,273
Valuation allowance for
deferred tax assets... $ 0 $ 9,000 $ 0 $ 0 $ 9,000

- --------
(a) Represents recovery of balances previously written off.
(b) Uncollectible accounts written off by a charge to reserve.
(c) Represents the allowance for doubtful accounts of vinyl business sold of
$517 and the uncollectible accounts written off by a charge to reserve of
$2,549.

F-28

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

COMBINED FINANCIAL STATEMENTS
AND SUPPLEMENTAL INFORMATION
ITEM 14(d)

DECEMBER 31, 1994

F-29

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1994

TABLE OF CONTENTS

PAGE
----

Financial Statements
Independent Auditors' Report............................................. F-31
Combined Balance Sheet................................................... F-32
Combined Statements of Operations and Partners' Capital (Deficit)........ F-33
Combined Statements of Cash Flows........................................ F-34
Notes to the Combined Financial Statements............................... F-35
Supplemental Information
Independent Auditors' Report on Financial Statement Schedule............. F-45
Financial Statement Schedule II.......................................... F-46

F-30

INDEPENDENT AUDITORS' REPORT

To the Partners
Kensington Partners and Affiliate
Leechburg, Pennsylvania

We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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. An audit
also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

/s/ Alpern, Rosenthal & Company

Pittsburgh, Pennsylvania
February 10, 1995

F-31

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

COMBINED BALANCE SHEET
DECEMBER 31, 1994

ASSETS
CURRENT ASSETS
Cash............................................................ $ 55,655
Accounts receivable
Trade--net of allowance for doubtful accounts of $323,000--
Note 3....................................................... 1,742,715
Related parties--Note 13B..................................... 1,286,189
Inventories--Note 4............................................. 1,875,584
Prepaid expenses................................................ 79,862
-----------
TOTAL CURRENT ASSETS........................................ 5,040,005
-----------
PROPERTY AND EQUIPMENT--At cost--net of accumulated depreciation
of $1,139,398--Note 5.......................................... 3,136,639
-----------
OTHER ASSETS
Other receivables--related party--net of allowance--Note 13E.... 306,386
Other assets--Note 6............................................ 371,249
-----------
677,635
-----------
TOTAL ASSETS................................................ $ 8,854,279
===========
LIABILITIES AND PARTNERS' DEFICIT
CURRENT LIABILITIES
Demand notes payable--Note 7.................................... $ 1,628,302
Current maturities of capital lease obligations and long-term
debt--Note 8................................................... 312,023
Accounts payable
Trade......................................................... 2,485,977
Related parties--Note 13A..................................... 3,654,990
Accrued expenses--Note 9........................................ 1,640,238
-----------
TOTAL CURRENT LIABILITIES................................... 9,721,530
-----------
LONG-TERM LIABILITIES
Capital lease obligations and long-term debt--net of current
maturities--Note 8............................................. 807,012
Accounts payable--trade--long-term.............................. 354,636
Other long-term liabilities--related parties--Notes 13D and 13E. 126,314
-----------
TOTAL LONG-TERM LIABILITIES................................. 1,287,962
-----------
TOTAL LIABILITIES........................................... 11,009,492
PARTNERS' DEFICIT................................................. (2,155,213)
COMMITMENTS AND CONTINGENCIES--NOTE 12............................ --
-----------
TOTAL LIABILITIES AND PARTNERS' DEFICIT..................... $ 8,854,279
===========

The accompanying notes are an integral part of these combined financial
statements.

F-32

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

COMBINED STATEMENTS OF OPERATIONS AND PARTNERS' CAPITAL (DEFICIT)

FOR THE YEARS ENDED DECEMBER 31
--------------------------------
1994 1993
--------------- ---------------

NET SALES (related parties--1994--26%, 1993--
34%)........................................ $24,180,093 $21,169,467
COST OF GOODS SOLD (purchased from related
parties--1994--28%,
1993--27%).................................. 22,863,159 19,785,555
--------------- ---------------
GROSS PROFIT............................. 1,316,934 1,383,912
OPERATING EXPENSES (related parties--1994--
11%, 1993--23%)............................. 5,346,966 6,012,508
--------------- ---------------
LOSS FROM OPERATIONS..................... (4,030,032) (4,628,596)
--------------- ---------------
OTHER INCOME (EXPENSE)
Interest expense........................... (289,638) (155,452)
Income (loss) from equity investment....... 3,468 (69,578)
Provision for doubtful accounts............ (595,417) (202,154)
Tax penalties.............................. (199,872) --
Other expense--net......................... (198,186) (193,647)
--------------- ---------------
TOTAL OTHER EXPENSE...................... (1,279,645) (620,831)
--------------- ---------------
NET LOSS................................. (5,309,677) (5,249,427)
PARTNERS' CAPITAL (DEFICIT)--Beginning of
year........................................ (195,526) 4,453,901
Capital Contributions...................... 3,349,990 600,000
--------------- ---------------
PARTNERS' DEFICIT--End of year............... $(2,155,213) $(195,526)
=============== ===============

The accompanying notes are an integral part of these combined financial
statements.

F-33

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

COMBINED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31
--------------------------------
1994 1993
--------------- ---------------

CASH PROVIDED BY (USED FOR) OPERATING
ACTIVITIES
Net loss................................... $ (5,309,677) $ (5,249,427)
Adjustments for noncash items included in
net loss
Depreciation and amortization............ 763,183 540,921
(Income) loss from equity investment..... (3,468) 68,578
Working capital changes (below).......... 2,818,892 3,269,036
--------------- ---------------
NET CASH USED FOR OPERATING ACTIVITIES. (1,731,070) (1,370,892)
--------------- ---------------
CASH PROVIDED BY (USED FOR) INVESTING
ACTIVITIES
Purchase of property and equipment......... (38,222) (132,650)
Proceeds from sale of equipment............ 81,430 --
Other assets............................... (98,273) (280,508)
Other receivables--related parties......... 18,723 (100,000)
--------------- ---------------
NET CASH USED FOR INVESTING ACTIVITIES. (36,342) (513,158)
--------------- ---------------
CASH PROVIDED BY (USED FOR) FINANCING
ACTIVITIES
Cash contributed by the partners--Note 10.. 2,825,000 600,000
Demand notes payable....................... (617,278) 1,335,000
Proceeds from long-term debt............... 169,706 34,107
Payments on long-term debt................. (631,082) (399,543)
Other long-term liabilities--related
parties................................... 61,203 306,286
--------------- ---------------
NET CASH PROVIDED BY FINANCING
ACTIVITIES............................ 1,807,549 1,875,850
--------------- ---------------
INCREASE (DECREASE) IN CASH.................. 40,137 (8,200)
CASH--Beginning of year...................... 15,518 23,718
--------------- ---------------
CASH--End of year............................ $ 55,655 $ 15,518
=============== ===============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for interest....... $ 255,304 $ 152,341
=============== ===============
NONCASH INVESTING AND FINANCING ACTIVITIES
Capital lease and debt obligations incurred
for acquisition of equipment................ $ 68,431 $ 1,502,028
=============== ===============
Partners' capital contribution of inventory.. $ 399,990 $ --
=============== ===============
Liability to related party contributed to
capital..................................... $ 125,000 $ --
=============== ===============
WORKING CAPITAL (INCREASES) DECREASES
Accounts receivable
Trade...................................... $ 1,020,492 $ (1,210,178)
Related parties............................ (280,204) (13,661)
Inventories.................................. 1,480,803 (921,219)
Other current assets and liabilities......... 940,601 520,199
Accounts payable
Trade...................................... (1,087,268) 2,825,082
Related parties............................ 744,468 2,068,813
--------------- ---------------
INCREASE IN WORKING CAPITAL............ $ 2,818,892 $ 3,269,036
=============== ===============

The accompanying notes are an integral part of these combined financial
statements.

F-34

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. PRINCIPLES OF COMBINATION

The accompanying combined financial statements include the accounts of
Kensington Partners (KP), combined with the accounts of North American
Installations Company (NAICO). NAICO is owned 100% by common owners of KP. All
significant intercompany balances and transactions have been eliminated in the
preparation of the combined financial statements. The combined group is herein
referred to as "the Companies".

KP is a joint venture partnership formed by ZES, Inc. (formerly Kensington
Manufacturing Company) (ZES) and Bird-Kensington Holding Corp., an indirect
subsidiary of Bird Corporation (Bird). NAICO was formed in May 1993, as a joint
venture partnership, and ceased operations in 1994.

B. NATURE OF BUSINESS

Kensington Partners operates in one principal industry segment: the
manufacture of vinyl replacement windows for wholesalers and home remodelers.
The Partnership grants credit to its customers, substantially all of which are
retail and wholesale resellers of windows located in the eastern half of the
United States.

NAICO was an exclusive installer of KP windows for a significant customer of
KP, a retail seller of windows to end users, which has sales throughout the
United States. The installation of the windows has been transferred to the
customer that purchases the windows.

C. CASH AND CASH EQUIVALENTS

Interest-bearing deposits and other investments with original maturities of
three months or less are considered cash equivalents.

D. ACCOUNTS RECEIVABLE

The Companies provide for estimated losses on uncollectible accounts
receivable based on historical data and management's evaluation of individual
accounts receivable balances at the end of the year.

E. INVENTORIES

The Companies value all of its inventories at the lower of cost or market.
Raw materials are determined on the last-in, first-out (LIFO) method. Work-in-
process and finished goods inventories are determined on a first-in, first-out
(FIFO) method.

F. DEPRECIATION

Depreciation is computed by the straight-line method at rates intended to
distribute the cost of the assets over their estimated useful lives. Property
under capital lease is being amortized over the life of the lease in accordance
with generally accepted accounting principles. Rates used by principal
classifications are as follows:

RATE
(YEARS)
-------

Warehouse and manufacturing equipment............................. 3-10
Furniture and fixtures............................................ 5-10
Leasehold improvements............................................ 3-15
Transportation equipment.......................................... 3-6

F-35

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Maintenance and repairs which are not considered to extend the useful lives
of assets are charged to operations as incurred. Upon sale or retirement, the
cost of assets and related allowances are removed from the accounts and any
resulting gains or losses are included in other income (expense) for the year.

G. INVESTMENT IN AFFILIATED COMPANY

The Companies' investment in a joint venture partnership is carried on the
equity basis, which approximates the Companies' equity in the underlying net
book value.

H. PRODUCT WARRANTIES

The Companies provide an accrual for future warranty costs based upon actual
claims experience. The warranties are limited and provide for parts and/or
labor based upon the type of window sold.

I. INCOME TAXES

The Companies are being treated as partnerships for Federal and state income
tax purposes. Under the Internal Revenue Code provisions for partnerships, the
partners reflect their proportionate share of the Companies' taxable income or
loss on their respective income tax returns, and the Companies are not liable
for income taxes.

J. RECLASSIFICATION

Certain reclassifications were made to the amounts previously reported for
December 31, 1993 to conform with the 1994 classifications.

NOTE 2--OPERATIONS AND LIQUIDITY

The Companies' combined financial statements have been presented on the basis
that they are going concerns, which contemplates the realization of assets and
the satisfaction of liabilities in the normal course of business. The Companies
incurred net losses of approximately $5,310,000 and negative cash flows from
operations of $1,731,000 for 1994. At December 31, 1994, the balance sheet
reflects an excess of current liabilities over current assets of $4,682,000,
and a net capital deficiency of $2,155,000.

In addition, a lease agreement (Note 12A) is in default as a result of late
payments being made and certain payroll and sales taxes are delinquent. (Note
9)

Management believes the above mentioned losses and the associated balance
sheet deficiencies are a result of adding new products in 1993 which required
different manufacturing processes and a significant increase in orders, which
put strain on the existing systems. The combination of the above resulted in
manufacturing inefficiencies, low asset performance, excessive delivery costs
and inadequate management information.

During 1993, the Companies embarked on a program to correct the problems
associated with operations. Management believes that the major components of
the plan have been achieved in 1994 and that the effect of addressing and
correcting these problems during 1994 will have a positive impact on 1995
operating results.

During the first quarter of 1995, KP has secured price increases from a
majority of its customers and negotiated a price reduction from a major vendor.
In addition, KP continues on a program to increase productivity, which
includes: simplifying product lines, improving plant layout, management
training and investing in labor saving equipment. KP has also begun a sales
program to broaden its customer base.

F-36

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 2--OPERATIONS AND LIQUIDITY (CONTINUED)

The outcome of the uncertainties discussed above cannot be predicted at this
time. The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts and classification
of liabilities that might be necessary should the Companies be unable to
continue in existence.

NOTE 3--ACCOUNTS RECEIVABLE

At December 31, 1994, accounts receivable--trade from three customers were
approximately 67% of trade receivables. Sales to these unrelated customers
comprised 67% of total sales for the years ended December 31, 1994. Sales to
these customers comprised 51% of total sales for the year ended December 31,
1993.

NOTE 4--INVENTORIES

Inventories at December 31, 1994 are as follows:

Raw materials................................................. $ 950,893
Allowance to state raw materials at LIFO cost................. (39,005)
----------
Raw materials at LIFO cost.................................... 911,888
Work-in-process............................................... 648,987
Finished goods................................................ 314,709
----------
Total Inventories......................................... $1,875,584
==========

NOTE 5--PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1994 is as follows:

Equipment under capital leases--Note 8........................ $1,785,817
Warehouse and manufacturing equipment......................... 1,715,676
Furniture and fixtures........................................ 290,258
Leasehold improvements........................................ 419,791
Transportation equipment...................................... 64,495
----------
4,276,037
Less: Accumulated depreciation 1,139,398
----------
Total Property and Equipment.............................. $3,136,639
==========

NOTE 6--OTHER ASSETS

Other assets at December 31, 1994 is as follows:

Deposits......................................................... $199,838
Sample windows................................................... 89,965
Other assets..................................................... 81,446
--------
$371,249
========

F-37

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 7--DEMAND NOTES

On June 15, 1994, KP entered into a financing/factoring agreement with a
lending institution to sell, on an ongoing basis, up to 80% or $2,500,000,
whichever is less, of acceptable trade accounts receivable. All accounts
receivable that remain unpaid after 90 days of the purchase by the lender are
subject to recourse at the lender's discretion. KP may, at any time, repurchase
the accounts receivable sold. The agreement, which expires on June 15, 1995, is
subject to automatic renewal for a six month period, unless notice of
nonrenewal is given by either party. The loan was funded with $1,000,000, at
which time the Companies' line of credit was paid in full (see below).

Under the terms of this agreement, fees ranging from 1% to 3 1/2% are based
on the number of days to collect the trade receivable, with a guaranteed
minimum monthly fee of $5,000. In addition, interest is charged on any amounts
advanced under the agreement, at the rate of prime (8 1/2% at December 31,
1994) plus 1 1/2%. Under the terms of this agreement, Bird has guaranteed
$1,250,000 of this debt.

The amount outstanding under this agreement, included in the accompanying
balance sheet at December 31, 1994, is net of a $150,000 cash reserve held by
the lending institution.

Prior to June 15, 1994, the Companies had a line-of-credit, with maximum
borrowings of $2,500,000. Interest was payable monthly at the bank's basic rate
plus 1% (see below). The borrowings on the line were collateralized by
substantially all the assets of the Companies. The line was guaranteed by the
partners of the Companies.

In early 1994, the bank cited defaults under the line of credit agreement and
made demand for payment. Based on agreements between the Companies and the bank
in February and April, 1994, the bank agreed to forebear collection and set a
final due date of August 31, 1994. In addition, the interest rate was changed
to the bank's basic rate plus 3%. Bird was required to put up $750,000 as
additional collateral, which was later applied to the line. Bird was also
required to make additional payments totaling $1,200,000. The payments by Bird
were recorded as capital contributions to the partnership.

NOTE 8--CAPITAL LEASE OBLIGATIONS AND LONG-TERM DEBT

The following is a schedule by years of future minimum lease payments under
capital leases and installment notes together with the present value of the net
minimum lease payments and note payments as of December 31, 1994:

1995.......................................................... $ 332,000
1996.......................................................... 287,000
1997.......................................................... 278,000
1998.......................................................... 334,000
---------
Net minimum lease payments.................................. 1,231,000
Less: Amount representing interest............................ 158,000
---------
Present value of net minimum lease payments................. 1,073,000
Long-term debt principal payments--all due within one year.... 46,000
---------
Net obligations under capital leases and notes payable...... 1,119,000
Less: Current portion......................................... 312,000
---------
Long-term obligations under capital leases and notes
payable.................................................... $ 807,000
=========

F-38

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 8--CAPITAL LEASE OBLIGATIONS AND LONG-TERM DEBT (CONTINUED)
The partners have guaranteed substantially all of the above lease
obligations.

Assets under capital lease are capitalized using interest rates appropriate
at the inception of each lease. The following is an analysis of the Companies'
assets under capital lease obligations, included in property and equipment
(Note 5), at December 31, 1994:

Warehouse and manufacturing equipment......................... $1,624,677
Transportation equipment...................................... 161,140
----------
1,785,817
Less: Accumulated amortization................................ 290,729
----------
Total..................................................... $1,495,088
==========

NOTE 9--ACCRUED EXPENSES

Accrued expenses at December 31, 1994 are as follows:

Accrued and withheld payroll and payroll taxes (Note 2)....... $ 575,500
Accrued and collected sales taxes (Note 2).................... 502,415
Accrued tax penalties and interest............................ 239,219
Accrued vacation.............................................. 155,510
Accrued real estate taxes..................................... 105,932
Other accrued expenses........................................ 61,662
----------
Total Accrued Expenses.................................... $1,640,238
==========

NOTE 10--PARTNERS' CAPITAL

Effective July 1, 1992, ZES entered into an agreement with Bird through one
of Bird's indirect subsidiaries to form a joint venture partnership, Kensington
Partners (KP), for the purpose of manufacturing and selling custom windows, a
business previously conducted by ZES. ZES' capital contribution to KP consisted
of all of its assets subject to certain of its liabilities, including
$2,800,000 owed to Jones and Brown, Inc. (J&B), a related party. Bird's capital
contribution consisted of $2,800,000, in cash, which was used to pay off the
amount owed by KP to J&B, subsequent to the inception of the Partnership. The
net assets contributed by ZES were $1,689,000.

During 1994, the partners entered into an agreement to restructure the
partnership agreement of KP and to make capital contributions. Each partner's
ownership percentage is to be adjusted plus or minus 2% for each $50,000 of
capital contributed or collateral provided on the bank loan, but in no event
should a partner be diluted below 10%. A diluted partner is entitled to cure
any shortfall between its capital account and the other partner's capital
account by contributing the capital necessary to equalize each partner's
capital account by the later of December 31, 1994 or six months from the date
of the last capital contribution (August 1994) made on or before December 31,
1994.

Pursuant to the agreement, Bird contributed $2,700,000 in cash, including
payments on debt (Note 7), and $150,000 of inventory. ZES has contributed
$250,000 in cash and $250,000 of inventory. Accordingly, the ownership
percentages for Bird and ZES at December 31, 1994 are 90% and 10%,
respectively.

In addition to the capital contributed, the partners have advanced various
amounts of working capital during 1994 (Note 13).

F-39

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 10--PARTNERS' CAPITAL (CONTINUED)

In September 1994, Bird entered into a sales agreement with Jannock, Inc. to
sell all of the assets of a wholly owned subsidiary, Bird Incorporated. The
sales agreement contains an option for Jannock to purchase Bird's interest in
Kensington Partners for $2,780,000. In addition to the purchase price, Jannock
would assume all of Bird's obligations under various security agreements. The
option, which expires on April 7, 1995, is subject to Bird fulfilling its
obligations under the partnership agreement.

Subsequent to December 31, 1994, Bird advanced KP approximately $524,000.

NOTE 11--RETIREMENT PLANS

KP participates in a multi-employer defined benefit pension plan for the
electrician's union employees. Plan contributions are determined by the union
labor agreement. Management has not expressed any intent to terminate its
participation in this plan. KP contributed approximately $191,000 and $163,000
to this plan during the years ended December 31, 1994 and 1993, respectively.

The Companies also sponsors an executive retirement plan. Under the
provisions of the plan certain key employees may elect, at their discretion, to
contribute to the plan. The Companies provide a matching contribution of one
half of all employee contributions up to a maximum of 3% of gross compensation.
Contributions are used to purchase variable rate annuities.

Additional benefits under this plan include proceeds from life insurance
policies owned by KP or the cash value upon termination of employment. The
Companies' contributions to this plan were not material for the years ended
December 31, 1994 and 1993.

NOTE 12--COMMITMENTS AND CONTINGENCIES

A. OPERATING LEASES

The Companies lease various operating facilities from related and
unrelated parties and transportation equipment from unrelated parties under
various operating leases. Rent expense for the years ended December 31,
1994 and 1993 are as follows:

1994 1993
-------- --------

Facilities leases--primarily related party................ $285,000 $263,000
Transportation equipment.................................. 133,000 67,000
-------- --------
$418,000 $330,000
======== ========

The following are the approximate future minimum operating lease payments at
December 31, 1994, substantially all of which are due to a related party:

YEAR ENDING
DECEMBER 31 AMOUNT
----------- ----------

1995........................................................ $ 239,000
1996........................................................ 227,000
1997........................................................ 215,000
1998........................................................ 215,000
1999........................................................ 215,000
Thereafter................................................... 1,280,000
----------
Total minimum lease payments.................................. $2,391,000
==========

F-40

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 12--COMMITMENTS AND CONTINGENCIES (CONTINUED)
KP is currently in default on its lease for its primary operating facility as
a result of not making the required rent payments as they became due. Rent of
approximately $237,000, due a related party, has been accrued in the
accompanying balance sheets at December 31, 1994. Based upon the current
payment plan, approximately $61,000 of the accrued rent at December 31, 1994 is
included in other long-term liabilities--related parties.

B. PURCHASE COMMITMENTS

KP and Bird have entered into a supply agreement which requires KP to
purchase specified quantities of raw materials from Bird beginning in 1993 and
ending in the year 2002. Minimum purchases for the next five years are 1995,
$900,000; 1996, $1,100,000; 1997, $1,300,000; and 1998 and 1999, the greater of
$1,300,000 or actual amounts purchased in 1997. The agreement includes
penalties for shortfalls in purchases on a per year basis. Shortfalls can be
offset with credits from years when excess volume is purchased.

KP and Domken Plastics (Note 13A) have entered into a supply agreement which
requires KP to purchase $2,500,000 of raw materials, annually, through 1999.
The agreement includes penalties for shortfalls in total purchases over the
term of the agreement.

C. SUPPLY AGREEMENTS

KP has entered into a supply agreement with a customer that primarily
purchases through Quantum II Partners (Notes 12D and 13E). The agreement
requires KP to provide not less than 90% of the customer's total requirement of
Quantum II vinyl replacement windows (Note 12D).

D. LITIGATION

On September 13, 1994, a complaint was filed in Middlesex Superior Court by
the other 50% owner of Quantum II Partners (Note 13E) and others, including
Quantum II Partners (collectively, the plaintiffs), against Kensington Partners
and Quantum II Partners (collectively, the defendants). The plaintiffs allege
various breaches of contract on the part of the defendants including breach of
a partnership agreement, a supply agreement (Note 12C) and an employment
agreement along with other complaints under the Massachusetts Unfair Trade
Practices Act. The plaintiffs are seeking relief of actual damages in an
unspecified amount and a doubling or trebling of such damages as provided in
the Unfair Trade Practices Act. KP believes that the claims filed by the
plaintiffs have no merit and denies any liability.

On October 4, 1994, the defendants filed a complaint in Federal Court
alleging various breaches of contract by the plaintiffs and seeking collection
of outstanding balances due to the Company from the plaintiffs of approximately
$560,000, included in accounts receivable--trade.

No answers have been filed in these actions because the parties are involved
in settlement negotiations. With respect to the litigation filed by KP for the
collection of the 1994 balances receivable, management estimates that some loss
may occur and has recorded its estimate of possible loss as an allowance for
doubtful accounts.

The Company anticipates that a settlement agreement will be achieved, as
currently contemplated. If the matter is not settled, and goes to trial,
management believes that the ultimate loss, if any, will not exceed the amounts
recorded.

F-41

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 13--RELATED PARTY TRANSACTIONS

The Companies have entered into various transactions with related parties
during the years ended December 31, 1994 and 1993. The transactions are as
follows:

A. PURCHASES AND PAYABLES

The Companies have purchases for raw materials, advertising services, and
commissions from the following related parties as of and for the years ended
December 31, 1994 and 1993:

1994 1993
---------- ----------

Vinyl Division of Bird, Inc........................... $2,862,000 $2,053,000
Domken Plastics Limited (DPL)......................... $3,616,000 $2,964,000
Quantum II Partners (see below)....................... $ 200,000 $ 440,000
Design Matrix, Inc. (DMI)--Advertising................ $ -- $ 147,000

Accounts payable to related parties at December 31,1994 is as follows:

Bird, Inc..................................................... $1,947,000
Domken Plastics Limited (DPL)................................. 1,436,000
Quantum II (Notes 12D and 13E)................................ 16,000
Other related parties......................................... 256,000
----------
$3,655,000
==========

DMI and DPL are related through common ownership with ZES.

A stockholder of ZES was compensated approximately $143,000 during the year
ended December 31, 1993 for services rendered in assisting with the acquisition
of raw materials from DPL. In addition, J&B was also compensated $86,000 during
1993 for similar services.

Any compensation for services discussed above was reimbursed directly by DPL
to ZES for the year ended December 31, 1994.

Fees from J&B for computer software support of approximately $144,000 were
charged to operations for the year ended December 31, 1994.

B. SALES AND RECEIVABLES

The Companies had sales to Jones & Brown, Inc. (J&B), a related party through
common ownership with ZES, of approximately $5,890,000 and $7,255,000 for 1994
and 1993, respectively. In addition, the Companies had sales to other related
parties of approximately $471,000 for 1994. Accounts receivable from related
parties are as follows as of December 31, 1994:

J&B............................................................ $1,174,000
Other.......................................................... 112,000
----------
Total........................................................ $1,286,000
==========

F-42

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 13--RELATED PARTY TRANSACTIONS (CONTINUED)

C. RENTS

KP rents facilities from related parties (Note 12).

D. MANAGEMENT FEES

Management fees of approximately $488,000 were paid to J&B under a management
contract for the year ended December 31, 1993. The management agreement was
terminated effective December 31, 1993.

E. OTHER

Kensington Partners owns a 50% equity investment in Quantum II Partners (Note
12D). Quantum II was formed during 1993 to be the exclusive marketing
representative to sell Quantum II replacement windows manufactured by KP.
Quantum II Partners reported a net partnership deficit of approximately
$130,000 and $138,000 for 1994 and 1993, respectively. KP has reflected its
share of Quantum's excess of liabilities over assets in other long-term
liabilities.

At December 31, 1994, approximately $306,000 due from Quantum II is included
in other receivables--related parties. This amount is net of an allowance for
doubtful accounts of $65,000.

EVENT (UNAUDITED) SUBSEQUENT TO THE DATE OF THE INDEPENDENT AUDITORS' REPORT

In 1995, Jannock, Inc. exercised its option to purchase Bird's interest,
owned by its wholly-owned subsidiary Bird-Kensington Holding Corporation, in
KP. Immediately preceding the sale, Bird purchased ZES' interest in KP for
$1,000,000. In addition, Bird invested in KP $4,090,000 prior to the sale to
fulfill provisions in the asset purchase agreement.

On June 2, 1995, the stock of Bird-Kensington Holding Corporation, which
owned the assets and liabilities of KP was sold by Bird to Jannock, Inc. in
exchange for cash of $2,780,000 and assumption of certain liabilities.

In April 1996, the litigation (Note 12D) between the other 50% owner of
Quantum II Partners (Note 13E) and Bird, as successor in interest to certain of
Kensington Partners' rights and obligations under the Quantum II Partnership,
Supply and Sales Representative Agreements, was concluded as a result of the
parties entering into a settlement agreement. The agreement calls for Bird to
receive total payments of $410,000, cancellation of the Sales Representative
and Supply Agreements and termination of the partnership.

F-43

INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULE

To the Partners
Kensington Partners and Affiliate
Leechburg, Pennsylvania

We have audited the combined financial statements of Kensington Partners and
Affiliate as of December 31, 1994 and for each of the two years in the period
then ended, and have issued our report thereon dated February 10, 1995. In
connection with our audits of these financial statements, we audited financial
statement schedule II. In our opinion, such a financial statement schedule,
when considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects, the information set forth therein.

/s/ Alpern, Rosenthal & Company

Pittsburgh, Pennsylvania
February 10, 1995

F-44

SCHEDULE II

KENSINGTON PARTNERS AND AFFILIATE

VALUATION AND QUALIFYING ACCOUNTS

YEAR ENDED DECEMBER 31, 1994

ADDITIONS
---------------------
BALANCE CHARGED TO CHARGED TO BALANCE
BEGINNING COSTS AND OTHER AT END
OF YEAR EXPENSES ACCOUNTS DEDUCTIONS(1) OF YEAR
--------- ---------- ---------- ------------- --------

Year Ended December 31,
1994:
Allowance for doubtful
accounts............. $195,000 $595,000 $-- $402,000 $388,000
======== ======== ==== ======== ========
Year Ended December 31,
1993:
Allowance for doubtful
accounts............. $ 66,000 $202,000 $-- $ 73,000 $195,000
======== ======== ==== ======== ========

- --------
(1) Uncollectible accounts written off.

F-45