1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

---------------------------------

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended Commission File
May 31, 1996 No. 1-10023
SUDBURY, INC.
A Delaware Corporation IRS Employer Identification
No. 34-1546292

30100 CHAGRIN BOULEVARD - SUITE 203
CLEVELAND, OHIO 44124
TELEPHONE (216) 464-7026

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
None

Securities registered pursuant to Section 12(g) of the Act:
Title of each class
Common Stock, par value $.01
$10,000,000 8 3/5% Senior Subordinated Pay-In-Kind Notes due 1997

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, 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. /X/

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. YES X NO
--- ---

As of August 2, 1996, 10,770,174 shares were outstanding. The
aggregate market value of the voting stock held by non-affiliates of the
registrant at August 2, 1996 was $91,424,172.

DOCUMENTS INCORPORATED BY REFERENCE
- -----------------------------------
Portions of the Registrant's Annual Report to Stockholders for the
fiscal year ended May 31, 1996 are deemed incorporated by reference in Parts II
and IV of this Form 10-K. Portions of the Registrant's Proxy Statement for the
Annual Meeting of Stockholders to be held October 3, 1996 are deemed to be
incorporated by reference in Part III of this Form 10-K.

PART I
------

ITEM 1. BUSINESS
--------

GENERAL INFORMATION
- -------------------
Sudbury, Inc. (the "Company") operates through its subsidiaries, which
are engaged in the manufacture and sale of a broad range of industrial products,
including iron, aluminum and zinc castings, coating applications, cranes and
truck bodies and precision machined components.

From 1983 through January 1988, the Company purchased 30 companies at
an aggregate cost of approximately $193 million. The acquisitions were financed
through a combination of secured bank borrowings, subordinated borrowings,
seller financing in the form of subordinated seller notes and the issuance of
common stock and preferred stock.

In late 1990, as a result of the Company's highly leveraged condition
arising from the aforementioned acquisitions and recessionary economic
conditions which began to effect the Company's performance, the Company was
unable to meet its debt repayment obligations. To remedy its poor financial
condition, on January 10, 1992 the Company filed a petition (relating to the
Company only and not to its operating subsidiaries) under Chapter 11 of the
United States Bankruptcy Code. At that time, the Company hired Jacques R. Sardas
as its new president and chief executive officer, effective January 13, 1992.

The Company was able to exit bankruptcy in less than eight months. Its
amended Plan of Reorganization (the "Plan") was confirmed by the United States
Bankruptcy Court, Northern District of Ohio ("Bankruptcy Court") by Order dated
August 18, 1992 and became effective on September 1, 1992 (the "Effective
Date"). Distributions under the Plan commenced on October 15, 1992.

The Plan implemented a restructuring of the Company by providing for a
new amortization schedule for the repayment of the indebtedness owed to its
secured lender banks, mainly through the sale of a substantial number of its
subsidiaries and a significant reduction of the Company's indebtedness to
subordinated debtholders and certain other unsecured creditors through the
conversion of debt into equity of the restructured Company.

In order to repay the indebtedness owed to the secured lender banks as
provided by the Plan, the Company implemented a business plan with an asset
disposition program involving the sale of a substantial number of its
subsidiaries which sales generated aggregate net cash proceeds of approximately
$37.6 million during fiscal years 1993 and 1994.

In May 1993, the Company successfully completed the refinancing of its
then existing bank debt which allowed the Company to retain six core businesses
and cease the previous asset sale process.

In December 1995, the Company sold its South Coast Terminals, Inc.
("South Coast") subsidiary for $18.6 million because in management's view the
business of South Coast was not complementary to the Company's other businesses
or the Company's long-term growth plans. See Note C -- Dispositions of the
financial statements.

- 2 -

PRODUCTS, MARKETS AND SALES
- ---------------------------
The Company has one business segment--the manufacture of industrial
products. Ongoing operations in this segment include five businesses which are
described below.

The Company's largest group of products consists of products and
services sold to the automotive industry which are principally produced by the
Company's Wagner Castings Company ("Wagner") and Industrial Powder Coatings,
Inc. ("IPC") subsidiaries. Sales to the automotive industry represented 60%, 61%
and 59% of the Company's total sales from ongoing operations for the fiscal
years ended 1996, 1995 and 1994, respectively.

Wagner is the Company's largest automotive supplier and produces
ductile and malleable iron castings. Wagner sells its products both domestically
and in Europe, and is known as a producer of engineered critical safety castings
in the automotive industry. Wagner's product line includes steering knuckles,
suspension parts and transmission components. Wagner's castings range in size
from small pieces weighing less than one pound to castings weighing up to 40
pounds.

Ductile iron castings represent approximately 85% of Wagner's product
line, with the balance being principally malleable iron castings. Ductile iron
has similar properties to that of malleable iron, however, ductile is less
costly to produce because it does not require the additional process of heat
treatment that malleable iron does. As a result of this cost differential, the
market for malleable iron has been decreasing. To offset the decline in
malleable castings, the Company made a decision in fiscal 1995 to expand the
capacity at its ductile iron foundry and phase out the malleable process by
fiscal 1997. Wagner's current annual ductile iron capacity before expansion is
approximately 70,000 tons. The ductile iron expansion and modernization plan
will increase Wagner's annual ductile capacity by 14,000 tons, or 20%, and will
cost approximately $14 million ($12 million of which was expended in fiscal
1996). The new ductile line is planned to be in operation in the second quarter
of fiscal 1997. The Company has funded the $12 million capital investment and
expects to fund the remaining $2 million portion of the project through cash
generated from operations. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and Capital
Resources."

IPC serves the automotive and appliance industries through the
application of coatings to metal parts, components and finished products. With
nine powder coating lines, the Company believes that IPC is one of the largest
independent powder coating job shops in the United States. Powder coatings are
used to enhance appearance and improve corrosion protection to parts. Powder
coating's use of a dry paint process gives it advantages over liquid painting
processes which give rise to certain environmental concerns surrounding the use
of solvents and the generation of air emissions. In fiscal 1995, IPC expanded
its powder coating technology and customer base through the construction of a
new leased building equipped with approximately $5 million in equipment to
powder coat steel blanks under a long-term contract (subject to certain
conditions) with General Electric Company for their new washing machine program.
This blank coating line was one of the first of its kind in the United States
and is designed to coat flat steel blanks before, rather than after, the forming
process and is capable of running at much higher line speeds with less labor
than a typical monorail powder coating line. The line began production in May
1995.

- 3 -

IPC also has the capability of cathodic electrodeposition coating of
parts which is used primarily for anti-corrosion purposes. In fiscal 1996, IPC
expanded into Mexico by entering into a long-term contract (subject to certain
conditions) to apply electrodeposition coatings to Chrysler Ram pickup truck
frames. IPC invested approximately $4 million in equipment which has been
installed in the customer's facility in Monterrey, Mexico. The facility is in
the start-up stage with full production expected by the end of the first quarter
of fiscal 1997.

The Company's Iowa Mold Tooling Co., Inc. ("IMT") subsidiary designs
and manufactures hydraulic articulating and telescoping truck-mounted cranes,
tire handling equipment, air compressors, and service bodies including
lubrication, field service, utility and tire service bodies. IMT services, both
domestically and internationally, the following industries: construction,
utilities, tire service, railroad, forestry and municipalities.

The Company's remaining products come from its two smallest businesses:
Frisby P.M.C., Incorporated ("Frisby") and Cast-Matic Corporation
("Cast-Matic"). Frisby is a high-volume precision machining operation which
principally produces small diameter shafts, spindles and spindle assemblies for
the electric motor, electric hand tool and automotive markets. Cast-Matic
manufactures aluminum and zinc die castings which are used in a variety of
different industries including gas regulation, appliance, hardware and
automotive.

CYCLICALITY AND SEASONALITY
- ---------------------------
As a result of the Company's dependence on the automotive industry,
there is cyclicality and seasonality in the Company's sales and profits. The
cyclicality of the automotive industry affects the Company's sales and profits
during periods of slow economic growth or recession. The seasonality results in
the Company typically having higher sales and operating profits in its second
and fourth fiscal quarters.

RAW MATERIALS
- -------------
Raw materials are purchased from a number of different sources and the
loss of any particular supplier would not have a material effect on any of the
Company's businesses. Scrap steel is the principal raw material utilized at
Wagner in the production of ductile and malleable iron castings and is subject
to price fluctuations. Commitments with most of Wagner's major customers allow
Wagner to pass on the majority of increases or decreases in the cost of scrap
steel to these customers, however, these adjustments are generally passed along
three to six months subsequent to the time the change occurs.

WORKING CAPITAL
- ---------------
The seasonality of certain of the Company's businesses serving the
automotive market may result in significant fluctuations in working capital.
Terms for sales to automotive customers are typically 30-45 days. Additionally,
IMT maintains large inventories due to the variety of its products and customer
demands regarding lead times.

- 4 -

MARKETING AND COMPETITION
- -------------------------
The Company's sales to the automotive industry, which are principally
through Wagner and IPC, are primarily made through their respective in-house
sales forces. A portion of Wagner's sales may also come through its sales
engineers who are capable of providing design and engineering work in the early
stages of production. Companies competing in the automotive industry compete on
the basis of pricing, quality, engineering and design capabilities and delivery.
The highly competitive nature of this market makes it very difficult for Wagner
and IPC to improve margins through increases in the selling prices of their
products.

Wagner competes with many other foundries in the castings market and
also competes with manufacturers of metal castings and steel forgings. As a
result of industry consolidation occurring over the past several years, there
has been a reduction in the number of smaller foundries and an increase in the
market share held by larger foundries. Some of the foundries that compete with
Wagner are larger and have greater financial resources than the Company.

The competition for IPC, one of the largest companies in the powder
coatings industry, is very fragmented. IPC competes with many smaller facilities
which are located close to the ultimate customer. Locating a coating facility
close to a customer has become increasingly important because of high
transportation costs relative to the cost of the coating. As discussed
previously, IPC has expanded its electrodeposition and powder coating technology
and customer base through new production facilities located in proximity to
particular customers. The Company anticipates future growth at IPC will require
substantial capital expenditures to equip additional facilities located near
strategic customers. The Company intends to fund these capital investments
through cash generated from operations and funds available under its $40 million
revolving credit facility ("Credit Facility"). See "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources."

IMT's products are marketed through its (i) in-house sales force, (ii)
an organization of sales representatives and (iii) a worldwide distributor
network. IMT competes against numerous competitors, both domestically and
internationally, for its different products. The Company believes that IMT is
one of the leading producers of articulating cranes in North America; however,
it is a much smaller manufacturer in the market of truck service bodies. IMT
competes in its markets on the basis of product capabilities, quality and price.

Both Frisby and Cast-Matic market their own products to a variety of
customers through a combination of in-house sales forces and outside sales
representatives. Competition in both of their respective markets is based on a
company's engineering and design capabilities, quality and price. In addition,
competition in these markets is highly fragmented. The precise nature of the
products that Frisby sells and the competitive pressures from newer technologies
will continue to require Frisby to make capital expenditures to remain
competitive during the next several years. The Company intends to fund these
expected capital investments from cash generated from operations and funds
available under its Credit Facility. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Liquidity and Capital
Resources."

- 5 -

SALES TO CERTAIN CUSTOMERS
- --------------------------
For the fiscal years ended 1996, 1995 and 1994, sales to Ford Motor
Company were approximately $42.8 million, $46.6 million and $34.6 million,
respectively; and sales to Chrysler Corporation were approximately $39.2
million, $36.3 million and $31.5 million, respectively. No other customers
accounted for more than 5% of sales for any such period.

BACKLOG
- -------
As of May 31, 1996, the Company had an order backlog of $69.0 million,
compared to $55.2 million at the end of fiscal 1995. The increase in backlog
occurred primarily at Wagner. Sales backlog levels at Wagner may vary depending
on the timing of its customers order releases. At May 31, 1995, Wagner's order
level was adversely impacted by the timing of certain automotive model
changeovers. Of the Company's backlog, orders of approximately $53.2 million
associated with the automotive and truck industries are subject to cancellation
without compensation, as is customary in the industry.

ENVIRONMENTAL MATTERS
- ---------------------
The Company's manufacturing facilities and production processes, like
those of industrial manufacturers generally, are subject to numerous laws and
regulations designed to protect the environment. Environmental requirements have
become more stringent, not only with respect to emissions and wastes from
ongoing operations, but also with respect to historic conditions and
discontinued operations. Several of the Company's subsidiaries' current and
historic business activities may give rise to cleanup requirements in the
future, both with respect to on-site and off-site activities or conditions. See
"Item 3 - Legal Proceedings" for a discussion of environmental proceedings
involving the Company's operating units. The ultimate costs of environmental
compliance cannot be predicted with precision due to many uncertainties, such
as whether cleanup action will be required and, if required, what cleanup
measures, techniques or standards will be imposed.

EMPLOYEES
- ---------
As of May 31, 1996, the Company employed 2,371 employees, of whom 1,299
were represented by unions.

- 6 -

ITEM 2. PROPERTIES
----------

The Company's corporate headquarters are located in 3,000 square feet
of leased space in Pepper Pike, Ohio. The Company's operating units occupy a
total of approximately 1,745,000 square feet, with the majority devoted to
manufacturing, assembly and storage. Of the approximately 1,745,000 square feet
occupied, 1,277,000 square feet are owned and 468,000 square feet are leased.

The Company's manufacturing facilities are set forth in the table
below.

APPROXIMATE
LOCATION PRINCIPAL PRODUCTS SQUARE FOOTAGE STATUS
- -------- ------------------ -------------- ------

ILLINOIS
- --------
Decatur Ductile iron castings 390,000 Owned
Decatur Inventory storage 110,000 Leased
Havana Ductile iron castings 210,000 Owned

Elk Grove Village High precision machined 105,000 Leased
components

IOWA
- ----
Garner Metal fabrication of 433,500 Owned
truck mounted cranes,
truck bodies and
compressors

KENTUCKY
- --------
Shelbyville Custom powder coating 40,000 Owned
Shelbyville Materials & inventory storage 9,150 Leased
Louisville Blank powder coating 97,000 Leased

MICHIGAN
- --------
Stevensville Precision aluminum and zinc 64,000 Owned
die castings; machining

OHIO
- ----
Norwalk Custom powder coating 40,000 Owned
Norwalk Custom powder coating 69,500 Owned
Norwalk Custom powder coating 30,000 Owned
Norwalk Custom powder & electro-
deposition coating 92,450 Leased
Norwalk Materials and inventory storage 22,280 Leased

CANADA
- ------
Orillia, Ontario Servicing of truck mounted 5,900 Leased
cranes, truck bodies and
compressors
MEXICO
- ------
Monterrey, Mexico Electrodeposition coating 25,800 Leased

The Company believes that all of its facilities are reasonably
maintained and are generally adequate for their present purposes. Facilities are
believed to be sufficient to accommodate reasonable increases in business.

- 7 -

ITEM 3. LEGAL PROCEEDINGS
-----------------

GENERAL
- -------
Other than routine litigation incident to its business and except as
noted below, the Company is not a party to any legal proceedings which could be
material to its results of operations, financial position or liquidity.

ENVIRONMENTAL MATTERS
- ---------------------
Several of the Company's operating units have been identified as
potentially responsible parties in legal proceedings or otherwise notified that
they may be liable for the cleanup of hazardous substances under federal
"Superfund" and other environmental protection legislation. The Company intends
to utilize all available legal defenses and remedies, including insurance owned
by the Company or its predecessors in interest, with respect to these sites and
any other site in which it may be involved in legal proceedings, to minimize the
Company's financial exposure to environmental liability.

On April 19, 1993, the Minnesota Pollution Control Agency (MPCA) issued
Metalcote Grease and Oil Company ("Metalcote"), a division of Western Capital
Corporation, a non-operating subsidiary of the Company, an order to investigate
and take other corrective action at property Metalcote owned in St. Paul,
Minnesota. The property was subsequently owned by Randolph Capital Corporation,
a subsidiary of Western Capital Corporation. Although Randolph Capital
Corporation is currently contesting its responsibility for environmental
conditions that allegedly exist at the property, Randolph Capital Corporation is
cooperating with the MPCA and has retained legal counsel and environmental
consultants to respond to the MPCA's order. Although additional investigation is
necessary and ongoing, Randolph Capital Corporation currently estimates that the
future costs to respond to the order will be at least $300,000. This estimate is
subject to reevaluation following completion of the current investigation.
During 1995, the Minnesota legislature passed legislation making a substantial
portion of these costs potentially eligible for reimbursement from the Minnesota
Petroleum Tank Release Cleanup Fund.

A release of petroleum products has also been identified and reported
to regulatory authorities at a second site in St. Paul, Minnesota previously
owned and operated by Metalcote, and a site in Philadelphia, Pennsylvania
previously owned and operated by Master Lubricants, both divisions of Western
Capital Corporation. Environmental consultants have been retained to investigate
and address the two reported petroleum releases. The preliminary investigation
at these sites has been completed and the Company is discussing with regulatory
agencies the corrective actions, if any, which may be needed at these sites.
There is no current estimate on the cost of further work, if any, at these
sites.

To date, Management believes that the resolution of other pending or
anticipated environmental proceedings and all claims in the aggregate (after
applicable reserves, see Note F -- Contingencies and Commitments of the
financial statements) are immaterial to the Company's financial position,
results of operations and liquidity taken as a whole. Although the Company
continues to assess the potential liability of its operating units for pending
and anticipated legal proceedings, the ultimate liability for such environmental
matters cannot be predicted with certainty.

- 8 -

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

None

ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------

The following sets forth the name, age and recent business experience
of each person who is an executive officer of the Company. All executive
officers are elected by and serve at the pleasure of the Board of Directors.

Principal occupation or
employment for the past
Name five years Age
- ---- ----------------------------------------------- ---

Jacques R. Sardas Director, President and Chief 65
Executive Officer since
January 13, 1992; Chairman of
the Board of Directors and
Treasurer since January 1993; Director and
Executive Vice President of Goodyear Tire and
Rubber Co., which develops and sells tires
domestically and abroad (1980-1991)

Mark E. Brody Vice President and Chief 34
Financial Officer since
October 1994; Vice President
of Finance (October 1992 -
October 1994); Controller
(September 1991 - October 1994);
Assistant Controller (April
1989-September 1991)

- 9 -

PART II
-------

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
-------------------------------------------------------------
MATTERS
-------

The Company's common shares are listed on the Nasdaq Stock Market. The
information required by this item appears under the caption "Market For
Registrant's Common Equity and Related Stockholder Matters" on page 28 of the
1996 Annual Report and is incorporated herein by reference thereto.

ITEM 6. SELECTED FINANCIAL DATA
-----------------------

The information required by this item appears under the caption
"Selected Financial Data" on page 1 of the 1996 Annual Report and is
incorporated herein by reference thereto.

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

The information required by this item appears under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 25 through 28 of the 1996 Annual Report and is incorporated
herein by reference thereto.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------------------------------------------

The information required by this item appears on pages 13 through 24 of
the 1996 Annual Report and is incorporated herein by reference thereto.

ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
----------------------------------------------------

Not Applicable

- 10 -

PART III
--------

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
-----------------------------------------------

The information required by this item appears under the caption
"Election of Directors" on pages 4 through 6 of the Company's definitive Proxy
Statement to be filed with the Securities and Exchange Commission within 120
days of the close of the Company's fiscal year ended May 31, 1996 and is
incorporated herein by reference thereto.

Information concerning executive officers of the Company is contained
in Part I of this report under the caption "Executive Officers of the
Registrant."

ITEM 11. EXECUTIVE COMPENSATION
----------------------

The information required by this item is located on pages 7 through 14
of the Company's definitive Proxy Statement to be filed with the Securities and
Exchange Commission within 120 days of the close of the Company's fiscal year
ended May 31, 1996 and is incorporated herein by reference thereto.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------

The information required by this item appears under the caption
"Beneficial Ownership of Securities" on pages 2 and 3 of the Company's
definitive Proxy Statement to be filed with the Securities and Exchange
Commission within 120 days of the close of the Company's fiscal year ended May
31, 1996 and is incorporated herein by reference thereto.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------

Not applicable.

- 11 -

PART IV
-------

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

(a)(1), (a)(2) and (d) Financial Statements and Financial Schedules.
---------------------------------------------

The financial statements and financial statement
schedules listed in accompanying index to financial
statements and financial schedules are filed as part of
this Annual Report on Form 10-K.

(a)(3) and (c) Exhibits.
---------

The exhibits listed on the accompanying index to exhibits are
filed as part of this Annual Report on Form 10-K.

(b) Reports on Form 8-K.

None.

- 12 -

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
August 15, 1996 on its behalf by the undersigned, thereunto duly authorized.

SUDBURY, INC.

By: /S/Mark E. Brody
------------------------------------------
Mark E. Brody
Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
and the rules and regulations promulgated thereunder, this report has been
signed on behalf of the Registrant by the following persons, in their indicated
capacities, on August 15, 1996.

/S/Jacques R. Sardas
- -----------------------------
Jacques R. Sardas Director, Chairman, President and Chief
Executive Officer (Principal Executive
Officer)

/S/Mark E. Brody
- -----------------------------
Mark E. Brody Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

/S/Cloyd J. Abruzzo
- -----------------------------
Cloyd J. Abruzzo Director

/S/Jerry A. Cooper
- -----------------------------
Jerry A. Cooper Director

/S/Preston Heller, Jr.
- -----------------------------
Preston Heller, Jr. Director

/S/James A. Karman
- -----------------------------
James A. Karman Director

/S/David A. Preiser
- -----------------------------
David A. Preiser Director

/S/Thomas F. Slater
- -----------------------------
Thomas F. Slater Director

- 13 -

SUDBURY, INC.

ANNUAL REPORT ON FORM 10-K

ITEMS 14 (a) (1), (2) (d) AND (3) (c)

INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES

FINANCIAL STATEMENT SCHEDULES

INDEX TO EXHIBITS

CERTAIN EXHIBITS

FISCAL YEAR ENDED MAY 31, 1996

- 14 -

SUDBURY, INC.

INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES

(ITEM 14(a)(1) AND (2)(d))

PAGE REFERENCE
------------------------------
FORM 10-K ANNUAL REPORT
--------- -------------

Data incorporated by reference from the 1996 Annual Report:

Consolidated Statements of Income -
Fiscal Years Ended May 31, 1996, 1995 and 1994 13

Consolidated Balance Sheets - May 31, 1996
and May 31, 1995 14

Consolidated Statements of Stockholders'
Equity - Fiscal Years Ended May 31, 1996, 1995
and 1994 15

Consolidated Statements of Cash Flows -
Fiscal Years Ended May 31, 1996, 1995 and 1994 16

Notes to Consolidated Financial Statements 17-24

Report of Independent Auditors 24

Consolidated Financial Statement Schedules:

Schedule II - Valuation and Qualifying Accounts 16

Report of Independent Auditors 17

All other schedules for the Company have been omitted because the required
information is not present or not present in amounts sufficient to require
submission of the schedule, or because the information required is included in
the financial statements, including the notes thereto.

The consolidated financial statements of the Company listed in the preceding
index, which are included in the 1996 Annual Report, are incorporated herein by
reference. With the exception of the pages listed in the above index and
information incorporated by reference elsewhere herein, the 1996 Annual Report
is not to be deemed filed as part of this report.

- 15 -

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

SUDBURY, INC. AND SUBSIDIARIES

- ------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- ------------------------------------------------------------------------------------------------------------------------
ADDITIONS

BALANCE AT CHARGED TO CHARGED BALANCE AT
BEGINNING COSTS AND TO OTHER END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS PERIOD
- ------------------------------------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)

Fiscal year ended May 31, 1996:
Deferred tax asset valuation
allowance $6,463 $ (316) (2) $(3,069) (1) $3,078

Fiscal year ended May 31, 1995:
Deferred tax asset valuation
allowance $9,214 $ 215 $ (946) (2) $(2,020) (2) $6,463

Fiscal year ended May 31, 1994:
Deferred tax asset valuation
allowance $9,208 $ 6 (3) $9,214

<FN>
(1) Decrease in valuation allowance resulted primarily from utilization of net
operating and capital loss carryforwards.

(2) Valuation allowance was reduced as a result of an evaluation of future
realizability.

(3) Increase in valuation allowance resulted primarily from net operating and
capital losses which could not be realized.

- 16 -

REPORT OF INDEPENDENT AUDITORS

We have audited the consolidated financial statements of Sudbury, Inc. as of May
31, 1996 and 1995, and for each of the three years in the period ended May 31,
1996 and have issued our report thereon dated July 12, 1996 [incorporated by
reference elsewhere in this Annual Report (Form 10-K)]. Our audits also included
the related consolidated financial statement schedule of Sudbury, Inc. listed in
item 14(a) of this Annual Report (Form 10-K). This schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits.

In our opinion, the consolidated financial statement schedule referred to above,
when considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

ERNST & YOUNG LLP

Cleveland, Ohio
July 12, 1996

- 17 -

SUDBURY, INC.

FORM 10-K

EXHIBIT INDEX
-------------

Item 14(a)(3) EXHIBITS: Exhibits identified in parenthesis below, on file with
the SEC, are incorporated herein by reference as exhibits hereto.

EXHIBIT NO.
- -----------

(2) Third Amended Plan of Reorganization as confirmed by the United States
Bankruptcy Court, Northern District of Ohio. (Exhibit (2) to Form
10-K for the fiscal year ended May 31, 1992.)

(2)(a) Agreement and Plan of Merger among South Coast Delaware, Inc., Sudbury,
Inc. And South Coast Terminals, Inc. Dated as of December 22, 1995.
(Exhibit (2) to Form 10-Q for the fiscal quarter ended November 30,
1995.)

(3)(a) By-Laws of Sudbury, Inc., as amended November 19, 1992. (Exhibit
(3)(a) to Form 10-K for the fiscal year ended May 31, 1993.)

(3)(b) Second Restated Certificate of Incorporation of Sudbury, Inc. (Exhibit
(3)(b) to Form 10-K for the fiscal year ended May 31, 1993.)

(4)(a) Credit Agreement by and among Sudbury, Inc. and National City Bank,
Star Bank, National Association and National City Bank, as Agent, dated
May 30, 1995. (Exhibit (4)(c) to Form 10-K for the fiscal year ended
May 31, 1995.)

(4)(b) First Amendment dated August 30, 1995 to Credit Agreement by and
among Sudbury, Inc. and National City Bank, Star Bank, National
Association and National City Bank, as Agent, dated May 30, 1995.
(Exhibit (4)(a) to Form 10-Q for the fiscal quarter ended August
31, 1995.)

(4)(c) Second Amendment dated May 31, 1996 to Credit Agreement by and among
Sudbury, Inc. and National City Bank, Star Bank, National Association
and National City Bank, as Agent, dated May 30, 1995.

(4)(d) Form of Participation Certificate Agreement entered into in
connection with Sudbury's Third Amended Plan of Reorganization.
(Exhibit (4)(r) to Form 10-K for the fiscal year ended May 31,
1992.)

(4)(e) Form of Indenture between Sudbury and IBJ Schroder Bank and Trust
Company, as Trustee for Sudbury's 8.6% $10 million Senior
Subordinated Pay-In-Kind Notes due 1997, distributed pursuant to
Sudbury's Third Amended Plan of Reorganization. (Exhibit T3C to the
Form T-3 filed on August 17, 1992.)

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SUDBURY, INC.

FORM 10-K

EXHIBIT INDEX (CONTINUED)
-------------

EXHIBIT NO.
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(10)(a) 1990 Stock Option Plan. (Exhibit (10)(1) to Form 10-K for the fiscal
year ended May 31, 1990.)

(10)(b) Amended Employment Agreement dated January 13, 1992 between Sudbury and
Jacques R. Sardas. (Exhibit (10)(h) to Form 10-K for the fiscal year
ended May 31, 1992.)

(10)(c) Agreement and Plan of Merger dated November 7, 1989 among Sudbury,
Western, General Products Delaware Corporation, General Products
Angola Corporation and General Products Corporation. (Exhibit
(10)(b) to Current Report on Form 8-K for event occurring on
November 7, 1989.)

(10)(d) Asset Purchase Agreement dated November 7, 1989 among Sudbury,
Western and General Products Delaware Corporation. (Exhibit 10(a)
to the Current Report on Form 8-K filed for event occurring on
November 7, 1989.)

(10)(e) Settlement Agreement and Mutual Release dated July 29, 1994 between
Jacques R. Sardas and Sudbury, Inc. (Exhibit (10)(e) to Form 10-K for
the fiscal year ended May 31, 1994.)

(10)(f) Stock Option Agreement dated July 29, 1994 between Jacques R. Sardas
and Sudbury, Inc. (Exhibit (10)(f) to Form 10-K for the fiscal year
ended May 31, 1994.)

(10)(g) Summary Description of the Sudbury, Inc. Incentive Bonus Plan.

(10)(h) Directors' Deferral Plan adopted September 12, 1994. (Exhibit
(10)(h) to Form 10-K for the fiscal year ended May 31, 1995.)

(10)(i) First Amendment dated August 15, 1996 to Directors' Deferral Plan
adopted September 12, 1994.

(10)(j) 1995 Stock Option Plan. (Exhibit (10)(i) to Form 10-K for the fiscal
year ended May 31, 1995.)

(10)(k) Employment Agreement between Jacques R. Sardas and Sudbury, Inc. dated
July 28, 1995. (Exhibit (10)(j) to Form 10-K for the fiscal year ended
May 31, 1995.)

(10)(l) Non-Qualified Stock Option Agreement between Sudbury, Inc. and Jacques
R. Sardas dated July 28, 1995. (Exhibit (10)(k) to Form 10-K for the
fiscal year ended May 31, 1995.)

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SUDBURY, INC.

FORM 10-K

EXHIBIT INDEX (CONTINUED)
-------------

(10)(m) Employment Agreement dated October 12, 1995 between Mark E. Brody and
Sudbury, Inc. (Exhibit (10) to Form 10-Q for the fiscal quarter ended
November 30, 1995.)

(11) Statement re: Computation of Per Share Earnings

(13) Selected portions of the 1996 Annual Report

(21) Subsidiaries of the Company

(23) Consent of Independent Auditors

(27) Financial Data Schedule

The above exhibits are available to shareholders upon written request to:

Corporate Secretary
Sudbury, Inc.
30100 Chagrin Boulevard, Suite 203
Cleveland, Ohio 44124

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