POINDEXTER J B & CO INC - 10-K Annual Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
================================================================================

(MARK ONE) [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to __________

Commission file number 33-75154
J.B. POINDEXTER & CO., INC.
(Exact name of registrant as specified in its charter)

DELAWARE 76-0312814
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(State or other jurisdiction of (I.R.S. incorporation or organization)
Employer Identification No.)

1100 LOUISIANA
SUITE 5400
HOUSTON, TEXAS 77002
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(Address if principal executive offices) (Zip Code)

(Registrant's telephone number, including area code) (713) 655-9800

Securities registered pursuant to Section 12(b) of the Act: None
Name of each exchange where registered: None

Securities registered pursuant to Section 12(g) of the Act: None

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. [X]

State the aggregate market value of the voting stock held by non-affiliates of
the registrant: $ 0

The number of shares outstanding of each of the registrants' classes of common
stock as of February 2, 2004: 3059

Documents Incorporated by Reference: None

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

PART I.

ITEM 1. BUSINESS

J.B. Poindexter & Co., Inc. ("JBPCO") operates primarily manufacturing
businesses. JBPCO's operating subsidiaries are Morgan Trailer Mfg. Co.,
("Morgan"), Truck Accessories Group, Inc., ("Truck Accessories"), EFP
Corporation, ("EFP") and Magnetic Instruments Corp., ("MIC Group").

Unless the context otherwise requires, the "Company", "we", "our" or "us" refers
to JBPCO together with its consolidated subsidiaries. The Company is owned and
controlled by John B. Poindexter. In May 1994, the Company completed an initial
public offering of $100 million, 12 1/2% Senior Notes due 2004 (sometimes
referred to herein as the "Initial Note Offering" and the "Notes"). During 2003
the Company completed the exchange (Exchange Offer) of principally all of its
$85 million of outstanding Notes for approximately $85 million of 12 1/2 Senior
Notes due 2007 ("New Notes"). The Company, subsequently to the Exchange Offer
purchased $9.1 million of New Notes under the terms of a modified Dutch auction
procedure.

The Company manages its assets on a decentralized basis, with a small corporate
staff providing strategic direction and support. The Company operates and
manages its subsidiaries within three separate business segments. See Note 3 to
the Consolidated Financial Statements of the Company.

MORGAN

Through Morgan, we are a leading manufacturer of commercial truck bodies for
medium duty trucks. Morgan generally manufactures products for medium duty
trucks having a gross vehicular weight rating of between 10,001 pounds (Class 3)
and 33,000 pounds (Class 7). Trucks equipped with our products are commonly used
in a wide variety of applications, including general freight and deliveries,
moving and storage and distribution of refrigerated consumables. We also sell
service parts and offer service programs for our truck bodies. Formed in 1952,
Morgan is headquartered in Morgantown, Pennsylvania, and was acquired by us in
1990.

We reach a broad base of customers nationwide through our sales force and over
180 authorized dealers and distributors. Our customers primarily include rental
companies, truck dealers, leasing companies and companies that operate fleets of
delivery vehicles. Through eight manufacturing plants and seven service
facilities in strategic locations nationwide, we can provide timely product
delivery and service to its customers.

The principal products we manufacture and sell are: dry freight bodies that are
typically fabricated with pre-painted aluminum or fiberglass reinforced plywood
panels, hardwood floors and various door configurations to accommodate end-user
loading and unloading requirements; refrigerated van bodies fabricated with
insulated aluminum or fiberglass reinforced plywood panels that accommodate
controlled temperature and refrigeration needs of end-users; and aluminum or
fiberglass reinforced plywood cutaway van bodies that are installed only on
cutaway chassis, and are available with or without access to the cargo area from
the cab. We also manufacture stake bodies, which are flatbeds with various
configurations of removable sides and a limited quantity of overhead doors for
use on truck bodies produced by us and other truck body manufacturers. We

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

manufacture our products to customer order and specifications and install our
products on truck chassis supplied by our customers.

Customers and sales. We principally generate revenue through three sources:
sales of truck bodies to commercial divisions of leasing companies, companies
with fleets of delivery vehicles, truck dealers and distributors; sales of truck
bodies to consumer rental companies; and sales of parts and service. Morgan's
net sales constituted 48%, 45% and 54% of our consolidated net sales in 2001,
2002 and 2003, respectively.

We make sales of truck bodies through our sales force directly to large end-user
customers, including Penske and Ryder, and to distributors and truck dealers.
Commercial sales of truck bodies, not including consumer rental sales,
constituted 76%, 73% and 79% of Morgan's net sales in 2001, 2002 and 2003,
respectively.

We have an independent authorized distributor network of 59 distributors
nationwide. Most distributors sell a wide variety of truck or related equipment
to truck dealers and end-users. Generally, distributors sell Morgan products in
a specified territory with limited exclusivity. We also sell our products
directly to truck dealers, selling to over 120 dealers in 2003.

Consumer rental sales are composed of sales to companies that maintain large
fleets of one-way and local hauling vehicles available for rent to the general
public. We make these sales directly to these companies through our sales force.
Primary consumer rental product customers include Penske and U Haul. We
negotiate contracts for consumer rental sales annually, usually in late summer
to early fall, with products to be shipped during the first half of the next
year. These sales are seasonal, with substantially all product shipments
occurring the first six months of the year. Consumer rental sales tend to be the
most volatile and price sensitive aspect of Morgan's business and depend on
factors such as product mix and delivery schedules. Consumer rental sales
constituted 14%, 17% and 15% of Morgan's net sales in 2001, 2002 and 2003,
respectively.

Morgan's two largest customers, Ryder Truck Leasing, Inc. and Penske Truck
Leasing, L.P., have, together, historically represented approximately 35% to 50%
of Morgan's total net sales. Each has been our customer for approximately 20
years and we believe relations with each are good. Sales to these customers
represented 19%, 16% and 23% of our consolidated net sales during the years
2001, 2002 and 2003, respectively.

Morgan distributes spare parts through, and offers limited service programs, at
its own service and parts facilities and through its authorized distributors.
Parts and service sales constituted 8%, 9% and 6% of Morgan's net sales in 2001,
2002 and 2003 respectively.

Manufacturing and supplies. We operate manufacturing, body mounting and parts
and service facilities in Florida, Georgia, Pennsylvania, Wisconsin, Texas,
Arizona and California. We also have sales, service and body mounting facilities
in Florida, Colorado and California. All of Morgan's manufacturing facilities
are ISO 9000 certified. We can produce all Morgan products at all Morgan
manufacturing facilities.

Generally, Morgan engineers its products to the specifications of the customer.
Typically, the customer places an order and arranges for a truck chassis
manufacturer to deliver a truck chassis to us. We manufacture and install the
body on the chassis. The customer arranges for delivery of the

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

completed truck. Our production cycle ranges from three to seven days for dry
freight products and up to 28 days for more complex refrigerated products.

Morgan has a comprehensive quality assurance program, including qualification of
suppliers to ensure satisfactory quality of materials, inspections during the
manufacturing process, and a final pre-delivery inspection. To further our
objective of producing the highest quality truck body products, we have
implemented the Morgan Body Configurator, an online order entry program that
allows customers to specify, cost and order truck bodies online. Morgan made 40%
of its sales in 2003 through Morgan Body Configurator. This system enables us to
reduce specification errors, which, in turn, reduces manufacturing costs and
improves delivery performance.

Because contracts for consumer rental sales are entered into in the summer or
fall but production does not begin until the following January, we generally
have a significant backlog of consumer rental sales orders at the end of each
year that is processed through May of the following year. In addition, we
typically maintain a significant backlog of commercial sales. Morgan's backlog
at December 31, 2003 was $72.0 million compared to $46.3 million at December 31,
2002. We expect to complete all of these orders during 2004.

We provide limited warranties against construction defects in our products.
These warranties generally provide for the replacement or repair of defective
parts or workmanship for up to five years following the date of sale. Warranty
costs have not had a material adverse effect on our business.

We maintain an inventory of raw materials necessary to build truck bodies
according to customers' orders. Because Morgan primarily manufactures its
products to order, it does not maintain substantial inventories of finished
goods.

Our principal raw materials include aluminum, steel, fiberglass reinforced
plywood and hardwood. We acquire raw materials from a variety of sources and has
not experienced significant shortages of materials. There are a limited number
of suppliers of fiberglass reinforced plywood, an important truck body material.
While we have not experienced a disruption in supply, or a shortage, of
fiberglass reinforced plywood, such a disruption or shortage could occur in the
future. We may not easily be able to replace our existing supply of fiberglass
reinforced plywood on acceptable terms or at all. To manage our supply costs, we
enter into long term supply contracts on principal materials to lock in prices
for up to one year.

Our customers purchase their truck chassis from major truck manufacturing
companies. The delivery of a chassis to us depends upon truck manufacturers'
production schedules, which are beyond our control. Delays in chassis deliveries
can disrupt our operations and can increase our working capital requirements.

Industry. Industry revenue and growth depend primarily on the demand for
delivery vehicles in the general freight, moving and storage, parcel delivery
and food distribution industries, which are affected by general economic
conditions. Replacement of older vehicles in fleets represents an important
revenue source, with replacement cycles varying from approximately six to seven
years, depending on vehicle types. During economic downturns, replacement orders
are often deferred or, in some cases, older vehicles are retired without
replacement. During periods of economic growth,

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

as customers decide to increase their capital expenditures, sales of delivery
trucks grow as customers make purchases they deferred in prior years.

Competition. The truck body manufacturing industry is highly competitive. We
compete with three national manufacturers: Supreme Industries, Inc., Kidron, a
division of Specialized Vehicles Corporation and, Utilimaster Corporation. There
are a large number of smaller manufacturers, who are regionally focused.
Competitive factors in the industry include product quality, delivery time,
geographic proximity of manufacturing facilities to customers, warranty terms,
service and price. We believe our customers value Morgan's high quality products
and competitive pricing and delivery times.

TRUCK ACCESSORIES GROUP

Through Truck Accessories, we are the leading manufacturer of pickup truck caps
and tonneau covers in terms of U.S. and Canadian combined market share. Our
products are marketed under leading brand names Leer, Raider, LoRider and
Century. Leer is the United States and Canadian combined market leading brand in
terms of sales and market share.

Caps and tonneau covers enclose the beds of pickup trucks, turning the bed into
a secure weatherproof storage area. Our truck caps and tonneau covers offer
customers a variety of designs and features, allowing them to customize the look
and utility of their pickup trucks. We offer caps and tonneau covers in multiple
distinctive styles with numerous features. Leer has three product lines, ranging
from standard to premium, differentiated by features and styling.

Features include cap shape and design, color, paint and finish, window packages,
roof racks, glass tint, trim, and interior features such as lighting, carpeting,
and special gear storage options. Caps and tonneau covers can be designed to
target specific customers. For example, Leer offers lifestyle equipped caps and
tonneaus for hunters, fishermen and outdoors enthusiasts, which are styled and
designed, through gear storage features and product appearance, to appeal to
these customers. Through its multiple lines of caps and tonneau covers, with
numerous features, we believe we are an industry leader in product innovation
and style.

Our six manufacturing plants and our network of over 1,200 independent dealers
provide a national network through which our products are marketed on a
non-exclusive basis to individuals, small businesses and fleet operators. We
operate two retail stores and also operate Midwest Truck Aftermarket, which
distributes a wide array of truck accessories manufactured by a number of other
companies and some of our tonneau covers. Truck Accessories' net sales
constituted 35%, 39% and 32% of our consolidated net sales during 2001, 2002 and
2003, respectively.

Customer and Sales. Most of our products are purchased by individuals through
our network of over 1,200 independent dealers. We sell our products to our
dealers through our sales force. We also sell our products in Canada. In 2003,
foreign sales (primarily in Canada) represented approximately 11% of Truck
Accessories net sales and 4% of our net sales.

In 2003, we expanded our collaboration with Ford to market products at Ford
dealerships as new pickup trucks are sold. We developed the first tonneau cover
approved by Ford for use on the new Ford F-150 pickup trucks. At some Ford
dealers, customers can purchase our tonneau covers, branded "BoxTop" for their
new trucks through a dealer-provided catalog. We believe this will

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

provide us with an additional avenue to increase sales. We have also established
co-branding arrangements with companies such as Browning and Yamika, to market
specifically designed products to hunters and outdoorsmen.

Manufacturing and supplies. We design and manufacture caps and tonneau covers in
six manufacturing facilities located in Pennsylvania, Indiana, California and
Saskatchewan, Canada. Typical product delivery times range from one to two weeks
from the time of the order. Truck Accessories operates a fleet of trucks and
trailers to deliver its products to its dealers.

We obtain raw materials and components from a variety of sources. Principal raw
materials and components include resin, fiberglass, paint, locks, windows and
doors. We have not experienced significant shortages of materials. We purchase
our windows for caps from two suppliers, and a substantial majority of them from
one supplier, and although the loss of that supplier would disrupt production
activities until a replacement supplier could be located, we do not believe that
such loss would have a material adverse effect on us. We have maintained a
stable supply of materials and components on favorable terms as a result of our
size and purchasing power.

Our products are typically manufactured upon receipt of an order by the dealer
and, consequently, our backlog represents between one and two weeks production.
Truck Accessories' backlog was $4.3 million at December 31, 2003 compared to
$3.6 million as of December 31, 2002.

Industry. Sales of caps and tonneaus correspond to the level of new pickup truck
sales. In 2003, we estimate that 16% to 18% of new pickup trucks were equipped
with caps and tonneau covers. Based on our market share in the United States and
Canada of 29%, we estimate that 5% of new pickup trucks are equipped with our
caps and tonneau covers. Factors influencing the automotive industry, including
general economic conditions, customer preferences, new model introductions,
interest rates and fuel costs, will directly influence our business. Based on
the Monthly Autocast Report, sales of pickup trucks in the United States are
expected to grow by a compound annual growth rate of 2.8% through 2005. Cap and
tonneau cover sales are seasonal, with sales typically being higher in the
spring and fall than in the summer and winter.

Competition. The pickup truck cap and tonneau cover industry is highly
competitive. We compete with two other national competitors, A.R.E., Inc. and
Astro, and a number of smaller companies that are regionally focused.
Competitive factors include design, features, delivery times, product
availability, warranty terms, quality and price. We believe we are the industry
leader in design and features, based on the number of products and features we
offer, and are competitive in all other key competitive factors.

SPECIALTY MANUFACTURING GROUP

Specialty Manufacturing operates through two subsidiaries, Magnetic Instruments
Corp. and EFP Corporation. Magnetic Instruments represents approximately 60% of
Specialty Manufacturing's of net sales and provides contract manufacturing
services for customers requiring precision metal parts and machining and casting
services. EFP represents approximately 40% of Specialty Manufacturing's net
sales and markets expandable foam plastics engineered to customer specifications
for use primarily by the automotive, electronics, furniture and appliance
industries as packaging, shock absorbing and material handling products.
Specialty Manufacturing's sales made up 18%, 16% and 13% of our net sales during
2001, 2002 and 2003, respectively.

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

Products. Magnetic Instruments processes precision metal parts used in energy
exploration and production, aerospace and other industries and performs
machining services for manufacturers of metal parts and components used in
products such as small gasoline powered engines. EFP manufactures and markets:

o custom made packaging and shock absorbing products sold to
manufacturers who use them to package and ship a wide assortment of
industrial and consumer products;

o material handling products including reusable trays and containers that
are used for transporting components to or from a customer's
manufacturing facility; and

o components used as the energy absorbing elements of automobile bumpers
and other applications including a line of its StyroCast(R) foam
foundry patterns used by foundries in the "lost foam" or evaporative
metal casting process.

Customers and Sales. We sell products to international oilfield service
companies and a variety of businesses in the consumer products and other
industries. One oilfield service customer represented approximately 21% 14% and
15% of the total sales of Specialty Manufacturing during 2001, 2002 and 2003,
respectively. Management considers relations with its customers to be good.

Manufacturing and Supplies. Our operations are located in Alabama, Indiana,
Tennessee, Texas, and Wisconsin. Our facilities in Alabama, Indiana, and Texas
are ISO 9000 certified and our facility in Wisconsin is QS 9000 certified.
Magnetic Instruments performs a broad range of services including
computer-controlled precision machining and welding, electrostatic discharge
machining, electron beam welding, trepanning, gun drilling and investment
casting. EFP molds and markets expandable foam plastics used as packaging and
materials handling products. Our backlog at December 31, 2003 was $11.2 million
compared to $18.1 million at December 31, 2002.

Magnetic Instruments utilizes ferrous and non-ferrous materials including
stainless steel, alloy steels, nickel-based alloys, titanium, brass,
beryllium-copper alloys and aluminum. EFP's products are manufactured from a
wide variety of materials including expandable polystyrene, polypropylene,
polyethylene and resins, which are subject to cost fluctuations based on changes
to the price of oil in the international markets. Materials are obtained from a
variety of sources and Specialty Manufacturing has not experienced significant
shortages in materials.

Industry. Our customers operate in a wide variety of businesses. Magnetic
Instruments' services are particularly demanded by companies involved in oil and
gas exploration. The demand for equipment and services supplied to the oilfield
service industry and, in turn, sales of related manufactured parts are directly
correlated to the level of worldwide oil and gas drilling activity. Most of
EFP's products are manufactured for use by other industries; economic conditions
that affect those other industries will generally affect our operations. In
particular, growth or a downturn in the automotive, electronics, furniture or
appliance industries generally would have a corresponding effect on our
business.

Competition. Magnetic Instruments competes with a large number of other
businesses engaged in the machining, casting and manufacturing of parts and
equipment utilized in the oil and gas exploration, aerospace and general
industries. EFP competes with a large number of other molded, expandable plastic
producers. Price, delivery times, technological know-how and production
flexibility and capacity are the primary competitive factors in our industries.

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

TRADEMARKS AND PATENTS

We own rights to certain presentations of Truck Accessories' "Leer" brand name,
which we believe are valuable because we believe that "Leer" is recognized as
being a leading "brand name." We also own rights to certain other trademarks and
trade names, including certain presentations of Morgan's name. Although these
and other trademarks and trade names used by us help customers differentiate our
product lines from those of competitors, we believe that the trademarks or trade
names themselves are less important to customers than the quality of the
products and services. Our subsidiaries, principally Morgan and the EFP foam
packaging subsidiary of Specialty Manufacturing, hold, directly or indirectly
through subsidiaries, patents on certain products and components used in the
manufacturing processes. We do not believe that the loss of any one patent would
have a material adverse effect on us.

EMPLOYEES

At December 31, 2003, the Company had approximately 3,000 full-time employees.
Personnel are unionized in EFP's Decatur, Alabama facility (covering
approximately 60 persons, with a contract expiring in August 2006); and, Truck
Accessories' Raider Industries facilities in Canada (covering approximately 173
persons, with a contract that expires in April 2005). The Company believes that
relations with its employees are good.

ENVIRONMENTAL MATTERS

The Company's operations are subject to numerous environmental statutes and
regulations, including laws and regulations affecting its products, the
materials used in and wastes generated by manufacturing the Company's products
and the investigation and cleanup of contaminated sites. In addition, certain of
the Company's operations are subject to federal, state and local environmental
laws and regulations that impose limitations on the discharge of pollutants into
the air and water of the United States or that impose workplace health and
safety requirements. Pursuant to these laws, some of the Company's operations
require permits which may restrict the Company's operations and which are
subject to renewal, modification or revocation by issuing authorities. The
Company also generates hazardous and non-hazardous wastes. The Company has
received notices of noncompliance, from time to time, with respect to its
operations, which are typically resolved by correcting the conditions and the
payment of minor fines, none of which individually or in the aggregate has had a
material adverse effect on the Company. Further, we cannot assure you that the
Company has been or will be at all times in compliance with all of these
requirements, including those related to reporting or permit restrictions or
that the Company will not incur material fines, penalties, costs or liabilities
in connection with such requirements or a failure to comply with them. The
Company expects that the nature of its operations will continue to make it
subject to increasingly stringent environmental and workplace health and safety
regulatory standards and to the increasingly stringent enforcement of those
standards. Although the Company believes it has made sufficient capital
expenditures to maintain compliance with existing laws and regulations, future
expenditures may be necessary, as compliance standards and technology change.
Unforeseen significant expenditures required to maintain such future compliance,
including unforeseen liabilities, could limit expansion or otherwise have a
material adverse effect on the Company's business and financial condition.

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

In a memorandum dated January 10, 2002 issued by the Georgia Environmental
Protection Division ("EPD"), Truck Accessories was notified that it may be a
"Potentially Responsible Party" in a Georgia state Superfund site. Although a
precise estimate of liability cannot currently be made with respect to this
site, the Company currently believes that its proportionate share, if any, of
the ultimate costs related to any necessary investigation and remedial work at
this site will not have a material adverse effect on the Company. The Company
has not recorded a liability related to this matter.

On January 29, 2003, the United States Environmental Protection Agency ("USEPA")
notified Truck Accessories that it had reviewed a self-disclosure regarding
failure to file certain forms allegedly required pursuant to Section 313 of the
Emergency Planning and Community Right-to-Know Act, and regulations promulgated
thereunder. The Company is engaged in settlement discussions to resolve these
and other potential claims. USEPA has proposed a penalty of $11,045. The Company
has accrued expenses of $20,000 and has implemented three Supplemental
Environmental Projects, undertaken in connection with this matter, that require
approximately $125,000 of capital expenditures.

In October 2003, Truck Accessories was notified that it may be a potentially
responsible party at a United States Environmental Protection Agency Superfund
Site in California. The Company has executed a tolling agreement with the EPA
and has been invited to attend a de minimis potentially responsible party
settlement conference being held by the EPA. Although the Superfund statute
provides for joint and several liability and a precise estimate of liability
cannot be determined at this time, the Company currently believes that our
proportionate share, if any, of the ultimate cost related to any necessary
investigation and remedial work at the site will not have a material adverse
effect on the Company.

A self-audit conducted in 2002 revealed that a machine shop operated by MIC
Group may have failed to file certain forms required pursuant to Section 313 of
the Emergency Planning and Community Right-to-Know Act, and regulations
promulgated thereunder. The Company disclosed this situation to the EPA,
completed all required reports and filed them with the appropriate agencies in
2002. Recently, the EPA requested additional information, which the Company has
provided. At this time we do not know whether the EPA will seek to penalize the
Company for these reporting violations.

During a Phase II Environmental Assessment in November 2002 at KWS
Manufacturing, in preparation for its sale, two areas of potential contamination
were identified. As a part of the sale agreement, a Phase III project was
undertaken to determine the exact level of contamination and potential
remediation, if necessary. The Company has entered into a "Voluntary Clean Up
Project" with the Texas Commission on Environmental Quality that is expected to
be completed by November 2003. Although a precise estimate of liability cannot
currently be made with respect to the contamination levels or potential
remediation, the Company has incurred costs of approximately $60,000, as of
December 31, 2003, and it believes that the ultimate cost of this matter will be
approximately $70,000. Costs incurred over and above $50,000 should be
reimbursable to the company by the previous owner of KWS.

On February 20, 2004, the EPA sent a request for information to the Truck
Accessories facility in Milton, Pennsylvania. The information request states
that it is pursuant to the EPA's authority under the Resource Conservation
Recovery Act, which is the federal statue regulating the handling of hazardous
waste. The request asks for a large volume of information and documents related
to the Milton facility's handling and recordkeeping related to hazardous
wastes. Included with the information request was a copy of a September 2003
inspection report on which the EPA and the Pennsylvania Department of
Environmental Protection investigators appear to have indicated non-compliance
by Truck Accessories with some Resource Conservation Recovery Act standards.
Truck Accessories is in the initial stages of gathering the information
necessary to respond to the request. At this time, we do not know if the EPA or
the Pennsylvania Department will take enforcement action against Truck
Accessories, and we cannot estimate the financial impact of such an enforcement
action, if any, which could be material.

ITEM 2. PROPERTIES

The Company owns or leases the following manufacturing, office and
sales facilities as of January 31, 2004:

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

The Company believes that its facilities are adequate for its current
needs and are capable of being utilized at higher capacities to supply increased
demand, if necessary.

ITEM 3. LEGAL PROCEEDINGS

The Company is involved in various lawsuits, which arise in the
ordinary course of business. In the opinion of management, the ultimate outcome
of these lawsuits will not have a material adverse effect on the Company.

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

No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year covered by this report.

PART II

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

The registrant's common equity is privately held and not publicly
traded. As of January 31, 2004, one individual owned all of the registrant's
issued and outstanding common equity. During the last three fiscal years, the
Company paid no cash dividends.

The Senior Secured Note Indenture, dated as of June 10, 2003 and the
Loan and Security Agreement, as amended and dated as of June 28, 1996 with
Congress Financial Corporation, restricts the registrant's ability to pay
dividends on its common equity.

ITEM 6. SELECTED FINANCIAL DATA

The historical financial data presented below, for the years ended
December 31, 2003, 2002, 2001, 2000 and 1999, are derived from the audited
Consolidated Financial Statements of the

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

Company. The data presented below should be read in conjunction with
Management's Discussion and Analysis of Financial Condition and Results of
Operations and the Consolidated Financial Statements of the Company and notes
thereto.

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

(a) "EBITDA" is net income from continuing operations increased by the sum
of interest expense, income taxes, depreciation and amortization and
other non-cash items for those operations defined as restricted
subsidiaries in the Indenture pertaining to the Senior Notes. EBITDA is
not included herein as operating data and should not be construed as an
alternative to operating income (determined in accordance with
accounting principles generally accepted in the United States) as an
indicator of the Company's operating performance. The Company has
included EBITDA because it is relevant for determining compliance under
the Indenture and because the Company understands that it is one
measure used by certain investors to analyze the Company's operating
cash flow and historical ability to service its indebtedness. The
following are the components of the Company's EBITDA:

(b) "Consolidated EBITDA Coverage Ratio" is the ratio of EBITDA to interest
expense of the Company and its subsidiaries that guarantee the Notes.
It is used in the Indenture to limit the amount of indebtedness that
the Company may incur. All the Company's subsidiaries are restricted
under the terms of the indenture and guarantee the Notes.

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

The following discussion of the Company's financial condition and
results of operations should be read in conjunction with the Consolidated
Financial Statements of the Company and the notes thereto.

OVERVIEW

We consist of three operating segments:

Morgan, which manufactures and sells truck bodies;

Truck Accessories, which manufactures and sells pick up truck caps and tonneau
covers; and

Specialty Manufacturing, which manufactures precision components, provides metal
machining services and manufactures expandable foam products for packaging and
other applications.

History and development. We are wholly owned by John Poindexter. In 1994, we
issued $100 million of 12.50% Senior Notes due 2004. With the proceeds of that
offering, we purchased from Mr. Poindexter (and other minority holders) the
Truck Accessories and Specialty Manufacturing businesses. We also purchased a
floor covering distribution business, Lowy Group, Inc., and its carpet
manufacturing subsidiary, Blue Ridge Carpet Mills.

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

In 1998, we disposed of the wholesale distribution and retail operations of
Truck Accessories and focused Truck Accessories primarily on manufacturing. We
also disposed of Lowy's Blue Ridge subsidiary and realized net cash proceeds of
approximately $15.8 million that were used to pay down revolver borrowings.

In 1999 we sold Lowy and used net proceeds of approximately $7.8 million to pay
down revolver borrowings.

In 2000, we acquired two companies: Universal Brixius, which has been integrated
into the precision component manufacturing operations of Specialty
Manufacturing, and KWS, a bulk material handling business. We disposed of KWS in
2002. In 2003, we acquired a truck body manufacturing operation and facility in
Riverside, California and have integrated it into Morgan. Morgan builds and
mounts truck bodies at that facility. Also, during 2003, we sold Morgan's idle
Monterey, Mexico plant.

In 2002 and 2003, we identified unprofitable operations for sale, including KWS,
the PPD operations of Truck Accessories, which produced polymer-based caps and
covers, the Gem-Top operations of Truck Accessories Group and the Marlin
operations of Specialty Manufacturing, one of our foam packaging manufacturing
plants. All of these operations have been treated as discontinued operations in
our financial statements for all periods presented.
Further detail is included below under "--Discontinued operations."

During June 2003, we completed an exchange offer, in which we exchanged
approximately $85 million of 12.50% Senior Secured Notes due 2007 for the
outstanding $85 million of 12.50 % Senior Notes due 2004. We paid approximately
$2.6 million in consent fees in connection with the exchange offer. In
connection with the exchange offer, we secured our long-term debt with
substantially all of our assets. The old notes had been unsecured. The exchange
offer allowed us to extend the maturity of our long term debt by three years. At
the time of the exchange offer, we had been experiencing lower operating cash
flows since 2001. We did not project to have sufficient cash to pay the notes at
maturity in 2004, and uncertain economic and bond market conditions at the time
led us to decide to extend and secure our debt through the exchange offer,
rather than refinance the debt through a new debt offering.

Factors influencing results of operations. Demand for our products is highly
cyclical and our results of operations are affected by general economic
conditions and conditions specific to the industries in which we and our
customers operate.

Morgan's sales depend on the replacement cycle for delivery trucks, primarily in
general freight, moving and storage, parcel delivery and distribution
industries. We estimate that customers typically replace delivery trucks every
six to seven years. However, the replacement cycle is directly impacted by
general economic conditions in the United States. In a weaker economy, customers
will often defer purchases of new delivery trucks or retire old delivery trucks
without replacement. In the early stages of a stronger economy, customers
typically replace delivery trucks at a faster than normal rate, making purchases
that were deferred in prior years. Morgan experienced a substantial decline in
sales in 2001 and 2002, due to the weak economy. Morgan experienced a
significant increase in sales in 2003 as economic conditions improved. We expect

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

general economic conditions to cause significant variability in Morgan's future
results of operations and we cannot predict the extent of such impact.

Some of Morgan's sales are also seasonal. Approximately 25% of Morgan's unit
sales are to companies that rent trucks on a short term basis to consumers. The
substantial majority of these sales are made during the first half of each
calendar year.

Specialty Manufacturing sells products primarily to companies in the energy
services, consumer electronics industries and automotive industries. Specialty
Manufacturing's sales dropped substantially from 2001 to 2002 and did not
materially rebound in 2003, primarily as a result of adverse economic conditions
in the energy services industry. Sales to customers in the energy services
business, which represented 35% of Specialty Manufacturing's sales during 2003,
depend upon the level of exploration and production of oil and gas.

We have been successful in reducing costs at Morgan and Truck Accessories
through personnel reductions and improved operating efficiency. Our operating
margin improved at Morgan and Truck Accessories in 2003 compared to 2002.
However, our operating margin at Specialty Manufacturing decreased from 2002 to
2003. The following table shows our net sales, operating income and operating
income as a percentage of sales for each segment for 2001, 2002 and 2003.

Following is a discussion of the key components of our results of operations:

Source of revenues. We derive revenues from:

o Morgan's sales of truck bodies, parts and services.

o Truck Accessories' sales of pick up truck caps and tonneau covers;

o Specialty Manufacturing's sales of precision machining services,
packaging and other products.

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

Discounts, returns and allowances. Our gross sales are reduced by discounts we
provide to customers and returns and allowances in the ordinary course of our
business. Morgan and Truck Accessories provide discounts as they deem necessary
to generate sales volume and remain price competitive. Discounts include payment
terms discounts and discretionary discounts from list price.

Cost of sales. Cost of sales represent the costs directly associated with the
manufacture of our products and generally vary with the volume of products
produced. The components of cost of sales are materials, labor and overhead. We
have experienced some variability in materials costs, for materials such as
aluminum, steel, fiberglass reinforced plywood and lumber at Morgan, fiberglass,
windows, paint and resin at Truck Accessories and nickel and resin at Specialty
Manufacturing but such variability has not materially impacted our financial
condition or results of operations. We enter into long term supply contracts for
some materials at a fixed price for up to one year to manage materials costs.
Overhead costs are allocated to production based on labor costs and include the
depreciation and amortization costs associated with the assets used in
manufacturing. At Truck Accessories, distribution costs are also included in
overhead.

Selling, general and administrative expenses. Selling, general and
administrative expenses are made up of the costs of selling our products and
administrative costs such as information technologies, accounting, finance,
human resource and engineering. Costs include personnel and related costs
including travel, equipment and facility rent expense and professional services
such as audit fees. Selling, general and administrative expenses also includes
the costs of the parent company office that provides strategic direction and
support to the subsidiaries.

Other income and expense. Income and expenses that we incur during the year that
are nonrecurring in nature and not directly comparable to the prior year are
included in Other income and expense.

BASIS OF FINANCIAL STATEMENTS

Various items in our financial statements have been restated for all prior
periods, as described below.

Effective March 2002, EFP Corporation, our foam packaging and related products
business, was included in Specialty Manufacturing for management and reporting
purposes. The results of operations for all periods presented have been restated
to reflect this change.

During the quarter ended December 31, 2002, we identified Gem-Top, KWS and our
Marlin, Texas foam packaging operations for sale, as described below in
"--Discontinued operations". In 2002, we completed the closure of our polymer
division of Truck Accessories. Accordingly, all these operations have been
treated as discontinued in the consolidated financial statements for all periods
presented. Income we have received, or expenses we have incurred, from
previously disposed operations is also reported in "Discontinued operations."

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The discussion and analysis of financial condition and the results of operations
are based upon our consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United
States. The preparation of these financial statements

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

requires the use of estimates that affect the reported amounts of assets,
liabilities, revenues and expenses and related disclosure of contingent assets
and liabilities. The estimates are evaluated continually, including those
related to warranties offered on products, self-insurance reserves, bad debts,
inventory obsolescence, investments, intangible assets and goodwill, income
taxes, financing operations, workers' compensation insurance, and contingent
liabilities. The estimates are based on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different
assumptions or conditions.

We believe the following are our most critical accounting policies used in the
preparation of our financial statements.

Warranties. Reserves for costs associated with fulfilling warranty obligations
offered on Truck Accessories and Morgan products are established based on
historical experience and an estimate of future claims. Increases in the
incidence of product defects would result in additional reserves being required
in the future and would reduce income in the period of such determination.

Self-Insurance risks. We utilize a combination of insurance coverage and
self-insurance programs for property, casualty, workers' compensation and health
care insurance. We record an actuarially determined, fully developed
self-insurance reserve to cover the self-insured portion of these risks based on
known facts and historical industry trends. Changes in the assumptions used by
the actuary could result in a different self-insurance reserve.

Income taxes. We estimate our income taxes in each of the jurisdictions in which
we operate. This process involves estimating our current tax exposure together
with assessing temporary differences resulting from differing treatment of items
for tax and accounting purposes. These differences result in deferred tax assets
and liabilities, which are included in the consolidated balance sheet. We then
assess the likelihood that the deferred tax assets will be recovered from future
taxable income, and, to the extent recovery is not likely, a valuation allowance
is established. When an increase in this allowance within a period is recorded,
we include an expense in the tax provision in the consolidated statements of
operations. Management's judgment is required in determining the provision
(benefit) for income taxes, deferred tax assets and liabilities and any
valuation allowance recorded against the net deferred tax assets. We have a
deferred tax asset relating to net operating loss carryforwards of approximately
$7.4 million as of December 31, 2003. We have recorded a valuation allowance of
$1.9 million and $2.7 million as of December 31, 2003 and 2002, respectively
against the net operating loss carryforwards as we believe that the
corresponding deferred tax asset may not be realizable. While the deferred tax
assets for which valuation allowances have not been provided are considered
realizable, actual amounts could be reduced if future taxable income is not
achieved.

Inventory valuation. Our inventories primarily consist of inventories of raw
materials, supplies and work-in-progress. Because our largest segments, Morgan
and Truck Accessories primarily produce products to the customer's order, we
maintain a relatively small stock of finished goods inventories. Inventories are
stated at the lower of cost (first-in, first-out method) or market. We record
reserves against the value of inventory based upon our determination that the
inventory is not usable in our products. These reserves are estimates, which
could vary significantly, either favorably or unfavorably, from actual
requirements if future economic conditions, customer inventory levels or
competitive conditions differ from our expectations.

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

Accounts receivable. We provide credit to our customers in the ordinary course
of business. We are not aware of any significant credit risks related to our
customer base and do not generally require collateral or other security to
support customer receivables. The carrying amount of our accounts receivable
approximate the fair value of the receivables because of their short-term nature
payment is typically due within 30 days after we send an invoice. We establish
an allowance for doubtful accounts on a case by case basis when we believe that
we are unlikely to receive payment in full of amounts owed to us. We must make a
judgment in these cases based on available facts and circumstances and we may
record a reserve against a customer's account receivable. We reevaluate the
reserves and adjust them as we obtain more information regarding the account.
The collectability of trade receivables could be significantly reduced if there
is a greater than expected rate of defaults or if one or more significant
customers experience financial difficulties or are otherwise unable to make
required payments.

Goodwill and long-lived assets impairment. We perform a test of our goodwill and
other intangible assets for potential impairment annually as of October 1 as
prescribed by Statement of Financial Accounting Standards 142, Goodwill and
Other Intangibles. The fair value of our reporting units is based on acquisition
multiples, which are derived from information and analysis of recent
acquisitions in the market place for companies with similar operations. Changes
in the assumptions used in the fair value calculation could result in an
estimated reporting unit fair value that is below the carrying value, which may
give rise to an impairment of our assets. In addition to the annual review, we
also test for impairment of our long-lived assets, goodwill and intangible
assets should an event or circumstance change that may indicate a reduction in
the fair value of a reporting unit below its carrying value.

Contingent liabilities. We establish reserves for estimated loss contingencies
when a loss is probable and the amount of the loss can be reasonably estimated.
Revisions to contingent liabilities are reflected in income in the period in
which different facts or information become known or circumstances change that
affect the previous assumptions with respect to the likelihood or amount of
loss. Reserves for contingent liabilities are based upon the assumptions and
estimates regarding the probable outcome of the matter. Should the outcome
differ from the assumptions and estimates, revisions to the estimated reserves
for contingent liabilities would be required.

COMPARISON OF 2003 TO 2002

Sales. Consolidated net sales increased $79.9 million, or 24%, to $410.9 million
for the year ended December 31, 2003 compared to $331.0 million during the year
ended December 31, 2002.

o Morgan's net sales increased $74.8 million, or 50.3%, to $223.2 million
for the year ended December 31, 2003 compared to $148.4 million for the
year ended December 31, 2002. The increase resulted from a 45% increase
in the number of units shipped to approximately 29,000 units. Net sales
increased by a greater percentage number of units shipped because of a
change in the mix of products sold (and not because of improved
pricing). Shipment of units to consumer rental companies that are
historically large production runs completed in the first and second
quarters of the year, and generally command a lower unit price,
increased approximately 17% in 2003 compared to 2002. Shipments of
commercial units (representing about 75% of Morgan's total sales)
increased by 57.3% to $175.4 million in 2003 from $108.1 million in
2002 as Morgan's major fleet customers and dealers increased new truck
body purchases from Morgan. This increase in commercial sales reflected
an improvement in general economic

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

conditions. The increase in purchases by the major fleet companies
reflected a favorable turn in the replacement cycle of their fleets.
Discounts increased to $10.8 million (4.6% of gross sales) compared to
$5.3 million (3.4% of gross sales) last year as a result of increased
sales volume and pricing pressure in the Industry.

o Truck Accessories' net sales increased $4.3 million, or 3.3%, to $132.8
million for the year ended December 31, 2003 compared to $128.5 million
for the year ended December 31, 2002. The increase resulted in part
from a 0.5% increase in unit shipments from approximately 175,000 to
176,000 units in 2003 compared to 2002. The remaining increase in sales
was due to improved tonneau and parts pricing and increased sales of
premium caps. Sales of pickup trucks in the United States and Canada, a
leading indicator of Truck Accessories' business, rose by approximately
1.1% over the same period.

o Specialty Manufacturing's net sales increased by $0.9 million, or 1.7%,
to $54.9 million for the year ended December 31, 2003 compared to $54.0
million for the year ended December 31, 2002. Sales to customers in the
energy services business represented 35% of Specialty Manufacturing's
sales during 2003, and sales to their customers increased 11% to $19.3
million during 2003 compared to $17.4 million during 2002. The increase
resulted from increased oil and gas exploration activity during 2003.
Other sales decreased by 2.6% to $35.7 million during 2003 compared to
$36.6 million during 2002 as a result of lower sales to customers in
the automotive and electronics industries.

Backlog

o Morgan's backlog at December 31, 2003 was $72.0 million compared to
$46.3 million at December 31, 2002. The December backlog includes
consumer rental orders to be completed generally during the first and
second quarters of the following year.

o Truck Accessories maintains a backlog of approximately two weeks
production was $4.3 million at December 31, 2003 compared to $3.6
million as of December 31, 2002.

o Specialty Manufacturing's backlog at December 31, 2003 was $11.2
million compared to $18.1 million at December 31, 2002. The decrease
was due to lower bookings for oil and non-oil related products.

Cost of sales and gross profit. Consolidated cost of sales increased by $64.5
million, or 22.6%, to $350.4 million for the year ended December 31, 2003
compared to $285.9 million for the year ended December 31, 2002. Consolidated
gross profit increased by $15.4 million, or 34.1%, to $60.5 million (14.7% of
net sales) for the year ended December 31, 2003 compared to $45.1 million (13.6%
of net sales) for the year ended December 31, 2002.

o Morgan's gross profit increased by $13.1 million, or 74.9%, to $30.6
million (13.7% of its net sales) for the year ended December 31, 2003
compared to $17.5 million (11.8% of its net sales) for the year ended
December 31, 2002. The gross profit increased primarily because of
higher sales. The gross profit margin increased because of greater
overhead cost absorption. This increase was partially offset by higher
labor and material cost relative to sales.

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

o Truck Accessories' gross profit increased by $4.3 million, or 25.7%, to
$21.0 million (15.8% of its net sales) for the year ended December 31,
2003 compared to $16.7 million (13.0% of its net sales) for the year
ended December 31, 2002. Truck Accessories' cost of sales was virtually
unchanged in 2003 compared to 2002, while sales increased by 3.3% in
2003 compared to 2002, increasing the gross profit margin percentage
from 13.0% to 15.8%. During 2002, Truck Accessories experienced higher
labor and materials costs, as a percentage of sales, at the Leer
divisions. New product and option introductions resulted in higher
material costs and inefficient manufacturing processes. In addition, we
increased prices on products and options during 2003, as compared to
2002.

o Specialty Manufacturing's gross profit decreased $2.0 million, or
18.3%, to $8.9 million (16.2% of its net sales) for the year ended
December 31, 2003 compared to $10.9 million (20.2% of its net sales)
for the year ended December 31, 2002 primarily due to increased raw
material cost is as a percentage of sales, relating to machinery
services provided to a significant customer of Magnetic Instruments.
Previously, the customer had provided raw materials to be processed by
Magnetic Instruments under a tolling arrangement. In 2003, the terms of
the arrangement were modified such that Magnetic Instruments purchased
and maintained an inventory of the raw materials, produced the
components and sold the components to the customer. Magnetic
Instruments did not recover the increased material and related carrying
costs, through sufficient incremental sales to this customer.

Selling, general and administrative expenses. Consolidated selling, general and
administrative expenses decreased $3.5 million, or 8.7%, to $36.6 million (8.9%
of net sales) for the year ended December 31, 2003 compared to $40.1 million
(12.1% of net sales) for the year ended December 31, 2002.

o Morgan's selling, general and administrative expenses increased by $2.2
million, or 17.9%, to $14.5 million (6.5% of its net sales) for the
year ended December 31, 2003 compared to $12.3 million (8.3% of its net
sales) for the year ended December 31, 2002. The increase resulted
primarily from incentives paid to our sales and management personnel as
a result of increased sales.

o Truck Accessories' selling, general and administrative expenses
decreased by $2.5 million, or 17.6%, to $11.7 million (8.8% of its net
sales) for the year ended December 31, 2003 from $14.2 million (11.1%
of its net sales) for the year ended December 31, 2002. The decrease
resulted primarily from reductions in administrative personnel and
associated costs.

o Specialty Manufacturing's selling, general and administrative expenses
declined by $0.3 million, or 4.0%, to $7.2 million (13.1% of its net
sales) for the year ended December 31, 2003 from $7.5 million (13.9% of
its net sales) for the year ended December 31, 2002. The decrease
resulted primarily from 10% reduction in personnel and related costs.

o Corporate selling, general and administrative expenses during the 2003
period declined $2.9 million or 48.3% to $3.1 million for the year
ended December 31, 2003 from $6.0 million for the year ended December
31, 2002 primarily as a result of personnel reductions and their
associated costs of approximately $0.8 million and due to a casualty
insurance related expense to increase reserves for all operations of
$1.3 million taken in 2002 but not repeated in 2003.

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

Other income and other expenses. Exchange offer costs of $0.8 million during the
year ended December 31, 2003 comprised primarily of the expenses we incurred in
connection with the exchange of our 12.50% Senior Secured Notes due 2004 for
our 12.50% Senior Secured Notes due 2007 that was completed June 10, 2003. Other
income includes management fees of $0.3 million received from Morgan Olson for
services provided by us in 2003. We also included in other income a gain of $0.4
million on our purchase and cancellation of $9.1 million principal amount of
outstanding 12.50% Senior Secured Notes due 2007 during September 2003,
approximately four months after the exchange offer.

Operating income. Due to the effect of the factors summarized above,
consolidated operating income increased by $18.2 million, or 325.0%, to $23.8
million (5.8% of net sales) for the year ended December 31, 2003 from $5.6
million (1.7% of net sales) for the year ended December 31, 2002.

o Morgan's operating income increased by $10.8 million, or 207.7%, to
$16.0 million (7.2% of its net sales) for the year ended December 31,
2003 compared to $5.2 million (3.5% of its net sales) for the year
ended December 31, 2002 due to higher sales and greater fixed cost
absorption.

o Truck Accessories' operating income increased by $6.9 million, or
287.5%, to $9.3 million (7.0% of its net sales) for the year ended
December 31, 2003 compared to $2.4 million (1.9% of its net sales) for
the year ended December 31, 2002 due to higher sales and primarily
lower selling, general and administrative costs resulting from improved
product design and pricing at Leer.

o Specialty Manufacturing's operating income decreased by $2.1 million,
or 53.8%, to $1.8 million (3.3% of its net sales) for the year ended
December 31, 2003, compared to $3.9 million (7.3% of its net sales) for
the year ended December 31, 2002, as a result of reductions in non-oil
related profits due to higher material costs, which was partially
offset by increased profits from oil related sales.

Interest expense. Consolidated interest expense decreased by $0.4 million, or
3.2% to $12.1 million for the year ended December 31, 2003 compared to $12.5
million for the year ended December 31, 2002. The decrease was due to a
reduction in long term debt as a result of our purchase and cancellation of $9.1
million of our 12.50% Senior Secured Notes due 2007 on September 29, 2003 and a
slight decrease in the effective interest rate on the revolving loans.

Tax provision. The income tax provision (benefit) for the years ended December
31, 2003 and 2002 differ from amounts computed based on the federal statutory
rate due to state and foreign taxes in jurisdictions where net operating losses
were not available to reduce current period income. Also during the year ended
December 31, 2003 we reduced the amount of the valuation allowance recorded
against the net operating loss carryforwards by $0.8 million and reduced other
tax reserves by $0.9 million for prior year provision to return differences,
thereby reducing the provision for income taxes by $1.7 million for the period.
During the 2002 period we increased the valuation allowance and thereby reduced
the tax benefit by $0.5 million for a valuation allowance recorded against net
operating loss carryforwards in continuing operations.

20

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

COMPARISON OF 2002 TO 2001

Sales. Consolidated net sales decreased by $31.6 million, or 8.7%, to $331.0
million for the year ended December 31, 2002 compared to $362.6 million for the
year ended December 31, 2001.

o Morgan's net sales decreased by $24.8 million, or 14.3%, to $148.4
million for the year ended December 31, 2002 compared to $173.2 million
for the year ended December 31, 2001. The decrease resulted from an 8%
decrease in units shipped to approximately 19,500 units in 2002 from
approximately 21,000 units in 2001. Shipments of products to consumer
rental companies, usually large production runs completed by the end of
the second quarter, increased 26% in 2002 compared to 2001. These
consumer rental sales comprised 30% of Morgan's shipments in 2002.
However, this increase sales offset by a decrease in sales of all other
products, principally commercial units sold to truck dealers,
distributors and companies with fleets of delivery trucks, of 18% to
$108.1 million in 2002 from $132.0 million in 2001 as a result of
continued lowered demand for truck bodies as a result of a weak
economy.

o Truck Accessories' net sales increased by $3.2 million, or 2.6%, to
$128.5 million for the year ended December 31, 2002 compared to $125.3
million for the year ended December 31, 2002. The increase resulted
from a 4% increase in units shipped. Truck Accessories increased its
penetration of the tonneau market with improvements to existing
products and new product introductions. Pickup truck sales, a leading
indicator for Truck Accessories' business, decreased approximately 3.4%
during 2002 compared to 2001.

o Specialty Manufacturing's net sales decreased by $10.1 million, or
15.7%, to $54.0 million for the year ended December 31, 2002 compared
to $64.1 million for the year ended December 31, 2001. The decrease
primarily resulted from a $10.1 million, or 37%, decrease in sales to
customers in the energy services business due to a decline in the oil
and gas business in the same period. The average United States rig
count for 2002, a leading indicator for the energy services industry,
was 28% below levels of 2001.

Backlog.

o Morgan's backlog at December 31, 2002 was $46.3 million compared to
$30.1 million at December 31, 2001.

o Truck Accessories maintains a backlog of approximately 2 weeks of
production or approximately $3.6 million at December 31, 2002,
comparable to its backlog at the end of 2001.

o Specialty Manufacturing's backlog at December 31, 2002 was $18.1
million compared to $15.3 million at the end of December 2001.

Cost of sales and gross profit. Consolidated cost of sales decreased by $19.7
million, or 6.4%, to $285.9 million for the year ended December 31, 2002,
compared to $305.6 million for the year ended December 31, 2001. Consolidated
gross profit decreased by $11.9 million, or 20.8%, to $45.1 million for the year
ended December 31, 2002, compared to $57.0 million for the year ended December
31, 2001.

o Morgan's gross profit decreased by $1.8 million, or 9.3%, to $17.5
million (11.7% of its net sales) for the year ended December 31, 2002
compared to $19.3 million (11.1% of its net sales)

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

for the year ended December 31, 2001. The decrease resulted from lower
production volume. Morgan partially offset this decrease by reducing
its manufacturing overhead during 2002 by approximately $6.2 million
and cutting manufacturing labor costs by 13% through a 13% reduction in
average annual headcount.

o Truck Accessories' gross profit decreased $4.7 million, or 22.0%, to
$16.7 million (12.9% of its net sales) for the year ended December 31,
2002 compared to $21.4 million (17.0% of its net sales) for the year
ended December 31, 2001. The decrease resulted primarily from increased
material, labor and overhead costs relative to sales at its Leer
division which were partially offset by improved sales and higher gross
profits at the other Truck Accessories divisions. During 2002, Leer
introduced some new products and experienced higher than normal
material costs as a result of new products that were not optimally
designed for lowest cost production resulting in higher labor and
material costs. In addition, we did not take advantage of pricing
opportunities with respect to those products.

o Specialty Manufacturing's gross profit decreased $5.4 million, or
33.1%, to $10.9 million (20.1% of its net sales) for the year ended
December 31, 2002 compared to $16.3 million (25.4% of its net sales)
for the year ended December 31, 2001. The decrease was primarily as a
result of lower production volumes on lower sales to customers in the
energy services business.

Selling, general and administrative expenses. Consolidated selling, general and
administrative expenses increased $1.1 million, or 2.8%, to $40.1 million (12.1%
of net sales) for the year ended December 31, 2002 compared to $38.9 million
(10.7% of net sales) for the year ended December 31, 2001.

o Morgan's selling, general and administrative expenses decreased by $1.3
million, or 9.6%, to $12.3 million (8.2% of its net sales) for the year
ended December 31, 2002 compared with $13.6 million (7.9% of its net
sales) for the year ended December 31, 2001. The decrease primarily
resulted from reduced personnel and related costs. Morgan's average
general and administrative headcount was reduced by 21% in 2002
compared to 2001.

o Truck Accessories' selling, general and administrative expenses
increased by $1.9 million, or 15.4%, to $14.2 million (11.0% of its net
sales) for the year ended December 31, 2002 compared with $12.3 million
(9.8% of its net sales) for the year ended December 31, 2001. The
increase primarily resulted from additional personnel and related costs
of $1.4 million.

o Specialty Manufacturing's selling general and administrative expenses
decreased by $0.9 million, or 10.7%, to $7.5 million (13.9% of its net
sales) for the year ended December 31, 2002 compared with $8.4 million
(13.1% of its net sales) for the year ended December 31, 2001. The
decrease primarily resulted from reduced personnel and related costs.
Specialty Manufacturing's average general and administrative headcount
was reduced by 23% in 2002 compared to 2001.

o Corporate selling, general and administrative expenses increased by
$2.3 million, or 62.1%, to $6.0 million for the year ended December 31,
2002 compared to $3.7 million for the year ended December 31, 2001. The
increase primarily resulted from an increase of $0.6 million in
executive compensation and severance costs and due to a $1.3 million
increase in

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J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

workers' compensation insurance expense and prior year insurance
premium costs of $0.4 million.

Other income and expense. Closed and excess facility costs include $0.2 million
for the write down of the Morgan facility in Mexico to its estimated realizable
value. Morgan ceased production at the facility during 2002 and sold the
facility in 2003.

During 2002, we liquidated certain life insurance policies (covering certain
former employees) related to our former Lowy operations. We received cash
proceeds of $0.9 million which were used to pay down revolving credit facility
borrowings and we recorded a gain of $0.1 million on the sale. Specialty
Manufacturing received approximately 18,000 shares of common stock in an
insurance company as a result of its demutualization. Specialty Manufacturing
sold the shares and realized a gain of approximately $0.6 million; the net
proceeds of $0.6 million were used to pay down revolving credit facility
borrowings. The gains on the liquidation of the life insurance policies and the
sale of stock are included in Other Income for the period ended December 31,
2002.

Operating income. Reflecting the effect of the factors listed above,
consolidated operating income decreased by $12.6 million, or 69.2%, to $5.6
million (1.7% of net sales) for the year ended December 31, 2002 compared to
$18.2 million (5.0% of net sales) for the year ended December 31, 2001.

o Morgan's operating income decreased by $0.6 million, or 10.3%, to $5.2
million (3.5% of its net sales) for the year ended December 31, 2002
compared to $5.8 million (3.3% of its net sales) for the year ended
December 31, 2001, primarily as a result of lower sales.

o Truck Accessories' operating income decreased by $5.8 million, or
70.7%, to $2.4 million (1.9% of its net sales) for the year ended
December 31, 2002 compared to $8.2 million (6.5% of its net sales) for
the year ended December 31, 2001, primarily as a result of higher
manufacturing costs per unit at the Leer division resulting from
product design and pricing issues during 2002.

o Specialty Manufacturing's operating income decreased by $4.0 million,
or 50.6%, to $3.9 million (7.3% of its net sales) for the year ended
December 31, 2002 compared to $7.9 million (12.3% of its net sales) for
the year ended December 31, 2001, primarily as a result of lower sales.

Interest expense. Interest expense decreased by $0.7 million, or 5.3%, to $12.5
million for the year ended December 31, 2002, compared to $13.2 million for the
year ended December 31, 2001. The decrease resulted from lower interest rates
and lower average borrowings under our revolving credit facility as a result of
lower economic activity. Average monthly borrowings under our revolving credit
facility decreased $3.8 million or 21% during 2002 to $13.9 million compared to
$17.7 million during 2001.

Income tax benefit. The income tax benefit for the year ended December 31, 2002
of $1.2 million differs from amounts computed based on the federal statutory
rates principally due to state and foreign taxes in jurisdictions where net
operating losses were not available to reduce current period taxable income and
a $0.5 million valuation allowance recorded against net operating loss
carryforwards in continuing operations.

23

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

DISCONTINUED OPERATIONS

Specialty Manufacturing Group-KWS operations. During the fourth quarter of 2002,
we committed to a plan to sell principally all of the assets, excluding accounts
receivable and excluding the liabilities of the KWS bulk material handling
operations of Specialty Manufacturing. The sale was completed effective December
31, 2002. We realized net cash proceeds of approximately $3.2 million from the
sale that were used to repay acquisition debt of approximately $0.8 million and
borrowings under our revolving credit facility of approximately $2.4 million. We
recorded a loss on disposal of approximately $1.9 million which included the
write down of related goodwill of $1.2 million, assets of $300,000 and accrued
costs related to the sale of $339,000, including environmental remediation costs
of $55,000. During the year ended December 31, 2003 losses of KWS were $66,000,
net of incomes taxes, and consisted primarily of increases to worker
compensation insurance reserves for claims made prior to the sale of the
company. For the year ended December 31, 2002, net sales of KWS were $7.8
million, and the operation lost $3.4 million, net of income taxes.

Specialty Manufacturing-Marlin operations. Specialty Manufacturing's Marlin
Operation was one of five of our locations that manufactures expandable foam
plastic packaging materials. The operation lost a major customer during 2001 and
a failure to replace the lost production volume resulted in our decision, during
2002, to close or sell the operation. An agreement to transfer the operations to
a third party was reached during the fourth quarter of 2002 and the transfer was
completed effective January 31, 2003. The third party assumed the operating
lease on the premises and acquired the inventory, principally finished goods at
book value. Cash proceeds of approximately $0.2 million from the transaction,
received during January 2003, were used to repay borrowings under our revolving
credit facility. We recorded a loss on disposal of approximately $0.2 million
which included the write down of remaining property, plant and equipment. During
the year ended December 31, 2003, there was no income or loss associated with
these operations. For the year ended December 31, 2002 net sales of the
Specialty Manufacturing-Marlin operations were $4.1 million and the losses, net
of income taxes, were $748,000.

Truck Accessories Gem Top Operations. During the fourth quarter of 2002, we
committed to a plan to sell principally all of the assets, less certain of the
liabilities of the Gem Top operations of Truck Accessories. The sale was
completed effective February 28, 2003. We realized net cash proceeds of
approximately $840,000 from the sale. We accrued certain closing costs and wrote
down the value of inventory and fixed assets and recorded an impairment loss of
approximately $0.6 million as of December 31, 2002. During the year ended
December 31, 2003 and 2002, net sales of the Gem Top division were $0.9 million
and $6.1 million, respectively, and operating losses, net of income taxes, were
$0.2 million and $1.5 million, respectively.

Other Discontinued Operations. During 2003 we received a settlement from a class
action suit against a supplier of approximately $0.3 million and proceeds from a
surrendered life insurance policy of approximately $0.1 million that were
related to operations sold in 1999. Net income from these transactions of $0.3
million was included in Losses from Discontinued Operations of the Company for
the year ended December 31, 2003. During the first quarter of 2002, we decided
to cease production of polymer based products at Truck Accessories and the
closure of this division was completed during the fourth quarter. Limited
production of certain polymer-based tonneau models continued in 2002. We wrote
off the product molds and inventory associated with the discontinued products of
approximately $0.6 million and expensed approximately $0.7 million

24

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

associated with potential future product warranty costs during the year ended
December 31, 2001. Net sales from the polymer products division for the year
ended December 31, 2002, were $0.4 million and the loss, net of income taxes,
was $0.5 million. Additionally, during 2002, Truck Accessories incurred an
expense related to the Truck Accessories distribution operations that were sold
during the year ended December 31, 1999 of $146,000 net of applicable taxes. We
do not believe our ongoing obligations with respect to our discontinued
operations will have a material impact on our financial condition or results of
operations.

LIQUIDITY AND CAPITAL RESOURCES

We have funded our operations primarily with cash generated by operations and
borrowings under our existing revolving loan agreement. Our cash balances are
restricted in that daily cash collected from our customers is deposited into
accounts controlled by our revolving lender and is transferred to pay down
borrowings. Our cash requirements are funded daily by our revolving lender
provided we have available funds. When our business has generated excess cash,
we have borrowed under the revolver to pay down long-term debt.

The ability to borrow under the existing revolving loan agreement depends on the
amount of eligible collateral, which, in turn, depends on certain advance rates
applied to the value of accounts receivables and inventory. At December 31,
2003, we had unused available borrowing capacity of approximately $19.5 million
under the terms of the revolving loan agreement. Borrowings under the revolving
loan agreement at December 31, 2003 were $13.9 million compared to $15.9 million
at December 31, 2002. The amounts borrowed under our revolving loan agreement
tend to increase during the summer months with the seasonal increase in business
experienced by Morgan and Truck Accessories.

The revolving loan agreement was renewed, effective March 26, 2003, and
automatically renews for a one year period unless cancelled by either party to
the agreement at least 60 days prior to its anniversary date of March 30, 2004.
We have not received or given notice of cancellation.

Working capital at December 31, 2003 was $11.5 million compared to $5.9 million
at December 31, 2002. The increase was primarily due to increased receivables
and inventory partially offset by the increase in payables in response to the
increase in sales during the year ended December 31, 2003. Average days sales
open during 2003 and 2002 were approximately 26, inventory turns for the year
ended December 31, 2003 improved to 12.6 compared to 12.4 for 2002 and average
days payable open for 2003 and 2002 were 25 and 19 respectively. We continue to
take advantage of economic discounts whenever possible. We continue to focus on
the management of working capital as a critical component of cash flow.

Operating cash flows. Operating activities during the year ended December 31,
2003 generated cash of $18.2 million compared to $0.5 million of cash used
during 2002 and $24.1 million of cash generated during 2001. The difference
between 2002 and 2003 primarily resulted from the difference between our net
income for the years. The difference between 2001 and 2002 resulted primarily
from the difference between net losses between the years ($2.2 million in 2001
and $12.1 million in 2002) and a reduction in accounts receivable of $7.7
million during 2001, as compared to an increase in accounts receivable of $1.5
million in 2002.

Investing cash flows. Cash flows used in investing activities increased to $2.4
million during the year ended December 31, 2003 compared to $2.3 million during
the year ended December 31, 2002

25

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

and $8.5 million during the year ended December 31, 2001. Capital expenditures
for the year ended December 31, 2003 was $4.0 million compared to $5.5 million
in 2002 and $7.9 million in 2001. Our capital expenditures are primarily for the
replacement of equipment and product mold costs for the Truck Accessories
operations. Product mold costs were $1.7 million in 2003.

The decrease in capital expenditures from 2002 to 2003 was offset by a $2.2
million decrease in cash generated from investing activities by discontinued
operations, primarily resulting from the sale of four operations during 2002.
During 2001, discontinued operations used $0.6 million in investment activities,
primarily for capital expenditures.

As of December 31, 2003, we had no significant open commitments for capital
expenditures.

On May 5, 2003, Morgan acquired certain assets, primarily inventory, of a truck
body manufacturer, located in Riverside, California. Morgan paid approximately
$400,000, in cash, for the assets and assumed certain liabilities of
approximately $240,000. Morgan also sold its Monterey, Mexico facility during
the year and realized proceeds of $0.8 million that are included in investing
cash flows.

Financing cash flows. We used $15.4 million of cash in financing activities for
the year ended December 31, 2003, compared with $2.8 million of cash generated
by financing activities for the year ended December 31, 2002 and $15.4 million
of cash used in financing activities for the year ended December 31, 2001.
During 2003, we repaid $1.6 million on our revolving credit facility, compared
with net borrowings of $7.9 million during 2002, as a result of improved
operating cash flows during 2003. During 2001, we paid down $15.4 million of
revolving credit borrowing. In addition, because we had available cash during
2003, we repaid $9.9 million of long term debt and capital lease obligations,
principally as a result of our offer to repurchase our senior secured notes
during September 2003. During 2002, we repaid $2.5 million of long term debt and
capital lease obligations. During 2001, we repaid $2.6 million of long term debt
and capital lease obligations. In addition, during 2003, we incurred $2.7
million of exchange offer consent fees and debt costs in 2003, with no
comparable outflow during 2002 and 2001.

Long-term debt. Effective June 10, 2003, we successfully completed the exchange
of $84,985,000 of our 12.50 % Senior Notes due 2004 for the same principal
amount of 12.50% Senior Secured Notes due 2007, which resulted in extending the
maturity of the principal portion of our long term debt by three years. We paid
a consent fee of approximately $2,550,000, in cash at the time of closing of the
exchange offer to the holders. The consent fee was capitalized as deferred loan
costs and will be amortized over the life of the new notes. In connection with
the exchange offer, we secured our long-term debt with substantially all of our
assets. The old notes had been unsecured. At the time of the exchange offer, we
had been experiencing lower operating cash flows since 2001. We did not project
to have sufficient cash to pay the notes at maturity in 2004, and uncertain
economic and bond market conditions at the time caused us to extend and secure
our debt through the exchange offer, rather than refinance the debt through a
new debt offering.

We made an offer to purchase up to $12.5 million of the new notes at a price of
between $870 and $920 per $1,000 principal amount effective August 29, 2003. The
offer expired on September 29, 2003 and we purchased and cancelled $9.1 million
aggregate principal amount of new notes at $920 per $1,000 principal amount of
new notes using borrowings under the revolving loan agreement.

26

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

Under the terms of our senior secured notes, if we do not retire an additional
approximately $3.3 million of notes by May 15, 2006, the interest rate on the
notes will increase by 2.5% or until such time as such amount of notes are
retired.

Our total funded debt was $91.9 million and $103.7 million as of December 31,
2003 and 2002, respectively. Funded debt decreased $11.8 million primarily as a
result of the purchase of the new notes and a $1.6 million decrease in
borrowings under the revolving loan agreement. The reduction in long-term debt
resulting from the purchase and cancellation of the new notes will reduce
interest expense by approximately $0.5 million per year at current short term
interest rates.

At December 31, 2003, the Consolidated EBITDA Coverage Ratio, as defined in the
indenture relating to our senior secured notes was 3:1. As a result, we are able
to incur additional borrowings for capital expenditures. Our revolving loan
agreement and such indenture restrict our ability to, incur debt, pay dividends,
and undertake certain corporate activities. We are in compliance with the terms
of the revolving loan agreement and such indenture.

Assessment of resources. We continually evaluate, depending on market
conditions, the most efficient use of our capital and contemplate various
strategic options, which may include, without limitation, restructuring our
business, indebtedness or capital structure. Accordingly, we or our subsidiaries
may from time to time consider, among other things, purchasing, refinancing or
otherwise retiring certain outstanding indebtedness (whether in the open market
or by other means), public or private issuances of debt or equity securities,
joint venture transactions, new borrowings, tender offers, exchange offers or
any combination thereof, although there can be no assurances that such financing
sources will be available on commercially reasonable terms. There can be no
assurances that these strategic options, if pursued, will be consummated.

Proposed Refinancing. We have begun the process of refinancing our existing debt
with a proposed offering of new senior notes and a new revolving credit
facility. At the same time as the proposed offering we will acquire from John
Poindexter the stock of Morgan Olson, a truck body manufacturing company that he
acquired effective July 14, 2003. The net proceeds from our new credit facility
and this offering will be used to repay amounts outstanding under our existing
credit facility, Morgan Olson's term and revolver loans of $17.4 million as of
December 31, 2003 and to redeem our 12 1/2% Senior Secured Notes due May 2007.
There can be no assurances that the refinancing will occur. We believe that we
will have adequate resources to meet our working capital and capital expenditure
requirements consistent with past trends and practices for at least the next 12
months. Additionally, we believe that our borrowing availability under the new
credit facility or the existing facility will satisfy our cash requirements for
the coming year, given our anticipated additional capital expenditures, working
capital requirements and known obligations.

The Company commits to the purchase of certain amounts of aluminum for
the next operating year based on expected levels of production and does not have
any material commitments to acquire new capital equipment as of December 31,
2003.

27

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

The Company's future obligations are:

OTHER MATTERS

We are significantly leveraged and had a $8.5 million stockholder's deficit at
December 31, 2003 compared to a deficit of $18.1 million at December 31, 2002.
Through our floating rate debt, we are subject to interest rate fluctuations. We
operate in cyclical businesses and the markets for our products are highly
competitive. In addition, we have two customers that accounted for 22% of 2003
consolidated net sales. The combination of these factors, which are outside our
control, cause us to be subject to changes in economic trends and new business
developments.

We had net operating loss carryforwards of approximately $21.8 million for U.S.
federal income tax purposes at December 31, 2003, which, if not utilized, will
begin to expire in 2008. We have recorded a valuation allowance of $1.9 million
as of the December 31, 2003 against the net operating loss carryforwards as we
believe that the corresponding deferred tax asset may not be realizable. We have
considered prudent and feasible tax planning strategies in assessing the need
for the valuation allowance. There are significant assumptions inherent in our
prudent and feasible tax planning strategies. Changes in these assumptions could
impact the estimated amount of deferred tax assets realized by these tax
planning strategies.

In the event that market conditions necessitate implementing the strategic
options available to us including the refinancing of our debt or the sale of one
or more of its businesses, management believes that such events would generate
sufficient taxable income to utilize its net operating loss carryforwards
against which a valuation allowance has not been recorded.

Historically, inflation has not materially affected our business, although raw
materials and general operating expenses, such as salaries and employee
benefits, are subject to normal inflationary pressures. We believe that,
generally, it has been able to increase its selling prices to offset increases
in costs due to inflation.

The Company pays fees to a corporation, owned by Mr. Poindexter, for services
provided by Mr. Poindexter. Mr. Poindexter does not receive a salary from the
Company. The Company charges the Subsidiaries for their use of funds and for
stewardship services provided to them by the Company.

Environmental Matters The Company's operations are subject to numerous
environmental statutes and regulations, including laws and regulations affecting
its products, the materials used in and

28

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

wastes generated by manufacturing the Company's products and the investigation
and cleanup of contaminated sites. In addition, certain of the Company's
operations are subject to federal, state and local environmental laws and
regulations that impose limitations on the discharge of pollutants into the air
and water of the United States or that impose workplace health and safety
requirements. Pursuant to these laws, some of the Company's operations require
permits which may restrict the Company's operations and which are subject to
renewal, modification or revocation by issuing authorities. The Company also
generates hazardous and non-hazardous wastes. The Company has received notices
of noncompliance, from time to time, with respect to its operations, which are
typically resolved by correcting the conditions and the payment of minor fines,
none of which individually or in the aggregate has had a material adverse effect
on the Company. Further, we cannot assure you that the Company has been or will
be at all times in compliance with all of these requirements, including those
related to reporting or permit restrictions or that the Company will not incur
material fines, penalties, costs or liabilities in connection with such
requirements or a failure to comply with them. The Company expects that the
nature of its operations will continue to make it subject to increasingly
stringent environmental and workplace health and safety regulatory standards and
to the increasingly stringent enforcement of those standards. Although the
Company believes it has made sufficient capital expenditures to maintain
compliance with existing laws and regulations, future expenditures may be
necessary, as compliance standards and technology change. Unforeseen significant
expenditures required to maintain such future compliance, including unforeseen
liabilities, could limit expansion or otherwise have a material adverse effect
on the Company's business and financial condition.

In a memorandum dated January 10, 2002 issued by the Georgia Environmental
Protection Division ("EPD"), Truck Accessories was notified that it may be a
"Potentially Responsible Party" in a Georgia state superfund site. Although a
precise estimate of liability cannot currently be made with respect to this
site, the Company currently believes that its proportionate share, if any, of
the ultimate costs related to any necessary investigation and remedial work at
this site will not have a material adverse effect on the Company. The Company
has not recorded a liability related to this matter.

On January 29, 2003, the United States Environmental Protection Agency ("USEPA")
notified Truck Accessories that it had reviewed a self-disclosure regarding
failure to file certain forms allegedly required pursuant to Section 313 of the
Emergency Planning and Community Right-to-Know Act, and regulations promulgated
thereunder. The Company is engaged in settlement discussions to resolve these
and other potential claims. USEPA has proposed a penalty of $11,045. The Company
has accrued expenses of $20,000 and has implemented four Supplemental
Environmental Projects, undertaken in connection with this matter, that require
approximately $125,000 of capital expenditures.

In October 2003, Truck Accessories was notified that it may be a potentially
responsible party at a United States Environmental Protection Agency Superfund
Site in California. The Company has executed a tolling agreement with the EPA
and has been invited to attend a de minimis potentially responsible party
settlement conference being held by the EPA. Although the Superfund statute
provides for joint and several liability and a precise estimate of liability
cannot be determined at this time, the Company currently believes that our
proportionate share, if any, of the ultimate cost related to any necessary
investigation and remedial work at the site will not have a material adverse
effect on the Company.

A self-audit conducted in 2002 revealed that a machine shop operated by MIC
Group may have failed to file certain forms required pursuant to Section 313 of
the Emergency Planning and Community Right-to-Know Act, and regulations
promulgated thereunder. The Company disclosed this situation to the EPA,
completed all required reports and filed them with the appropriate agencies in
2002. Recently, the EPA requested additional information, which the Company has
provided. At this time we do not know whether the EPA will seek to penalize the
Company for these reporting violations.

During a Phase II Environmental Assessment in November 2002 at KWS, in
preparation for its sale, two areas of potential contamination were identified.
As a part of the sale agreement, a Phase III project was undertaken to determine
the exact level of contamination and potential remediation, if necessary. The
Company has entered into a "Voluntary Clean Up Project" with the Texas
Commission on Environmental Quality that is expected to be completed by November
2003. Although a precise estimate of liability cannot currently be made with
respect to the contamination levels or potential remediation, the Company has
incurred costs of approximately $60,000, as of December 31, 2003, and it
believes that the ultimate cost of this matter will be approximately

29

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

$70,000. Costs incurred over and above $50,000 should be reimbursable to the
company by the previous owner of KWS.

On February 20, 2004, the EPA sent a request for information to the Truck
Accessories facility in Milton, Pennsylvania. The information request states
that it is pursuant to the EPA's authority under the Resource Conservation
Recovery Act, which is the federal statue regulating the handling of hazardous
waste. The request asks for a large volume of information and documents related
to the Milton facility's handling and recordkeeping related to hazardous
wastes. Included with the information request was a copy of a September 2003
inspection report on which the EPA and the Pennsylvania Department of
Environmental Protection investigators appear to have indicated non-compliance
by Truck Accessories with some Resource Conservation Recovery Act standards.
Truck Accessories is in the initial stages of gathering the information
necessary to respond to the request. At this time, we do not know if the EPA or
the Pennsylvania Department will take enforcement action against Truck
Accessories, and we cannot estimate the financial impact of such an enforcement
action, if any, which could be material.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to certain market risks, including interest rate risk and
foreign currency risk. The adverse effects of potential changes in these market
risks are discussed below. The sensitivity analyses presented do not consider
the effects that such adverse changes may have on overall economic activity, nor
do they consider additional actions management may take to mitigate the
Company's exposure to such changes. Actual results may differ. See the Notes to
the Consolidated Financial Statements for a description of the Company's
accounting policies and other information related to these financial
instruments.

INTEREST RATES

Variable-Rate Debt. As of December 31, 2003, we had approximately $13.9 million
outstanding under our asset-based, revolving credit facilities. The interest
rates on the revolving credit facilities are based upon a spread above either
the Prime Interest Rate or the London Interbank Overnight Rate (LIBOR). Which
rate used is determined at our option. The amount outstanding under this
revolving credit facility will fluctuate throughout the year based upon working
capital requirements. Based upon the monthly average of $15.1 million
outstanding under the revolving credit facilities during 2003, a 1% change in
the interest rate would have caused a change in interest expense of
approximately $151,000 on an annual basis. Our objective in maintaining these
variable rate borrowings is the flexibility obtained regarding early repayment
without penalties and lower overall cost as compared with fixed-rate borrowings.

Fixed-Rate Debt. As of December 31, 2003 and 2002, we had $75.9 million and
$85.0 million, respectively of 12 1/2% Senior Notes, long-term debt,
outstanding, with an estimated fair value of approximately $70.6 million and
$69.7 million based upon their publicly traded value at December 31, 2003 and
2002, respectively. Market risk, estimated as the potential increase in fair
value resulting from a hypothetical 1.0% decrease in interest rates, was
approximately $2.1 million as of December 31, 2003 and $1.3 million as of
December 31, 2002.

FOREIGN CURRENCY

Raider Industries, a subsidiary of Truck Accessories, has two manufacturing
plants in Canada, which generated revenues of approximately $23.3 million during
the year ended December 31, 2003. The functional currency of Raider Industries
is the Canadian Dollar. We do not currently employ risk management techniques to
manage this potential exposure to foreign currency fluctuations; however, the
majority of goods manufactured in Canada are exported and sold to customers in
the United States. Therefore, a weakening of the United States Dollar in
relation to the Canadian Dollar may have the effect of decreasing Raider
Industries' gross margin, assuming that the United States sales price remains
unchanged.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Forward-looking statements in this report including, without limitation,
statements relating to the Company's plans, strategies, objectives,
expectations, intentions and adequacy of resources, are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

30

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES

Investors are cautioned that such forward-looking statements involve risks and
uncertainties including without limitation, the following: (1) the Company's
plans, strategies, objectives, expectations and intentions are subject to change
at any time at the discretion of the Company; (2) other risks and uncertainties
indicated from time to time in the Company's filings with the Securities and
Exchange Commission.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS:............................................................... Page
----

Report of Independent Auditors............................................................... 32
Consolidated Balance Sheets as of December 31, 2003 and 2002................................. 33
Consolidated Statements of Operations for the years ended
December 31, 2003, 2002 and 2001.................................................... 34
Consolidated Statements of Cash Flows for the years ended
December 31, 2003, 2002 and 2001.................................................... 35
Consolidated Statements of Stockholder's Deficit for the years
Ended December 31, 2003, 2002 and 2001.............................................. 36
Notes to Consolidated Financial Statements................................................... 37

31

REPORT OF INDEPENDENT AUDITORS

Board of Directors and Stockholder
J.B. Poindexter & Co., Inc.

We have audited the accompanying consolidated balance sheets of J.B. Poindexter
& Co., Inc. and subsidiaries as of December 31, 2003 and 2002 and the related
consolidated statements of operations, stockholder's deficit, and cash flows for
each of the three years in the period ended December 31, 2003. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of J.B.
Poindexter & Co., Inc. and subsidiaries at December 31, 2003 and 2002, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 2003, in conformity with accounting
principles generally accepted in the United States.

As discussed in Note 2 to the Consolidated Financial Statements, the Company
adopted Statement of Financial Accounting Standard 142. "Goodwill and Other
Intangible Assets" in 2002

ERNST & YOUNG LLP

Houston, Texas
February 23, 2004

32

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

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

33

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)

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

34

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

The accompanying notes are an integral part of these
consolidated financial statements

35

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
(DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)

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

36

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION & BUSINESS:

J.B. Poindexter & Co., Inc. ("JBPCO") and its subsidiaries (the "Subsidiaries",
and together with JBPCO, the "Company") operate primarily manufacturing
businesses principally in North America. JBPCO and the Subsidiaries are owned
and controlled by John Poindexter.

MORGAN TRAILER MANUFACTURING CO. ("MORGAN") manufactures truck bodies for dry
freight and refrigerated vans (excluding those made for pickup trucks and
tractor-trailer trucks). Its customers include rental companies, truck dealers
and companies that operate fleets of delivery vehicles. The principal raw
materials used by Morgan include steel, aluminum, fiberglass reinforced plywood,
hardwood and oil acquired from a variety of sources

TRUCK ACCESSORIES GROUP, INC. ("TRUCK ACCESSORIES") manufactures pickup truck
"caps" and tonneau covers, which are fabricated enclosures that fit over the
open beds of pickup trucks, converting the beds into weatherproof storage areas.
Truck Accessories includes Leer, Century Fiberglass (Century), Raider Industries
Inc. (Raider) and Midwest Truck Aftermarket (MTA). The principal raw materials
used by Truck Accessories include resin, fiberglass, paint, locks and windows

SPECIALTY MANUFACTURING GROUP ("SPECIALTY MANUFACTURING") comprises MIC Group
("MIC Group") and EFP Corp ("EFP"). MIC Group is a manufacturer, investment
caster and assembler of precision metal parts for use in the worldwide oil and
gas exploration, the automotive and aerospace industries and other general
industries. EFP molds, fabricates and markets expandable foam products which are
used as casting patterns, packaging, shock absorbing and materials handling
products primarily by the automotive, electronics, furniture, appliance and
other industries. It also manufactures products used as thermal insulators. The
principal raw materials used by Specialty Manufacturing are expandable
polystyrene, polypropylene, polyethylene, resins, ferrous and non-ferrous
materials including stainless steel, alloy steels, nickel-based alloys,
titanium, brass, beryllium-copper alloys and aluminum.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation. The consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States. All intercompany accounts and transactions have been eliminated
in consolidation.

Restricted Cash. At December 31, 2003 and 2002, substantially all of the
Company's cash is restricted pursuant to the terms of the revolving credit
facility (See Note 6).

Revenue Recognition. Revenue is recognized upon shipment of the product to
customers, except for Morgan where revenue is recognized when title transfers to
the customer upon final body assembly, quality inspection and customer
notification. We classify amounts billed to customers related to shipping and
handling as revenue. The costs associated with the shipping and handling revenue
are included in cost of sales.

Accounts Receivable. Accounts receivable are stated net of an allowance for
doubtful accounts of $834,000 and $828,000 at December 31, 2003 and 2002,
respectively. The Company establishes an allowance for doubtful accounts
receivable on a case by case basis when it believes that the required payment of
specific amounts owed is unlikely to occur. During the years ended December 31,
2003, 2002 and 2001, the Company charged to expense, $198,000, $195,000 and
$984,000 respectively, as a provision for doubtful accounts and deducted from
the allowance $192,000, $238,000 and $942,000, respectively, for write-offs of
bad debts. The carrying amounts of trade receivables approximate fair value
because of the short maturity of those instruments. The Company is not aware of
any significant

37

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

credit risks related to its customer base and does not generally require
collateral or other security to support customer receivables.

Inventories. Inventories are stated at the lower of cost or market. Cost is
determined by the first-in, first-out (FIFO) method.

Property, Plant and Equipment. Property, plant and equipment, including property
under capital leases, are stated at cost. The cost of property under capital
leases represents the present value of the future minimum lease payments at the
inception of the lease. Depreciation and amortization is computed by using the
straight-line method over the estimated useful lives of the applicable assets.
The cost of maintenance and repairs is charged to operating expense as incurred
and the cost of major replacements and significant improvements is capitalized.
The Company records impairment losses on long-lived assets used in operations
when events and circumstances indicate that the assets may be impaired and the
undiscounted cash flows estimated to be generated by those assets are less than
the carrying amounts of those assets.

Warranty. Morgan provides product warranties for periods up to five years. Truck
Accessories provides a warranty period, exclusive to the original truck owner,
which is, in general but with exclusions, one year for parts, five years for
paint and lifetime for structure. A provision for warranty costs is included in
cost of sales when goods are sold based on historical experience and estimated
future claims. The Company had accrued warranty costs of $2,682,000 and
$2,519,000 at December 31, 2003 and 2002, respectively. During the years ended
December 31, 2003, 2002 and 2001, the Company charged to expense $1,363,000,
$913,000 and $106,000 and deducted from the accrual costs of $1,200,000,
$1,090,000 and $1,337,000, respectively.

Advertising and Research and Development Expense. The Company expenses
advertising costs and R&D costs as incurred. During the years ended December 31,
2003, 2002 and 2001, advertising expense was approximately $1,896,000,
$1,793,000 and $1,774,000, respectively and R&D expense was $1,241,000,
$1,978,000 and $1,884,000, respectively.

Income Taxes. The Company accounts for income taxes under the provisions of
Statement of Financial Accounting Standards (SFAS) No. 109. Under SFAS No. 109,
deferred tax assets and liabilities are computed based on the difference between
the financial statement and income tax bases of assets and liabilities using the
enacted tax rates.

The Company records a valuation allowance to reduce deferred tax assets to the
amount that is more likely than not to be realized. The Company has considered
on-going prudent and feasible tax planning strategies in assessing the need for
the valuation allowance. There are significant assumptions inherent in the
Company's prudent and feasible tax planning strategies. Changes in these
assumptions would impact the estimated amount of deferred tax assets realized by
these tax planning strategies. Should the Company determine that it is more
likely than not able to realize the deferred tax assets in the future in excess
of the net recorded amount, an adjustment to the valuation allowance would
increase income in the period such determination was made. Likewise, should the
Company determine that it is more likely than not unable to realize all or part
of the net deferred tax asset in the future, an adjustment to the valuation
allowance would reduce income in the period such determination was made.

Self-Insurance Risks - The Company utilizes a combination of insurance coverage
and self-insurance programs for property, casualty, including workers'
compensation and health care insurance. The Company records an actuarially
determined, fully developed self insurance reserve to cover the self

38

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

insured portion of these risks based on known facts and historical industry
trends. Changes in the assumptions used by the actuary could result in a
different self-insurance reserve.

Contingent Liabilities - Reserves are established for estimated environmental
and legal loss contingencies when a loss is probable and the amount of the loss
can be reasonably estimated. Revisions to contingent liabilities are reflected
in income in the period in which different facts or information become known or
circumstances change that affect the previous assumptions with respect to the
likelihood or amount of loss. Reserves for contingent liabilities are based upon
the assumptions and estimates regarding the probable outcome of the matter.
Should the outcome differ from the assumptions and estimates, revisions to the
estimated reserves for contingent liabilities would be required.

Use of Estimates. The preparation of financial statements in conformity with
accounting principles generally accepted in the United States 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.

Reclassifications. Certain prior year amounts have been reclassified to conform
to the fiscal year 2003 presentation. Lowy Group was a subsidiary that was
disposed of in 1999 and treated as a discontinued operation. During the year
ended December 31, 2002, the Company recorded a gain of approximately $91,000
net of income taxes from the surrender of life insurance policies attributed to
Lowy Group. The gain was recorded in other income and expense and has been
reclassified to discontinued operations in the financial statements presented.

Recently Issued Accounting Standards. In January 2003 the FASB issued FIN 46,
Consolidation of Variable Interest Entities. FIN 46 requires that companies that
control another entity through interests other than voting interest should
consolidate the controlled entity. Interpretation 46 initially applied to
variable interest entities created after January 31, 2003 and to variable
interest entities in which a company obtained an interest after that date. The
effective date of FIN 46 has been deferred to December 31, 2003 for all
interests in variable interest entities existing prior to January 31, 2003.
Since the Company had no such interests arising subsequent to or before January
31, 2003, this interpretation has had no impact on its consolidated results of
operations or consolidated balance sheet to date.

Effective January 1, 2003, the Company adopted SFAS 146, "Accounting for Costs
Associated with Disposal or Exit Activities", which requires liabilities for
costs associated with exit or disposal activities to be recognized when the
liabilities are incurred, rather than when an entity commits to an exit plan.
The new rule changes the timing of liability and expense recognition related to
exit or disposal activities, but not the ultimate amount of such expenses. This
SFAS has had no impact on the Company's consolidated results of operations or
consolidated balance sheet.

Prior to the adoption of SFAS No. 142, Goodwill and Other Intangible Assets, the
excess of the purchase price over the estimated fair value of net assets
acquired was accounted for as goodwill and was amortized on a straight lines
basis over a 20 to 40 year life. In accordance with SFAS No. 142, goodwill is
tested at the reporting unit level, which is defined as an operating segment or
a component of an operating segment that constitutes a business for which
financial information is available and is regularly reviewed by management.
Management has determined that the Company's reporting units are the same as its
operating segments for the purpose of allocating goodwill and the subsequent
testing of goodwill for impairment with the exception of the Specialty
Manufacturing operating segment.

39

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Management has determined that Specialty Manufacturing has two reporting units
that include EFP and MIC Group. No impairment test was performed on EFP because
the reporting unit had no goodwill or indefinite-lived intangible assets at
January 1, 2002.

During the first quarter of 2002, the Company implemented SFAS No. 142 and
performed the initial impairment test of goodwill on its three reporting units
with goodwill. The test was applied utilizing the estimated fair value of the
reporting units as of January 1, 2002. The fair value of the Company's reporting
units is based on acquisition multiples, which are derived from information and
analysis of recent acquisitions in the market place for companies with similar
operations. No impairment was recorded in any of the Company's three reporting
units with goodwill. The Company completed its subsequent annual impairment
review effective October 1, 2003 and 2002, which indicated that there was no
impairment (See also Note 5). Pro forma results for the year ended December 31,
2001, assuming the discontinuation of amortization of goodwill as of January 1,
2001, are shown below:

3. SEGMENT DATA:

The Company operates and manages its subsidiaries within the separate
business segments described in Note 1. The Company evaluates performance and
allocates resources based on the operating income of each segment. The
accounting policies of the reportable business segments are the same as those
described in the summary of significant accounting policies. Effective March 1,
2002 EFP was included in the Specialty Manufacturing segment for all periods
presented. EFP represented $21,821,000, $22,498,000 and $22,614,000 of Specialty
Manufacturing's net sales for the years ended December 31, 2003, 2002 and 2001,
respectively and $7,230,000, $8,063,000 and $8,791,000 of Specialty
Manufacturing's assets as of December 31, 2003, 2002 and 2001, respectively.

The following is a summary of the business segment data for the years
ended December 31, (dollars in thousands):

40

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Morgan has two customers (truck leasing and rental companies) that accounted
for, on a combined basis, approximately 41%, 35% and 39% of Morgan's net sales
during 2003, 2002 and 2001, respectively. Specialty Manufacturing has one
customer in the international oil field service industry that accounted for
approximately 15%, 14% and 21% of Specialty Manufacturing's net sales during
2003, 2002 and 2001, respectively.

The Company's operations are located principally in the United States. However,
Raider is located in Canada. Long-lived assets relating to these foreign
operations were $3,700,000 and $4,188,000 at December 31, 2003 and 2002,
respectively. Consolidated net sales include $15,124,000, $13,633,000 and
$13,827,000 in 2003, 2002 and 2001, respectively, of sales to customers outside
the United States.

JBPCO (Corporate) operating losses for all periods comprise the costs of the
parent company office and personnel that provide strategic direction and support
to the subsidiary companies.

4. INVENTORIES:

Consolidated net inventories consist of the following (dollars in
thousands):

Inventories are stated net of an allowance for shrinkage, excess and obsolete
inventory of $1,720,000 and $2,123,000 at December 31, 2003 and 2002,
respectively. During the years ended December 31,

41

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2003, 2002 and 2001, the Company charged to expense $90,000, $378,000 and
$1,044,000, respectively, as a provision for excess and obsolete inventory and
deducted from the allowance $493,000, $393,000 and $1,296,000, respectively, for
write-offs of excess and obsolete inventory.

5. LONG LIVED ASSETS

Property, plant and equipment, as of December 31, 2003 and 2002,
consisted of the following (dollars in thousands):

Machinery and Equipment included approximately $1,030,000 and $966,000 of
equipment at cost recorded under capital leases as of December 31, 2003 and
2002.

Depreciation expense was $8,595,000, $9,136,000 and $9,221,000 and included
$151,000, $149,000 and $93,000 for assets recorded under capital leases, for the
years ended December 31, 2003, 2002 and 2001, respectively.

Other assets and goodwill as of December 31, 2003 and 2002, consist of
the following (dollars in thousands):

Amortization expense was $260,000, $132,000 and $1,184,000 for the years ended
December 31, 2003, 2002 and 2001. The amortization of deferred loan costs were
$692,000, $400,000 and $400,000 for the years ended December 31, 2003, 2002 and
2001 and are projected to be $912,000 for the 2004, 2005 and 2006 years and
$456,000 in 2007. See also Note 16 related to the Proposed Refinancing and
Acquisition which if completed could result in the write off of all or a portion
of the debt issuance costs.

42

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company records impairment losses on long-lived assets used in operations
when events and circumstances indicate that the assets may be impaired and the
undiscounted cash flows estimated to be generated by those assets are less than
the carrying amounts of those assets. At December 31, 2003 goodwill comprised of
approximately $2,181,000, $10,684,000 and $3,951,000 for the Morgan, Truck
Accessories and MIC Group reporting units, respectively.

During 2002 Morgan discontinued operations at its Mexico plant and wrote down
the carrying value of the related buildings and improvements by $240,000 which
is included in closed and excess facility costs for the year ended December 31,
2002. Effective May 12, 2003, the Company sold the Morgan facility located in
Monterrey, Mexico. The Company received cash proceeds of approximately $865,000,
net of fees, which was used to pay down borrowings under the Revolving Loan
Agreement. There was no gain or loss on the transaction. Effective October 19,
2003, the Company sold the capital stock of Acero-Tec S.A. de C.V., for
approximately $157,000 net of foreign taxes and expenses. The gain on the sale
of the stock of $157,000 was included in other income for the year ended
December 31, 2003.

6. REVOLVING CREDIT AGREEMENTS:

Amounts outstanding under the Revolving Credit Agreement as of December
31, 2003 and 2002 were (in thousands):

The Company's Revolving Loan Agreement was renewed on March 26, 2003, and it
automatically renews each year, subject to cancellation by either party not less
than 60 days prior March 30 of that year. The Agreement allows the Company to
borrow funds and provides for the guarantee of letters of credit and certain
foreign exchange contracts, issued by the Company's banks, up to the lesser of
$40,000,000, reduced from $58,000,000 effective March 31, 2003, or an amount
based on advance rates applied to the total amounts of eligible accounts
receivable and inventories of the Subsidiaries. The advance rates are 85% for
receivables and 60% for inventory excluding work in process. The Revolving Loan
Agreement provides for borrowing at variable rates of interest, based on either
LIBOR (London Interbank Offered Rate, 1.1% at December 31, 2003) plus a margin
of 2% or U.S. prime rate (4.00% at December 31, 2003). Interest is payable
monthly including a fee of one-half of one percent on a portion of unused
borrowing availability. The Subsidiaries are guarantors of this indebtedness,
and inventory and receivables are pledged under the Revolving Loan Agreement. At
December 31, 2003, the Company had total borrowings of $13,860,000 and letters
of credit of $5,280,000 outstanding pursuant to the Revolving Loan Agreement. At
December 31, 2003 the Company's unused available borrowing under the Revolving
Loan Agreement totaled approximately $19,548,000 based on eligible accounts
receivable and inventories.

The Revolving Loan Agreement contains provisions allowing the lender to
accelerate debt repayment upon the occurrence of an event the lender determines
to represent a material adverse change. Balances outstanding under the Revolving
Loan Agreement are classified as current liabilities. The Revolving Loan
Agreement also contains restrictive covenants, which, among other things,
restrict the ability of the Company to dispose of assets, incur debt and
restrict certain corporate activities. At December 31, 2003, the Company was in
compliance with all covenants of the Revolving Loan Agreement. The Company
believes that it has adequate resources to meet its working capital and capital
expenditure requirements consistent with past trends and practices. At December
31, 2003, the Company was prohibited from paying dividends under the terms of
the Revolving Loan Agreement. Additionally, the

43

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Company's cash balance is restricted under the terms of the Revolving Loan
Agreement. The Company anticipates that it will be in compliance with all
covenants of the Revolving Loan Agreement in 2004.

7. LONG-TERM DEBT AND NOTE OFFERING:

Long-term debt as of December 31, 2003 and 2002 consists of the
following (Dollars in the table in thousands):

Effective June 10, 2003 the Company successfully completed the exchange
(Exchange Offer) of $84,985,000 of its 12.5% Senior Notes due May 2004 (Old
Notes) for $84,985,000 of 12.5% Senior Secured Notes due May 2007 (New Notes).
Effective September 29, 2003 the Company purchased for cash $9,131,000 of the
New Notes. The interest rate on the New Notes is 12.50% per year; provided that,
if on May 15, 2006, the Company has not retired (either through tender offers or
redemptions) at least an additional aggregate of $3,319,000 of New Notes since
the issue date of the New Notes, the interest rate on the New Notes will
increase by an additional 250 basis points (i.e., 2.5%) from the interest rate
then in effect until the interest payment date immediately succeeding the date
on which the Company has repaid an aggregate of at least $3,319,000 of New
Notes. Interest on the New Notes accrued from May 15, 2003 and will be payable
on May 15 and November 15 of each year and at maturity. Interest will be paid in
cash provided that, at the option of the Company, any three of the first five
interest payments (i.e., November 15, 2003, May 15 and November 15, 2004 and May
15 and November 15, 2005) may be made (i) half in cash and (ii) half in the form
of additional New Notes, or paid-in kind, with a principal amount equal to
112.5% of the amount of cash that would have otherwise been payable. The
November 15, 2003 interest payment was made in cash.

The New Notes rank senior in right of payment to all subordinated debt of the
Company, and pari passu in right of payment with all senior debt of the Company,
including obligations under the Company's Revolving Loan Agreement. However, the
New Notes are effectively subordinated to the Company's obligations under the
Revolving Loan Agreement to the extent of the value of the assets securing such
obligations. While the Company's unsecured and unsubordinated indebtedness rank
pari passu with the

44

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

New Notes in right of payment, the holders of the New Notes
may, to the exclusion of unsecured creditors, seek recourse against the pledged
assets as security for the New Notes until amounts owed under the New Notes are
satisfied in full.

The Company's obligations under the New Notes are guaranteed by all of its
current and future subsidiaries (the "Subsidiaries" or the "Guarantors"). The
New Notes are secured by a perfected, first priority security interest in all
the assets owned by the Company and the Subsidiaries except for the assets
securing the Revolving Credit Agreement (primarily cash, inventory and accounts
receivable) and the assets of Specialty Manufacturing that secure borrowings of
$1,111,000 as of December 31, 2003 under a term loan agreement. The New Notes
are also secured by a pledge of the capital stock of the Company's subsidiaries,
other than the stock of Morgan. Separate financial statements of the Subsidiary
Guarantors are not included because all the Subsidiary Guarantors provide the
Guarantees, and the Subsidiary Guarantors are jointly and severally liable on a
full and unconditional basis.

The New Indenture includes covenants that limit the ability of the Company and
the ability of the Company's Restricted Subsidiaries to: incur additional debt,
including guarantees; make acquisitions; sell assets; make investments and other
restricted payments, pay dividends, redeem or repurchase capital stock or
subordinated obligations, subject to certain exceptions; create specified liens;
create or permit restrictions on the ability of the Company's Restricted
Subsidiaries to pay dividends or make other distributions to the Company; engage
in transactions with affiliates; engage in sale and leaseback transactions;
consolidate or merge with or into other companies or sell all or substantially
all of their assets. The Company is in compliance with all the restrictive
covenants of the New Indenture as of December 31, 2003.

Costs associated with the Exchange Offer of $831,000 were expensed during the
year ended December 31, 2003. The Company paid a consent fee to the holders of
the Old Notes of 3% or approximately $2,550,000 that was paid in cash effective
June 10, 2003. The consent fee was capitalized as deferred loan costs and will
be amortized as interest expense over the term of the New Notes.

Effective September 29, 2003 the Company purchased for cash $9,131,000 principal
amount of its New Notes pursuant to an offer to purchase up to $12.5 million of
the New Notes. The Company paid approximately $8,838,000, including accrued
interest of approximately $438,000, and recorded a gain, included in Other
Income, on the purchase of approximately $367,000 net of deferred loan costs of
$288,000.

At December 31, 2003, the Consolidated EBITDA Coverage Ratio, as defined in the
12 1/2% New Notes Bond Indenture, was greater than 2:1 in which case the Company
is permitted to incur debt for the purposes of making capital expenditures
including capital leases.

The Company believes that it has adequate resources to meet its working capital
and capital expenditure requirements consistent with past trends and practices.
Operating cash flows are a principal source of liquidity to the Company and the
diverse nature of the operations of the Company, in management's opinion,
reduces exposure to economic factors such as the current manufacturing
recession. Additionally, the Company believes that its borrowing availability
under the Revolving Credit Agreement and potentially available sources of
long-term financing will satisfy the Company's cash requirements for the coming
year, given its anticipated additional capital expenditures, working capital
requirements and its known obligations. The Company has commenced negotiations
to refinance its New Notes due in May 2007; however, there can be no assurances
that any refinancing will be successfully completed.

45

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company's obligation under the term loan due December 30, 2005 is secured by
a lien upon the property of Specialty Manufacturing in the amount of
approximately $1,111,000 granted to the lender.

The Company estimates the fair value of the 12 1/2% Senior Notes at December 31,
2003 and 2002 to be approximately $70,640,000 and $69,700,000, respectively,
based on their publicly traded value at that date compared to a recorded amount
of $75,854,000 and $85,000,000 as of December 31, 2003 and 2002, respectively.

The carrying values of receivables, payables and debt maturing within one year
contained in the Consolidated Balance Sheets as of December 31, 2003 and 2002
approximate the fair value of those instruments.

MATURITIES. Aggregate principal payments on long-term debt for the next
five years and thereafter to December 31, 2003, are as follows (dollars in
thousands):

2004.................................................................................... $ 1,221
2005.................................................................................... 749
2006.................................................................................... 177
2007.................................................................................... 75,895
2008.................................................................................... 3
-------
$78,085

8. OPERATING LEASES:

The Company leases certain manufacturing facilities and equipment under
noncancelable operating leases certain of which contain renewal options. The
future minimum lease payments for the next five years subsequent to December 31,
2003 are as follows (dollars in thousands):

2004.................................................................................... $ 8,430
2005.................................................................................... 6,383
2006.................................................................................... 5,043
2007.................................................................................... 3,716
2008.................................................................................... 2,769

Total rental expense included in continuing operations under all operating
leases was $9,600,000 $9,451,000 and $10,615,000 for the years ended December
31, 2003, 2002 and 2001, respectively.

9. SUPPLEMENTAL CASH FLOW INFORMATION:

Cash payments for interest were $13,524,000, $12,255,000 and
$13,134,000 for the years ended December 31, 2003, 2002 and 2001, respectively.
Cash payments for income taxes, net of refunds, were $485,000, $1,440,000 and
$948,000 for the years ended December 31, 2003, 2002 and 2001, respectively.

46

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. INCOME TAXES:

The income tax provision consists of the following for the years ended
December 31, 2003, 2002 and 2001 (dollars in thousands):

The following table reconciles the differences between the federal
statutory income tax rate and the effective tax rate for the years ended
December 31, 2003, 2002 and 2001 (Dollars in thousands):

The domestic and foreign components of Income (Loss) from Continuing
Operations before Income Taxes were:

47

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred income taxes are based on the estimated future tax effects of
differences between the financial statements and tax basis of assets and
liabilities given the provisions of the enacted tax laws. The net deferred tax
assets and liabilities as of December 31, 2003 and 2001 were (dollars in
thousands):

TAX CARRYFORWARDS. The Company has alternative minimum tax credit
carryforwards of approximately $1,134,000 at December 31, 2003 for U.S. federal
income tax purposes, which may be carried forward indefinitely. The Company has
net operating loss carryforwards of approximately $21,800,000 for U.S. federal
income tax purposes at December 31, 2003, which if not utilized, will begin to
expire in 2008. At December 31, 2003, the Company had a valuation allowance of
$1,865,000 which reflects an $800,000 decrease from the amount at December 31,
2002. The Company believes, based on available evidence, that it is more likely
than not that an additional portion of the Company's net deferred tax asset will
be realized in the future. The $1,035,000 of other reconciling differences
between the federal income tax rate and the effective rate for the year ended
December 31, 2003 was due primarily to prior year provision to return
differences.

11. COMMON STOCK:

As of December 31, 2003 and 2002, there were 100,000 shares authorized
and 3,059 shares issued and outstanding of JBPCO common stock with a par value
of $.01 per share. JBPCO was incorporated in Delaware. No other classes of
common stock, preferred stock or common stock equivalents exist.

48

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. EMPLOYEE BENEFIT PLANS:

DEFINED CONTRIBUTION PLANS

JBPCO 401(k) PLAN. The JBPCO-sponsored 401(k) savings plan allows participating
employees to contribute through salary deductions up to 15% of gross pay and
provides for Company matching contributions up to two percent of the first six
percent of gross pay as well as the opportunity for an annual discretionary
contribution. The Company reduced the matching percentage from three percent
effective August 1, 2002 and has not made an annual discretionary contribution.
Vesting in the Company matching contribution is 20% per year over the first five
years. The Company incurred related employer matching contribution and
administrative expenses of $674,000, $1,044,000 and $918,000 during the years
ended December 31, 2003, 2002 and 2001, respectively.

DEFINED BENEFIT PLANS

Truck Accessories assumed future sponsorship of a defined benefit plan covering
hourly employees at its Gem Top division that was sold and all the employees
terminated effective February 28, 2003. The plan was frozen effective March 31,
1996 and at December 31, 2003 and 2002 the plan was underfunded by approximately
$81,000 and $147,000, respectively. The Company's funding policy for the Truck
Accessories plan is to make the minimum annual contributions required by
applicable regulations.

The following table sets forth the funded status and amounts recognized in the
Company's consolidated balance sheets as of December 31, 2003 and 2002, and the
significant assumptions used in accounting for the defined benefit plan.
(dollars in thousands):

49

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. ACQUISITIONS:

Effective May 5, 2003 Morgan purchased certain assets, primarily
inventory, of a truck body manufacturer, located in Los Angeles, California. The
acquisition was made by an un-restricted, non-guarantor subsidiary of Morgan
prior to June 10, 2003 and was merged into Morgan on that date. Morgan paid
approximately $400,000, in cash, for the assets and assumed certain liabilities
of approximately $240,000. Concurrently with the acquisition, Morgan entered
into a two year non-compete agreement with the former owner and a two year
consulting agreement with a former officer of the company. Morgan will pay an
aggregate of approximately $380,000 each year under the terms of the agreements.
The acquisition provided Morgan with an operational manufacturing facility and
was a cost effective alternative to a planned investment in a new facility in
the Los Angeles market.

14. COMMITMENTS AND CONTINGENCIES:

Claims and Lawsuits. The Company is involved in certain claims and lawsuits
arising in the normal course of business. In the opinion of management, the
ultimate resolution of these matters will not have a material adverse effect on
the financial position or results of operations of the Company.

Letters of Credit and Other Commitments. The Company had $5,280,000 and
$4,080,000 in standby letters of credit outstanding at December 31, 2003 and
2002, primarily securing the Company's insurance programs.

Environmental Matters. The Company's operations are subject to numerous
environmental statutes and regulations, including laws and regulations affecting
its products, the materials used in and wastes generated by manufacturing the
Company's products and the investigation and cleanup of contaminated sites. In
addition, certain of the Company's operations are subject to federal, state and
local environmental laws and regulations that impose limitations on the
discharge of pollutants into the air and water of the United States or that
impose workplace health and safety requirements. Pursuant to these laws, some of
the Company's operations require permits which may restrict the Company's
operations and which are subject to renewal, modification or revocation by
issuing authorities. The Company also generates hazardous and non-hazardous
wastes. The Company has received notices of noncompliance, from time to time,
with respect to its operations, which are typically resolved by correcting the
conditions and the payment of minor fines, none of which individually or in the
aggregate has had a material adverse effect on the Company. Further, we cannot
assure you that the Company has been or will be at all times in compliance with
all of these requirements, including those related to reporting or permit
restrictions or that the Company will not incur material fines, penalties, costs
or liabilities in connection with such requirements or a failure to comply with
them. The Company

50

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

expects that the nature of its operations will continue to make it subject to
increasingly stringent environmental and workplace health and safety regulatory
standards and to the increasingly stringent enforcement of those standards.
Although the Company believes it has made sufficient capital expenditures to
maintain compliance with existing laws and regulations, future expenditures may
be necessary, as compliance standards and technology change. Unforeseen
significant expenditures required to maintain such future compliance, including
unforeseen liabilities, could limit expansion or otherwise have a material
adverse effect on the Company's business and financial condition.

In a memorandum dated January 10, 2002 issued by the Georgia Environmental
Protection Division ("EPD"), Truck Accessories was notified that it may be a PRP
in a Georgia state superfund site. Although a precise estimate of liability
cannot currently be made with respect to this site, the Company currently
believes that its proportionate share, if any, of the ultimate costs related to
any necessary investigation and remedial work at this site will not have a
material adverse effect on the Company. The Company has not recorded a liability
related to this matter.

On January 29, 2003, the United States Environmental Protection Agency ("USEPA")
notified Truck Accessories that it had reviewed a self-disclosure regarding
failure to file certain forms allegedly required pursuant to Section 313 of the
Emergency Planning and Community Right-to-Know Act, and regulations promulgated
thereunder. The Company is engaged in settlement discussions to resolve these
and other potential claims. USEPA has proposed a penalty of $11,045. The Company
has accrued expenses of $20,000 and has implemented four Supplemental
Environmental Projects, undertaken in connection with this matter, that require
approximately $125,000 of capital expenditures.

In October 2003, Truck Accessories was notified that it may be a potentially
responsible party at a United States Environmental Protection Agency Superfund
Site in California. The Company has executed a tolling agreement with the EPA
and has been invited to attend a de minimis potentially responsible party
settlement conference being held by the EPA. Although the Superfund statute
provides for joint and several liability and a precise estimate of liability
cannot be determined at this time, the Company currently believes that our
proportionate share, if any, of the ultimate cost related to any necessary
investigation and remedial work at the site will not have a material adverse
effect on the Company.

A self-audit conducted in 2002 revealed that a machine shop operated by MIC
Group may have failed to file certain forms required pursuant to Section 313 of
the Emergency Planning and Community Right-to-Know Act, and regulations
promulgated thereunder. The Company disclosed this situation to the EPA,
completed all required reports and filed them with the appropriate agencies in
2002. Recently, the EPA requested additional information, which the Company has
provided. At this time we do not know whether the EPA will seek to penalize the
Company for these reporting violations.

During a Phase II Environmental Assessment in November 2002 at KWS in
preparation for its sale, two areas of potential contamination were identified.
As a part of the sale agreement, a Phase III project was undertaken to determine
the exact level of contamination and potential remediation, if necessary. The
Company has entered into a "Voluntary Clean Up Project" with the Texas
Commission on Environmental Quality that is expected to be completed by November
2003. Although a precise estimate of liability cannot currently be made with
respect to the contamination levels or potential remediation, the Company has
incurred approximately $70,000, of expenses as of December 31, 2003, and
currently believes that to be the ultimate cost of this matter. Costs incurred
over and above $50,000 should be reimbursable to the company by the previous
owner of KWS.

On February 20, 2004, the EPA sent a request for information to the Truck
Accessories facility in Milton, Pennsylvania. The information request states
that it is pursuant to the EPA's authority under the Resource Conservation
Recovery Act, which is the federal statue regulating the handling of hazardous
waste. The request asks for a large volume of information and documents related
to the Milton facility's handling and recordkeeping related to hazardous
wastes. Included with the information request was a copy of a September 2003
inspection report on which the EPA and the Pennsylvania Department of
Environmental Protection investigators appear to have indicated non-compliance
by Truck Accessories with some Resource Conservation Recovery Act standards.
Truck Accessories is in the initial stages of gathering the information
necessary to respond to the request. At this time, we do not know if the EPA or
the Pennsylvania Department will take enforcement action against Truck
Accessories, and we cannot estimate the financial impact of such an enforcement
action, if any, which could be material.

15. RELATED PARTY TRANSACTIONS:

The Company is party to a Management Services Agreement with
Southwestern Holdings, Inc. a corporation ("Southwestern") owned by Mr.
Poindexter. Pursuant to the Management Services Agreement, Southwestern provides
services to the Company, including those of Mr. Poindexter. The Company pays to
Southwestern a base fee of approximately $46,000 per month for these services,
subject to annual automatic increases based upon the consumer price index. The
Company may also pay a discretionary annual bonus to Southwestern subject to
certain limitations; $200,000 was paid in 2003 and none was paid in 2002, or in
2001. The Company paid Southwestern $749,000, $549,000, and $757,000 during
2003, 2002 and 2001, respectively, for all these services.

John Poindexter owns 100% of the capital stock of Morgan Olson Corporation.
Effective with the acquisition by Morgan Olson Corporation on July 15, 2003 of
the business and assets of a truck body manufacturing plant located in Sturgis,
Michigan, the Company agreed to provide certain services to Morgan Olson
pursuant to a Management Services Agreement between the companies, including
Morgan. The Company charged Morgan Olson $362,000 during the period ended
December 31, 2003

51

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

for services provided that is included in Other income. Morgan purchases certain
materials for and provides the services of certain key personnel to Morgan Olson
for which it is reimbursed at cost. During the year ended December 31, 2003
Morgan Olson paid Morgan $956,000 for these purchase and time spent by its
personnel. As of December 31, 2003, Morgan Olson owed the Company $414,000 that
is included in Accounts Receivable and was paid subsequent to that date.

Mr. Poindexter acquired from a third party, effective November 7, 2003, certain
equipment that had been leased to Specialty Manufacturing and valued at
approximately $201,000. Also effective on that date Specialty Manufacturing
entered into a lease with Mr. Poindexter to lease the equipment. Specialty
Manufacturing made no payments under the lease during the year ended December
31,2003.

Mr. Poindexter is an officer of JBPCO and is a partner in a partnership that
leases to Morgan certain real property in Georgia. Morgan paid $286,000,
$290,000, and $287,000 in rent to the partnership in 2003, 2002 and 2001
pursuant to such lease.

16. PROPOSED REFINANCING AND ACQUISITION (UNAUDITED)

We have begun the process of refinancing our existing debt with a
proposed offering of new senior notes and a new revolving credit facility. At
the same time as the proposed offering or shortly thereafter we plan to acquire
from John Poindexter, the sole shareholder of the Company, the stock of Morgan
Olson, a truck body manufacturing company that he acquired effective July 14,
2003. The net proceeds from the new credit facility and this offering would be
used to repay amounts outstanding under the existing credit facility, Morgan
Olson's term loans of $17,400,000 as of December 31, 2003 and to redeem our 12
1/2% Senior Secured Notes due May 2007. There can be no assurances that the
refinancing will occur.

Morgan Olson, located in Sturgis Michigan, is one of three
manufacturers of walk-in truck bodies in the United States with a 50 year
heritage in the industry. Morgan Olson also manufactures and supplies service
parts for its van truck bodies under long-term contracts with the United States
Postal Service. Mr. Poindexter acquired certain assets of Morgan Olson from
Grumman Olson in a bankruptcy proceeding and will contribute those assets to the
Company in conjunction with the proposed refinancing. Mr. Poindexter paid
approximately $13,900,000 for the assets including $3,000,000 in cash that he
contributed as equity of the company and assumed certain liabilities of
approximately $1,500,000. The purchase price was allocated to the assets based
on the estimated fair values as of the date of acquisition. There was no
goodwill recorded with the acquisition. If the acquisition is consummated, the
historical financial statements of the Company will be revised to reflect the
merger on a basis similar to a pooling of interests so as to combine the
financial statements of both companies for the period they were under common
control.

17. DISCONTINUED OPERATIONS

During 2003 the Company received a settlement from a class action suit
of approximately $280,000 and proceeds from a surrendered life insurance policy
of approximately $86,000 that were related to operations sold in 1999. Income
from these transactions of $268,000, net of income taxes, was included in Losses
from Discontinued Operations of the Company for the year ended December 31,
2003.

52

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SPECIALTY MANUFACTURING GROUP-KWS OPERATIONS

During the fourth quarter of 2002, the Company committed to a plan to
sell principally all the assets, excluding accounts receivable and less certain
of the liabilities of the KWS operations of Specialty Manufacturing. The sale
was completed effective December 31, 2002. The Company realized net cash
proceeds of approximately $3,200,000 from the sale. KWS comprised the bulk
material handling operations of the Company's Specialty Manufacturing business
segment. The results of operations have been reported as discontinued operations
in the consolidated financial statements for the periods presented. In addition,
the net assets and liabilities which were disposed of have been segregated
within the consolidated balance sheet as "net assets of discontinued
operations".

Condensed financial information related KWS at December 31, 2003 and
2002 is as follows (in thousands):

KWS's loss before income taxes was $81,000 for the year ended December 31, 2003.
KWS's revenues were $7,802,000 and $9,926,000 and loss before tax was $4,230,000
and $2,029,000 for the twelve months ended December 31, 2002 and 2001,
respectively. The Company recorded a loss on disposal of approximately
$1,865,000 during the year ended December 31, 2002 which included the write off
of related goodwill of $1,159,000.

The income (loss) from discontinued operations related to KWS during the
twelve months ended December 31, 2003, 2002 and 2001, were as follows (in
thousands):

Losses from KWS's operations include interest expense of $0, $223,000 and
$342,000 related to the borrowings of KWS under the Revolving Loan Agreement,
the term loan due March 31, 2007 and the cash flow loan due March 31, 2003, for
the twelve months ended December 31, 2003, 2002 and 2001, respectively. The
borrowings were repaid using the proceeds from the sale.

SPECIALTY MANUFACTURING-MARLIN OPERATIONS

Specialty Manufacturing's Marlin Operation was one of five locations
that manufactures expandable foam plastic packaging materials. The operation
lost a major customer during 2001 and a failure to replace the lost production
volume resulted in management's decision, during 2002, to close or sell the
operation. An agreement to sell the operations to a third party was reached
during the fourth quarter of 2002 and the sale completed effective January 31,
2003. The third party assumed the operating lease on the premises. There were no
net cash proceeds from the transaction. Accordingly, the results of operations
have been reported as discontinued operations in the consolidated financial
statements for the periods presented. In addition, the net assets and
liabilities which were disposed of have been segregated within the consolidated
balance sheet as "net assets of discontinued operations".

53

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Condensed financial information related to Specialty Manufacturing's
Marlin Operations at December 31, 2003 and 2002 as follows (in thousands):

Specialty Manufacturing's Marlin Operation's revenues were $4,090,000 and
$1,998,000 and the loss before income taxes was $748,000 and $1,403,000 for the
twelve months ended December 31, 2002 and 2001, respectively. The Company
recorded a loss on disposal of approximately $172,000 during the year ended
December 31, 2002 which included the write down of remaining property plant, and
equipment.

The income (loss) from discontinued operations related to Specialty
Manufacturing's Marlin Operations during the twelve months ended December 31,
2002 and 2001 were as follows (in thousands):

TRUCK ACCESSORIES-GEM TOP OPERATIONS

During the fourth quarter of 2002, the Company committed to a plan to
sell principally all the assets, less certain of the liabilities of the Gem Top
operations of Truck Accessories. The sale was completed effective February 28,
2003. The Company realized net cash proceeds of approximately $840,000 from the
sale. Accordingly the results of operations have been reported as discontinued
operations in the consolidated financial statements for the periods presented.
In addition, the net assets and liabilities which were disposed of have been
segregated within the consolidated balance sheet as "net assets of discontinued
operations".

Condensed financial information related Gem Top at December 31, 2003
and 2002 is as follows (in thousands):

Gem Top's revenues were $918,000, $6,056,000 and $9,946,000, and the income
(loss) before income taxes was $ (345,000), $(1,544,000) and $500,000, for the
twelve months ended December 31, 2003, 2002 and 2001, respectively. The Company
accrued certain closing costs and wrote down the value of

54

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

inventory and fixed assets recording an impairment loss of approximately
$632,000 as of December 31, 2002. Accrued closing costs included severance costs
of $128,000.

The loss from discontinued operations related to Gem Top during the
twelve months ended December 31, 2003, 2002 and 2001, were as follows (in
thousands):

TRUCK ACCESSORIES-POLYMER PRODUCTS DIVISION (PPD) AND TRUCK ACCESSORIES
DISTRIBUTION

During the fourth quarter of 2001, management decided to cease
production of polymer based products at Truck Accessories and the closure of the
PPD division was completed during the fourth quarter. Limited production of
certain tonneau models continued in 2002. Accordingly the results of operations
have been reported as discontinued operations in the consolidated financial
statements for the periods presented. There were no net assets or liabilities
associated with these operations as of December 31, 2003 and 2002.

PPD's revenues were $410,000 and $4,479,000 and the (loss) before income taxes
were $(542,000) and $(4,225,000) for the twelve months ended December 31, 2002
and 2001, respectively. The Company wrote off the product molds and inventory
associated with the discontinued products of approximately $611,000 and expensed
approximately $682,000 associated with potential future product warranty costs
during the year ended December 31, 2001. Additionally, during 2002, Truck
Accessories incurred an expense related to the Truck Accessories Distribution
operations that were sold during the year ended December 31, 1999 of $146,000
net of applicable taxes.

55

J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18. SELECTED QUARTERLY INFORMATION (UNAUDITED)

The Company's accounting records are maintained on the basis of four 13
week quarters. Shown below are the selected unaudited quarterly data:

56

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

None.

ITEM 10. CONTROLS AND PROCEDURES

The Company's management with the participation of the Chief Executive Officer
and Chief Financial Officer performed an evaluation of the Company's disclosure
controls and procedures, which have been designed to permit the Company to
effectively identify and timely disclose important information as of the end of
the fiscal year ended December 31, 2004. Based on this evaluation, the CEO and
CFO have concluded that the Company's disclosure controls and procedures were
effective as of the end of the fiscal year ended December 31, 2004 to ensure
that information that is required to be disclosed by the Company in the reports
it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the SEC's rules and forms.

PART III.

ITEM 11. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The directors and executive officers of the Company are set forth
below. All directors hold office until the next annual meeting of stockholders
of the Company or until their successors are duly elected and qualified.
Executive officers of the Company are appointed by the Board of Directors
annually and serve at the discretion of the Board of Directors.

John B. Poindexter has served as Chairman of the Board and Director of
the Company since 1988, Chief Executive Officer since 1994 and President since
November 2002. From 1985 through 1996, Mr. Poindexter was the majority limited
partner of J.B. Poindexter & Co., L.P., a privately held, long-term equity
investment and management firm formed by Mr. Poindexter. From 1983 through 1985,
he was co-managing partner of KD/P Equities, a privately held equity investment
firm that he co-founded. From 1976 through 1985, Mr. Poindexter worked for Smith
Barney, Harris Upham & Co. While with Smith Barney, he became a senior vice
president for its Smith Barney Venture Corporation and Smith Barney Capital
Corporation ("SBCC") affiliates and a partner in First Century Partnership II,
an investment fund managed by SBCC.

Stephen P. Magee served as Treasurer and a Director of the Company
since the Company was formed in 1988 and as Chief Financial Officer of the
Company from 1994 to 2001. Mr. Magee also serves as Chairman of the Audit
Committee of the Board of Directors.

57

William J. Bowen retired in 1992 as the Chairman of the Board of
Transco Energy Company ("Transco"), a diversified energy company based in
Houston, Texas. Mr. Bowen served as Chief Executive Officer of Transco from 1974
until his retirement from that position in 1987.

Andrew Foskey has served as Vice President Business Development since
July 2001.

Robert S. Whatley has served as Vice President since June 1994.

Larry T. Wolfe has served as Vice President of Administration since May
of 1995.

Directors who are officers or employees of the Company do not receive
fees for serving as directors. The Company pays $20,000 per year as director's
fees to each outside director.

OTHER SIGNIFICANT PERSONS

Although not an executive officer of the Company, each of the following
persons is an officer of the referenced Subsidiary or division thereof and is an
important contributor to the Company's operations:

Nelson Byman became President of MIC in June of 1998 and President of Specialty
Manufacturing in January 2001. Previously Mr. Byman was Vice President/General
Manager of a domestic division of Weatherford/Enterra, a manufacturer of
oilfield related equipment.

Bruce L. Freeman was named Senior Vice President of Operations of J.B.
Poindexter & Co., Inc., on November 15, 2001 and became President of Truck
Accessories during July 2002. Previously, Mr. Freeman spent 20 years with the
General Electric Company in a variety of operations, senior management and
President assignments followed by four years as President of AEC Sterling and
later was a Senior Vice President with Northwestern Corporation.

Robert Ostendorf, Jr. became President and Chief Operating Officer of Morgan
Trailer Mfg., Co. in November 1999. Previously, Mr. Ostendorf served as
President of the Truck Group of Cambridge Industries, Inc. He has over 23 years
of experience in a variety of manufacturing and general management positions in
the truck and automotive related industries.

ITEM 12. EXECUTIVE COMPENSATION

The following table sets forth certain information regarding the
compensation paid to the Company's Chief Executive Officer and the other
executive officers whose total annual salary and bonus are anticipated to exceed
$100,000 for the fiscal years ended December 31, 2002, 2001 and 2000:

58

SUMMARY COMPENSATION TABLE

(a) Mr. Poindexter does not receive a salary from the Company. Rather, his
services are provided to the Company pursuant to a Management Services
Agreement. See "Management Services Agreement."

The Company's incentive compensation plan covering certain of its
executive officers is similar to the Subsidiary Incentive Plans described below.
During 2000, the Company implemented its long-term compensation plan in order to
provide the opportunity for key members of the Company and its Subsidiaries to
be rewarded with financial incentives for achieving the financial objectives of
the Company. Awards under the plan vest over a three year period provided
certain financial obligations have been met.

Mr. Poindexter is covered by the various insurance programs provided by
Morgan to its employees.

MANAGEMENT SERVICES AGREEMENT

Concurrently with the Note Offering, the Company entered into a
Management Services Agreement with a corporation ("Southwestern") owned by Mr.
Poindexter. Pursuant to the Management Services Agreement, Southwestern provides
services to the Company, including those of Mr. Poindexter who serves as the
Company's Chairman of the Board and Chief Executive Officer. The Company paid to
Southwestern approximately $549,000 during the year ended December 31, 2002 for
the services of Mr. Poindexter. The annual fee is subject to annual automatic
increases based upon the consumer price index. The Company may pay a
discretionary annual bonus to Southwestern for the provision of Mr. Poindexter's
services and may increase the annual fee payable above the automatic annual
increase, in each case subject to certain limitations, if after giving effect to
such payment and/or increase the Company's Consolidated EBITDA Coverage Ratio,
as defined in the Indenture, is 2.00 to 1 or higher.

59

SUBSIDIARY INCENTIVE PLANS

The Company has adopted an incentive compensation plan for members of
upper management of each of its Subsidiaries (collectively the "Incentive
Plans") to provide for the payments of annual bonuses based upon the attainment
of performance-based goals. Eligible employees are entitled to receive a bonus
if the Subsidiary attains or surpasses a stated percentage (which varies by
Subsidiary) of that Subsidiary's budgeted pre-tax profit, with the amount of
bonus being tied to the Subsidiary's actual pre-tax profits. Individual bonuses
are then allocated among the eligible employees based upon their individual
achievement of stated performance objectives. The Subsidiaries also maintain
certain other benefit plans for their respective officers and employees. See
Note 12 to the Consolidated Financial Statements for the Company.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company does not have a compensation committee.

ITEM 13. SECURITY OF OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Mr. Poindexter has sole voting and investment power with respect to all
shares that he beneficially owns.

60

ITEM 14. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Mr. Poindexter is a member of a partnership ("Bartow") that leases
certain real property in Georgia to Morgan. During each of 2003, 2002 and 2001,
Morgan paid $286,000, $290,000 and $287,000, respectively as rent to Bartow, and
it will continue to pay such rent to Bartow in the future. The Company believes
that the rent paid by Morgan to Bartow is a competitive market rate for the
location.

The Company has entered into a Management Services Agreement with
Southwestern Holdings, Inc. a corporation ("Southwestern") owned by Mr.
Poindexter. Pursuant to the Management Services Agreement, Southwestern provides
services to the Company, including those of Mr. Poindexter. The Company pays to
Southwestern approximately $46,000 per month for these services, subject to
annual automatic increases based upon the consumer price index. The Company may
also pay a discretionary annual bonus to Southwestern subject to certain
limitations. For all services the Company paid Southwestern $749,000, $549,000
and $757,000 during 2003, 2002 and 2001, respectively.

John Poindexter owns 100% of the capital stock of Morgan Olson
Corporation. Effective with the acquisition by Morgan Olson Corporation on July
15, 2003 of the business and assets of a truck body manufacturing plant located
in Sturgis, Michigan, the Company agreed to provide certain services to Morgan
Olson pursuant to a Management Services Agreement between the companies,
including Morgan. The Company charged Morgan Olson $362,000 during the period
ended December 31, 2003 for services provided that is included in Other income.
Morgan purchases certain materials for and provides the services of certain key
personnel to Morgan Olson for which it is reimbursed at cost. During the year
ended December 31, 2003 Morgan Olson paid Morgan $956,000 for these purchase and
time spent by its personnel. As of December 31, 2003, Morgan Olson owed the
Company $414,000 that is included in Accounts Receivable and was paid subsequent
to that date.

Mr. Poindexter acquired from a third party, effective November 7, 2003,
certain equipment that had been leased to Specialty Manufacturing and valued at
approximately $201,000. Also effective on that date Specialty Manufacturing
entered into a lease with Mr. Poindexter to lease the equipment. Specialty
Manufacturing made no payments under the lease during the year ended December
31,2003.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

There have been no significant changes in our internal controls or in
other factors that could significantly affect these controls subsequently to the
last time such controls were evaluated by management, including no corrective
actions with respect to significant deficiencies and material weaknesses in such
controls.

(a)(1) Financial Statements - None, other than as previously listed
in response to Item 8.

(a)(2) Financial Statement Schedules - Disclosures included in the
Notes to the Consolidated Financial Statements

(a)(3) Exhibits - None

3.1(a) Second Restated Certificate of Incorporation

3.1.1(b) Certificate of First Amendment to Second Restated Certificate
of Incorporation.

3.2(a) Amended and Restated Bylaws

4.1(b) Form of 12 1/2% Senior Note due 2004 (included in Exhibit 4.2)

4.2(b) Indenture dated as of May 23, 1994

61

4.2.1(c) First Supplemental Indenture dated as of May 11, 1995.
Incorporated by reference to Exhibit 4.1 to the Form 10-Q for
the quarterly period ended June 30, 1995, as filed with the
Commission on August 15, 1995

4.2.2(c) Second Supplemental Indenture dated as of June 26, 1995.
Incorporated by reference to Exhibit 4.2 to the Form 10-Q for
the quarterly period ended June 30, 1995, as filed with the
Commission on August 15, 1995.

4.2.3(m) Third Supplemental Indenture dated as of March 8, 2000.

4.2.4(m) Fourth Supplemental Indenture dated as of March 17, 2000.

4.2.5(m) Fifth Supplemental Indenture dated as of September 29, 2000.

4.2.6(j) Sixth Supplemental Indenture dated as of February 28, 2003.

4.2.7(k) Senior Secured Notes due 2007 Indenture dated June 10, 2003

4.3(a) List of certain promissory notes

10.1.5(d) Loan and Security Agreement by and among Congress Financial
Corporation and J.B. Poindexter & Co., Inc., dated June 28,
1996.

10.1.6(f) Amendment No. 1 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated May 13, 1998.

10.1.7(f) Amendment No. 2 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated June 30, 1998

10.1.8(f) Amendment No. 3 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated June 24, 1999

10.1.9(f) Amendment No. 4 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated February 25, 2000

10.1.10(f) Amendment No. 5 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated March 8, 2000

10.1.11(f) Amendment No. 6 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated March 17, 2000

10.1.12(f) Amendment No. 7 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated March 17, 2000

10.1.13(f) Amendment No. 8 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated October 31, 2000

10.1.14(g) Amendment No. 9 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated March 27, 2001

10.1.15(g) Waiver of Fixed Charge Coverage Ratio by and among Congress
Financial Corporation and KWS as a part of J.B. Poindexter &
Co., Inc., dated May 14, 2001

10.1.16(g) Amendment No. 10 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated June 21, 2001

10.1.17(h) Amendment No. 11 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated August 14, 2001

10.1.18(h) Amendment No. 12 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated December 13, 2001

10.1.19(h) Consent to Intercompany Loan to KWS and Brixius to Loan and
Security Agreement by and among Congress Financial
Corporation and J.B. Poindexter & Co., Inc., dated
August 14, 2001.

10.1.20(i) Amendment No. 13 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated March 1, 2002

10.1.21(i) Amendment No. 14 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated April 22, 2002

10.1.22(m) Amendment No. 15 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated May 30, 2002

62

10.1.23(j) Amendment No. 16 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated March 26, 2003

10.1.24(k) Amendment No. 17 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated April 22, 2003

10.23(a) Lease Agreement, dated as of March 29, 1990, between Bartow
Partners, L.P. and Morgan Trailer Manufacturing Co., d/b/a
Morgan Corporation, as amended by the First Amendment to Lease
Agreement, dated June 13, 1991

10.26(a) Form of Incentive Plan for certain employees of the
Subsidiaries

10.27(a) Morgan Trailer Mfg. Co. Long-Term Management Equity
Appreciation Program

10.86(e) Management Services Agreement dated as of May 23, 1994,
between J.B. Poindexter & Co., Inc. and Southwestern Holdings,
Inc.

10.102(c) Asset Purchase Agreement, dated as of June 15, 1995, among
Leer Inc., 20th Century Fiberglass, Inc., Steven E. Robinson
and Ronald E. Hickman. Incorporated by reference to Exhibit
10.1 to the current report on Form 8-K, dated June 29, 1995,
as filed with the Commission on September 11, 1995

10.109(c) Share Purchase Agreement dated as of June 30, 1995, between
Raider Industries, Inc. and Martin Brown

10.110(c) Asset Purchase Agreement dated as of June 30, 1995, by and
between Raider Industries Inc., Pro-More Industries Ltd.,
Brown Industries (1976) Ltd. and Martin Brown

10.112(e) Asset Purchase Agreement by and among Radco Industries Inc.
and Midwest Truck After Market and William J. Avery, Sr. and
Sarah A. Avery, dated October 31.1997

10.113(e) Asset Purchase Agreement by and among Lowy Group, Inc., J.B.
Poindexter & Co., Inc. and Blue Ridge Acquisition Company,
LLC, dated August 31, 1998.

10.114(a) J.B. Poindexter & Co., Inc. Long-Term Performance Plan.

10.115(e) Asset Purchase Agreement between L.D. Brinkman & Co. (Texas)
Inc. and Lowy Group, Inc. dated June 7, 1999.

10.117(l) Management Services Agreement between J.B. Poindexter & Co.,
Inc., Morgan Trailer Mfg. Co., and Morgan Olson.

21.1 Subsidiaries of the Registrant.

31.1 Certification by the Chief Executive officer dated February
20, 2003.

31.2 Certification by the Principal Financial Officer dated
February 20, 2003.

(a) Incorporated by reference to the Company's Registration Statement on
Form S-1 (No. 33-75154) as filed with the Commission on February 10,
1994

(b) Incorporated by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994, as filed with the Commission on
March 31, 1995.

(c) Incorporated by reference to the Company's Annual Report on form 10-K
for the year ended December 31, 1995, as filed with the Commission on
March 29, 1996.

(d) Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996, as filed with the Commission
on August 13, 1996.

(e) Incorporated by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 1997, as filed with the Commission on
March 30, 1998.

(f) Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1998, as filed with the Commission
on August 14, 1998.

(g) Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 2001, as filed with the Commission
on August 14, 2001.

63

(h) Incorporated by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 2001, as filed with the Commission on
March 29, 2002.

(i) Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 2002, as filed with the Commission
on August 16, 2002.

(j) Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 2003, as filed with the Commission
on May 15, 2003.

(k) Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 2003, as filed with the Commission
on August 14, 2003.

(l) Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 2003, as filed with the
Commission on November 13, 2003.

(m) Incorporated by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 2002 as filed with the Commission on
March 28, 2003.

(b) Reports of Form 8-K. The Company filed the following reports on Form
8-K during the year:

Form 8K filed with the Commission on June 4 providing financial
information for the period ended April 30, 2003.

Form 8K filed with the Commission on August 29, 2003 announcing the
Company's offer to purchase $12.5 million aggregate principal amount of its
12.5% Senior Secured Notes.

Supplemental Information to Be Furnished With Reports Filed Pursuant to Section
15 (d) of the Act by Registrants Which Have Not Registered Securities Pursuant
to Section 12 of the Act.

The registrant has not delivered to its security holders any annual report to
security holders covering the last fiscal year, proxy statement, form of proxy
or other proxy soliciting material (as described under this caption in Form 10-K
as promulgated by the Securities and Exchange Commission). A copy of this Form
10-K will be sent to each registered holder of the registrant's 12 1/2% Senior
Notes due 2004.

64

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

J.B. POINDEXTER & CO., INC.

Date: February 23, 2004 By: John B. Poindexter
--------------------------------------------
John B. Poindexter, Chairman of the
Board, President and Chief Executive Officer

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.

Date: February 23, 2004 John B. Poindexter
------------------
John B. Poindexter
Chairman and Chief Executive Officer and Director
(Principal Executive Officer)

Date: February 23, 2004 Stephen P. Magee
----------------
Stephen P. Magee
Director

Date: February 23, 2004 W.J. Bowen
-------------
W.J. Bowen
Director

Date: February 23, 2004 Robert S. Whatley
-----------------------
Robert S. Whatley
Vice President Finance
(Principal Financial and Accounting Officer)

65

EXHIBIT INDEX

4.2.1(c) First Supplemental Indenture dated as of May 11, 1995.
Incorporated by reference to Exhibit 4.1 to the Form 10-Q for
the quarterly period ended June 30, 1995, as filed with the
Commission on August 15, 1995

4.2.2(c) Second Supplemental Indenture dated as of June 26, 1995.
Incorporated by reference to Exhibit 4.2 to the Form 10-Q for
the quarterly period ended June 30, 1995, as filed with the
Commission on August 15, 1995.

4.2.3(m) Third Supplemental Indenture dated as of March 8, 2000.

4.2.4(m) Fourth Supplemental Indenture dated as of March 17, 2000.

4.2.5(m) Fifth Supplemental Indenture dated as of September 29, 2000.

4.2.6(j) Sixth Supplemental Indenture dated as of February 28, 2003.

4.2.7(k) Senior Secured Notes due 2007 Indenture dated June 10, 2003

4.3(a) List of certain promissory notes

10.1.5(d) Loan and Security Agreement by and among Congress Financial
Corporation and J.B. Poindexter & Co., Inc., dated June 28,
1996.

10.1.6(f) Amendment No. 1 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated May 13, 1998.

10.1.7(f) Amendment No. 2 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated June 30, 1998

10.1.8(f) Amendment No. 3 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated June 24, 1999

10.1.9(f) Amendment No. 4 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated February 25, 2000

10.1.10(f) Amendment No. 5 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated March 8, 2000

10.1.11(f) Amendment No. 6 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated March 17, 2000

10.1.12(f) Amendment No. 7 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated March 17, 2000

10.1.13(f) Amendment No. 8 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated October 31, 2000

10.1.14(g) Amendment No. 9 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated March 27, 2001

10.1.15(g) Waiver of Fixed Charge Coverage Ratio by and among Congress
Financial Corporation and KWS as a part of J.B. Poindexter &
Co., Inc., dated May 14, 2001

10.1.16(g) Amendment No. 10 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated June 21, 2001

10.1.17(h) Amendment No. 11 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated August 14, 2001

10.1.18(h) Amendment No. 12 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated December 13, 2001

10.1.19(h) Consent to Intercompany Loan to KWS and Brixius to Loan and
Security Agreement by and among Congress Financial
Corporation and J.B. Poindexter & Co., Inc., dated
August 14, 2001.

10.1.20(i) Amendment No. 13 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated March 1, 2002

10.1.21(i) Amendment No. 14 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated April 22, 2002

10.1.22(m) Amendment No. 15 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated May 30, 2002

10.1.23(j) Amendment No. 16 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated March 26, 2003

10.1.24(k) Amendment No. 17 to Loan and Security Agreement by and among
Congress Financial Corporation and J.B. Poindexter & Co.,
Inc., dated April 22, 2003

10.23(a) Lease Agreement, dated as of March 29, 1990, between Bartow
Partners, L.P. and Morgan Trailer Manufacturing Co., d/b/a
Morgan Corporation, as amended by the First Amendment to Lease
Agreement, dated June 13, 1991

10.26(a) Form of Incentive Plan for certain employees of the
Subsidiaries

10.27(a) Morgan Trailer Mfg. Co. Long-Term Management Equity
Appreciation Program

10.86(e) Management Services Agreement dated as of May 23, 1994,
between J.B. Poindexter & Co., Inc. and Southwestern Holdings,
Inc.

10.102(c) Asset Purchase Agreement, dated as of June 15, 1995, among
Leer Inc., 20th Century Fiberglass, Inc., Steven E. Robinson
and Ronald E. Hickman. Incorporated by reference to Exhibit
10.1 to the current report on Form 8-K, dated June 29, 1995,
as filed with the Commission on September 11, 1995

10.109(c) Share Purchase Agreement dated as of June 30, 1995, between
Raider Industries, Inc. and Martin Brown

10.110(c) Asset Purchase Agreement dated as of June 30, 1995, by and
between Raider Industries Inc., Pro-More Industries Ltd.,
Brown Industries (1976) Ltd. and Martin Brown

10.112(e) Asset Purchase Agreement by and among Radco Industries Inc.
and Midwest Truck After Market and William J. Avery, Sr. and
Sarah A. Avery, dated October 31.1997

10.113(e) Asset Purchase Agreement by and among Lowy Group, Inc., J.B.
Poindexter & Co., Inc. and Blue Ridge Acquisition Company,
LLC, dated August 31, 1998.

10.114(a) J.B. Poindexter & Co., Inc. Long-Term Performance Plan.

10.115(e) Asset Purchase Agreement between L.D. Brinkman & Co. (Texas)
Inc. and Lowy Group, Inc. dated June 7, 1999.

10.117(l) Management Services Agreement between J.B. Poindexter & Co.,
Inc., Morgan Trailer Mfg. Co., and Morgan Olson.

21.1 Subsidiaries of the Registrant.

31.1 Certification by the Chief Executive officer dated February
20, 2003.

31.2 Certification by the Principal Financial Officer dated
February 20, 2003.

(a) Incorporated by reference to the Company's Registration Statement on
Form S-1 (No. 33-75154) as filed with the Commission on February 10,
1994

(b) Incorporated by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994, as filed with the Commission on
March 31, 1995.

(c) Incorporated by reference to the Company's Annual Report on form 10-K
for the year ended December 31, 1995, as filed with the Commission on
March 29, 1996.

(d) Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996, as filed with the Commission
on August 13, 1996.

(e) Incorporated by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 1997, as filed with the Commission on
March 30, 1998.

(f) Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1998, as filed with the Commission
on August 14, 1998.

(g) Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 2001, as filed with the Commission
on August 14, 2001.

(h) Incorporated by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 2001, as filed with the Commission on
March 29, 2002.

(i) Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 2002, as filed with the Commission
on August 16, 2002.

(j) Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 2003, as filed with the Commission
on May 15, 2003.

(k) Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 2003, as filed with the Commission
on August 14, 2003.

(l) Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 2003, as filed with the
Commission on November 13, 2003.

(m) Incorporated by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 2002 as filed with the Commission on
March 28, 2003.