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                                SECURITIES AND EXCHANGE COMMISSION
                                      Washington, D.C. 20549
                                        -------------------

                                            FORM 10-K

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

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

                          For the fiscal year ended December 30, 2000

                                                OR

                  |_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                                 SECURITIES EXCHANGE ACT OF 1934
                                       -------------------

                                  Commission file number 0-18914

                                            R&B, INC.
                                Incorporated pursuant to the Laws
                               of the Commonwealth of Pennsylvania
                                       -------------------

                           IRS - Employer Identification No. 23-2078856

                       3400 East Walnut Street, Colmar, Pennsylvania 18915
                                          (215) 997-1800
                                       -------------------
                Securities Registered pursuant to Section 12(b) of the Act: NONE
                  Securities Registered pursuant to Section 12(g) of the Act:
                                 Common Stock, $0.01 Par Value
                                       -------------------

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 (ss.229.405 of this chapter) 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. |_|

As of March 19, 2001 the Registrant had 8,356,517common  shares, $.01 par value,
outstanding,   and  the   aggregate   market  value  of  voting  stock  held  by
non-affiliates of the Registrant was $4,182,326.

                               DOCUMENTS INCORPORATED BY REFERENCE

PART III - Certain information from the Registrant's  definitive Proxy Statement
for its Annual Meeting of Shareholders presently scheduled to be held on May 21,
2001.


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<PAGE>



                                            R & B, INC.

                                INDEX TO ANNUAL REPORT ON FORM 10-K
                                         DECEMBER 30, 2000

                                              Part I
                                                                           Page
Item 1.  Business. . . . . . .  . . . . . . . . . . . . . . . .  . . . . .  3
               General. . . . . . . . . . . . . . . . . . . . . . . . . .   3
               The Automotive Aftermarket. . . . . . . . . . . . . . . . .  3
               Products. . . .  . . . . . . . . . . . . . . . . . . . . . . 4
               Product Development. . . . . . . . . . . . . . . . . . . . . 5
               Sales and Marketing. . . . . . . . . . . . . . . . . . . . . 6
               Manufacturing. . . . . . . . . . . . . . . . . . . . . . . . 7
               Packaging, Inventory and Shipping. . . . . . . . . . . . . . 7
               Competition. . . . . . . . . . . . . . . . . . . . . . . . . 7
               Proprietary Rights. . . . . . . . . . . . . . . . . . . . .  8
               Employees. . . . . . . . . . . . . . . . . . . . . . . . . . 8
               Investment Considerations. . . . . . . . . . . . . . . . . . 8

Item 2.   Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 3.   Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . .  11
Item 4.   Submission of Matters to a Vote of Security Holders. . . . . . .  11
Item 4.1 Certain Executive Officers of the Registrant. . . . . . . . . . .  11

                                              Part II

Item 5.  Market for Registrant's Common Equity and
         Related Shareholder Matters. . . . . . . . . . . . . . . . . . . . 13
Item 6.  Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . 13
Item 7.  Management's Discussion and Analysis of Results of Operations
         and Financial Condition. . . . . . . . . . . . . . . . . . . . . . 14
Item 8.  Consolidated Financial Statements and Supplementary Data. . . . . .19
Item 9.  Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosure. . . . . . . . . . . . . . . . . . . . .  35

                                             Part III

Item 10.  Directors and Executive Officers of the Registrant. . . . . . . . 36
Item 11.  Executive Compensation. . . . . . . . . . . . . . . . . . . . . . 36
Item 12.  Security Ownership of Certain Beneficial Owners and Management. . 36
Item 13.  Certain Relationships and Related Transactions. . . . . . . . . . 36

                                              Part IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.. 36
               Signatures. . . . . . . . . . . . . . . . . . . . . . . . . .39
               Report of Independent Public Accountants on
                 Financial Statement Schedule. . . . . . . . . . . . . . .  40
               Financial Statement Schedule. . . . . . . . . . . . . . . .  41








                                           Page 2 of 41

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                                              PART I

Item 1. Business.

General

        R&B, Inc. was incorporated in Pennsylvania in October 1978.  As used
herein, unless the context otherwise requires, "R&B" or the "Company" refers to
R&B, Inc. and its subsidiaries.

        The Company is a leading supplier of "hard-to-find" parts, fasteners and
service line products primarily for the automotive aftermarket, a market segment
which it helped to  establish.  The Company  designs,  packages and markets over
60,000  different  automotive  replacement  parts,  fasteners  and service  line
products manufactured to its specifications,  with approximately half consisting
of "hard-to-find" parts and fasteners. "Hard-to-find" parts are those which were
traditionally  available to consumers only from original equipment manufacturers
or junk yards and include,  among other parts,  window handles,  headlamp aiming
screws, power steering filler caps, pedal pads and carburetor  pre-heater hoses.
Fasteners   include   such  items  as  oil  drain  plugs  and  wheel  lug  nuts.
Approximately  85% of the Company's  products are sold under its brand names and
the remainder are sold for resale under customers' private labels,  other brands
or in bulk.  The  Company's  products are sold  primarily  in the United  States
through  automotive  aftermarket  retailers (such as AutoZone,  The Pep Boys and
Advance),  national,  regional and local  warehouse  distributors  (such as Auto
Value,  Carquest and NAPA) and specialty markets  including parts  manufacturers
for resale  under their own  private  labels  (such as Federal  Mogul and Dana),
automotive  dealers and salvage  yards.  Through its Scan-Tech  subsidiary,  the
Company is increasing its international  distribution of automotive  replacement
parts, with sales into Europe, the Middle East and the Far East.

The Automotive Aftermarket

        The automotive  replacement  parts market is made up of two  components:
parts  for  passenger  cars and  light  trucks,  which  accounted  for  sales of
approximately  $162  billion  in 2000,  and parts for heavy duty  trucks,  which
accounted for sales of approximately  $62 billion in 2000. The Company currently
markets products primarily for passenger cars and light trucks.

        Two distinct groups of end-users buy replacement  automotive  parts: (i)
individual consumers,  who purchase parts to perform "do-it-yourself" repairs on
their own vehicles; and (ii) professional  installers,  which include automotive
repair shops and the service departments of automobile  dealers.  The individual
consumer market is typically  supplied through  retailers and through the retail
arms of warehouse distributors. Automotive repair shops generally purchase parts
through local  independent  parts  wholesalers  and through  national  warehouse
distributors.  Automobile  dealer  service  departments  generally  obtain parts
through the  distribution  systems of automobile  manufacturers  and specialized
national and regional warehouse distributors.

        The  increasing  complexity of  automobiles  and the number of different
makes and models of automobiles  have resulted in a significant  increase in the
number of  products  required  to service the  domestic  and foreign  automotive
fleet. Accordingly,  the number of parts required to be carried by retailers and
wholesale distributors has increased  substantially.  These pressures to include
more products in inventory and the significant  consolidation among distributors
of automotive replacement parts have in turn resulted in larger distributors.

        Retailers  and others who  purchase  aftermarket  automotive  repair and
replacement  parts for resale are con  strained  in the  short-term  to a finite
amount of space in which to display and stock products. Thus, the reputation for
quality,  customer service and line  profitability  which a supplier enjoys is a
significant factor in a purchaser's  decision as to which product lines to carry
in the limited space available.  Further,  because of the efficiencies  achieved
through the ability to order all or part of a complete line of products from one
supplier (with  possible  volume  discounts),  as opposed to satisfying the same
requirements  through  a  variety  of  different  sources,  retailers  and other
purchasers of automotive parts seek to purchase products from fewer but stronger
suppliers.


                                           Page 3 of 41

<PAGE>



Products

        The Company sells over 60,000 different  automotive  replacement  parts,
fasteners  and  service  line  products  to meet a variety  of needs,  including
"hard-to-find" parts sold under one of the Motormite(R) family of brands such as
the  HELP!(R)  brand name,  a  comprehensive  array of  automotive  and hardware
fasteners  sold under the  Dorman(R)  and  Pik-A-Nut(R)  family of brand  names,
service  line  products  sold  under  the  Champ(R)  family  of brand  names and
traditional  automotive  replacement  parts sold under the Company's other brand
names as well as under customers' private label brands. Approximately 85% of the
Company's  revenues  are derived  from  products  sold under its more than sixty
brand names.

Motormite(R) - brand names within the  Motormite(R)  master brand  represent the
Company's "hard-to-find" parts, including, among others, the following:

* HELP!(R)                   - An extensive array of replacement parts,including
                             window handles, knobs and switches, door handles,
                             control knobs, cigarette lighters, interior trim
                             parts, pedal pads, wheel center caps, headlamp
                             aiming screws and retainer rings, license plate
                             frames and parts, windshield washer parts, hood
                             latch release cables, radiator parts, battery hold-
                             down bolts, valve train parts, spring U-bolts,
                             tailgate cables, and power steering filler caps

* Conduct-Tite!(R)           - Electrical connectors

* Mighty Flow!(R)            - Air intake, carburetor preheater and defroster
                               duct hoses

* Look!(R)                   - Sideview mirror glass

* Cool-Aid!(R)               - Air conditioning O-rings, gaskets, valves, tubes
                               and switches

* Speedi-Boot!TM             - Constant velocity joint boots and clamps


Dorman(R)  - brand  names  within  the  Dorman(R)  master  brand  represent  the
Company's  automotive  fasteners and traditional  replacement parts,  including,
among others, the following:

* Manifold Plus TM           - exhaust manifolds and related components

* Oil-Tite!(R)               - Oil drain plugs and gaskets

* Cable-All!TM               - Accelerator, detent and transhift cables

* Gear-Up!(R)                - Flywheels, ring gears and flex plates

* Quick-Boot(R)              - Constant velocity joint boots and clamps

* Uni-Fit TM                 - Constant velocity joint boots and clamps

* Start!TM                   - Alternator and starter repair components







                                           Page 4 of 41

<PAGE>



Champ(R) - brand names within the Champ(R)  master brand represent the Company's
automotive  shop  supplies  and  accessories,   including,   among  others,  the
following:

* Metal Work!TM              - A program of metal-working  related
                             categories,    including   welding   supplies   and
                             accessories,   cutting   equipment   and  supplies,
                             abrasives  and  related  tools and brushes for hand
                             and power applications

* SafetyXCounts!TM           - Safety products relating to compliance items,
                             gear for personal protection and first aid


Pik-A-Nut(R)-  the Pik-A-Nut(R) brand represents the Company's automotive and
hardware fasteners

Platinum  Parts  TM - the  Platinum  Parts  TM brand  represents  the  Company's
automotive  replacement  parts and supplies for  automotive  dealers and salvage
yards

Brakeware(R) - the Brakeware(R)  brand represents the Company's  hydraulic brake
parts, including wheel cylinders and related hardware

        The  remainder of the  Company's  revenues are  generated by the sale of
parts packaged by the Company,  or others, for sale in bulk or under the private
labels  of parts  manufacturers  (such as  Federal  Mogul and  Dana),  na tional
warehouse  distributors  (such as NAPA) and  automobile  manufacturers  or their
dealers  (such as General  Motors'  "AC/Delco"  brand).  During the years  ended
December  2000,  1999 and 1998,  no single  product or related group of products
accounted for more than 10% of gross sales.


Product Development

        Product   development  is  central  to  the  Company's   business.   The
development of a broad range of products,  many of which are not conveniently or
economically  available  elsewhere,  has in part, enabled the Company to grow to
its present  size and is  important  to its future  growth.  In  developing  its
products,  the Company's strategy has been to design and package its parts so as
to make them  better and easier to install  and/or use than the  original  parts
they replace and to sell  automotive  parts for the broadest  possible  range of
uses.  Through  careful  evaluation,  exacting design and precise  tooling,  the
Company is frequently  able to offer products which fit a broader range of makes
and models than the original equipment parts they replace, such as an innovative
neoprene  replacement  oil drain plug which fits not only a variety of Chevrolet
models,  but also Fords,  Chryslers and a range of foreign  makes.  This assists
retailers and other  purchasers in maximizing  the  productivity  of the limited
space  available  for each  class of part sold.  Further,  where  possible,  the
Company improves its parts so they are better than the parts they replace. Thus,
many of the  Company's  products  are  simpler  to  install  or  use,  such as a
replacement  "split  boot" for a constant  velocity  joint that can be installed
without  disassembling  the joint itself and a replacement  spare tire hold-down
bolt that is longer and easier to thread  than the  original  equipment  bolt it
replaced.  In addition,  the Company often packages  different items in complete
kits to ease installation.

        Ideas for  expansion  of the  Company's  product  lines arise  through a
variety of sources.  The Company main tains an in-house  engineering  staff that
routinely  generates  ideas for new parts and expansion of existing  lines.  Fur
ther, the Company  maintains an "800" telephone  number and an Internet site for
"New Product  Suggestions"  and receives,  either  directly or through its sales
force,  many ideas from the  Company's  customers as to which types of presently
unavailable parts the ultimate consumers are seeking.

        Each new product idea is reviewed by the Company's engineering staff, as
well  as  by  members  of  the  production,   sales,   finance,   marketing  and
administrative staffs. In determining whether to produce an individual part or a
line of  related  parts,  the  Company  considers  the number of  vehicles  of a
particular model to which the part


                                           Page 5 of 41

<PAGE>



may be applied,  the potential for modifications which will allow the product to
be used over a broad range of makes and models,  the average age of the vehicles
in which the part would be used and the  failure  rate of the part in  question.
This  review  process  winnows the many new  product  suggestions  to those most
likely to enhance the Company's existing product lines or to support new product
lines.


Sales and Marketing

        The Company  markets its parts to three groups of purchasers who in turn
supply individual consumers and professional installers:

               (i)  Approximately  41% of the  Company's  revenues are generated
        from sales to automotive  aftermarket  retailers (such as AutoZone,  The
        Pep Boys and Advance),  local independent parts wholesalers and national
        general  merchandise  chain  retailers.  The  Company  sells some of its
        products  to  virtually  all  major  chains  of  automotive  aftermarket
        retailers;

               (ii)  Approximately  30% of the Company's  revenues are generated
        from sales to warehouse  distributors (such as Auto Value,  Carquest and
        NAPA), which may be local,  regional or national in scope, and which may
        also engage in retail sales; and

               (iii) The balance of the Company's  revenues are  generated  from
        international sales and sales to special markets,  which include,  among
        others,  home center and hardware (such as Wal- Mart and Lowe's) salvage
        yards,  automobile dealers and the parts  distribution  systems of parts
        manufacturers (such as Federal Mogul and Dana).

        The Company utilizes a number of different methods to sell its products.
The Company's  approximately 25 person direct sales force solicits  purchases of
the  Company's  products  directly  from  customers,  as  well as  managing  the
activities of more than 10 independent  manufacturer's  representative agencies.
The Company  uses  independent  manufacturer's  representative  to help  service
existing retail and warehouse distribution customers, providing frequent on-site
contact.  The sales focus is  designed  to increase  sales by adding new product
lines and expanding product  selection within existing  customers and secure new
customers. For certain of its major customers, and its private label purchasers,
the Company relies  primarily  upon the direct efforts of its sales force,  who,
together with the marketing  department  and the Company's  executive  officers,
coordinate the more complex pricing and ordering requirements of these accounts.

        The  Company's   sales  efforts  are  not  directed  merely  at  selling
individual  products,  but rather more broadly towards selling groups of related
products that can be displayed on attractive  Company-designed  display systems,
thereby maximizing each customer's ability to present the Company's product line
within the confines of the available area.

        The  Company  prepares  a number of  catalogs,  application  guides  and
training  materials  designed  to  describe  the  Company's  products  and other
applications  as well as to train the  customers'  salesmen in the promotion and
sale of the Company's products. Every three to four years the Company prepares a
new master  catalog  which  lists all of its  products.  The  catalog is updated
periodically through supplements.

        The Company currently services more than 12,000 active accounts.  During
2000, 1999 and 1998, one customer  (AutoZone),  accounted for approximately 20%,
21% and 15% of sales, respectively.







                                           Page 6 of 41

<PAGE>



Manufacturing

        Substantially  all of the products sold by the Company are  manufactured
to its  specifications by third parties,  although  replacement  sideview mirror
glass (sold under its Look! trademark),  is manufactured by the Company. Because
numerous contract  manufacturers are available to manufacture its products,  the
Company is not dependent upon the services of any one contract  manufacturer  or
any small group of them, so no one vendor  supplies 10% or more of the Company's
products.  In 2000, as a percentage of the total dollar volume of purchases made
by the Company,  approximately 63% of the Company's products were purchased from
various  suppliers  throughout  the United States and  approximately  37% of the
Company's products were purchased directly from a variety of foreign countries.

        Once  a new  product  has  been  developed,  the  Company's  engineering
department produces detailed en gineering drawings and prototypes which are used
to solicit bids for  manufacture  from a variety of vendors in the United States
and abroad. After a vendor is selected, tooling for a production run is produced
by the vendor at the Company's  expense.  A pilot run of the product is produced
and subjected to rigorous testing by the Company's en gineering  department and,
on occasion, by outside testing laboratories and facilities in order to evaluate
the precision of manufacture and the resiliency and structural  integrity of the
materials used. If acceptable, the product then moves into full production.

Packaging, Inventory and Shipping

        Finished  products  are  received  at  one  or  more  of  the  Company's
facilities,  depending on the type of part.  Samples of each shipment are tested
upon receipt. If cleared,  these shipments of finished parts are logged into the
Company's computerized production tracking systems and staged for packaging.

        The Company employs a variety of custom-designed  packaging machines for
"blister  packaging,"  in  which  individual  parts  are  dropped  into  plastic
"blister" cups to which a preprinted card backing with  appropriate  graphics is
sealed,  and for "skinning," in which parts are pre-positioned on a printed card
backing,  over which a malleable plastic "skin" is laid and fixed by vacuum- and
heat-treatment  processes.  In either  event,  the  printed  card  contains  the
Company's label (or a private label), a part number,  a universal  packaging bar
code suitable for electronic scanning, a description of the part and appropriate
installation  instructions.  Products are also sold in bulk to automotive  parts
manufacturers and packagers.  Computerized tracking systems, mechanical counting
devices and  experienced  workers  combine to assure that the proper variety and
number  of  parts  meet the  correct  packaging  and  backing  materials  at the
appropriate  places and times to produce  the  required  quantities  of finished
products.

        Completed  inventory  is  stocked  in  the  warehouse  portions  of  the
Company's  facilities  and is organized ac cording to  historical  popularity in
order to aid in retrieval for shipping.  The Company strives to maintain a level
of inventory to adequately  meet current  customer order demand with  additional
inventory to satisfy new customer orders and special programs. In the aggregate,
this has  resulted  in  approximately  a three  month  supply  of its  products,
packaged and readily  available for  shipment,  and a two to six month supply of
product in finished bulk form ready for packaging.

        The Company  ships its  products  from all of its  locations,  either by
contract  carrier,  common  carrier or parcel  service.  Products are  generally
shipped to the  customer's  central  warehouse for  redistribution  within their
network. In certain  circumstances,  at the request of the customer, the Company
ships directly to the customer's stores.

Competition

        The replacement automotive parts industry is highly competitive. Various
competitive  factors  affecting the automotive  aftermarket  are price,  product
quality,  breadth of product line,  range of applications and customer serv ice.
Substantially  all of the  Company's  products are subject to  competition  with
similar products manufactured by


                                           Page 7 of 41

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other manufacturers of aftermarket automotive repair and replacement parts. Some
of these  competitors  are divi sions and  subsidiaries of companies much larger
than the  Company,  and  possess a longer  history  of  operations  and  greater
financial and other resources than the Company.  Further,  some of the Company's
private label customers also compete with the Company.


Proprietary Rights

        While the Company takes steps to register its trademarks  when possible,
it does not believe that trademark  registration  is generally  important to its
business.  Similarly, while the Company actively seeks patent protection for the
products and  improvements  which it  develops,  it does not believe that patent
protection is generally important to its business.


Employees

        At December 30, 2000,  the Company had 985  employees,  of whom 926 were
employed full-time and 59 were employed part-time. Of these employees,  699 were
engaged in  production,  inventory,  or quality  control,  50 were  involved  in
engineering and product development,  85 were employed in sales and order entry,
and the  remaining  151,  including  the  Company's 7 executive  officers,  were
devoted to administration, finance and strategic planning.

        No  employee  is covered by any  collective  bargaining  agreement.  The
Company considers its relations with its employees to be generally good.


Investment Considerations

        Increasing Service Life. Advancing technology and competitive  pressures
have compelled  original  equipment  automobile and parts  manufacturers  to use
parts  with  longer  service  lives,  which  are  covered  by  longer  and  more
comprehensive  warranties.  This may have the effect of reducing  demand for the
Company's  products by delaying the onset of repair  conditions  requiring their
use.

        Competition  for Shelf Space.  Since the amount of space  available to a
retailer  and  other  purchasers  of the  Company's  products  is  limited,  the
Company's products compete with other automotive  aftermarket products,  some of
which are entirely dissimilar and otherwise  non-competitive  (such as car waxes
and engine  oil),  for shelf and floor  space.  No  assurance  can be given that
additional space will be available in a customers'  stores to support  expansion
of the number of products offered by the Company.

        Concentration of Sales to Certain Customers. A significant percentage of
the Company's  sales have been,  and will continue to be,  concentrated  among a
relatively  small  number  of  customers.  In 2000,  1999 and 1998 one  customer
(AutoZone) accounted for approximately 20%, 21% and 15% of sales,  respectively.
The Company  anticipates  that this  concentration of sales among customers will
continue  in the future.  The loss of a  significant  customer or a  substantial
decrease in sales to such a customer could have a material adverse effect on the
Company's sales and operating results. See "Management's Discussion and Analysis
of Results of  Operations  and  Financial  Condition"  and  "Business-Sales  and
Marketing."

        Dependence on Senior  Management.  The success of the Company's business
will  continue to be dependent  upon  Richard N. Berman,  Chairman of the Board,
President  and Chief  Executive  Officer and Steven L.  Berman,  Executive  Vice
President,  Secretary-Treasurer and Director. The loss of the services of one or
both of these  individuals could have a material adverse effect on the Company's
business.



                                           Page 8 of 41

<PAGE>



        Dividend Policy.  The Company does not intend to pay cash dividends for
the foreseeable future. Rather, the Company intends to retain its earnings, if
any, for the operation and expansion of the Company's business.

        Control by Officers, Directors and Family Members. Richard N. Berman and
Steven L. Berman,  who are officers and directors of the Company,  their father,
Jordan S.  Berman,  and  their  brothers,  Marc H.  Berman  and Fred B.  Berman,
beneficially own approximately 49 % of the outstanding Common Stock and are able
to elect the Board of Directors, determine the outcome of most corporate actions
requiring shareholder approval (including certain fundamental  transactions) and
control the policies of the Company.

        Possible Environmental Liability.  See "Legal Proceedings."




                                           Page 9 of 41

<PAGE>



Item 2.  Properties.

Facilities

The Company currently has 12 warehouse and office facilities  located throughout
the  United  States  and  Sweden.  Three of these  facilities  are owned and the
remainder  are  leased.  The  Company's  headquarters  and  principal  warehouse
facilities, are as follows:

        Location             Description
        -------------------  ---------------------------------------------------
        Colmar, PA           Warehouse and office - 334,000 sq. ft. (leased) (1)
        Warsaw, KY           Warehouse and office - 326,000 sq. ft. (owned) (2)
        Carrollton, GA       Warehouse and office - 100,000 sq. ft. (leased) (3)
        Baltimore, MD        Warehouse and office - 83,000 sq. ft.(leased)
        Allentown, PA        Warehouse and office - 65,000 sq. ft. (leased)
        Louisiana, MO        Warehouse and office - 62,000 sq. ft. (owned)

In the opinion of  management,  the Company's  existing  facilities  are in good
condition.
-----------------

(1)  Leased by the  Company  from a  partnership  (the  "partnership")  of which
Richard N. Berman,  President and Chief  Executive  Officer of the Company,  and
Steven L. Berman,  Executive Vice President of the Company, their father, Jordan
S. Berman, and their brothers,  Marc H. Berman and Fred B. Berman, are partners.
Under the lease the Company paid rent of $3.33 per square foot ($1.1 million per
year) in 2000.  The rents  payable will be adjusted on January 1 of each year to
reflect  annual  changes in the Consumer  Price Index for All Urban  Consumers -
U.S.  City  Average,  All Items.  The lease also  provides  that, as between the
Company and the related  partnership  lessor,  the lessor and its partners  will
bear any  environmental  liability  and all related  expenses,  including  legal
expenses,  incurred  by the  Company or the lessor as a result of matters  which
arose other than from activities of the Company  (although for any environmental
liability arising from the Company's activities,  the Company will bear all such
liability and any related  expenses,  including legal expenses,  incurred by the
Company or the  lessor).  The lease will expire on  December  28,  2002.  In the
opinion of management,  the terms of this lease are no less favorable than those
which could have been obtained from an unaffiliated party.

        The property is being purchased by the partnerships  from the Montgomery
County Industrial  Development  Corporation  ("MCIDC") under an installment sale
agreement.  MCIDC has, in turn,  borrowed  approximately  $1,971,000  from First
Union  National  Bank  and   approximately   $1,161,000  from  the  Pennsylvania
Industrial  Development  Authority  ("PIDA")  to fund in full its  purchase  and
development of the Pennsylvania  property.  The partnerships'  payments to MCIDC
under the  installment  sale  agreement are required to be at least equal to the
principal and interest payable by MCIDC under these two loans, and the Company's
rental payments on the  Pennsylvania  property are required to be at least equal
to the  partnership's  payments under the installment sale agreement with MCIDC.
The Company has guaranteed  the  obligations  of the  partnerships  and MCIDC to
First Union and of MCIDC to PIDA. Under the provisions of the agreement pursuant
to which  the  partnerships  acquired  the  property,  the  partnerships  may be
required to indemnify the seller of that property for environmental  liabilities
which existed at the time of the sale.

(2) The  Kentucky  facility is being  purchased,  pursuant  to a lease  purchase
agreement,   from  the  City  of  Warsaw,  Kentucky  (the  "City").  The  City's
acquisition  of the fee  interest and building  construction  was financed  with
$6,500,000  Floating/Fixed  Rate Industrial  Building Revenue Bonds, Series 1988
(SDI Operating  Partners L.P. Project) (the "Bonds").  Under the lease agreement
for the Kentucky  property,  the Company pays interest monthly on the Bonds at a
floating  rate,  and makes a monthly  "sinking fund" payment to cover the annual
principal  payment of $300,000 or $350,000 in alternating  years, with the final
payment due in July,  2009.  In 2000 the Company paid  $300,000 in principal and
$135,000 in interest under the Bonds.

(3)  Leased by the  Company  from a  partnership  (the  "partnership")  of which
Richard N. Berman,  President and Chief  Executive  Officer of the Company,  and
Steven L. Berman,  Executive Vice President of the Company, their father, Jordan
S. Berman, and their brothers,  Marc H. Berman and Fred B. Berman, are partners.
Under the lease,  the Company paid rent of $2.58 per square foot ($0.26  million
per year) in 2000.  The lease will  expire on January  2, 2005.  The  Company is
currently  not using this  facility and is  attempting to sub-lease the property
and as an  alternative,  is assisting the  partnership in attempting to sell the
property.  In the  opinion  of  management,  the terms of this lease are no less
favorable than those which could have been obtained from an unaffiliated party.







                                           Page 10 of 41

<PAGE>



Item 3.  Legal Proceedings.

        In addition to commitments and  obligations  which arise in the ordinary
course of business,  the Company is subject to various  claims and legal actions
from time to time involving contracts,  competitive practices, trademark rights,
product  liability  claims and other  matters  arising out of the conduct of the
Company's business.

        The Company's primary operating facility in Colmar, Pennsylvania,  which
is leased from the  partnership,  is located  within an area  identified  by the
Environmental  Protection  Agency  ("EPA") as a possible  source or  location of
volatile  organic  chemical  contamination.  In  November  1990,  the EPA sent a
general  notice  letter to certain  present and former  owners and  operators of
properties  within this area,  informing  them that they may be liable under the
Comprehensive  Environmental  Response,  Compensation  and  Liability  Act  with
respect to this contamination. As a current operator of the Colmar property, the
Company received such a general notice letter. The Company may be deemed jointly
and severally liable,  together with all other potentially  responsible parties,
for (i) the  costs  of  performing  a study  of the  nature  and  extent  of the
contamination and the possible alternatives for remediation,  if any, as well as
(ii) the costs of effectuating that remediation. The Company's operations do not
generally  have,  and  have  not  generally  had,  an  adverse  impact  upon the
environment or produce or use the materials of environmental concern that caused
the contamination  being investigated by the EPA. Based on data generated by the
EPA in 1998, the Company believes that its Colmar site has not historically been
a source of such  contamination,  and as such,  the  Company  believes  that any
remediation  order issued by the EPA would not include the Company or the Colmar
site. In addition, the Company's lease for its Colmar facility provides that, as
between  the  Company and the  related  partnership  lessor,  the lessor and its
partners  will  bear  any  environmental  liability  and all  related  expenses,
including legal  expenses,  incurred by the Company or the lessor as a result of
the  presence  of  hazardous  substances  at  the  facility  (although  for  any
environmental liability arising from the Company's activities,  the Company will
bear all such  liability and any related  expenses,  including  legal  expenses,
incurred by the Company or the lessor).

        On February 27,  1996,  the  Company's  subsidiary,  Dorman  Products of
America, Ltd. ("Dorman"),  filed a complaint in the United States District Court
for the Eastern District of Pennsylvania  against SDI Operating  Partners,  L.P.
("SDI") for damages  resulting  from,  inter alia, an alleged  breach of various
representations  and warranties  contained in the Asset Purchase Agreement dated
as of October 5, 1994  between  Dorman and SDI. On April 25,  1996,  SDI filed a
complaint in the Court of Common Pleas, Montgomery County,  Pennsylvania against
Dorman and the Company for damages of  approximately  $450,000  resulting  from,
inter alia,  Dorman's alleged failure to use its "best efforts" to assist SDI in
collecting  certain past due accounts  receivable  which were not transferred to
Dorman as a result of the acquisition.  In addition,  SDI is seeking declaratory
judgment  that SDI has not breached the  representations  and  warranties of the
Asset  Purchase  Agreement as alleged by Dorman in the federal court action.  In
May 1996, the issues were  consolidated  and will proceed in the Court of Common
Pleas.

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

        There were no matters submitted to a vote of the security holders of the
Company during the fourth quarter of fiscal year 2000.

Item 4.1  Certain Executive Officers of the Registrant.

        The following table sets forth certain  information  with respect to the
executive officers of the Company:

Name                   Age      Position with the Company
-----------------      ---      ----------------------------------------------
Mathias J. Barton       41      Senior Vice President, Chief Financial Officer

Richard N. Berman       44      President, Chief Executive Officer, Chairman
                                of the Board of Directors, and Director


                                           Page 11 of 41

<PAGE>



Steven L. Berman        41       Executive Vice President, Secretary-Treasurer,
                                 and Director

Edward L. Dean          44       Senior Vice President, Marketing

David A. Eustice        40       Senior Vice President, Chief Operating Officer

Ronald R. Montgomery    59       Senior Vice President, Sales

Barry D. Myers          41       Senior Vice President, General Counsel and
                                 Assistant Secretary


        Mathias J. Barton  joined the  Company in  November  1999 as Senior Vice
President,  Chief Financial Officer. Prior to joining the Company Mr. Barton was
Senior  Vice  President  and  Chief  Financial   Officer  of  Central  Sprinkler
Corporation, a manufacturer and distributor of automatic fire sprinklers, valves
and component parts. From May 1989 to September 1998, Mr. Barton was employed by
Rapidforms,  Inc., most recently as Executive Vice President and Chief Financial
Officer. He is a graduate of Temple University.

        Richard N.  Berman has been  President,  Chief  Executive  Officer and a
Director of the Company since its inception in October 1978. He is a graduate of
the University of Pennsylvania.

        Steven L. Berman has been Executive Vice-President, Secretary-Treasurer
and a Director of the Company since its inception.He attended Temple University.

        Edward L. Dean joined the Company in November 1997 as Vice President,
Marketing and was named Senior Vice President, Marketing in December 1999. Prior
to joining the Company Mr. Dean was the Vice President of Sales with Angelo
Brothers Co., a lighting products company. He is a graduate of Cincinnati
Technical College.

        David A. Eustice joined the Company in December 1996 as Vice  President,
Operations  and was named  Chief  Operating  Officer in January  1998.  Prior to
joining the Company Mr.  Eustice was the Vice  President of Operations  with the
Baldwin  Hardware  Division  of  Masco  Corporation.   Baldwin  is  a  high  end
manufacturer  and  international  distributor of  architectural  hardware.  From
August 1990 to January 1994, Mr.  Eustice was a Senior  Project  Manager for USC
Consulting,  a operational  improvement  firm.  While with USC  Consulting,  Mr.
Eustice  consulted to clients including IBM, Copper  Industries,  PPG Industries
and Masco  Corporation.  He is a graduate of The State University of New York at
Buffalo.

        Ronald R. Montgomery  joined the Company in June 1997 as Vice President,
Sales and was named  Senior Vice  President,  Sales in December  1999.  Prior to
joining the  Company Mr.  Montgomery  was Senior Vice  President,  Sales for the
Coleman Company, responsible for North American sales in the outdoor and camping
equipment  division.  From December 1979 to October 1995,  Mr.  Montgomery  held
various  senior sales  positions  with Black & Decker,  Inc. He is a graduate of
Miami University (Ohio).

        Barry D. Myers has been an employee of the Company since March 1988, and
was Vice President,  General Counsel and Assistant  Secretary for more than five
years.  In December  1999,  Mr. Myers was named Senior Vice  President,  General
Counsel  and  Assistant  Secretary.  He is a graduate  of  Moravian  College and
Syracuse University College of Law, and is a member of the Pennsylvania Bar.






                                           Page 12 of 41

<PAGE>



                                              PART II

Item 5.  Market for Registrant's Common Equity and Related Shareholder Matters.

        The  Company's  shares  of  common  stock  are  traded  publicly  in the
over-the-counter  market under the NASDAQ system.  At March 19, 2001, there were
158 holders of record of common stock,  representing  more than 1,500 beneficial
owners.  The last price for the  Company's  common stock on March 19,  2001,  as
reported by NASDAQ,  was $2.06 per share.  Since the  Company's  initial  public
offering,  it has  paid  no cash  dividends.  The  Company  does  not  presently
contemplate  paying any such dividends in the foreseeable  future.  The range of
high and low sales  prices for the  Company's  common  stock for each  quarterly
period of 2000 and 1999 are as follows:


                            2000                     1999
                   -----------------------  -----------------------
                      High        Low          High        Low
------------------ ---------- ------------  ---------- ------------
First Quarter       $6.00       $2.38          $9.00        $7.13
Second Quarter       3.50        2.25           8.75         6.50
Third Quarter        3.13        2.50          10.75         5.50
Fourth Quarter       2.75        1.19           6.50         4.41




Item 6.  Selected Financial Data.

<TABLE>


                               Selected Consolidated Financial Data
<CAPTION>

                                                          Year Ended December
                               -------------------------------------------------------------------------
(in thousands, except per
 share data                        2000 (a)       1999 (b)        1998           1997           1996
-----------------------------  --------------  ------------ -------------- --------------- -------------
<S>                                  <C>           <C>            <C>             <C>           <C>
Statement of Operations Data:
   Net sales                         $201,390      $236,689       $178,301        $153,046      $146,952
   Income from operations              12,308         1,633         16,419          14,784        13,244
   Net income (loss)                    4,095        (3,602)         7,556           6,714         5,662
   Earnings (loss) per share:
      Basic                              0.49         (0.43)          0.91            0.83          0.71
      Diluted                            0.48         (0.43)          0.90            0.83          0.71
Balance Sheet Data:
   Total assets                       159,879       188,004        183,948         128,707       128,970
   Working capital                     83,262        96,612         97,620          58,609        63,368
   Long-term debt                      65,066        85,283         80,004          44,336        56,248
   Shareholders' equity                72,384        68,234         71,614          61,162        54,169

<FN>

(a) Results for 2000 include non-recurring  revenues and gain on sale of product
line of $5,500 and $1,600 ($1,100 after tax or $0.13 per share), respectively.

(b) Results for 1999 include a restructuring charge of $11,400 ($7,500 after tax
or $0.90 per share).
</FN>
</TABLE>






                                           Page 13 of 41

<PAGE>



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

General

       Over the  periods  presented,  the  Company  has  focused  its efforts on
providing an expanding  array of new product  offerings  and  strengthening  its
relationships with its customers.  To that end, the Company has made significant
investments  to increase  market  penetration,  primarily in the form of product
development, customer service, customer credits and allowances.

       The  Company  calculates  its  net  sales  by  subtracting   credits  and
allowances  from  gross  sales.   Credits  and  allowances   include  costs  for
co-operative  advertising,  product  returns,  discounts  given to customers who
purchase  new  products  for  inclusion  in  their  stores,   and  the  cost  of
competitors'  products that are purchased from the customer in order to induce a
customer  to  purchase  new  product  lines from the  Company.  The  credits and
allowances are designed to increase  market  penetration and increase the number
of product lines carried by customers by displacing competitors' products within
customers' stores and promoting consolidation of customers' suppliers.

       The Company  may  experience  significant  fluctuations  from  quarter to
quarter in its results of  operations  due to the timing of orders placed by the
Company's customers.  Generally,  the second and third quarters have the highest
level of customer orders, but the introduction of new products and product lines
to customers may cause significant fluctuations from quarter to quarter.

       The Company  operates on a fifty-two,  fifty-three  week period ending on
the last  Saturday  of the  calendar  year.  Results  for the fiscal  year ended
December 30, 2000 include  fifty-three  weeks,  while the results for the fiscal
years ended December 25, 1999 and December 26, 1998 include fifty-two weeks.

       In the fourth quarter of fiscal 2000, the Company  adopted the provisions
of Emerging  Issues Task Force (EITF) Issue No. 00-10,  "Accounting for Shipping
and Handling Fees and Costs",  by  reclassifying  freight  expense from selling,
general and  administrative  expense to cost of sales in all periods  presented.
The adoption of EITF 00-10 increased cost of sales and reduced selling,  general
and  administrative  expenses in 1999 and 1998 by $7.1 million and $4.7 million,
respectively.

Acquisitions

        In January 1998,  the Company  acquired  Scan-Tech  USA/Sweden  A.B. and
related entities ("Scan- Tech").  Headquartered in Stockholm,  Sweden, Scan-Tech
is a global  distributor of replacement  automotive  parts,  primarily Volvo and
Saab.

        In September 1998, the Company began its acquisition of selective assets
of the Service Line Division  ("Champ") of Standard Motor  Products,  Inc. Champ
includes the Champ  Service  Line,  Pik-A-Nut and Everco.  The  acquisition  was
completed in stages with the final stage (Everco) occurring in January 1999.

        In October  1998,  the Company  acquired  the assets of  Allparts,  Inc.
Headquartered  in  Louisiana,  Missouri,  Allparts  is  a  leading  supplier  of
automotive hydraulic brake parts to the automotive aftermarket.

Restructuring Charges

        In  the  fourth  quarter  of  fiscal  1999,   the  Company   recorded  a
restructuring  charge  of $11.4  million  ($7.5  million  after tax or $0.90 per
share) to reflect costs primarily  related to inventory  write downs  associated
with the elimination of a significant  number of  underperforming  products,  as
well as the  closing of a  warehouse  and  production  facility  in  Carrollton,
Georgia,  and a work force  reduction  of 158 people.  A total of $9.8  million,
representing  inventory  write  downs,  was  charged  to cost of sales  and $1.6
million was charged to selling,


                                         Page 14 of 41

<PAGE>



general  and  administrative  expenses.  A total of $7.6  million  in costs were
incurred and charged  against  restructuring  reserves  during fiscal 2000.  The
Company  believes  that  restructuring  reserves  as of  December  30,  2000 are
adequate to cover remaining costs to be incurred.


Results of Operations

        The  following  table  sets  forth,  for  the  periods  indicated,   the
percentage  of  net  sales  represented  by cer  tain  items  in  the  Company's
Consolidated Statements of Operations.

<TABLE>
<CAPTION>

                                             Percentage of Net Sales
                             -------------------------------------------------------
                                                   Year Ended
                             -------------------------------------------------------
                                December 30,      December 25,      December 26,
                                    2000              1999              1998
---------------------------  ------------------ ---------------- -------------------
<S>                                <C>              <C>                 <C>
Net sales                          100.0%           100.0%              100.0%
Cost of goods sold                  65.9             71.3                63.1
---------------------------  ------------------ ---------------- -------------------
Gross profit                        34.1             28.7                36.9
Selling, general and
  administrative expenses           28.0             28.0                27.7
---------------------------  ------------------ ---------------- -------------------
Income from operations               6.1              0.7                 9.2
Interest expense, net                3.0              3.0                 2.6
---------------------------  ------------------ ---------------- -------------------
Income (loss) before taxes           3.1             (2.3)                6.6
Provision (benefit) for taxes        1.1             (0.8)                2.4
---------------------------  ------------------ ---------------- -------------------
Net income (loss)                    2.0%            (1.5)%               4.2%
===========================  ================== ================ ===================
</TABLE>


2000 Compared to 1999

        During the first  quarter of fiscal  2000,  the Company  sold all of its
inventory and certain other assets related to its lift support product line as a
result of a strategic  decision to  eliminate  this  product  line.  Fiscal 2000
revenues  include  non-recurring  net sales of $5.5  million and gross profit of
$1.6 million  attributable to the sale of the inventory and related assets.  The
gain on the sale was $1.6 million ($1.1 million after tax or $0.13 per share).

        Net sales  decreased  to $201.4  million in 2000 from $236.7  million in
1999, a decrease of $35.3  million or 14.9%.  The sales decline is the result of
lower sales in  substantially  all of the  Company's  product  lines due to weak
automotive  aftermarket  conditions  and the  Company's  strategic  decision  to
eliminate  unprofitable  products in connection  with the  restructuring  of its
business  in the  fourth  quarter  of 1999.  In  addition,  the sale of the lift
support inventory  mentioned above accounted for  approximately  $6.0 million of
the net sales reduction in 2000. This sales reduction was  substantially  offset
by revenues from a new fiscal 2000 initiative to sell the Company's  "Pik-a-Nut"
brand of hardware and general use fasteners to Wal-Mart.  Net income in 2000 was
negatively impacted by start up losses from this and other new initiatives.

        Cost of goods sold  decreased to $132.6  million from $168.7  million in
1999,  a decrease  of $36.1  million.  Restructuring  charges  recorded  in 1999
accounted for $9.8 million of this decrease. In addition, cost of goods


                                         Page 15 of 41

<PAGE>



sold in 2000 includes $3.8 million  attributable to the sale of the lift support
inventory  mentioned  above.  Cost of goods sold as a percentage of sales before
1999  restructuring  charges and without the impact of the lift  support sale in
2000  decreased  to 65.7% from 67.1% in 1999.  This decline is  attributable  to
lower  operating  costs as a result of savings  achieved from the  restructuring
initiatives implemented early in 2000.

        Selling,  general and administrative expenses in 2000 decreased to $56.5
million  from $66.3  million  in 1999,  a decrease  of $9.8  million,  or 14.8%.
Restructuring  charges  recorded  in 1999  accounted  for $1.6  million  of this
decrease. As a percentage of sales, selling, general and administrative expenses
before  restructuring  charges and the lift support inventory sale were 28.9% in
2000  compared  to 27.4% in 1999.  This  increase  as a  percentage  of sales is
primarily attributable to start up costs associated with new initiatives and the
decline in sales in 2000,  as the  Company  was not able to reduce  fixed  costs
adequately to offset the lower sales levels experienced in 2000.

        Interest  expense,  net  decreased  to $6.0  million  in 2000  from $7.0
million in 1999. The decline in interest costs is the result of lower  borrowing
levels in 2000 due to reduced  working  capital  requirements.  Working  capital
levels  declined in 2000 primarily as a result of lower accounts  receivable and
inventory levels.

        The  Company  recorded an income tax  provision  at the rate of 34.8% in
2000  compared to an income tax benefit at an  effective  rate of 32.4% in 1999.
The higher  effective  income tax rate in 2000 is primarily due to the lack of a
state income tax benefit on the $11.4 million  restructuring  charge recorded in
1999.

1999 Compared to 1998

        Net sales  increased  to $236.7  million in 1999 from $178.3  million in
1998, an increase of $58.4 million, or 32.7 %. Approximately $29 million of this
increase  is the  result of a full  year of sales in 1999 from two  acquisitions
that were  completed in 1998 - Allparts  and Champ.  The  remaining  increase is
primarily  the result of sales volume  increases in the  Company's  core product
lines.

        Cost of goods  sold  increased  to $168.7  million  in 1999 from  $112.6
million in 1998, an increase of $56.1 million.  Restructuring  charges accounted
for $9.8 million of this  increase.  Cost of goods sold as a percentage of sales
before the  restructuring  charges  were 67.1%  compared to 63.1% in 1998.  This
increase is primarily  attributable to lower profitability in the Company's core
business and a change in mix as the businesses acquired in 1998 have higher cost
of goods sold as a percentage of sales than the  Company's  core  business.  The
lower  profitability  in the core business is the result of lower selling prices
to a number of customers in 1999 as a result of  consolidation in the automotive
aftermarket.

        Selling,  general and administrative expenses in 1999 increased to $66.3
million  from $49.3  million in 1998,  an increase of $17.0  million,  or 34.5%.
Restructuring  charges  accounted  for  $1.6  million  of  this  increase,   and
approximately  $5 million of the  increase is the result of a full year of costs
in 1999 of  acquisitions  made in  1998.  Selling,  general  and  administrative
expenses as a  percentage  of sales before  restructuring  charges were 27.4% in
1999 and 27.7% in 1998.

        Interest  expense,  net  increased  to $7.0  million  in 1999  from $4.6
million in 1998.  The increase  resulted from higher average debt levels in 1999
and higher interest costs on the Company's Revolving Credit Facility.  Borrowing
levels increased in 1999 due to higher working capital levels primarily  related
to higher  inventory,  and were at higher average levels for the year due to the
acquisitions made in 1998.

        The Company recorded an income tax benefit at an effective rate of 32.4%
in 1999.  This compares to an effective  income rate of 35.9% in 1998. The lower
effective income tax rate in 1999 is primarily due to the lack of a state income
tax benefit on the $11.4 million restructuring charge recorded in 1999.




                                         Page 16 of 41

<PAGE>



Liquidity and Capital Resources

        The Company has financed its growth through the combination of cash flow
from its  operations,  issuance  of senior  notes,  borrowings  under its credit
facilities and industrial revenue bonds. Working capital was $83.3 million as of
December  30,  2000 and $96.6  million as of  December  25,  1999.  The  Company
believes that cash generated from operations and borrowings  under its revolving
credit  facility will be sufficient to meet the Company's  working capital needs
and to fund expansion for the foreseeable future.

        Net cash  provided by operating  activities  was $41.9  million in 2000,
compared to net cash used in operating  activities  of $ 6.0 million in 1999 and
$11.1 million in 1998.  During 2000, net income,  depreciation and amortization,
non-cash  provisions  for  doubtful  accounts,  deferred  income taxes and stock
compensation,  accounts  receivable  and  inventory  provided  were the  primary
sources of $46.6  million in positive cash flow,  which was partially  offset by
$4.7 million in cash used to fund decreases in accounts payable and increases in
prepaid expenses and other assets. During 1999, the net loss, offset by non-cash
provisions for depreciation,  amortization and restructuring  charges, and lower
accounts  receivable  levels  provided  $21.0  million  in  positive  cash flow,
however,  these  increases were offset by $27.0 million in cash used as a result
of increases in  inventory,  other assets and  reductions  in accounts  payable.
During  1998,  net  income,  depreciation  and  amortization  and an increase in
accounts  payable  provided the majority of the $24.0  million in positive  cash
flow,  however,  these  increases were more than offset by $35.1 million in cash
used related primarily to increases in accounts receivable and inventories.

        Net cash used in investing  activities amounted to $6.8 million in 2000,
$7.9 million in 1999,  and $16.8 million in 1998. In 1998, the  acquisitions  of
Scan-Tech,  Champ and Allparts  accounted  for $13.4  million in cash used while
additions to property,  plant and equipment  required an additional $7.7 million
in  cash.  This  was  partially  offset  by  $4.3  million  in  proceeds  from a
sale/leaseback transaction. Additions to property, plant and equipment accounted
for all cash used in 1999 and 2000.

        Net cash provided by financing  activities  amounted to $14.5 million in
1999 and $27.2 million in 1998, compared to cash used in financing activities of
$29.1  million  in  2000.  During  2000  cash  was used to  reduce  the  amounts
outstanding under the Company's  revolving credit facility and for repayments of
term debt and  capitalized  lease  obligations.  During 1999,  revolving  credit
facility  borrowings  provided $15.0 million in cash which was used to fund cash
used in operating  and  investing  activities.  During 1998,  proceeds  from the
issuance of the senior notes  provided  $60.0  million in cash which was used to
partially   paydown  other  debt  and  fund  acquisitions  and  working  capital
increases.

        The  Acquisition of Scan-Tech.  In January 1998,  Scan-Tech was acquired
with the payment of $1 million in cash,  up to 350,000  shares of the  Company's
common stock and assumption of certain liabilities including  approximately $0.8
million in bank debt.

        The  Acquisition  of Champ.  In September  1998,  the Company  began its
acquisition of selective assets of Champ from Standard Motor Products,  Inc. for
approximately $2.3 million representing the net asset value of inventories.  The
acquisition  was completed in stages with the final stage (Everco)  occurring in
January 1999 and requiring a payment of approximately $0.4 million  representing
the net asset value of inventories.

        The Acquisition of Allparts.  In October 1998, the Company acquired the
assets of Allparts from JPE, Inc., for approximately $10.1 million in cash.

        Senior Notes. In August 1998, the Company  completed a private placement
of $60  million in 6.81%  Senior  Notes  ("Notes")  due  August  21,  2008 on an
unsecured  basis.  The ten-year  Notes bear a 6.81 percent fixed  interest rate,
payable  quarterly,  with an initial  four-year  interest  only  period.  Annual
repayments at the rate of $8.6 million are due beginning in August 2002.


                                         Page 17 of 41

<PAGE>



        Bank Credit  Facility.  In March 2001, the Company amended its Revolving
Credit Facility.  The amended agreement  provides for a $10 million facility for
an additional  three-year term that expires in March 2004.  Borrowings under the
amended  facility are on an unsecured  basis with interest at rates ranging from
Libor plus 150 to Libor plus 275 basis points.  The loan agreement also contains
covenants,  the most  restrictive of which pertain to net worth and the ratio of
debt to EBITDA.  The Company  believes that the amended  facility  together with
cash  generated  from  operations  will provide  sufficient  funding to meet the
Company's working capital needs for the foreseeable future.

        Prior to the March 2001  amendment,  the Company had a revolving  credit
facility  that  provided  for  borrowings  of up to $35  million  in  1999  with
mandatory  reductions  throughout  2000 to $10  million at  December  30,  2000.
Borrowings  under the facility were on an unsecured basis with interest at rates
ranging  from  Libor  plus 150 to 300  basis  points.  The loan  agreement  also
contained  covenants,  the most  restrictive of which pertained to net worth and
the ratio of debt to EBITDA. There were no borrowings under the revolving credit
facility at December 30, 2000.  Borrowings  under the revolving  credit facility
amounted to $28.5 million at December 25, 1999.

        Industrial Revenue Bonds. Construction of the Company's Warsaw, Kentucky
facility in 1990 was funded by the Bonds.  The Bonds bear interest at a variable
rate (5.15% at December 30, 2000) payable  monthly and require annual  principal
payments of $300,000 or $350,000 in alternating years with the final payment due
in July, 2009.

        Capitalized Leases. The Company's lease for its Pennsylvania facility is
recorded  as a  capitalized  lease in the  Company's  financial  statements.  In
addition,  the  Company  has  entered  into  three  sale/leaseback  transactions
relating to computer  hardware and software.  The aggregate  amount  outstanding
under all capital leases amounted to $4.3 million at December 30, 2000.

        Foreign  Currency  Fluctuations.  In  2000,  approximately  37%  of  the
Company's  products  were pur chased  from a variety of foreign  countries.  The
products generally are purchased through purchase orders with the purchase price
specified in U.S.  dollars.  Accordingly,  the Company does not have exposure to
fluctuation  in  the  relationship   between  the  dollar  and  various  foreign
currencies  between the time of execution of the purchase  order and payment for
the  product.  However,  to the  extent  that the dollar  decreases  in value to
foreign  currencies  in the future,  the price of the product in dollars for new
purchase orders may increase. The Company attempts to lessen the impact of these
currency fluctuations by resourcing its purchases to other countries.

Impact of Inflation

        The Company has not generally been adversely affected by inflation.  The
Company believes that price increases  resulting from inflation  generally could
be passed on to its  customers,  since prices charged by the Company are not set
by long-term contracts.

Cautionary Statement Regarding Forward Looking Statements

        Certain statements  periodically made by or on behalf of the Company and
certain  statements   contained  herein  including  statements  in  Management's
Discussion and Analysis of Financial Condition and Results of Operation; certain
statements contained in Business,  such as statements regarding litigation;  and
certain  other  statements  contained  herein  regarding  matters  that  are not
historical fact are forward  looking  statements (as such term is defined in the
Securities  Act  of  1933),  and  because  such  statements  involve  risks  and
uncertainties,  actual  results may differ  materially  from those  expressed or
implied by such forward looking statements. Factors that cause actual results to
differ  materially  include but are not limited to those  factors  discussed  in
"Business - Investment Considerations."




                                         Page 18 of 41

<PAGE>



Item 7A. Quantitative and Qualitative Disclosure about Market Risk

        The  Company's  market risk is the  potential  loss arising from adverse
changes in interest rates. With the exception of the Company's  revolving credit
facility, long-term debt obligations are at fixed interest rates and denominated
in U.S. dollars. The Company manages its interest rate risk by monitoring trends
in interest rates as a basis for determining whether to enter into fixed rate or
variable  rate  agreements.  Under the terms of the Company's  revolving  credit
facility,  a change in either the  lender's  base rate or LIBOR would affect the
rate at which the Company could borrow funds  thereunder.  The Company  believes
that the effect of any such change would be minimal.

        Although  the  Company  continues  to  evaluate   derivative   financial
instruments to manage foreign currency  exchange rate changes,  the Company does
not currently hold derivatives for managing these risks or for trading purposes.

Item 8.  Financial Statements and Supplementary Data.

        The  financial  statement  schedules  of the Company that are filed with
this Report on Form 10-K are listed in Item 14(a)(2), Part IV, of this Report.




































                                         Page 19 of 41

<PAGE>








                             Report of Independent Public Accountants

To R&B, Inc.:

We have audited the  accompanying  consolidated  balance  sheets of R&B, Inc. (a
Pennsylvania  corporation) and subsidiaries as of December 30, 2000 and December
25, 1999, and the related consolidated  statements of operations,  shareholders'
equity and cash  flows for each of the three  fiscal  years in the period  ended
December 30, 2000.  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 financial  statements  referred to above present fairly, in
all material  respects,  the  consolidated  financial  position of R&B, Inc. and
subsidiaries as of December 30, 2000 and December 25, 1999 and the  consolidated
results of their  operations  and their cash flows for each of the three  fiscal
years in the period ended  December  30, 2000,  in  conformity  with  accounting
principles generally accepted in the United States.


                                           Arthur Andersen LLP


Philadelphia, PA
March 26, 2001





















                                         Page 20 of 41

<PAGE>


<TABLE>

                                   R&B, INC. AND SUBSIDIARIES

                             CONSOLIDATED STATEMENTS OF OPERATIONS


<CAPTION>

                                             53 Weeks Ended          52 Weeks Ended
                                             --------------    ---------------------------
                                               December 30,    December 25,  December 26,
(in thousands, except per share data)              2000            1999          1998
----------------------------------------------------------------------------------------
<S>                                               <C>            <C>            <C>
Net Sales                                         $201,390       $236,689       $178,301
Cost of goods sold                                 132,621        168,730        112,596
----------------------------------------------------------------------------------------
         Gross profit                               68,769         67,959         65,705
Selling, general and administrative                 56,461         66,326         49,286
expenses
----------------------------------------------------------------------------------------
         Income from operations                     12,308          1,633         16,419
Interest expense, net                                6,032          6,961          4,629
----------------------------------------------------------------------------------------
         Income (loss) before taxes                  6,276         (5,328)        11,790
Provision (benefit) for taxes                        2,181         (1,726)         4,234
----------------------------------------------------------------------------------------
         Net income (loss)                        $  4,095       $ (3,602)      $  7,556
========================================================================================
Earnings (Loss) Per Share:
         Basic                                    $   0.49       $  (0.43)      $   0.91
         Diluted                                  $   0.48       $  (0.43)      $   0.90
========================================================================================
Weighted Average Shares Outstanding:
        Basic                                        8,439          8,375          8,330
        Diluted                                      8,523          8,375          8,421
========================================================================================
</TABLE>



     The accompanying Notes are an integral part of these Consolidated Financial
Statements.






                                         Page 21 of 41

<PAGE>

<TABLE>


                                   R&B, INC. AND SUBSIDIARIES

                                   CONSOLIDATED BALANCE SHEETS

<CAPTION>

                                                             December 30,      December 25,
 (in thousands, except share data)                               2000              1999
------------------------------------------------------ ----------------- -----------------
<S>                                                            <C>               <C>
Assets
Current Assets:

   Cash and cash equivalents                                   $   7,553         $   1,467
   Accounts receivable, less allowance for doubtful
     accounts and customer credits of $10,334 and $8,764          36,322            49,979
  Inventories                                                     50,765            70,272
  Deferred income taxes                                            4,896             4,574
  Prepaids and other current assets                                2,665             2,543
------------------------------------------------------ ----------------- -----------------
     Total current assets                                        102,201           128,835
------------------------------------------------------ ----------------- -----------------
Property, Plant and Equipment, net                                23,332            22,919
Intangible Assets, net                                            31,358            33,212
Other Assets                                                       2,988             3,038
------------------------------------------------------ ----------------- -----------------
      Total                                                    $ 159,879         $ 188,004
====================================================== ================= =================

Liabilities and Shareholders' Equity
Current Liabilities:
  Current portion of long-term debt                            $   2,583         $  11,910
  Accounts payable                                                 8,159            12,867
  Accrued compensation                                             3,580             2,820
  Other accrued liabilities                                        4,617             4,626
------------------------------------------------------ ----------------- -----------------
    Total current liabilities                                     18,939            32,223
------------------------------------------------------ ----------------- -----------------
Long-Term Debt                                                    65,066            85,283
Deferred Income Taxes                                              3,490             2,264
Commitments and Contingencies  (Note 11)
Shareholders' Equity:
  Common stock, par value $.01; authorized
     25,000,000 shares; issued 8,481,517 and 8,393,796                85                84
  Additional paid-in capital                                      34,229            33,517
  Cumulative translation adjustments                                (839)             (181)
  Retained earnings                                               38,909            34,814
------------------------------------------------------ ----------------- -----------------
  Total shareholders' equity                                      72,384            68,234
------------------------------------------------------ ----------------- -----------------
      Total                                                    $ 159,879         $ 188,004
====================================================== ================= =================
</TABLE>

    The accompanying Notes are an integral part of these Consolidated  Financial
Statements.



                                         Page 22 of 41

<PAGE>


<TABLE>

                                   R&B, INC. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<CAPTION>

                                                 Common Stock
                                            ---------------------
                                                                   Additional    Cumulative
                                                 Shares    Par       Paid-In     Translation   Retained
(in thousands, except share data)                Issued   Value      Capital     Adjustment    Earnings     Total
------------------------------------------- ----------- --------- ------------- ------------- ---------- -----------
<S>                                           <C>         <C>        <C>           <C>        <C>         <C>
    Balance at December 28, 1997              8,066,543   $  81      $ 30,221      $   -      $ 30,860    $ 61,162
Common stock issued for purchase of Scan-Tech
USA/Sweden AB (Note 5)                          250,000       2         2,668          -           -         2,670
Common stock issued to
  Employee Stock Purchase Plan                    5,631      -             42          -           -            42
Common stock issued to 401(k) Retirement Plan    17,251      -            170          -           -           170
Shares issued under Incentive Stock Plan          4,657      -             32          -           -            32
Comprehensive Income:
   Net income                                        -       -             -           -        7,556        7,556
         Currency translation adjustments            -       -             -          (18)        -            (18)
                                                                                                         -----------
Total comprehensive income                                                                                   7,538
------------------------------------------- ----------- --------- ------------- ------------- ---------- -----------
    Balance at December 26, 1998              8,344,082      83        33,133         (18)      38,416      71,614
Common stock issued for purchase of Scan-Tech
USA/Sweden AB (Note 5)                            3,479      -             29          -          -             29
Common stock issued to
   Employee Stock Purchase Plan                  11,505      -             73          -          -             73
Common Stock issued to 401(k)  Retirement Plan   34,268       1           277          -          -            278
Shares issued under Incentive Stock Plan            462      -              5          -          -              5
Comprehensive Income:
   Net (loss)                                        -       -             -           -       (3,602)      (3,602)
Currency translation adjustments                     -       -             -         (163)        -           (163)
                                                                                                         -----------
Total comprehensive (loss)                                                                                  (3,765)
------------------------------------------- ----------- --------- ------------- ------------- ---------- -----------
    Balance at December 25, 1999              8,393,796      84        33,517        (181)     34,814       68,234
Common stock issued for purchase of Scan-Tech
USA/Sweden AB (Note 5)                           11,188      -             30          -          -             30
Common stock issued to
  Employee Stock Purchase Plan                   32,791      -             97          -          -             97
Common stock issued to  401(k) Retirement Plan   43,742       1           204          -          -            205
Shares issued and cost of Incentive Stock Plan       -       -            381          -          -            381
Comprehensive Income:
    Net income                                       -       -             -           -       4,095         4,095
 Currency translation adjustments                    -       -             -         (658)        -           (658)
                                                                                                         -----------
Total comprehensive income                                                                                   3,437
------------------------------------------- ----------- --------- ------------- ------------- ---------- -----------
    Balance at December 30, 2000              8,481,517    $ 85      $ 34,229      $ (839)   $38,909       $72,384
=========================================== =========== ========= ============= ============= ========== ===========
</TABLE>
      The  accompanying  Notes  are  an  integral  part  of  these  Consolidated
Financial Statements.


                                           Page 23 of 41

<PAGE>

<TABLE>


                                    R&B, INC. AND SUBSIDIARIES

                               CONSOLIDATED STATEMENTS OF CASH FLOWS

<CAPTION>

                                                           53 Weeks Ended           52 Weeks Ended
                                                          ---------------- --------------------------------
                                                             December 30,      December 25,     December 26,
(in thousands)                                                   2000             1999            1998
--------------------------------------------------------  ---------------- --------------- ----------------
<S>                                                             <C>              <C>               <C>
Cash Flows from Operating Activities:
Net income (loss)                                               $   4,095        $ (3,602)         $ 7,556
Adjustments to reconcile net income (loss) to cash provided
by (used in) operating activities:
   Depreciation and amortization                                    7,931           7,551            6,396
   Provision for doubtful accounts                                    566           1,058              649
   Provision for deferred income tax                                  965          (3,150)             256
   Provision for restructuring                                          -          11,400                -
   Provision for non-cash stock compensation                          381               -                -
Changes in assets and liabilities, net of acquisitions:
    Accounts receivable                                            12,900           4,548          (13,355)
    Inventories                                                    18,987         (11,671)         (20,181)
    Prepaids and other current assets                                (156)         (1,682)             899
    Other assets                                                       97          (2,318)          (1,513)
    Accounts payable                                               (4,576)         (5,605)           6,695
    Other accrued liabilities                                         746          (2,572)           1,501
-------------------------------------------------------- ---------------- --------------- ----------------
      Cash provided by  (used in) operating activities             41,936          (6,043)         (11,097)
-------------------------------------------------------- ---------------- --------------- ----------------
Cash Flows from Investing Activities:
   Property, plant and equipment additions                         (6,759)         (7,890)          (7,744)
   Proceeds from sale/leaseback transaction                           -                 -            4,338
   Business acquisitions, net of cash acquired                        -                 -          (13,351)
-------------------------------------------------------- ---------------- --------------- ----------------
     Cash used in investing activities                             (6,759)         (7,890)         (16,757)
-------------------------------------------------------- ---------------- --------------- ----------------
Cash Flows from Financing Activities:
   Proceeds from senior notes                                           -               -           60,000
   Net (repayment) proceeds from revolving credit                 (28,500)         15,000           (5,000)
   Net repayment of term loans and capitalized leases                (923)           (900)         (28,076)
   Proceeds from common stock issuances                               332             385              244
-------------------------------------------------------- ---------------- --------------- ----------------
      Cash (used in) provided by financing activities             (29,091)         14,485           27,168
-------------------------------------------------------- ---------------- --------------- ----------------
Net Increase (Decrease) in Cash and Cash Equivalents                6,086             552             (686)
Cash and Cash Equivalents, Beginning of Year                        1,467             915            1,601
-------------------------------------------------------- ---------------- --------------- ----------------
Cash and Cash Equivalents, End of Year                          $   7,553       $   1,467       $      915
======================================================== ================ =============== ================
Supplemental Cash Flow Information
    Cash paid for interest expense                             $    5,933       $   6,692       $    4,246
    Cash paid for income taxes                                 $    1,170       $   3,327       $      499
</TABLE>


      The  accompanying  Notes  are  an  integral  part  of  these  Consolidated
Financial Statements.


                                           Page 24 of 41

<PAGE>




                                   R&B, INC. AND SUBSIDIARIES

                           Notes to Consolidated Financial Statements
                                       December 30, 2000

1.  Summary of Significant Accounting Policies

         R&B, Inc. (the  "Company")  is  principally  engaged in the business of
selling a broad range of "hard-to-find"  replacement auto parts and hardware for
the automotive  aftermarket to retailers,  wholesalers and others for use in the
repair and maintenance of automobiles and trucks.

         The Company operates on a fifty-two,  fifty-three week period ending on
the last Saturday of the calendar year.

         Principles of  Consolidation.  The  consolidated  financial  statements
include  the  accounts of the Company  and its  wholly-owned  subsidiaries.  All
material   intercompany  accounts  and  transactions  have  been  eliminated  in
consolidation.

         Use of  Estimates  in the  Preparation  of  Financial  Statements.  The
preparation of financial  statements in accordance  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.

         Cash and Cash Equivalents. The Company considers all highly liquid debt
instruments  with  original  maturities  of  three  months  or  less  to be cash
equivalents.

         Inventories. Inventories are stated at the lower of average cost or
market.

         Property and Depreciation.  Property,  plant and equipment are recorded
at cost and  depreciated  over their  estimated  useful lives,  which range from
three to fifteen years, using the straight-line  method for financial  statement
reporting purposes and accelerated  methods for income tax purposes.  Properties
under  capitalized  leases are  amortized  over the  related  lease  terms (3-15
years). The costs of maintenance and repairs are expensed as incurred.  Renewals
and betterments are capitalized.

         Intangible  Assets.  Intangible  assets  consist  primarily of goodwill
which  is  amortized  over  periods  from  10 to  40  years.  Total  accumulated
amortization on intangible  assets as of December 30, 2000 and December 25, 1999
was $7.8 million and $6.1 million,  respectively.  Amortization expense of these
assets was $1.7 million in 2000, $1.7 million in 1999, and $1.4 million in 1998.

         It is the  Company's  policy to review  goodwill  and other  long-lived
assets for  possible  impairment  whenever  events or  changes in  circumstances
indicate that the carrying  amount of an asset may not be  recoverable.  If such
review  indicates  that  the  carrying  amount  is  not  recoverable,  it is the
Company's policy to reduce the carrying amount of such assets to fair value.

         Other Assets.  Other assets consist of deferred credits associated with
certain  customer  multi-year  sales  arrangements  which  are  capitalized  and
amortized  against current and future sales;  costs incurred for the preparation
and  printing of product  catalogs  which are  capitalized  and  amortized  upon
distribution;  and deferred  financing costs which are capitalized and amortized
over the term of the related financing agreement.

         Foreign Currency Translation.  Assets and liabilities of a foreign sub-
sidiary are translated into U.S. dollars at the rate of exchange prevailing at
the end of the year.  Income statement accounts are translated at the average
exchange rate prevailing during the year.  Translation adjustments resulting
from this process are recorded directly in shareholders' equity.




                                         Page 25 of 41

<PAGE>



         Fair Value  Disclosures.  The carrying  value of financial  instruments
such as cash, accounts  receivable,  accounts payable,  and other current assets
and liabilities approximate their value based on the short- term nature of these
instruments.  Based on borrowing  rates  currently  available to the Company for
loans with  similar  terms and average  maturities,  the fair value of long-term
debt was $67.5  million and $94.2  million at December 30, 2000 and December 25,
1999, respectively.

         Income  Taxes.  Income taxes include  federal,  state and foreign taxes
with deferred tax benefits and  liabilities  arising from temporary  differences
between financial and tax reporting.

         Revenue Recognition.  The Company records sales when its products are
shipped.  A provision is recorded for anticipated returns or allowances, based
primarily on historical experience and current estimates.

         Freight  Expense  Reclassification.  In the fourth quarter of 2000, the
Company  adopted the  provisions of Emerging  Issues Task Force (EITF) Issue No.
00-10,  "Accounting for Shipping and Handling Fees and Costs",  by reclassifying
freight  expense from  selling,  general and  administrative  expense to cost of
sales in all periods  presented.  The adoption of EITF 00-10  increased  cost of
sales and reduced selling,  general and administrative expenses in 1999 and 1998
by $7.1 million and $4.7 million, respectively.

         Earnings Per Share.  Earnings per share is computed under Statement of
Financial Accounting Standards No. 128 , "Earnings Per Share".  Weighted average
shares for diluted earnings per share includes the assumption of the exercise of
all potentially dilutive securities ("in the money" stock options).

2.  Restructuring Charges

         In  the  fourth   quarter  of  fiscal   1999,   the  Company   recorded
restructuring  charges of $11.4  million  ($7.5  million  after tax or $0.90 per
share) to reflect costs primarily  related to inventory  write downs  associated
with the elimination of a significant  number of  underperforming  products,  as
well as the  closing of a  warehouse  and  production  facility  in  Carrollton,
Georgia,  and a  workforce  reduction  of 158 people.  A total of $9.8  million,
representing  inventory  write  downs,  was  charged  to cost of sales  and $1.6
million  was  charged to  selling,  general  and  administrative  expenses.  The
following  summarizes the  restructuring  charge and activity  recorded  through
December 30, 2000:
<TABLE>
<CAPTION>


                                          Costs        Balance at         Costs       Balance at
(in thousands)              Charge        Incurred  December 25, 1999   Incurred    December 30, 2000
------------------------ ------------- ----------- ----------------- ------------- ------------------
<S>                      <C>           <C>          <C>               <C>           <C>
Inventory Disposals      $     9,800   $      -     $       9,800     $   (7,100)   $    2,700
Employee Termination
Benefits                         475       (124)              351           (351)           -
Facility Shutdown
Costs                          1,125       (300)              825           (145)          680
                         ------------- ------------ ----------------- --- --------- --- --------------
                         $    11,400   $   (424)    $      10,976     $   (7,596)   $    3,380
                         ============= ============ ================= === ========= === ==============
</TABLE>














                                         Page 26 of 41

<PAGE>



3.   Inventories

         Inventories  include the cost of  material,  freight,  direct labor and
overhead utilized in the processing of the Company's products.  Inventories were
as follows:


                         December 30,        December 25,
(in thousands)               2000                1999
---------------------- -----------------  ------------------
Bulk product                     $15,170             $20,665
Finished product                  31,984              45,136
Packaging materials                3,611               4,471
---------------------- -----------------  ------------------
Total                            $50,765             $70,272
                                   41,6523838
====================== =================  ==================


4.   Property, Plant  and Equipment

         Property, plant and equipment consists of the following:


                                         December 30,         December 25,
(in thousands)                                   2000           1999
----------------------------------- ----------------- --- ----------------
Property under
  capitalized leases                           $6,026              $ 8,944
Buildings                                       7,311                7,308
Machinery, equipment and
   tooling                                     15,200               14,069
Furniture,  fixtures and
   leasehold improvements                       3,189                2,551
Computer and other
   equipment                                   19,047               14,230
----------------------------------- ----------------- --- ----------------
Total                                          50,773               47,102
Less-accumulated  depreciation                (27,441)             (24,183)
----------------------------------- ----------------- --- ----------------
Property, plant and equipment, net            $23,332              $22,919
=================================== ================= === ================


5.   Acquisitions

        Scan-Tech.  In January 1998, the Company acquired the outstanding  stock
of Scan-Tech USA/Sweden A.B. and related entities  ("Scan-Tech").  Headquartered
in Stockholm,  Sweden,  Scan-Tech is a  distributor  of  replacement  automotive
parts,  primarily Volvo and Saab, throughout Europe, the United States,  Russia,
the Middle East and Far East with annual sales of  approximately  $10 million in
1997. The  acquisition  was effected  through the payment of $1 million in cash,
350,000  shares  of  the  Company's  common  stock  and  assumption  of  certain
liabilities  including  approximately  $0.8 million in bank debt. Of the shares,
250,000  will vest over four years and are  included in the  computation  of the
purchase price.  The remaining  100,000 are subject to performance  criteria and
are included in the  computation  of purchase price as the criteria are met. The
Company  accounted for this acquisition  using the purchase method of accounting
which resulted in the recording of goodwill of $2.7 million.



                                         Page 27 of 41

<PAGE>



        Champ. In September 1998, the Company began its acquisition of selective
assets of the Service Line Division  ("Champ") of Standard Motor Products,  Inc.
for approximately $2.3 million  representing the net asset value of inventories.
Champ included the Champ Service Line, Pik-A-Nut and Everco. The acquisition was
completed in stages with the final stage (Everco) occurring in January 1999. The
Company  accounted for this acquisition  using the purchase method of accounting
which resulted in the recording of goodwill of $1.3 million.

        Allparts.  In October 1998, the Company acquired the assets of Allparts,
Inc., from JPE, Inc., for approximately $10.1 million in cash.  Headquartered in
Louisiana,  Missouri,  Allparts is a leading  supplier of  automotive  hydraulic
brake  parts  to the  automotive  aftermarket.  Allparts  had  annual  sales  of
approximately  $18 million in 1997. The Company  accounted for this  acquisition
using the  purchase  method of  accounting  which  resulted in the  recording of
goodwill of $1.2 million.

        The unaudited pro forma consolidated results for the year ended December
26, 1998, as if the  acquisitions of Scan-Tech,  Champ and Allparts had occurred
at the beginning of 1998, are as follows:

        (in thousands, except per share data)             1998
        ------------------------------------------------------------
        Net sales                                       $202,071
        Net income                                        $8,035
        Diluted earnings per share                         $0.95

6.  Long-Term Debt

      Long-term  debt  consists of borrowings  under senior  notes,  bank credit
facilities,  industrial  revenue  bonds and  capitalized  lease  obligations  as
follows:


                                      December 30,         December 25,
 (in thousands)                            2000                 1999
--------------------------------- ------------------- -------------------
Senior Notes                                 $ 60,000           $  60,000
Bank credit facility                                -              28,500
Industrial revenue bonds                        2,918               3,224
Capitalized lease obligations                   4,294               4,387
Subsidiary line of credit                         437               1,082
--------------------------------- ------------------- -------------------
    Total                                      67,649              97,193
    Less: Current portion                     ( 2,583)            (11,910)
--------------------------------- ------------------- -------------------
    Total long-term debt                      $65,066             $85,283
================================= =================== ===================

        Senior Notes. In August 1998, the Company  completed a private placement
of $60  million  in 6.81%  Senior  Notes due  August 21,  2008  ("Notes")  on an
unsecured  basis.  The ten-year Notes bear a 6.81% fixed interest rate,  payable
quarterly,  with an initial  four-year  interest only period.  Terms of the Note
Purchase  Agreement  require,  among other  things,  that the  Company  maintain
certain financial  covenants  relating to debt to capital ratios and minimum net
worth. Annual repayments at the rate of $8.6 million are due beginning in August
2002.

        Bank Credit  Facility.  In March 2001, the Company amended its Revolving
Credit Facility.  The amended agreement  provides for a $10 million facility for
an additional  three-year term that expires in March 2004.  Borrowings under the
amended  facility are on an unsecured  basis with interest at rates ranging from
Libor plus 150 to Libor plus 275 basis points.  The loan agreement also contains
covenants,  the most  restrictive of which pertain to net worth and the ratio of
debt to EBITDA. The Company believes that the amended


                                         Page 28 of 41

<PAGE>



facility  together with cash generated from operations  will provide  sufficient
funding to meet the Company's working capital needs for the foreseeable future.

        Prior to the March 2001  amendment,  the Company had a revolving  credit
facility  that  provided  for  borrowings  of up to $35  million  in  1999  with
mandatory  reductions  throughout  2000 to $10  million at  December  30,  2000.
Borrowings  under the facility were on an unsecured basis with interest at rates
ranging  from  Libor  plus 150 to 300  basis  points.  The loan  agreement  also
contained  covenants,  the most  restrictive of which pertained to net worth and
the ratio of debt to EBITDA.

        The average amount  outstanding  under the bank credit facility was $9.0
million and $27.7 million during 2000 and 1999, respectively. The maximum amount
outstanding was $29.3 million in 2000 and $35.0 million in 1999.

        Industrial  Revenue  Bonds.  The Bonds bear  interest at a variable rate
(5.15% at December  30,  2000)  payable  monthly and  require  annual  principal
payments of $300,000 or $350,000 in alternating years with the final payment due
in July,  2009.  The Bonds are  secured by the  Company's  warehouse  and office
facility in Warsaw, Kentucky.

        Capitalized   Lease   Obligations.   The  Company's   capitalized  lease
obligation for its primary operating  facility is with a partnership  related to
the  Company  by  common  ownership  (see  Note  8) and is  payable  monthly  in
installments of $47,500  including  interest  imputed at 13.96% through December
2002. The lease provides for contingent  rental  payments in amounts that,  when
added to the annual  capitalized  lease payments,  do not exceed the fair market
rental rate of the facility. The contingent rental payments are determined on an
annual  basis to  approximate  the change in the  Consumer  Price  Index and are
payable  only to the extent that the Company has  available  sufficient  pre-tax
income in the preceding fiscal year to support the increase.  The net book value
of the assets under this capitalized lease was $0.5 million at December 30, 2000
and $0.6 million at December 25, 1999 (see Note 11).

        The Company has entered into three  sale/leaseback  transactions with an
equipment lease company to finance computer equipment. The leases are payable in
monthly  installments  of  $133,000  including  interest  computed at a weighted
average rate of 9.6%. The leases expire in 2002 and 2003.

        The following is a schedule of  approximate  annual future minimum lease
payments for the Company's primary operating facility with a partnership related
to the Company by common ownership (exclusive of contingent rental payments) and
other capital lease obligations as of December 30, 2000:


(in thousands)         Facility           Equipment           Total
---------------------- -----------------  ------------------  -----------------
2001                              $  570             $ 1,638             $2,208
2002                                 570               1,358              1,928
2003                                   -                 745                745
2004                                   -         -                            -
2005                                   -                   -                  -
Thereafter                             -                   -                  -
---------------------- -----------------  ------------------  -----------------
Total payments                     1,140               3,741              4,881
Less -amounts
 representing
 interest                          ( 150)               (437)              (587)
---------------------- -----------------  ------------------  -----------------
Total principal                    $ 990             $ 3,304            $ 4,294
====================== =================  ==================  =================




                                         Page 29 of 41

<PAGE>



        Aggregate annual principal  payments  applicable to long-term debt as of
December 30, 2000 are as follows:



(in thousands)

 2001                              $ 2,583
 2002                               10,622
 2003                                9,607
 2004                                8,877
 2005                                8,887
Thereafter                          27,073
------------------------------------------
Total                             $ 67,649
==========================================


7.  Operating Lease Commitments and Rent Expense

        The Company leases certain equipment and automobiles under noncancelable
operating leases.  Approximate future minimum rental payments under these leases
are summarized as follows:



 (in thousands)
2001               $   1,046
2002                     932
2003                     554
2004                      26
2005                       6
---------  -----------------
Total                 $2,564
=========  =================

        Rent expense,  which includes rental adjustment  payments and contingent
rentals  paid to related  parties  (see Notes 6 and 8) of $0.6  million in 2000,
1999 and 1998, was $1.4 million in 2000,  $1.7 million in 1999, and $1.5 million
in 1998.


8.   Related Party Transactions

        The Company has entered into leases for two  operating  facilities  with
partnerships related to the Company by common ownership(see Notes 6 and 11). The
Company has guaranteed the mortgages of the  partnerships  on these  facilities.
These  guarantees at December 30, 2000 were  approximately  $1.2 million.  Total
interest expense on these capitalized  leases was $214,000 in 2000,  $273,000 in
1999, and $326,000 in 1998.












                                         Page 30 of 41

<PAGE>



9. Income Taxes

        The components of the income tax provision (benefit) are as follows:

 (in thousands)                      2000              1999              1998
-------------------------- ------------------ ----------------- ----------------
Federal:
  Current                              $1,178            $1,373           $3,773
  Deferred                                931            (3,150)             243
-------------------------- ------------------ ----------------- ----------------
      Subtotal                          2,109            (1,777)           4,016
-------------------------- ------------------ ----------------- ----------------
State:
  Current                                  38                51              205
  Deferred                                 34                 -               13
-------------------------- ------------------ ----------------- ----------------
      Subtotal                             72                51              218
-------------------------- ------------------ ----------------- ----------------
      Total                            $2,181           $(1,726)          $4,234
========================== ================== ================= ================


The following is a  reconciliation  of income taxes at the statutory tax rate to
the Company's effective rate:


                                             2000          1999          1998
--------------------------------------------------------------------------------
Federal taxes at statutory rate             34.0%        (34.0%)        34.2%
State taxes, net of Federal tax benefit      0.8%          0.6%          3.0%
Contributed property and other                -            1.0%         (1.3%)
--------------------------------------------------------------------------------
Effective tax rate                          34.8%        (32.4%)        35.9%
================================================================================

            Deferred  income  taxes  result  from  timing   differences  in  the
recognition of revenue and expense for tax and financial statement purposes. The
sources of temporary differences are as follows:


                                             December 30,         December 25,
 (in thousands)                                     2000              1999
---------------------------------- ------------------------ --------------------
Assets:
    Inventories                                      $1,756             $ 1,371
    Accounts receivable                                 276                (523)
    Restructuring charges                             1,252               4,509
    Accrued expenses                                    920                 450
---------------------------------- ------------------------ --------------------
        Gross deferred assets                         4,204               5,807
---------------------------------- ------------------------ --------------------
Liabilities:
    Depreciation                                        225                 460
    Goodwill                                          2,502               2,385
    Other                                                71                 652
---------------------------------- ------------------------ --------------------
        Gross deferred liabilities                    2,798               3,497
---------------------------------- ------------------------ --------------------
    Net deferred asset                               $1,406              $2,310
================================== ======================== ====================

                                        Page 31 of 41
<PAGE>

 10. Business Segments

            The Company adopted Statement of Financial Accounting Standards No.
131, "Disclosures about Segments of an Enterprise and Related Information,"
(SFAS No. 131) in 1998.  In accordance with the provisions of SFAS No. 131, the
Company has determined that its business comprises a single reportable operation
segment, namely, the sale of replacement parts for the automotive aftermarket.

            During 2000, 1999 and 1998, one customer accounted for approximately
20%,  21% and 15% of sales,  respectively.  Sales to  countries  outside the US,
primarily  to  Western  Europe  and  Canada in 2000,  1999 and 1998  were  $15.1
million, $20.0 million and $12.6 million, respectively.

 11.   Commitments and Contingencies

            Environmental  Matters.  The Company's primary operating facility in
Colmar, Pennsylvania,  which is leased from a partnership related to the Company
by common  ownership,  is located within an area identified by the Environmental
Protection  Agency ("EPA") as a possible source or location of volatile  organic
chemical  contamination.  In November 1990, the EPA sent a general notice letter
to certain  present and former owners and  operators of  properties  within this
area,   informing  them  that  they  may  be  liable  under  the   Comprehensive
Environmental  Response,  Compensation  and  Liability  Act with respect to this
contamination.  As a  current  operator  of the  Colmar  property,  the  Company
received such a general  notice  letter.  The Company may be deemed  jointly and
severally liable,  together with all other potentially  responsible parties, for
(i)  the  costs  of  performing  a  study  of  the  nature  and  extent  of  the
contamination and the possible alternatives for remediation,  if any, as well as
(ii) the costs of effectuating that  remediation.  The Company revised its lease
agreement for its Colmar  facility  effective  December 1990 to provide that, as
between  the  Company  and  the  partnership.  The  partnership  will  bear  any
environmental  liability and all related  expenses,  including  legal  expenses,
incurred by the Company or the  partnership  as a result of matters  which arose
other  than from  activities  of the  Company.  The  Company  believes  that the
ultimate outcome of this matter will not have a material adverse impact upon the
financial position or results of operations of the Company.

            Shareholder  Agreement.  A shareholder agreement was entered into in
September  1990 and  subsequently  amended in December 1992 and September  1993.
Under the agreement,  each of Richard Berman, Steven Berman, Jordan Berman, Marc
Berman and Fred Berman has  granted the others of them rights of first  refusal,
exercisable  on a pro rata basis or in such other  proportions as the exercising
shareholders  may agree,  to purchase  shares of the common stock of the Company
which any of them, or upon their deaths their  respective  estates,  proposes to
sell to third parties. The Company has agreed with these shareholders that, upon
their deaths, to the extent that any of their shares are not purchased by any of
these surviving  shareholders and may not be sold without registration under the
Securities  Exchange Act of 1933, as amended (the "1933 Act"),  the Company will
use its best efforts to cause those shares to be registered  under the 1933 Act.
The  expenses  of any  such  registration  will be borne  by the  estate  of the
deceased shareholder.

            Legal Proceedings. The Company is party to certain legal proceedings
and claims  arising in the normal course of business.  Management  believes that
the disposition of these matters will not have a material  adverse affect on the
Company's consolidated financial position or results of operations.


 12.  Capital Stock

            Undesignated  Stock. The Company has 75,000,000 shares authorized of
undesignated  capital stock for future  issuance.  The  designation,  rights and
preferences of such shares will be determined by the Board of Directors.

            Incentive Stock Plan. Effective May 18, 2000 the Company amended and
restated its Incentive  Stock Option Plan (the  "Plan").  Under the terms of the
Plan,  the Board of Directors of the Company may grant  incentive  stock options
and  non-qualified  stock  options or  combinations  thereof to  purchase  up to
1,172,500  shares of common stock to officers,  directors and employees.  Grants
under the Plan must be made within 10 years of the plan  amendment  date and are
exercisable at the discretion of the Board of Directors but in no event


                                         Page 32 of 41

<PAGE>



more than 10 years from the date of grant.  At  December  30,  2000,  options to
acquire 314,207 shares were available for grant under the Plan.

            Effective  January 8, 2001 an  aggregate  of 606,000  options with a
weighted average exercise price of $7.66 were exchanged  pursuant to an exchange
offer  approved  by the  Company's  Board of  Directors.  Under the terms of the
offer,  the options  were  canceled  in exchange  for new options to purchase an
equal  number of the same class of shares.  The new  options  will be granted in
July 2001 at an exercise price to be determined on the grant date.
<TABLE>
<CAPTION>

                                                      Option Price
                                                          per              Weighted
                                        Shares            Share         Average Price
---------------------------------- --------------- ------------------  ----------------
<S>                                    <C>           <C>                         <C>
 Balance at December 28, 1997          332,125       $5.75 - $9.50               $ 7.44
    Granted                            302,000        6.25 - 12.63                 9.60
    Exercised                           (4,657)       5.75 - 8.88                  6.95
    Canceled                           (52,093)       5.75 - 9.50                  8.05
                                   --------------- ------------------  ----------------
 Balance at December 26, 1998          577,375        5.75 - 12.63                 8.51
    Granted                            512,929        1.00 - 9.25                  4.50
    Exercised                             (462)       6.13 - 7.25                  7.01
    Canceled                          (172,388)       6.75 - 11.94                 8.86
                                   --------------- ------------------  ----------------
 Balance at December 25, 1999          917,454        1.00 - 12.63                 6.29
    Granted                              1,000            3.50                     3.50
    Exercised                              -               -                        -
    Canceled                           (68,600)       1.00 - 12.63                 7.63
 Balance at December 30, 2000          849,854       $1.00 - $12.63               $6.17
                                   =============== ==================  ================
</TABLE>


            The Company  applies  Accounting  Principles  Board  Opinion No. 25,
"Accounting  for Stock  Issued to  Employees",  and related  interpretations  in
accounting for this plan. The following pro forma amounts were  determined as if
the Company had accounted for its stock options under the methodology prescribed
by SFAS No. 123, "Accounting for Stock-Based Compensation":


 (in thousands, except        2000               1999                1998
per share data)
----------------------  ---------------   -----------------   ------------------
 Net income (loss):
     As reported            $4,095              $ (3,602)              $ 7,556
     Pro forma              $3,757              $ (3,951)              $ 7,364
 Earnings per share:
     As reported:
         Basic               $0.49                ($0.43)                $0.91
         Diluted             $0.48                ($0.43)                $0.90
     Pro forma:
         Basic               $0.45                ($0.47)                $0.88
         Diluted             $0.44                ($0.47)                $0.87



                                          Page 33 of 41

<PAGE>




            The fair  value of each  option  grant is  estimated  on the date of
grant using the Black-Scholes  option- pricing model with the following weighted
average assumptions:


                                       2000             1999             1998
                                       ----             ----             ----
 Expected dividend yield                 0%               0%               0%
 Expected stock price volatility        42%              42%              34%
 Risk-free interest rate               5.5%             5.5%             5.5%
 Expected life of option           7.5 years         7.5 years        7.5 years


            Employee  Stock Purchase Plan. In March 1992, the Board of Directors
adopted the Employee Stock Purchase Plan which was subsequently  approved by the
shareholders. The Plan permits the granting of options to purchase up to 300,000
shares of common  stock by the  employees  of the  Company.  In any given  year,
employees  may purchase up to 4% of their annual  compensation,  with the option
price set at 85% of the fair market  value of the stock on the date of exercise.
All options  granted  during any year expire on the last day of the fiscal year.
During 2000,  optionees had exercised rights to purchase 32,791 shares at prices
from $1.44 to
 $4.57 per share for total net proceeds of $97,000.

            401(k)  Retirement  Plan. The Company's  401(k)  retirement plan was
amended  in 1992 to  permit  contributions  in cash or kind,  including  Company
qualified securities.  The Company accrued for a discretionary  contribution for
2000 which will be funded in 2001 consisting of cash and  approximately  239,000
shares of Company common stock at a value of approximately $400,000. The Company
made a discretionary  contribution for 1999 consisting of cash and 43,742 shares
of Company common stock,  issued in 2000 at a value of  approximately  $205,000.
The Company made a  discretionary  contribution  for 1998 consisting of cash and
34,268 shares of stock, issued in 1999, at a value of approximately $280,000.





























                                          Page 34 of 41

<PAGE>




 Supplementary Financial Information

 Quarterly Results of Operations:

            The  following is a summary of the  unaudited  quarterly  results of
operations for the years ended December 30, 2000 and December 25, 1999:
<TABLE>
<CAPTION>


 (in thousands, except         First Quarter(a)  Second Quarter    Third Quarter   Fourth Quarter(b)
per share amounts)
----------------------------- ---------------- ------------------ --------------- -----------------
                                                                2000
                              ---------------------------------------------------------------------
<S>                                 <C>               <C>                 <C>               <C>
 Net sales                          $53,246           $49,239             $49,700           $49,205
 Income from operations               3,685             3,817               3,177             1,629
 Net income                           1,171             1,538               1,211               175
 Diluted earnings  per share           0.14              0.18                0.14              0.02

                                                                1999
                              ------------------------------------------------------------------------
 Net sales                          $55,946           $68,018             $59,495           $53,230
 Income (loss) from operations        3,784             6,082               3,640           (11,873)
 Net income (loss)                    1,351             2,780               1,260            (8,993)
 Diluted earnings (loss) per
 share                                 0.16              0.33                0.15             (1.07)
</TABLE>

 (a) Results for the first  quarter of 2000 include  non-recurring  revenues and
gain on sale of product line of $5,500 and $1,600 ($1,100 after tax or $0.13 per
share), respectively.

 (b) Results for the fourth quarter of 1999 include a restructuring charge of
$11,400 ($7,500 after tax or $0.90 per share).




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

            None



























                                           Page 35 of 41

<PAGE>




                                             PART III

 Item 10. Directors and Executive Officers of the Registrant.

            Information  concerning the directors of the Company is incorporated
by reference to the section  entitled  "Election of  Directors" in the Company's
Proxy  Statement for its Annual  Meeting of  Shareholders  to be held on May 21,
2001.

            Information concerning executive officers of the Company who are not
also directors is presented in Item 4.1, Part I of this Report on Form 10-K.

 Item 11. Executive Compensation.

            Incorporated  by  reference  to  the  section  entitled   "Executive
Compensation  and  Transactions" in the Company's Proxy Statement for its Annual
Meeting of Shareholders to be held on May 21, 2001.

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

            Incorporated  by  reference  to  the  section  entitled  "Beneficial
  Ownership of Common  Stock" in the  Company's  Proxy  Statement for its Annual
  Meeting of Shareholders to be held on May 21, 2001.

 Item 13. Certain Relationships and Related Transactions.

            Incorporated  by  reference  to  the  section  entitled   "Executive
Compensation  and  Transactions" in the Company's Proxy Statement for its Annual
Meeting of Shareholders to be held on May 21, 2001.

                                              PART IV

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

            (a)(1) Consolidated Financial Statements. The consolidated financial
             statements of the Company and related documents are listed in Item
             8, Part II, of this Report on Form 10-K.

            Report of Independent Public Accountants

            Consolidated  Statements of Operations  for the years ended December
            30, 2000, December 25, 1999 and December 26, 1998

            Consolidated Balance Sheets as of December 30, 2000 and
            December 25, 1999

            Consolidated  Statements of Shareholders' Equity for the years ended
            December 30, 2000, December 24, 1999 and December 26, 1998.

            Consolidated  Statements of Cash Flows for the years ended  December
            30, 2000, December 25, 1999 and December 26, 1998.

            Notes to Consolidated Financial Statements

            (a)(2) Consolidated Financial Statement Schedules.  The following
            consolidated financial statement schedule of the Company and related
            documents are filed with this Report on Form 10-K:

                                                                          Page

            Report of Independent Public Accountants on Financial
            Statement Schedule..........................................   40
            Schedule II - Valuation and Qualifying Accounts.............   41




                                           Page 36 of 41

<PAGE>



 (a)(3) Exhibits.


 Number       Title


 3.1 (1)      Amended and Restated Articles of Incorporation of the Company.

 3.2 (1)      Bylaws of the Company.

 4.1 (1)      Specimen Common Stock Certificate of the Company.

 4.2 (1)      Shareholders' Agreement, dated September 17, 1990.

4.2.1 (2)     Amendment to Shareholders' Agreement, dated December 29, 1992,
              amending 4.2.

 4.2.2 (3)    Amendment to Shareholders' Agreement, dated September 14, 1993,
              amending 4.2.

 4.2.3 (4)    Amendment to Shareholders' Agreement, dated March 14, 1994,
              amending 4.2.

 10.1  (1)    Lease,  dated  December  1, 1990,  between the Company and the
              Berman Real Estate Partnership,  for premises located at 3400 East
              Walnut Street, Colmar, Pennsylvania.

 10.1.1 (3)   Amendment to Lease,  dated  September  10, 1993,  between the
              Company  and the Berman  Real  Estate  Partnership,  for  premises
              located at 3400 East Walnut Street, Colmar, Pennsylvania, amending
              10.3.

 10.1.2 (5)   Assignment  of Lease,  dated  February 24, 1997,  between the
              Company,  the Berman Real Estate  Partnership  and BREP 1, for the
              premises located at 3400 East Walnut Street, Colmar, Pennsylvania,
              assigning 10.3.

 10.2 (1)     Lease,  dated  January 3, 1990,  between  the  Company and the
              Berman Real Estate  Partnership,  for premises  located at 390 Old
              Bremen Road, Carrollton, Georgia.

 10.2.1 (3)   Amendment to Lease,  dated  September  10, 1993,  between the
              Company  and the Berman  Real  Estate  Partnership,  for  premises
              located  at 390 Old Bremen  Road,  Carrollton,  Georgia,  amending
              10.4.

 10.2.2 (4)   Amendment to Lease,  dated  February  17,  1994,  between the
              Company  and the Berman  Real  Estate  Partnership,  for  premises
              located  at 390 Old Bremen  Road,  Carrollton,  Georgia,  amending
              10.4.

 10.3 (6)+    R&B, Inc. Amended and Restated Incentive Stock Plan.

 10.4 (2)+    R&B, Inc. 401(k) Retirement Plan and Trust.

 10.4.1 (7)+  Amendment No. 1 to the R&B, Inc. 401(k) Retirement Plan and Trust.

 10.5 (2)+    R&B, Inc. Employee Stock Purchase Plan.

 21           Subsidiaries of the Company (filed with this report)

 24           Consent of Arthur Andersen LLP (filed with this report)

 27           Financial Data Schedule (filed with this report)
 -------------------------
 + Management Contracts and Compensatory Plans, Contracts or Arrangements.


                                           Page 37 of 41

<PAGE>



 (1)  Incorporated by reference to the Exhibits filed with the Company's
Registration Statement on Form S-1 and Amendments No. 1, No. 2, and No. 3
thereto (Registration No. 33-37264).
 (2)  Incorporated by reference to the Exhibits files with the Company's  Annual
Report on Form 10-K for the fiscal year ended December 26, 1992.
 (3)  Incorporated by reference to the Exhibits filed with the Company's
Registration Statement on Form S-1 and Amendment No. 1 thereto (Registration
No. 33-68740).
 (4)  Incorporated by reference to the Exhibits filed with the Company's  Annual
Report on Form 10-K for the fiscal year ended December 25, 1993.
 (5)  Incorporated by reference to the Exhibits filed with the Company's  Annual
Report on Form 10-K for the fiscal year ended December 28, 1996.
 (6)  Incorporated  by reference to the Exhibits filed with the Company's  Proxy
Statement for the fiscal year ended December 27, 1997.
 (7)  Incorporated  by  reference  to the  Exhibits  filed  with  the  Company's
Quarterly Report on Form 10-Q for the quarter ended June 25, 1994.


            (b) Reports on Form 8-K.

            None


                                           Page 38 of 41

<PAGE>




                                            SIGNATURES

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


                                          R&B, Inc.

Date: March 28, 2001                      By:   \s\ Richard N. Berman
                                          -----------------------------
                                          Richard N. Berman, Chairman, President
                                          and Chief Executive Officer


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

        Signature                Capacity                      Date

  \s\ Richard N. Berman          President, Chief Executive    March 28, 2001
 ----------------------          Officer, and Chairman of the
                                 Board of Directors
                                 principal executive officer)
    Richard N. Berman

  \s\ Mathias J. Barton          Chief Financial Officer       March 28, 2001
 ----------------------          (principal financial and
                                 accounting officer)

    Mathias J. Barton
  \s\ Steven L. Berman           Executive Vice President,     March 28, 2001
  --------------------           Secretary-Treasurer, and
                                 Director

    Steven L. Berman
  \s\ George L. Bernstein        Director                      March 28, 2001
 ------------------------
    George L. Bernstein

  \s\ John F. Creamer, Jr.       Director                      March 28, 2001
 -------------------------
    John F. Creamer, Jr.

  \s\ Paul R. Lederer            Director                      March 28, 2001
  -------------------
    Paul R. Lederer

  \s\ Edgar W. Levin             Director                      March 28, 2001
 --------------------
    Edgar W. Levin





                                           Page 39 of 41

<PAGE>





                              REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                                  ON FINANCIAL STATEMENT SCHEDULE

 To R&B, Inc.:

 We have audited in accordance with auditing standards generally accepted in the
United States, the financial  statements of R&B, Inc. and subsidiaries  included
in this Form 10-K and have issued our report  thereon dated March 26, 2001.  Our
audit was made for the purpose of forming an opinion on the statements  taken as
a whole.  The  schedule  listed in Item  14(a)(2) is the  responsibility  of the
Company's  management  and is  presented  for  purposes  of  complying  with the
Securities  and  Exchange  Commission's  rules  and is  not  part  of the  basic
financial  statements.  This schedule has been subjected to the audit procedures
applied in the audits of the basic  financial  statements  and, in our  opinion,
fairly  states in all material  respects the  financial  data required to be set
forth therein in relation to the basic financial statements taken as a whole.

                                                   Arthur Andersen LLP

 Philadelphia, PA
  March 26, 2001







































                                           Page 40 of 41

<PAGE>








<TABLE>


                                        SCHEDULE II
<CAPTION>

 (in thousands)                         For the Year Ended
-------------------------------------- ----------------------------------------------------
                                          December 30,      December 25,     December 26,
                                              2000              1999             1998
                                       ----------------- ----------------- ----------------
<S>                                            <C>                 <C>              <C>
 Allowance for doubtful accounts:
      Balance, beginning of period             $     778           $ 1,439           $1,009
      Provision                                      566             1,058              649
      Charge-offs                                   (508)          ( 1,719)            (219)
-------------------------------------- ----------------- ----------------- ----------------
      Balance, end of period                    $    836          $    778          $ 1,439
====================================== ================= ================= ================
 Allowance for customer credits:
      Balance, beginning of period               $ 7,986           $ 8,276          $ 6,205
      Provision                                   28,952            32,928           26,039
      Charge-offs                                (27,440)          (33,218)         (23,968)
-------------------------------------- ----------------- ----------------- ----------------
      Balance, end of period                     $ 9,498           $ 7,986          $ 8,276
====================================== ================= ================= ================
 Restructuring reserves:
      Balance, beginning of period              $ 10,976          $      -          $     -
      Provision                                        -            11,400                -
      Charge-offs                                 (7,596)             (424)               -
-------------------------------------- ----------------- ----------------- ----------------
      Balance, end of period                    $  3,380           $10,976          $     -
====================================== ================= ================= ================
</TABLE>











                                           Page 41 of 41

