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Notes to Consolidated Financial Statements

2. MANAGEMENT INITIATIVES AND RESTRUCTURING

On January 19, 2001, the Company announced its intention to restructure and divest its cold -headed products (TCR), aerospace rivet (Aerospace Rivet Manufacturers Corp), retaining ring (Seeger-Orbis, TransTechnology (GB), TT Brasil and TT Engineered Rings USA) and hose clamp operations (Breeze Industrial and Pebra). The Company stated that it had detained an investment banking firm to consider funther strategic and business initiatives following these actions. In association with the restructuring, the Company stated it would suspend the payment of its quarterly dividend and recognize a charge in the fourth fiscal quarter of 2001 related to anticipated losses on the sale of several of these businesses as well as the provision for severance and other costs associated with these divestitures. Proceeds from the sales of the businesses will be used to repay debt and to refocus the Company's efforts on the design, manufacture and marketing of specialized aerospace equipment.

The Company entered into an amendment of its existing credit agreement under which the Company's senior lenders agreed to forbearance with respect to the Company's continuing violations of certain covenants in the senior agreement through September 27, 2001, subject to the Company meeting certain interim debt reduction and EBITDA targets. The Company's subordinated lenders also entered into a forbearance agreement with respect to the Company's expected violation of its net worth covenant as the result of write-offs to be incurred in the fourth fiscal quarter of 2001 as part of its restructuring plan.

In connection with this restructuring in the fourth quarter of 2001, the Company recognized an impairment charge of $67.9 million relating to a writedown of assets to expected realizable values of the Aerospace Rivet Manufacturers, TCR and the Engineered Rings businesses. Net realizable value is fair value less cost to sell. The Company has ceased depreciating/amortizing these assets effective January 19, 2001. The resultant carrying value of these businesses to be sold at March 31, 2001 was $85.3 million, which is the Company's combined estimate of realizable value. This impairment charge is summarized as follows (in thousands):

	Impairment Charge
Writedown of Property, net	$ 13,462
Writedown of Goodwill	47,659
Writedown of Patents and Trademarks	2,631
Establishment of liabilities for transaction costs	1,750
Establishment of liabilities, other	2,377
	$ 67,879

The Company expects additional net non-cash write-offs of goodwill in fiscal 2002 resulting from the divestiture process, including a gain on the July 10, 2001 sale of its Breeze Industrial Products and Pebra hose clamp businesses and an anticipated non-cash loss resulting from the planned sale of the TransTechnology Engineered Components business.

The results of operations in 2001 for businesses to be sold, before the impairment charge, were as follows (in thousands):

Sales	$152,098
Operating Income	5,293

In addition, the Company reported a provision for impairment of corporate assets in the fourth quarter of 2001. These assets, which are related to sold businesses, are summarized as follows (in thousands):

Writedown of note receivable due from and equity investment of investee, net	$   7,688
Writedown of real estate held for sale	2,300
Other	220
Total impairment - corporate assets	$ 10,208

The reduced carrying value of these assets, after the impairment charge, was $1.7 million at March 31, 2001.