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Notes to Consolidated Financial Statements

10. FINANCIAL INSTRUMENTS

Interest Rate Swap Agreements - The Company periodically enters into interest rate swap agreements to effectively convert all or a portion of its floating-rate debt to fixed-rate debt in order to reduce the Company's risk to movements in interest rates. Such agreements involve the exchange of fixed and floating interest rate payments over the life of the agreement without the exchange of the underlying principal amounts. Accordingly, the impact of fluctuations in interest rates on these interest rate swap agreements is fully offset by the opposite impact on the related debt. Swap agreements are only entered into with strong creditworthy counterparties. The swap agreements in effect were as follows:

	Notional Amount (In thousands)	Maturities	Receive Rate(1)	Pay Rate
March 31, 2001	$ 25,000	5/02	4.88%	5.48%
	25,000	5/02	4.88	5.48
	37,500	3/03	4.88	6.58
	37,500	3/03	4.88	6.58
(1) Based on three-month LIBOR

Foreign Currency Exchange Agreements - The Company enters into forward foreign currency agreements to hedge foreign currency financing transactions. Realized and unrealized gains and losses arising from forward currency contracts are recognized as adjustments to the gains and losses resulting from the underlying hedged transactions.

The Company enters into off-balance-sheet forward foreign exchange instruments in order to hedge certain intercompany financing denominated in foreign currencies, accounts receivable denominated in foreign currencies, a percentage of projected sales denominated in foreign currencies, and projected foreign currency intercompany purchases. The Company only hedges projected transactions that are expected to materialize within 12 months. Gains and losses on forward foreign exchange instruments that hedge specific identifiable third party transactions are deferred and ultimately included in the cost of the underlying transaction. Gains and losses on instruments that are hedges of projected third party transactions are not deferred and are included in current period income as "other income-net". The Company recognized $0.5 million of unrealized losses on forward exchange contracts in 2001 related to hedges of projected third party transactions. Deferred hedge gains or losses at March 31, 2001 were negligible.

The table below summarizes, by currency, the contractual amounts of the Company's foreign exchange contracts at March 31, 2001 and 2000. The "Buy" amounts represent the U.S. dollar equivalent of commitments to purchase foreign currencies, and the "Sell" amounts represent the U.S. dollar equivalent to sell foreign currencies (in thousands):

	2001		2000
	Buy	Sell	Buy	Sell
Currency Deutsche mark	-	$  9,977	-	$  10,589
Pound sterling	$  779	-	$  17,501	1,667
	$  779	$  9,977	$  17,501	$  12,256

Fair Value of Financial Instruments - SFAS No. 107, "Disclosure about Fair Value of Financial Instruments" and No. 119, "Disclosure about Derivative Financial Instruments and Fair Value of Financial Instruments," are part of a continuing process by the Financial Accounting Standards Board to improve information regarding financial instruments. The following methods and assumptions were used by the Company in estimating the fair value of each class of financial instruments:

Cash and Cash Equivalents - The carrying amount reported in the balance sheet for cash and cash equivalents approximates its fair value.

Debt - The carrying amounts of the Company's debt approximates its fair value.

Concentration of Credit Risk - The Company is subject to a concentration of credit risk primarily with its trade and notes receivable. The Company grants credit to certain customers who meet pre-established credit requirements, and generally requires no collateral from its customers. Estimates of potential credit losses are provided for in the Company's consolidated financial statements and are within management's expectations and industry averages. As of March 31, 2001, the Company had no other significant concentrations of credit risk.

Interest Rate Swaps and Forward Foreign Exchange Agreements - The fair values of the Company's interest rate swaps and forward foreign exchange agreements are the estimated amounts the Company would pay or receive to terminate the agreements at March 31, 2001 and 2000 based upon quoted market prices as provided by financial institutions which are counterparties to the agreements and were as follows (in thousands):

	2001 (Pay)		2000 Receive
Interest rate swap agreements	$  (3,207	)	$  2,405
Forward foreign exchange agreements	(9	)	1,537