The Company's fiscal year ends on March 31. Accordingly, all references to years in this Management's Discussion and Analysis refer to the fiscal year ended March 31 of the indicated year. Also, when referred to herein, operating profit means net sales less operating expenses, without deduction for general corporate expenses, interest and income taxes.

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 also announced that it had retained an investment banking firm to consider further 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 non-recurring 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 letter 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.

As discussed in Note 2 in the "Notes to Consolidated Financial Statements", the Company reported, on a pre-tax basis, asset impairment charges in the fourth fiscal quarter of 2001 of $67.9 million related to estimated losses on businesses to be sold, primarily related to the write-off of intangible assets and property. In addition, in the fourth fiscal quarter of 2001 the Company reported a pre-tax charge of $10.2 million associated with the write-down of real estate held for sale and equity investments and notes receivable from a 1995 divestiture. 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.

On April 12, 2001, the Company announced, following a review of alternative strategic initiatives, it would become solely a manufacturer of niche aerospace products. As a result, the Company will divest TransTechnology Engineered Components (TTEC), a manufacturer of spring steel engineered fasteners and headlight adjusters. The Company will seek to have all the divestitures, including TTEC, completed by September 2001.

Following the divestiture of the fastener business units, the Company expects to have retired substantially all of its debt and expects to reduce its corporate overhead by more than $4 million from its present $8.7 million level. Additionally, for tax purposes, the Company expects to have significant operating loss carry-forwards which will shelter future earnings from taxes for several years. The Company expects, when repositioned as an aerospace products manufacturer with revenues from new equipment sales, maintenance and service of existing equipment, and spare parts sales, to be significantly more profitable and less leveraged, with substantial growth opportunities. Management believes that the Company will present substantially more value to its shareholders after the restructuring than in its present form.

On July 10, consistent with the aforementioned actions, the Company completed the previously announced sale of its Breeze Industrial and Pebra hose clamp businesses in the U.S. and Germany, respectively, to Industrial Growth Partners and the current management team of these divested companies for $46.2 million in cash. Proceeds were used to repay debt. The Company is involved in ongoing discussions with potential buyers for the sales of the businesses previously reported as being held for sale. While there can be no assurances that these transactions will be consummated, management believes that they are continuing to make progress toward the execution of its previously announced strategies.

RESULTS OF OPERATIONS

Net sales increased 9.6% to $328.1 million for 2001 compared to $299.3 million in 2000. Sales in the Specialty Fasteners Products segment increased 8.0% to $257.6 million in 2001 from $238.4 million in 2000. This increase was primarily the result of the Tinnerman acquisition in 2000 where seven months of operations were reported in 2000 versus a full year in 2001. Sales in the Aerospace Products segment were up 15.9% in 2001 versus 2000 based on strong product demand at both Breeze-Eastern and Norco.

Consolidated gross margins were $86.4 million in 2001 versus $88.3 million in 2000.

The Company reported an Operating Loss in 2001 of $27.2 million compared to Operating Profit of $40.0 million in 2000. In 2001, the Company reported an asset impairment charge of $67.9 million related to the announced intention to sell its TCR, ARM, and Engineered Rings business units. This impairment loss relates primarily to the write-down of goodwill, patents, trademarks and net property. In addition, in 2001 the Company incurred additional costs in the U.K. associated with its consolidation of the Ellison and Anderton retaining ring plants of $2.1 million. Reduced product demand and lower gross margins contributed to this reported Operating Loss in 2001. Specific segment results are discussed below.

Net interest expense increased $14.5 million due to higher debt levels in 2001 versus 2000 to fund the Tinnerman and Ellison acquisitions which occurred in 2000. Also contributing to increased interest expense were higher interest rates in 2001 versus 2000 and a charge of $2.3 million in 2001 related to loan fees associated with the refinancing of the Company's bridge loan which occurred on September 1, 2000.

The Company reported a tax benefit of $10.9 million in 2001 which includes the estimated tax effects of the sale of the TCR, ARM, and Engineered Rings businesses and a valuation allowance for deferred tax assets related to the future sales of these business units.

New orders received during 2001 totaled $320.1 million versus $305.2 million in 2000. This increase reflected the inclusion of twelve months of orders in 2001 versus seven months of orders in 2000 for the Tinnerman businesses. This was offset somewhat by lower bookings in several of the Specialty Fasteners Products business units reflecting lower product demand. At March 31, 2001, total backlog of unfilled orders was $99.4 million versus $109.6 million at March 31, 2000. New orders and backlog by segment are discussed below.

SPECIALTY FASTENER PRODUCTS SEGMENT 2001 COMPARED TO 2000

Sales for the Specialty Fastener Products segment were $257.6 million in 2001 versus $238.4 million in 2000. $23.4 million of this increase occurred in the Engineered Components businesses which primarily were the result of the acquisition of Tinnerman in 2000. Sales at the Hose Clamp businesses (Breeze Industrial and Pebra) were down $4.6 million from 2000 primarily due to weak demand in the heavy truck markets. Sales at the Engineered Rings businesses were up $4.8 million over 2000 in both European and U.S. markets. $4.9 million of this increase resulted from the acquisition of Ellison in 2000; weak local currency exchange rates erased strong increases in unit sales in the U.K., Germany and Brazil. Sales at TCR were $2.6 million below 2000 due to weak product demand for cold-headed products and production problems associated with specific product orders.

Operating losses were $45.4 million in 2001 versus operating profit of $24.6 million in 2000. In 2001, the Company reported an asset impairment charge of $67.9 million primarily related to the write-down of goodwill, patents, trademarks, and property. On January 19, 2001, the Company announced that it intended to sell the TCR, ARM, Engineered Rings, and Hose Clamp businesses. This impairment charge was required to write the net assets of certain of these businesses down to estimated net realizable values associated with future dispositions.

Before the impairment charge, operating profit was $22.4 million. Operating income was down $2.1 million from 2000 in the Hose Clamp businesses, reflecting weak heavy truck production in the last half of fiscal 2001. Operating profit in the Engineered Rings businesses was up in 2001 in the U.S., Germany, and Brazil, but these improvements were more than offset by additional losses in the U.K. resulting from the consolidation of the Ellison and Anderton plants and associated production and delivery problems. The Company reported additional consolidation-related costs in 2001 of $2.1 million. Operating profit at the Engineered Components businesses was up $2.4 million primarily due to the inclusion of Tinnerman's results for the full year in 2001. Operating profit at TCR was down by 34% from 2000, resulting from weak sales and lower gross margin percentages due to product pricing pressures and production problems. In 2001, $1.3 million was received in an arbitration award at ARM from its largest customer due to that customer's breach of a contract to purchase a minimum amount of ARM'S products. This award was included in operating profit in 2001.

Gross margin earned at the Engineered Rings businesses in 2001 was $5.2 million below that of 2000 primarily due to additional production costs associated with the U.K. plant consolidation. Gross margin in 2001 at the hose clamp businesses was $2.7 million below 2000 due to lower sales levels and lower gross margin percentages attributable to the slow-down in the heavy truck industry. Gross margin earned at the Engineered Component businesses in 2001 was $5.1 million above 2000 due to a full twelve months reported in 2001 for Tinnerman versus seven months in 2000. New orders during 2001 were $253.5 million versus $243.4 million in 2000. This increase reflects the inclusion of Tinnerman for the full year in 2001. New orders were up 46% in 2001 over 2000 at ARM, reflecting stabilization in that business; down 3.1% at the Hose Clamp businesses, up 1.6% at the Engineered Rings businesses; and down 22.1% at TCR. The backlog at March 31, 2001 was $59.2 million versus $65.4 million at March 31, 2000. Backlog declined over this period in the Engineered Components businesses due to weakened automotive production in the last quarter of 2001. In the Rings businesses, backlog declined as past due shipments related to U.K. production problems became less significant.

SPECIALTY FASTENER PRODUCTS SEGMENT 2000 COMPARED WITH 1999

Sales for the Specialty Fastener Products segment were $238.4 million in 2000, an increase of $60.6 million, or 34%, from 1999. The increase in sales was primarily due to the acquisition of Ellison on July 19, 1999 and Tinnerman on August 31, 1999. Increases in domestic hose clamps and assembly fasteners and cold-headed parts sales were offset by decreases in European hose clamps and both domestic and international retaining rings. Sales at ARM continued to decline due to a loss of a substantial portion of business from its largest customer and the down cycle of the airframe industry. The Company filed an arbitration demand against this customer and the former owner seeking damages for fraud and breach of contract, punitive damages and rescission, which was settled in 2001.

Operating profit for the Specialty Fastener Products segment was $24.6 million in 2000, a decrease of $1.7 million, or 6%, compared to 1999. Excluding $5.5 million of expenses relating to the consolidation of two retaining ring factories in the UK as part of the Ellison acquisition program, operating profit increased 15%. This increase was primarily driven by the Tinnerman acquisition. Operating profits at the European operation were lower due to reduced market and economic factors, as well as currency factors, especially the exchange rates between the Pound sterling and the Euro. Domestic retaining ring operating profit was lower due to lower sales volume. Operating profit in assembly fasteners increased in 2000 mainly due to increased sales volume, primarily in the U.S. automotive market.

New orders during 2000 for the Specialty Fastener Products segment were $243.4 million, an increase of $71.9 million, or 42%, mainly due to the Tinnerman and Ellison acquisitions which were not owned in 1999. Backlog of unfilled orders as of March 31, 2000 increased to $65.4 million, compared to $45.9 million at March 31, 1999, mainly due to these acquisitions.

AEROSPACE PRODUCTS SEGMENT 2001 COMPARED WITH 2000

Sales of the Aerospace Products segment in 2001 were $70.5 million versus $60.8 million in 2000. Sales at Breeze-Eastern were $7.0 million above 2000, primarily due to strong product demand across all product lines and to a lesser degree because of improved product pricing. Sales at Norco were $2.7 million above 2000, also attributable to strong demand in the commercial aviation OEM and spare parts business as well as new product introductions.

Gross margin earned at Breeze-Eastern increased by $3.4 million in 2001 over 2000, the result of greater sales levels over the period as well as a higher gross margin rate. Norco's gross margin increased by $0.8 million primarily due to higher sales levels.

Operating income for the segment was $18.2 million in 2001 compared to $15.4 million in 2000. The majority of the operating income increase over 2000 occurred at Breeze-Eastern.

New orders during 2001 were $66.5 million versus $61.8 million in 2000. In 2001, order intake was up $0.7 million at Breeze-Eastern and $4.0 million at Norco compared to 2000. This reflects strong unit demand for these products. Backlog was $40.2 million at March 31, 2001 versus $44.2 million at March 31, 2000. The decline from the past year occurred primarily at Breeze-Eastern and was the result of the timing of large orders received.

AEROSPACE PRODUCTS SEGMENT 2000 COMPARED WITH 1999

Sales for the Aerospace Products segment were $60.8 million in 2000, an increase of $10.7 million, or 21%, from 1999. Approximately 9% of the increase came from increased rescue hoist and engineering development programs and 12% due to the inclusion of twelve months of sales from Norco this year compared to eight months in 1999.

Operating profit for the Aerospace Products segment was $15.4 million, an increase of $3.3 million, or 27%. This increase was due to the inclusion of Norco for the full year in 2000, as well as increased sales of rescue hoists.

New orders during 2000 for the Aerospace Products segment were $61.8 million, an increase of $12.4 million, or 25%, mainly due to the Norco acquisition. Increased orders also included increased engineering program orders and increased orders for spare parts. Backlog of unfilled orders as of March 31, 2000 was $44.2 million, compared to $43.8 million at March 31, 1999.

EURO CURRENCY

Effective January 1, 1999, eleven countries comprising the European Union established fixed foreign currency exchange rates and adopted a common currency unit designated as the "Euro". The Euro has since become publicly traded and is currently used in commerce during the present transition period which is scheduled to end January 1, 2002, at which time a Euro denominated currency is scheduled to be issued and is intended to replace those currencies of the eleven member countries. The transition to the Euro has not resulted in problems for the Company to date, and is not expected to have any material adverse impact on the Company's future operations.

NEW ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities". In June 2000, the FASB issued SFAS No. 138, which amends certain provisions of SFAS No. 133. The Company has appointed a team to implement SFAS No. 133 and the Company has adopted SFAS No. 133 and the corresponding amendments under SFAS No. 138 on April 1, 2001. SFAS No. 133, as amended by SFAS No 138. The impact on the Company of SFAS Nos. 133 and 138, adopted as of April 1, 2001, would result in a pre-tax charge to other comprehensive income of $3.2 million ($2.0 million after tax) and an offsetting liability of $3.2 million ($2.0 million net of tax benefit) at that date.

Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements" was issued in December 1999. SAB No. 101b, "Second Amendment: Revenue Recognition in Financial Statements", defers implementation of SAB No. 101 until no later than the fourth quarter of fiscal 2001. These SAB's were implemented effective January 1, 2001, and did not have a material impact on the Company's revenue recognition policies.

ACQUISITIONS

On August 31, 1999, the Company acquired all of the assets and assumed certain liabilities, consisting primarily of trade debts and accrued expenses, of the Engineered Fasteners Division of Eaton Corporation and its Tinnerman product line (collectively referred to as "Tinnerman") for a total purchase price of $173.3 million in cash. Tinnerman had 650 employees and manufactures a wide variety of fastening devices for the automotive, business equipment, consumer electronics and home appliance markets. Tinnerman has manufacturing facilities in Brunswick and Massillon, Ohio and Hamilton, Ontario, Canada.

On July 19, 1999, the Company acquired all the outstanding capital stock of Ellison Holdings PLC, a privately held company, and its German affiliate Ellison, Roettges & Co. GmbH (collectively referred to as "Ellison") for $13.8 million in cash, a $0.4 million note payable 24 months from the date of acquisition and other contingent consideration. Ellison, headquartered in Glusburn, West Yorkshire, England, manufactures retaining and snap rings as well as lockwashers for the automotive, heavy vehicle and industrial markets.

On June 29, 1998, the Company acquired all of the outstanding stock of Aerospace Rivet Manufacturers Corporation ("ARM") for $26.2 million in cash, including direct acquisition costs, and other contingent consideration. ARM, located in City of Industry, California, produces rivets and externally threaded fasteners for the aerospace industry.

On July 28, 1998, the Company acquired all of the outstanding stock of Norco, Inc. ("Norco") for $17.7 million in cash, including direct acquisition costs, and other contingent consideration. Norco, located in Ridgefield, Connecticut, produces aircraft engine compartment hold open rods, actuators and other motion control devices for the aerospace industry.

ASSETS HELD FOR SALE

Included in Other Assets at March 31, 2001 and 2000, were assets held for sale related to businesses previously reported as discontinued operations of $2.9 million and $5.2 million, respectively.

LIQUIDITY AND CAPITAL RESOURCES

The Company's credit facilities are considered short term and reflect the terms of the forbearance agreement with its lenders (the "Lenders"). The Company plans to reduce debt as previously announced by selling several of its fastener business units, and has taken action and initiated discussions with interested parties. The terms of sale of each business unit are subject to the approval of the Lenders. The Company's debt-to-capitalization ratio was 84%, 68%, and 45% as of March 31, 2001, 2000 and 1999, respectively. The higher debt-to-capitalization ratio for 2001 reflects reduced equity due to impairment charges of $78 million recorded in connection with the Company's restructuring and divestiture plan to reduce debt. Higher debt ratios for 2000 reflect the additional bank borrowings necessary for the Tinnerman and Ellison acquisitions in that year.

The current ratio as of March 31, 2001 was 0.41, compared to 1.01 and 3.39 at March 31, 2000 and 1999, respectively. Working capital was negative ($190.8) million at March 31, 2001, down $192.6 million from 2000 and down $261.9 million from 1999. The reduction in working capital in 2001 was due to the reclassification of long term bank debt to short term debt reflecting the terms of the current forbearance agreement, which has expiration dates less than one year. Total debt as of March 31, 2001 was $272.5 million or $4.9 million less than the March 31, 2000 amount.

Effective December 31, 2000, the Company was not able to meet certain financial ratio requirements of the credit facility (the "Credit Facility"), as amended. Pursuant to discussions with the Lenders, the Company and the Lenders agreed to an amendment to the Credit Facility to include a forbearance agreement, the payment of certain other fees by the Company and imposition of certain conditions on the Company including the suspension of dividend payments. During the forbearance period the Lenders agree not to exercise certain of their rights and remedies under the Credit Agreement. The Company has, accordingly, classified its bank debt as "current" to reflect the fact that the forbearance period is less than one year. The term of the forbearance period, initially scheduled to expire on January 31, 2001, was subsequently extended by an additional amendment to March 29, 2001. This additional amendment also reduced the Revolver from $200 million to $175 million with an additional sub-limit on usage at $162 million. Prior to the March 29, 2001 expiration date, an extension was agreed to extend the termination date until June 27, 2001, provided that certain performance and debt reduction requirements were achieved in which case the forbearance termination date may be further extended under similar terms and conditions until September 27, 2001. The senior debt reduction requirements of the forbearance agreement stipulate that $50 million be repaid prior to June 27, 2001, which was deemed satisfied, with the consent of the Lenders, by the sale of the Company's Breeze Industrial and Pebra divisions in July 2001, and the remainder be repaid prior to the September 27, 2001 termination date. Funds for such debt repayments are expected to be realized from the sale of business assets with the prior consent of the lending group. The forbearance agreement also requires the achievement of minimum levels of EBITDA (earnings before interest, taxes, depreciation, and amortization), and the adherence to borrowing limits as adjusted based on the scheduled debt reduction. Other terms of the forbearance agreement include the payment of certain fees, reporting and consulting requirements. The Company has taken action to reduce its debt by preparing to sell certain of its businesses in order to either comply with the requirements of the existing Credit Facility as amended or to be in an improved financial position to negotiate further amendments or borrowing alternatives. The Company has made all of its scheduled interest and principal payments on a timely basis. Various factors, including changes in business conditions, anticipated proceeds from the sale of operations and economic conditions in domestic and international markets in which the Company competes, will impact the restructuring results and may affect the ability of the Company to restore compliance with the financial ratios specified in the existing Credit Facility.

The Company has unused borrowing capacity for both domestic and international operations of $6.2 million as of March 31, 2001, including letters of credit of $5.0 million. The Revolver and Term Loan are secured by substantially all of the Company's assets. As of March 31, 2001, the Company had total borrowings of $271.2 million which have a current weighted-average interest rate of 11.5%.

Borrowings under the Revolver as of March 31, 2001, were $156.3 million. Interest on the Revolver is tied to the primary bank's prime rate, or at the Company's option, the London Interbank Offered Rate ("LIBOR"), plus a margin that varies depending upon the Company's achievement of certain operating results. As of March 31, 2001, $192.1 million of the Company's outstanding borrowings utilized LIBOR, of which $165.7 million were payable in U.S. Dollars and $7.3 million and $19.1 million were payable in Deutsche marks and Pounds sterling, respectively. The terms of the forbearance agreement provide that the Company's option to borrow at LIBOR is conditional upon the achievement of the debt reduction targets of $50 million by June 27, 2001, and the remainder by September 27, 2001. LIBOR borrowings, expiring prior to these dates, may not be renewed unless such debt reduction has occurred. Effective June 7, 2001, LIBOR borrowings consequently were converted to base rate borrowings at prime rate of 7% plus a margin of 2.5% to equal a borrowing rate of 9.5%. Borrowings under the Term Loan as of March 31, 2001, were $38.8 million. As discussed above, the Term Debt, as well as all other debt under the Credit Facility, has been classified as currently payable to reflect the forbearance agreement in place.

The Credit Facility requires the Company to maintain interest rate protection on a minimum of 50% of its variable rate debt The Company has, accordingly, provided sufficiently for this protection by means of interest rate swap agreements which have fixed the rate of interest on $50.0 million of debt at a base rate of 5.48% through May 4, 2002, and $75.0 million of debt at a base rate of 6.58% through March 3, 2003. Under the Credit Facility, the base interest rate is added to the applicable interest rate margin to determine the total interest rate in effect. The Credit Facility restricts annual capital expenditures to $12.0 million through 2001, $13.0 million in 2002, and $15.0 million thereafter, and contains other customary financial covenants, including the requirement to maintain certain financial ratios relating to performance, interest expense and debt levels. As noted above, the Company is currently operating under a forbearance arrangement and is in the process of reducing its debt through the sale of certain of its businesses in order to either comply with the requirements of the existing agreement or to be in an improved financial position to negotiate further amendments or borrowing alternatives.

On August 30, 2000, the Company completed a private placement of $75 million in senior subordinated notes (the "Notes") and certain warrants to purchase shares of the Company's common stock (the "Warrants") to a group of institutional investors (collectively, the "Purchasers"). The Company used the proceeds of the private placement to retire, in full, a $75 million Bridge Loan held by a group of lenders led by Fleet National Bank. The Notes are due on August 29, 2005 and bear interest at a rate of 16% per annum, consisting of 13% cash interest on principal, payable quarterly, and 3% interest on principal, payable quarterly in "payment-in-kind" promissory notes. Prepayment of the Notes is permitted after August 29, 2001 at a premium initially of 9% declining to 5%, 3%, and 1% annually, respectively, thereafter. The Notes contain customary financial covenants and events of default, including a cross-default provision to the Company's Credit Facility.

The Warrants entitle the Purchasers to acquire, in the aggregate, 427,602 shares, or 6.5%, of the common stock of the Company at an exercise price of $9.93 a share, which represents the average daily closing price of the Company's common stock on the New York Stock Exchange for the thirty (30) days preceding the completion of the private placement, and which may be subject to a price adjustment on the first anniversary of the issuance of the Warrants. The Warrants must be exercised by August 29, 2010. These Warrants have been valued at an appraised amount of $0.2 million and have been recorded in paid in capital. In connection with the transaction, the Company and certain of its subsidiaries signed a Consent and Amendment Agreement with its senior debt lenders (the "Lenders") under the Company's $250 million Credit Facility existing at that time, in which the Lenders consented to the private placement and amended certain financial covenants associated with the Credit Facility.

As of March 31, 2001, the Company had $1.3 million of other long-term debt consisting of collateralized borrowing arrangements with fixed interest rates of 3% and 3.75% and loans on life insurance policies owned by the Company with a fixed interest rate of 5%.

The Company did not purchase any treasury stock in 2001 or 2000 in contrast to 1999 during which the Company purchased 249,000 shares for $4.9 million. Treasury stock purchases are made in the open market or in negotiated transactions when opportunities are deemed to arise. Purchases of treasury stock are limited by the terms of the Company's Credit Facility.

Management believes that the Company's plan to divest several of its business units in order to reduce debt, along with the anticipated cash flow from its retained business operations, will be sufficient to support working capital, capital expenditure, and debt service costs. The amount and tuning of proceeds from such sales is subject to market and other conditions which the Company cannot control. Capital expenditures in 2001 were $5.7 million compared to $10.0 million in 2000 and $14.8 million in 1999, with capital expenditures for the Fastener Segment being much larger than those required by the Aerospace Products Segment. The Company expects capital expenditures in 2002 to be lower than the 2001 amount mainly due to the planned business unit dispositions.

Inflation - While neither inflation nor deflation has had, and the Company does not expect it to have, a material impact upon operating results, there can be no assurance that its business will not be affected by inflation or deflation in the future.

CONTINGENCIES

Environmental Matters - During the fourth quarter of fiscal 2000, the Company presented an environmental cleanup plan for a portion of a site in Pennsylvania which continues to be owned although the related business has been sold. This plan was submitted pursuant to the Consent Order and Agreement with the Pennsylvania Department of Environmental Protection ("PaDEP") concluded in fiscal 1999. Pursuant to the Consent Order, upon its execution the Company paid $0.2 million for past costs, future oversight expenses and in full settlement of claims made by PaDEP related to the environmental remediation of the site with an additional $0.2 million paid in fiscal 2001. A second Consent Order was concluded with PaDEP in the third quarter of fiscal 2001 for another portion of the site, and a third Consent Order for the remainder of the site is contemplated by October 1, 2002. The Company is also administering an agreed settlement with the Federal government under which the government pays 50% of the environmental response costs associated with a portion of the site. The Company is also in the process of finalizing the documentation of an agreed settlement under which the Federal government will pay 45% of the environmental response costs associated with another portion of the site. At March 31, 2001, the Company's cleanup reserve was $1.7 million based on the net present value of future expected cleanup costs. In fiscal 1999, the Company settled for a recovery of a portion of cleanup costs with its insurance carriers for approximately $5.1 million (net) which was included in Other income-net. The Company expects that remediation at the Pennsylvania site will not be completed for several years.

The Company also continues to participate in environmental assessments and remediation work at ten other locations, which include operating facilities, facilities for sale, and previously owned facilities. The Company estimates that its potential cost for implementing corrective action at these sites will not exceed $0.2 million payable over the next several years, and has provided for the estimated costs in its accrual for environmental liabilities.

In addition, the Company has been named as a potentially responsible party in seven environmental proceedings pending in several other states in which it is alleged that the Company was a generator of waste that was sent to landfills and other treatment facilities and, as to several sites, it is alleged that the Company was an owner or operator. Such properties generally relate to businesses which have been sold or discontinued. The Company estimates that its expected future costs, and its estimated proportional share of remedial work to be performed, associated with these proceedings will not exceed $0.1 million and has provided for these estimated costs in its accrual for environmental liabilities.

Litigation - The Company is also engaged in various other legal proceedings incidental to its business. It is the opinion of management that, after taking into consideration information furnished by its counsel, the above matters will have no material effect on the Company's consolidated financial position or the results of the Company's operations in future periods.

INFORMATION ABOUT FORWARD-LOOKING STATEMENTS

Certain statements in this press release constitute "forward-looking statements" within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the "Acts"). Any statements contained herein that are not statements of historical fact are deemed to be forward-looking statements.

The forward-looking statements in this document are based on current beliefs, estimates and assumptions concerning the operations, future results, and prospects of the Company. As actual operations and results may materially differ from those assumed in forward-looking statements, there is no assurance that forward-looking statements will prove to be accurate. Forward-looking statements are subject to the safe harbors created in the Acts.

Any number of factors could affect future operations and results, including, without limitation, the Company's ability to dispose of some or all of the business operations proposed for divestiture for the consideration currently estimated to be received by the Company or within the timeframe anticipated by the Company; the Company's ability to arrive at a mutually satisfactory amendment of its credit facilities with its lenders, if required; in the event of divestiture, the Company's ability to be profitable with a smaller and less diverse base of operations that will generate less revenue; the value of replacement operations, if any; general industry and economic conditions; interest rate trends; capital requirements; competition from other companies; changes in applicable laws, rules and regulations affecting the Company in the locations in which it conducts its business; the availability of equity and/or debt financing in the amounts and on the terms necessary to support the Company's future business and/or to provide adequate financing for parties interested in purchasing operations identified for divestiture; and those specific risks that are discussed in the Company's previously filed Annual Report on Form 10-K for the fiscal year ended March 31, 2001.

The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information or future events.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to various market risks, including changes in foreign currency exchange rates and interest rates. Market risk is the potential loss arising from adverse changes in market rates and prices, such as foreign currency exchange rates and interest rates. 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. Gains and losses on forward foreign exchange instruments that hedge specific third party transactions are included in the cost of carrying value of the underlying transaction. Gains and losses on instruments that are hedges of projected third party transactions are included in current period income. The Company recognized $0.5 million of unrealized gains on forward exchange contracts in 2000 that were hedges of forecasted future transactions. In 2001, the Company reversed $0.5 million of these gains as the hedges matured, which reduced income in 2001.

At March 31, 2001, the Company had outstanding forward foreign exchange contracts to purchase and sell $10.8 million of various currencies (principally Deutsche marks and Pounds sterling). At March 31, 2001, if all forward contracts were closed out there would be no cash received or paid (the fair value of all outstanding contracts is $0.0 million). A 10% fluctuation in the exchange rates for the currencies hedged would have a $0.9 million effect on fair values of these instruments.

The following table 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

The Company enters into interest rate swap agreements to manage a portion of its exposure to interest rate changes. The swaps involve the exchange of fixed and variable interest rate payments without exchanging the notional principal amount. Payments or receipts on the swap agreements are recorded as adjustments to interest expense. At March 31, 2001, the Company had outstanding interest rate swap agreements to convert $125 million of floating rate debt to fixed rate debt. The fair value of these swaps was approximately ($3.2) million at March 31, 2001.