| TEXAS                                                               | 75-0404410                                |
|---------------------------------------------------------------------|-------------------------------------------|
| (State      or other jurisdiction of incorporation or organization) | (I.R.S.      Employer Identification No.) |
|                                                                |                                      |
| 601      SOUTH RAGUET, LUFKIN, TEXAS                                | 75904                                     |
| (Address      of principal executive offices)                       | (Zip      Code)                           |

| l | the      level of North American and worldwide oil and gas exploration and      production activity; |
|---|------------------------------------------------------------------------------------------------------|
| l | worldwide      economic conditions, particularly economic conditions in North      America;          |
| l | oil      and gas production costs;                                                                   |
| l | weather      conditions;                                                                             |
| l | the      expected costs of developing new reserves;                                                  |
| l | national      government political requirements and the policies of  OPEC;                           |
| l | the      price and availability of alternative fuels;                                                |
| l | the      effect of worldwide energy conservation measures;                                           |
| l | environmental      regulation; and                                                                   |
| l | tax      policies.                                                                                   |

| l | disruption      of oil and natural gas exploration and production    activities;              |
|---|-----------------------------------------------------------------------------------------------|
| l | restriction      of the movement and exchange of funds;                                       |
| l | inhibition      of our ability to collect receivables;                                        |
| l | enactment      of additional or stricter U.S. government or international sanctions;      and |
| l | limitation      of our access to markets for periods oftime.                                  |

pension fundinvestment performance or assumptions relating to 
pension costs mayhave a material effect on the valuation of 
pensionobligations, the funded status of 
pension plans,and our 
pensioncost.

assets that, over the long-run, will approximate the presentvalue of projected benefit obligations. Our 
pension costis materially affected by the discount rate used to measure pension obligations,the level of plan assets available to fund those obligations at the measurementdate and the expected long-term rate of return on plan assets. Our pensionplan is supported by pension fund investments that are volatile and subjectto financial market risk, including fixed income, domestic and foreign equitysecurities, real estate and hedge funds. Significant changes in investmentperformance or a change in the portfolio mix of invested assets couldresult in corresponding increases and decreases in the valuation of plan assetsor in a change of the expected rate of return on plan assets. A change in thediscount rate would result in a significant increase or decrease in thevaluation of pension obligations, affecting the reported funded status of ourpension plans as well as the net periodic pension cost in the following fiscalyears. Similarly, changes in the expected return on plan assets couldresult in significant changes in the net periodic pension cost for subsequentfiscal years.

| l | trends      in the Company’s industries and the markets in which it      operates;                                                                                          |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| l | changes      in the market price of the products the Company sells;                                                                                                               |
| l | the      introduction of new technologies or products by the Company or its      competitors;                                                                                     |
| l | changes      in expectations as to the Company’s future financial performance,      including financial estimates by securities analysts and      investors;                |
| l | operating      results that vary from the expectations of securities analysts and      investors;                                                                                 |
| l | announcements      by the Company or its competitors of significant contracts, acquisitions,      strategic partnerships, joint ventures, financings or capital      commitments; |
| l | the      price of oil;                                                                                                                                                            |
| l | changes      in laws and regulations; and                                                                                                                                         |
| l | general      economic and competitiveconditions.                                                                                                                                  |

| Oil      Field:                   |                 |
|-----------------------------------|----------------------|
| Pumping      Unit Manufacturing   | 240,000      sq. ft. |
| Foundry      Operations           | 687,000      sq. ft. |
|                              |                 |
| Power      Transmission:          |                 |
| New      Unit Manufacturing       | 458,000      sq. ft. |
| Repair      Operations            | 84,000      sq. ft.  |
|                              |                 |
| Former      Trailer Manufacturing | 388,000      sq. ft. |
|                              |                 |
| Corporate      Facilities         | 33,000      sq. ft.  |

| Lufkin      ILS- Houston, TX    | 50,000      sq. ft. |
|---------------------------------|---------------------|
|                            |                |
| Lufkin      RMT- Wellsville, NY | 23,500      sq. ft. |

| Oil      Field (Pumping unit manufacturing and repair):      |                 |
|--------------------------------------------------------------|----------------------|
| Nisku,      Alberta, Canada                                  | 66,000      sq. ft.  |
| Comodoro      Rivadia, Argentina                             | 125,000      sq. ft. |
|                                                         |                 |
| Power      Transmission (New unit manufacturing and repair): |                 |
| Fougerolles,      France                                     | 377,000      sq. ft. |

|    |   | 2009             |   |   | 2008   |   |
|---------|--------|------------------|--------|--------|--------|--------|
|    |   | Stock      Price |   |   |   |   |   | Stock      Price |   |   |   |   |
| Quarter |   | High             |   |   | Low    |   |   | Dividend |   |   | High |   |   | Low |   |   | Dividend |   |
|    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| First   |   | $                | 41.25  |   |   | $      | 26.96 |   |   | $ | 0.25 |   |   | $ | 65.50 |   |   | $ | 50.85 |   |   | $ | 0.25 |   |
| Second  |   |             | 48.16  |   |   |   | 29.51 |   |   |   | 0.25 |   |   |   | 86.82 |   |   |   | 62.53 |   |   |   | 0.25 |   |
| Third   |   |             | 53.81  |   |   |   | 36.38 |   |   |   | 0.25 |   |   |   | 95.23 |   |   |   | 70.93 |   |   |   | 0.25 |   |
| Fourth  |   |             | 75.74  |   |   |   | 49.53 |   |   |   | 0.25 |   |   |   | 79.25 |   |   |   | 31.45 |   |   |   | 0.25 |   |

| Plan      Category                                              |   | Number      of securities to be issued upon exercise of outstanding options, warrants      and rights (a) |    |   | Weighted-average      exercise price of outstanding options, warrants and rights    (b) |   |   | Number      of securities remaining available for future issuance under equity      compensation plans (excluding securities reflected in column      (a)) |   |
|-----------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|---------|--------|-----------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                            |   |                                                                                                      |    |   |                                                                                    |   |   |                                                                                                                                                       |   |
| Equity      compensation plans approved by security holders     |   |                                                                                                      | 709,015 |   |                                                                                    | $      | 52.56  |                                                                                                                                                       |   |   | 786,592 |   |
|                                                            |   |                                                                                                      |    |   |                                                                                    |   |   |                                                                                                                                                       |   |   |   |   |
| Equity      compensation plans not approved by security holders |   |                                                                                                      | -       |   |                                                                                    |   | -      |                                                                                                                                                       |   |   | - |   |
|                                                            |   |                                                                                                      |    |   |                                                                                    |   |   |                                                                                                                                                       |   |   |   |   |
| Total                                                           |   |                                                                                                      | 709,015 |   |                                                                                    | $      | 52.56  |                                                                                                                                                       |   |   | 786,592 |   |
|                                                            |   |                                                                                                      |    |   |                                                                                    |   |   |                                                                                                                                                       |   |   |   |   |

| (In      millions, except per share data)           |   | 2009   |   |   | 2008   |   |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|-----------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sales                                               |   | $      | 521.4  |   |   | $      | 741.2  |   |   | $      | 555.8  |   |   | $      | 526.1  |   |   | $ | 413.7 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      from continuing operations            |   |   | 22.5   |   |   |   | 88.0   |   |   |   | 71.8   |   |   |   | 71.3   |   |   |   | 44.5 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      per share from continuing operations: |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Basic                             |   |   | 1.51   |   |   |   | 5.96   |   |   |   | 4.82   |   |   |   | 4.80   |   |   |   | 3.05 |   |
|    Diluted                           |   |   | 1.51   |   |   |   | 5.91   |   |   |   | 4.76   |   |   |   | 4.71   |   |   |   | 2.98 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      assets                                   |   |   | 541.6  |   |   |   | 530.7  |   |   |   | 500.7  |   |   |   | 409.1  |   |   |   | 338.3 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      dividends per share                       |   |   | 1.00   |   |   |   | 1.00   |   |   |   | 0.88   |   |   |   | 0.62   |   |   |   | 0.38 |   |

|                        |   |   |    |   |   |   |    | Increase/  |   |   | %      Increase/ |   |
|-----------------------------|--------|--------|---------|--------|--------|--------|---------|------------|--------|--------|------------------|--------|
| Year      Ended December 31 |   | 2009   |    |   | 2008   |   |    | (Decrease) |   |   | (Decrease)       |   |
|                        |   |   |    |   |   |   |    |       |   |   |             |   |
| Sales                       |   |   |    |   |   |   |    |       |   |   |             |   |
| Oil      Field              |   | $      | 349,168 |   |   | $      | 551,814 |       |   | $      | (202,646         | )      |   |   | (36.7 | ) |
| Power      Transmission     |   |   | 172,191 |   |   |   | 189,380 |       |   |   | (17,189          | )      |   |   | (9.1 | ) |
| Total                       |   | $      | 521,359 |   |   | $      | 741,194 |       |   | $      | (219,835         | )      |   |   | (29.7 | ) |
|                        |   |   |    |   |   |   |    |       |   |   |             |   |   |   |   |   |
| Gross Profit                |   |   |    |   |   |   |    |       |   |   |             |   |   |   |   |   |
| Oil      Field              |   | $      | 65,510  |   |   | $      | 153,673 |       |   | $      | (88,163          | )      |   |   | (57.4 | ) |
| Power      Transmission     |   |   | 47,034  |   |   |   | 60,286  |       |   |   | (13,252          | )      |   |   | (22.0 | ) |
| Adjustment*                 |   |   | -       |   |   |   | 115     |       |   |   | (115             | )      |   |   | (100.0 | ) |
| Total                       |   | $      | 112,544 |   |   | $      | 214,074 |       |   | $      | (101,530         | )      |   |   | (47.4 | ) |
|                        |   |   |    |   |   |   |    |       |   |   |             |   |   |   |   |   |

|                        |   |   |    |   |   |   |    | Increase/  |   |   | %      Increase/ |   |
|-----------------------------|--------|--------|---------|--------|--------|--------|---------|------------|--------|--------|------------------|--------|
| Year      Ended December 31 |   | 2008   |    |   | 2007   |   |    | (Decrease) |   |   | (Decrease)       |   |
|                        |   |   |    |   |   |   |    |       |   |   |             |   |
| Sales                       |   |   |    |   |   |   |    |       |   |   |             |   |
| Oil      Field              |   | $      | 551,814 |   |   | $      | 397,354 |       |   | $      | 154,460          |   |   |   | 38.9 |   |
| Power      Transmission     |   |   | 189,380 |   |   |   | 158,452 |       |   |   | 30,928           |   |   |   | 19.5 |   |
| Total                       |   | $      | 741,194 |   |   | $      | 555,806 |       |   | $      | 185,388          |   |   |   | 33.4 |   |
|                        |   |   |    |   |   |   |    |       |   |   |             |   |   |   |   |   |
| Gross Profit                |   |   |    |   |   |   |    |       |   |   |             |   |   |   |   |   |
| Oil      Field              |   | $      | 153,673 |   |   | $      | 109,091 |       |   | $      | 44,582           |   |   |   | 40.9 |   |
| Power      Transmission     |   |   | 60,286  |   |   |   | 52,476  |       |   |   | 7,810            |   |   |   | 14.9 |   |
| Adjustment*                 |   |   | 115     |   |   |   | 701     |       |   |   | (586             | )      |   |   | (83.6 | ) |
| Total                       |   | $      | 214,074 |   |   | $      | 162,268 |       |   | $      | 51,806           |   |   |   | 31.9 |   |
|                        |   |   |    |   |   |   |    |       |   |   |             |   |   |   |   |   |

| (In      thousands of dollars)                        |   |   |   |   | Payments      due by period |   |
|-------------------------------------------------------|--------|--------|--------|--------|-----------------------------|--------|
|                                                  |   |   |   |   | Less      than              |   |   |  1 -      3 |   |   |  3 -      5 |   |   | More      than |   |
| Contractual      obligations                          |   | Total  |   |   | 1      year                 |   |   | years |   |   | years |   |   | 5      years |   |
|                                                  |   |   |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      lease obligations                      |   | $      | 9,748  |   |                        | $      | 1,800 |   |   | $ | 1,997 |   |   | $ | 1,331 |   |   | $ | 4,620 |   |
| Contractual      commitments for capital expenditures |   |   | 6,105  |   |                        |   | 6,105 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Contractual      debt obligations                     |   |   | 2,888  |   |                        |   | 1,372 |   |   |   | 1,516 |   |   |   | - |   |   |   | - |   |
|                                                  |   |   |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                 |   | $      | 18,741 |   |                        | $      | 9,277 |   |   | $ | 3,513 |   |   | $ | 1,331 |   |   | $ | 4,620 |   |
|                                                  |   |   |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| l | The      customer has accepted title and risk of loss;                                                                                                                                                              |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| l | The      customer has provided a written purchase order for the      product;                                                                                                                                       |
| l | The      customer, not the Company, requested the product to be stored and to be      invoiced under a Bill-and-Hold arrangement. The customer must also provide      the business purpose for the storage request; |
| l | The      customer must provide a storage period and future shipping      date;                                                                                                                                      |
| l | The      Company must not have retained any future performance obligations on the      product;                                                                                                                     |
| l | The      Company must segregate the stored product and not make it available to use      on other orders; and                                                                                                       |
| l | The      product must be completed and ready for  shipment.                                                                                                                                                         |

|                                                         |   | Pension  |   |   | Other    |   |
|--------------------------------------------------------------|--------|----------|--------|--------|----------|--------|
| (Thousands      of dollars)                                  |   | Benefits |   |   | Benefits |   |
|                                                         |   |     |   |   |     |   |
| Discount rate                                                |   |     |   |   |     |   |
|                                                         |   |     |   |   |     |   |
| Effect      of change on net periodic benefit cost (income): |   |     |   |   |     |   |
|                                                         |   |     |   |   |     |   |
| .25      percentage point increase                           |   | $        | (613   | )      |     | $      | (16 | ) |
| .25      percentage point decrease                           |   |     | 641    |   |     |   | 10 |   |
|                                                         |   |     |   |   |     |   |   |   |
| Effect      of change on PBO/APBO:                           |   |     |   |   |     |   |   |   |
|                                                         |   |     |   |   |     |   |   |   |
| .25      percentage point increase                           |   | $        | (5,962 | )      |     | $      | (195 | ) |
| .25      percentage point decrease                           |   |     | 6,257  |   |     |   | 203 |   |
|                                                         |   |     |   |   |     |   |   |   |
| Long-term rate of return on plan      assets                 |   |     |   |   |     |   |   |   |
|                                                         |   |     |   |   |     |   |   |   |
| Effect      of change on net periodic benefit cost (income): |   |     |   |   |     |   |   |   |
|                                                         |   |     |   |   |     |   |   |   |
| .25      percentage point increase                           |   | $        | (429   | )      |     | $      | - |   |
| .25      percentage point decrease                           |   |     | 429    |   |     |   | - |   |
|                                                         |   |     |   |   |     |   |   |   |

| l | oil      prices;                                                                                                                                                                                                                                                                                  |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| l | declines      in domestic and worldwide oil and gas drilling;                                                                                                                                                                                                                                     |
| l | capital      spending levels of oil producers;                                                                                                                                                                                                                                                    |
| l | availability      and prices for raw materials;                                                                                                                                                                                                                                                   |
| l | the      inherent dangers and complexities of our operations;                                                                                                                                                                                                                                     |
| l | uninsured      judgments or a rise in insurance premiums;                                                                                                                                                                                                                                         |
| l | the      inability to effectively integrate acquisitions;                                                                                                                                                                                                                                         |
| l | labor      disruptions and increasing labor costs;                                                                                                                                                                                                                                                |
| l | the      availability of qualified and skilled labor;                                                                                                                                                                                                                                             |
| l | disruption      of our operating facilities or management information    systems;                                                                                                                                                                                                                 |
| l | the      impact on foreign operations of war, political disruption, civil      disturbance, economic and legal sanctions and changes in global trade      policies;                                                                                                                               |
| l | currency      exchange rate fluctuations in the markets in which the Company      operates;                                                                                                                                                                                                       |
| l | changes      in the laws, regulations, policies or other activities of governments,      agencies and similar organizations where such actions may affect the      production, licensing, distribution or sale of the Company’s products, the      cost thereof or applicable tax rates;    |
| l | costs      related to legal and administrative proceedings, including adverse      judgments against the Company if the Company fails to prevail in reversing      such judgments; and                                                                                                            |
| l | general      industry, political and economic conditions in the markets where the      Company’s procures material, components and supplies for the production of      the Company’s principal products or where the Company’s products are      produced, distributed or sold. |

| December      31, 2009 and 2008                                                                                                         |   |   |    |   |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| (Thousands      of dollars, except share and per share data)                                                                            |   |   |    |   |   |   |
|                                                                                                                                    |   |   |    |   |   |   |
|                                                                                                                                    |   | 2009   |    |   | 2008   |   |
| Assets                                                                                                                                  |   |   |    |   |   |   |
| Current      Assets:                                                                                                                    |   |   |    |   |   |   |
| Cash      and cash equivalents                                                                                                          |   | $      | 100,858 |   |   | $      | 107,756 |   |
| Receivables,      net                                                                                                                   |   |   | 92,506  |   |   |   | 139,144 |   |
| Income      tax receivable                                                                                                              |   |   | 4,303   |   |   |   | 978 |   |
| Inventories                                                                                                                             |   |   | 110,605 |   |   |   | 128,627 |   |
| Deferred      income tax assets                                                                                                         |   |   | 5,198   |   |   |   | 4,941 |   |
| Other      current assets                                                                                                               |   |   | 4,351   |   |   |   | 3,674 |   |
| Current      assets from discontinued operations                                                                                        |   |   | 811     |   |   |   | 618 |   |
| Total      current assets                                                                                                               |   |   | 318,632 |   |   |   | 385,738 |   |
|                                                                                                                                    |   |   |    |   |   |   |   |   |
| Property,      plant and equipment, net                                                                                                 |   |   | 159,770 |   |   |   | 130,079 |   |
| Goodwill,      net                                                                                                                      |   |   | 45,001  |   |   |   | 11,862 |   |
| Other      assets, net                                                                                                                  |   |   | 18,187  |   |   |   | 2,546 |   |
| Long-term      assets from discontinued operations                                                                                      |   |   | -       |   |   |   | 493 |   |
| Total      assets                                                                                                                       |   | $      | 541,590 |   |   | $      | 530,718 |   |
|                                                                                                                                    |   |   |    |   |   |   |   |   |
| Liabilities      and Shareholders' Equity                                                                                               |   |   |    |   |   |   |   |   |
|                                                                                                                                    |   |   |    |   |   |   |   |   |
| Current      liabilities:                                                                                                               |   |   |    |   |   |   |   |   |
| Accounts      payable                                                                                                                   |   | $      | 19,993  |   |   | $      | 38,543 |   |
| Current      portion of long-term debt                                                                                                  |   |   | 1,372   |   |   |   | - |   |
| Accrued      liabilities:                                                                                                               |   |   |    |   |   |   |   |   |
| Payroll      and benefits                                                                                                               |   |   | 9,568   |   |   |   | 14,046 |   |
| Warranty      expenses                                                                                                                  |   |   | 4,220   |   |   |   | 3,586 |   |
| Taxes      payable                                                                                                                      |   |   | 4,562   |   |   |   | 5,894 |   |
| Other                                                                                                                                   |   |   | 24,147  |   |   |   | 25,340 |   |
| Current      liabilities from discontinued operations                                                                                   |   |   | 1,026   |   |   |   | 1,404 |   |
| Total      current liabilities                                                                                                          |   |   | 64,888  |   |   |   | 88,813 |   |
|                                                                                                                                    |   |   |    |   |   |   |   |   |
| Long-term      debt                                                                                                                     |   |   | 1,516   |   |   |   | - |   |
| Deferred      income tax liabilities                                                                                                    |   |   | 10,950  |   |   |   | 9,219 |   |
| Postretirement      benefits                                                                                                            |   |   | 7,874   |   |   |   | 7,070 |   |
| Other      liabilities                                                                                                                  |   |   | 20,647  |   |   |   | 11,618 |   |
| Commitments      and contingencies                                                                                                      |   |   | -       |   |   |   | - |   |
| Long-term      liabilities from discontinued operations                                                                                 |   |   | 37      |   |   |   | 61 |   |
|                                                                                                                                    |   |   |    |   |   |   |   |   |
| Shareholders'      equity:                                                                                                              |   |   |    |   |   |   |   |   |
|                                                                                                                                    |   |   |    |   |   |   |   |   |
| Common      stock, $1.00 par value per share; 60,000,000 shares authorized; 15,808,588      and 15,791,963 shares issued , respectively |   |   | 15,809  |   |   |   | 15,792 |   |
| Capital      in excess par                                                                                                              |   |   | 70,508  |   |   |   | 63,014 |   |
| Retained      earnings                                                                                                                  |   |   | 421,908 |   |   |   | 414,748 |   |
| Treasury      stock, 923,168 and 931,168 shares, respectively, at cost                                                                  |   |   | (34,621 | )      |   |   | (34,917 | ) |
| Accumulated      other comprehensive income (loss)                                                                                      |   |   | (37,926 | )      |   |   | (44,700 | ) |
| Total      shareholders' equity                                                                                                         |   |   | 435,678 |   |   |   | 413,937 |   |
| Total      liabilities and shareholders' equity                                                                                         |   | $      | 541,590 |   |   | $      | 530,718 |   |
|                                                                                                                                    |   |   |    |   |   |   |   |   |

|                                                          |   | 2009    |    |   | 2008   |    |    | 2007   |   |
|---------------------------------------------------------------|--------|---------|---------|--------|--------|---------|---------|--------|--------|
|                                                          |   |    |    |   |   |    |    |   |   |
| Sales                                                         |   | $       | 521,359 |   |   | $       | 741,194 |   |   | $ | 555,806 |   |
|                                                          |   |    |    |   |   |    |    |   |   |   |   |   |
| Cost      of sales                                            |   |    | 408,815 |   |   |    | 527,120 |   |   |   | 393,538 |   |
|                                                          |   |    |    |   |   |    |    |   |   |   |   |   |
| Gross      profit                                             |   |    | 112,544 |   |   |    | 214,074 |   |   |   | 162,268 |   |
|                                                          |   |    |    |   |   |    |    |   |   |   |   |   |
| Selling,      general and administrative expenses             |   |    | 75,120  |   |   |    | 71,974  |   |   |   | 57,582 |   |
| Litigation      reserve                                       |   |    | 6,000   |   |   |    | 6,000   |   |   |   | - |   |
|                                                          |   |    |    |   |   |    |    |   |   |   |   |   |
| Operating      income                                         |   |    | 31,424  |   |   |    | 136,100 |   |   |   | 104,686 |   |
|                                                          |   |    |    |   |   |    |    |   |   |   |   |   |
| Interest      income                                          |   |    | 899     |   |   |    | 1,737   |   |   |   | 3,751 |   |
| Interest      expense                                         |   |    | (650    | )      |   |    | (193    | )      |   |   | (273 | ) |
| Other      income (expense), net                              |   |    | 1,339   |   |   |    | (1,232  | )      |   |   | 1,294 |   |
|                                                          |   |    |    |   |   |    |    |   |   |   |   |   |
| Earnings      from continuing operations before income        |   |    |    |   |   |    |    |   |   |   |   |   |
| tax      provision                                            |   |    | 33,012  |   |   |    | 136,412 |   |   |   | 109,458 |   |
|                                                          |   |    |    |   |   |    |    |   |   |   |   |   |
| Income      tax provision                                     |   |    | 10,533  |   |   |    | 48,387  |   |   |   | 37,673 |   |
|                                                          |   |    |    |   |   |    |    |   |   |   |   |   |
| Earnings      from continuing operations                      |   |    | 22,479  |   |   |    | 88,025  |   |   |   | 71,785 |   |
|                                                          |   |    |    |   |   |    |    |   |   |   |   |   |
| (Loss)      earnings from discontinued operations, net of tax |   |    | (453    | )      |   |    | 214     |   |   |   | 2,426 |   |
|                                                          |   |    |    |   |   |    |    |   |   |   |   |   |
| Net      earnings                                             |   |  $ | 22,026  |   |   |  $ | 88,239  |   |   |  $ | 74,211 |   |
|                                                          |   |    |    |   |   |    |    |   |   |   |   |   |
| Basic      earnings per share                                 |   |    |    |   |   |    |    |   |   |   |   |   |
|                                                          |   |    |    |   |   |    |    |   |   |   |   |   |
| Earnings      from continuing operations                      |   | $       | 1.51    |   |   | $       | 5.96    |   |   | $ | 4.82 |   |
| (Loss)      earnings from discontinued operations             |   |    | (0.03   | )      |   |    | 0.01    |   |   |   | 0.16 |   |
|                                                          |   |    |    |   |   |    |    |   |   |   |   |   |
| Net      earnings                                             |   | $       | 1.48    |   |   | $       | 5.97    |   |   | $ | 4.98 |   |
|                                                          |   |    |    |   |   |    |    |   |   |   |   |   |
| Diluted      earnings per share                               |   |    |    |   |   |    |    |   |   |   |   |   |
|                                                          |   |    |    |   |   |    |    |   |   |   |   |   |
| Earnings      from continuing operations                      |   | $       | 1.51    |   |   | $       | 5.91    |   |   | $ | 4.76 |   |
| (Loss)      earnings from discontinued operations             |   |    | (0.03   | )      |   |    | 0.01    |   |   |   | 0.16 |   |
|                                                          |   |    |    |   |   |    |    |   |   |   |   |   |
| Net      earnings                                             |   | $       | 1.48    |   |   | $       | 5.92    |   |   | $ | 4.92 |   |
|                                                          |   |    |    |   |   |    |    |   |   |   |   |   |

|                                              |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    | Accumulated        |   |   |    |   |
|---------------------------------------------------|--------|------------------|------------|--------|--------|--------|--------|----------------|--------|--------|----------|--------|--------|----------|---------|--------|---------|--------|---------|--------------------|--------|--------|---------|--------|
|                                              |   | Common           |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    | Other              |   |   |    |   |
|                                              |   | Stock            |       |   |   |   |   | Capital        |   |   |     |   |   |     |    |   | Compre- |   |    | Compre-            |   |   |    |   |
| Years      Ended December 31, 2009, 2008 and 2007 |   | Shares,      net |       |   | Common |   |   | In      Excess |   |   | Retained |   |   | Treasury |    |   | hensive |   |    | hensive            |   |   |    |   |
| (Thousands      of dollars, except share data)    |   | of      Treasury |       |   | Stock  |   |   | of      Par    |   |   | Earnings |   |   | Stock    |    |   | Income  |   |    | Income      (Loss) |   |   | Total   |   |
|                                              |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   |    |   |
| Balance,      Dec. 31, 2006                       |   |             | 14,927,625 |   |   | $      | 15,323 |           |   | $      | 38,173   |   |   | $        | 280,198 |   |    | $      | (4,083  | )                  |   |   |    |   | $ | (1,471 | ) |   | $ | 328,140 |   |
|                                              |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |   |   |
| Comprehensive      income:                        |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |   |   |
|                                              |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |   |   |
| Net      earnings                                 |   |             |       |   |   |   |   |           |   |   |     |   |   |     | 74,211  |   |    |   |    |               |   |   | 74,211  |   |   |   |   |   |   |   | 74,211 |   |
| Other      comprehensive income, net of tax:      |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |
| Foreign      currency translation adjsutments     |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    | 5,057              |   |   |    | 5,057  |   |   |   | 5,057 |   |
| Defined      benefit pension plans                |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   | 6,979   |   |   |   | 6,979 |   |   |   | 6,979 |   |
| Defined      benefit post-retirement plans        |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   | 504     |   |   |   | 504 |   |   |   | 504 |   |
| Total      comprehensive income                   |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   | $      | 86,751  |   |   |   |   |   |   |   |   |   |
|                                              |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |   |   |   |
| Cash      dividends                               |   |             |       |   |   |   |   |           |   |   |     |   |   |     | (13,094 | )      |    |   |    |               |   |   |    |   |   |   |   |   |   |   | (13,094 | ) |
| Treasury      stock purchases                     |   |             | (500,000   | )      |   |   |   |           |   |   |     |   |   |     |    |   |    |   | (27,497 | )                  |   |   |    |   |   |   |   |   |   |   | (27,497 | ) |
| Stock-based      compensation                     |   |             |       |   |   |   |   |           |   |   | 3,682    |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |   | 3,682 |   |
| Exercise      of stock options                    |   |             | 211,281    |   |   |   | 211    |           |   |   | 6,460    |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |   | 6,671 |   |
| Balance,      Dec. 31, 2007                       |   |             | 14,638,906 |   |   | $      | 15,534 |           |   | $      | 48,315   |   |   | $        | 341,315 |   |    | $      | (31,580 | )                  |   |   |    |   |   | $ | 11,069 |   |   | $ | 384,653 |   |
|                                              |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |   |   |   |
| Comprehensive      income:                        |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |   |   |   |
|                                              |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |   |   |   |
| Net      earnings                                 |   |             |       |   |   |   |   |           |   |   |     |   |   |     | 88,239  |   |    |   |    |               |   |   | 88,239  |   |   |   |   |   |   |   | 88,239 |   |
| Other      comprehensive income, net of tax:      |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |
| Foreign      currency translation adjsutments     |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    | (5,503             | )      |   |    | (5,503 | ) |   |   | (5,503 | ) |
| Defined      benefit pension plans                |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   | (50,142 | )      |   |   | (50,142 | ) |   |   | (50,142 | ) |
| Defined      benefit post-retirement plans        |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   | (124    | )      |   |   | (124 | ) |   |   | (124 | ) |
| Total      comprehensive income                   |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   | $      | 32,470  |   |   |   |   |   |   |   |   |   |
|                                              |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |   |   |   |
| Cash      dividends                               |   |             |       |   |   |   |   |           |   |   |     |   |   |     | (14,806 | )      |    |   |    |               |   |   |    |   |   |   |   |   |   |   | (14,806 | ) |
| Treasury      stock purchases                     |   |             | (71,890    | )      |   |   |   |           |   |   |     |   |   |     |    |   |    |   | (4,623  | )                  |   |   |    |   |   |   |   |   |   |   | (4,623 | ) |
| Stock-based      compensation                     |   |             |       |   |   |   |   |           |   |   | 3,584    |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |   | 3,584 |   |
| Exercise      of stock options                    |   |             | 293,779    |   |   |   | 258    |           |   |   | 11,115   |   |   |     |    |   |    |   | 1,286   |               |   |   |    |   |   |   |   |   |   |   | 12,659 |   |
| Balance,      Dec. 31, 2008                       |   |             | 14,860,795 |   |   | $      | 15,792 |           |   | $      | 63,014   |   |   | $        | 414,748 |   |    | $      | (34,917 | )                  |   |   |    |   |   | $ | (44,700 | ) |   | $ | 413,937 |   |
|                                              |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |   |   |   |
| Comprehensive      income:                        |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |   |   |   |
|                                              |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |   |   |   |
| Net      earnings                                 |   |             |       |   |   |   |   |           |   |   |     |   |   |     | 22,026  |   |    |   |    |               |   |   | 22,026  |   |   |   |   |   |   |   | 22,026 |   |
| Other      comprehensive income, net of tax:      |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |
| Foreign      currency translation adjsutments     |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    | 3,525              |   |   |    | 3,525  |   |   |   | 3,525 |   |
| Defined      benefit pension plans                |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   | 3,993   |   |   |   | 3,993 |   |   |   | 3,993 |   |
| Defined      benefit post-retirement plans        |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   | (744    | )      |   |   | (744 | ) |   |   | (744 | ) |
| Total      comprehensive income                   |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   | $      | 28,800  |   |   |   |   |   |   |   |   |   |
|                                              |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |   |   |   |
| Cash      dividends                               |   |             |       |   |   |   |   |           |   |   |     |   |   |     | (14,866 | )      |    |   |    |               |   |   |    |   |   |   |   |   |   |   | (14,866 | ) |
| Treasury      stock purchases                     |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   | 11      |               |   |   |    |   |   |   |   |   |   |   | 11 |   |
| Tax      settlement on stock-based compensation   |   |             |       |   |   |   |   | 3,880          |   |   |     |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   | 3,880 |   |
| Stock-based      compensation                     |   |             |       |   |   |   |   |           |   |   | 2,943    |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |   | 2,943 |   |
| Exercise      of stock options                    |   |             | 24,626     |   |   |   | 17     |           |   |   | 671      |   |   |     |    |   |    |   | 285     |               |   |   |    |   |   |   |   |   |   |   | 973 |   |
| Balance,      Dec. 31, 2009                       |   |             | 14,885,421 |   |   | $      | 15,809 |           |   | $      | 70,508   |   |   | $        | 421,908 |   |    | $      | (34,621 | )                  |   |   |    |   |   | $ | (37,926 | ) |   | $ | 435,678 |   |
|                                              |   |             |       |   |   |   |   |           |   |   |     |   |   |     |    |   |    |   |    |               |   |   |    |   |   |   |   |   |   |   |   |   |

| Years      ended December 31, 2009, 2008 and 2007                                         |   |   |    |   |   |   |
|-------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| (Thousands      of dollars)                                                               |   |   |    |   |   |   |   |   |   |
|                                                                                      |   | 2009   |    |   | 2008   |   |   | 2007 |   |
| Cash      flows form operating activities:                                                |   |   |    |   |   |   |   |   |   |
| Net      earnings                                                                         |   | $      | 22,026  |   |   | $      | 88,239 |   |   | $ | 74,211 |   |
| Adjustments      to reconcile net earnings to cash provided by operating      activities: |   |   |    |   |   |   |   |   |   |
| Depreciation      and amortization                                                        |   |   | 18,457  |   |   |   | 15,699 |   |   |   | 14,008 |   |
| (Recovery)      provision for losses on receivables                                       |   |   | (1,840  | )      |   |   | 2,508 |   |   |   | 11 |   |
| LIFO      (income) expense                                                                |   |   | (2,964  | )      |   |   | 7,742 |   |   |   | 1,905 |   |
| Deferred      income tax (benefit)/provision                                              |   |   | (913    | )      |   |   | (3 | ) |   |   | 7,250 |   |
| Excess      tax benefit from share-based compensation                                     |   |   | (259    | )      |   |   | (4,140 | ) |   |   | (3,031 | ) |
| Share-based      compensation expense                                                     |   |   | 2,943   |   |   |   | 3,584 |   |   |   | 3,682 |   |
| Pension      expense (income)                                                             |   |   | 10,665  |   |   |   | (1,274 | ) |   |   | (3,257 | ) |
| Postretirement      expense (income)                                                      |   |   | 539     |   |   |   | (48 | ) |   |   | (400 | ) |
| (Gain)      loss on disposition of property, plant and equipment                          |   |   | (354    | )      |   |   | 27 |   |   |   | (636 | ) |
| Loss      (income) from discontinued operations                                           |   |   | 453     |   |   |   | (214 | ) |   |   | (2,426 | ) |
| Changes      in:                                                                          |   |   |    |   |   |   |   |   |   |   |   |   |
| Receivables,      net                                                                     |   |   | 58,461  |   |   |   | (52,554 | ) |   |   | (2,928 | ) |
| Income      tax receivable                                                                |   |   | (3,248  | )      |   |   | 1,409 |   |   |   | (4,573 | ) |
| Inventories                                                                               |   |   | 28,650  |   |   |   | (46,151 | ) |   |   | (15,596 | ) |
| Other      current assets                                                                 |   |   | (1,376  | )      |   |   | (2,144 | ) |   |   | 177 |   |
| Accounts      payable                                                                     |   |   | (22,878 | )      |   |   | 24,201 |   |   |   | 7,788 |   |
| Accrued      liabilities                                                                  |   |   | (6,531  | )      |   |   | 12,060 |   |   |   | 13,532 |   |
| Net      cash provided by continuing operations                                           |   |   | 101,831 |   |   |   | 48,941 |   |   |   | 89,717 |   |
| Net      cash (used in) provided by discontinued operations                               |   |   | -       |   |   |   | (1,813 | ) |   |   | 593 |   |
| Net      cash provided by operating activities                                            |   |   | 101,831 |   |   |   | 47,128 |   |   |   | 90,310 |   |
|                                                                                      |   |   |    |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activites:                                                 |   |   |    |   |   |   |   |   |   |   |   |   |
| Additions      to property, plant and equipment                                           |   |   | (39,825 | )      |   |   | (29,552 | ) |   |   | (18,815 | ) |
| Proceeds      from disposition of property, plant and equipment                           |   |   | 923     |   |   |   | 219 |   |   |   | 1,383 |   |
| (Increase)      decrease in other assets                                                  |   |   | (1,216  | )      |   |   | 579 |   |   |   | (64 | ) |
| Acquisition      of other companies                                                       |   |   | (51,658 | )      |   |   | - |   |   |   | - |   |
| Net      cash used in continuing operations                                               |   |   | (91,776 | )      |   |   | (28,754 | ) |   |   | (17,496 | ) |
| Net      cash provided by (used in) discontinued operations                               |   |   | -       |   |   |   | 1,813 |   |   |   | (593 | ) |
| Net      cash used in investing activities                                                |   |   | (91,776 | )      |   |   | (26,941 | ) |   |   | (18,089 | ) |
|                                                                                      |   |   |    |   |   |   |   |   |   |   |   |   |
| Cash      flows from financing activites:                                                 |   |   |    |   |   |   |   |   |   |   |   |   |
| Payments      of notes payable                                                            |   |   | (3,426  | )      |   |   | - |   |   |   | - |   |
| Dividends      paid                                                                       |   |   | (14,866 | )      |   |   | (14,806 | ) |   |   | (13,094 | ) |
| Excess      tax benefit from share-based compensation                                     |   |   | 259     |   |   |   | 4,140 |   |   |   | 3,031 |   |
| Proceeds      from exercise of stock options                                              |   |   | 612     |   |   |   | 8,295 |   |   |   | 3,467 |   |
| Purchases      of treasury stock                                                          |   |   | 11      |   |   |   | (4,623 | ) |   |   | (27,497 | ) |
| Net      cash used in financing activities                                                |   |   | (17,410 | )      |   |   | (6,994 | ) |   |   | (34,093 | ) |
|                                                                                      |   |   |    |   |   |   |   |   |   |   |   |   |
| Effect      of translation on cash and cash equivalents                                   |   |   | 457     |   |   |   | (1,185 | ) |   |   | (177 | ) |
|                                                                                      |   |   |    |   |   |   |   |   |   |   |   |   |
| Net      (decrease) increase in cash and cash equivalents                                 |   |   | (6,898  | )      |   |   | 12,008 |   |   |   | 37,951 |   |
|                                                                                      |   |   |    |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents at beginning of period                                     |   |   | 107,756 |   |   |   | 95,748 |   |   |   | 57,797 |   |
|                                                                                      |   |   |    |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents at end of period                                           |   | $      | 100,858 |   |   | $      | 107,756 |   |   | $ | 95,748 |   |
|                                                                                      |   |   |    |   |   |   |   |   |   |   |   |   |

| l | The      customer has accepted title and risk of loss;                                                                                                                                                              |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| l | The      customer has provided a written purchase order for the      product;                                                                                                                                       |
| l | The      customer, not the Company, requested the product to be stored and to be      invoiced under a Bill-and-Hold arrangement. The customer must also provide      the business purpose for the storage request; |
| l | The      customer must provide a storage period and future shipping      date;                                                                                                                                      |
| l | The      Company must not have retained any future performance obligations on the      product;                                                                                                                     |
| l | The      Company must segregate the stored product and not make it available to use      on other orders; and                                                                                                       |
| l | The      product must be completed and ready for  shipment.                                                                                                                                                         |

|                                 |   | Useful      Life |   |
|--------------------------------------|--------|------------------|--------|
|                                 |   | (in      years)  |   |
|                                 |   |             |   |   |   |   |   |   |   |
| Land                                 |   |             |   |   |   |   |   |   |   |   |
| Land      improvements               |   |             | 10.0   |   |   |   | - |   |   |   | 25.0 |   |
| Buildings                            |   |             | 12.5   |   |   |   | - |   |   |   | 40.0 |   |
| Machinery      and equipment         |   |             | 3.0    |   |   |   | - |   |   |   | 15.0 |   |
| Furniture      and fixtures          |   |             | 5.0    |   |   |   | - |   |   |   | 12.5 |   |
| Computer      equipment and software |   |             | 3.0    |   |   |   | - |   |   |   | 7.0 |   |
|                                 |   |             |   |   |   |   |   |   |   |   |   |   |

| Cash      paid at closing, net |   | $      | 51,658 |   |
|--------------------------------|--------|--------|--------|--------|
| Holdback      consideration    |   |   | 4,500  |   |
|                           |   |   |   |   |
| Total      consideration paid  |   | $      | 56,158 |   |
|                           |   |   |   |   |

| Purchase      price                       |   | $      | 56,158 |   |
|-------------------------------------------|--------|--------|--------|--------|
|                                      |   |   |   |   |
| Receivables                               |   |   | 5,786  |   |
| Inventories                               |   |   | 5,705  |   |
| Other      current assets                 |   |   | 1,225  |   |
| Deferred      tax asset                   |   |   | 80     |   |
| Property,      plant and equipment        |   |   | 5,794  |   |
| Intangible      assets                    |   |   | 15,280 |   |
| Accounts      payable                     |   |   | (2,426 | )      |
| Other      short-term accrued liabiltiies |   |   | (575   | )      |
| Other      long-term accrued liabilities  |   |   | (363   | )      |
| Deferred      tax liability               |   |   | (1,100 | )      |
| Long-term      debt                       |   |   | (6,314 | )      |
|                                      |   |   |   |   |
| Goodwill      recorded                    |   | $      | 33,066 |   |
|                                      |   |   |   |   |

|                                                   |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|--------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                   |   |   |   |   |   |   |   |   |   |
| Sales                                                  |   | $      | 36     |   |   | $      | 7,135  |   |   | $ | 41,381 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      before income tax provision              |   |   | (724   | )      |   |   | 450    |   |   |   | 3,268 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      tax provision                              |   |   | 271    |   |   |   | (236   | )      |   |   | (842 | ) |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      from discontinued operations, net of tax |   | $      | (453   | )      |   | $      | 214    |   |   | $ | 2,426 |   |

|                                                  |   | December      31, |   |   | December      31, |   |
|-------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                                  |   | 2009              |   |   | 2008              |   |
|                                                  |   |              |   |   |              |   |
| Receivables,      net                                 |   | $                 | 17     |   |              | $      | 56 |   |
| Income      tax receivable                            |   |              | 302    |   |              |   | - |   |
| Deferred      income tax assets                       |   |              | 492    |   |              |   | 562 |   |
|                                                  |   |              |   |   |              |   |   |   |
| Current      assets from discontinued operations      |   |              | 811    |   |              |   | 618 |   |
|                                                  |   |              |   |   |              |   |   |   |
| Property,      plant and equipment, net               |   |              | -      |   |              |   | - |   |
| Other      assets, net                                |   |              | -      |   |              |   | 493 |   |
|                                                  |   |              |   |   |              |   |   |   |
| Long-term      assets from discontinued operations    |   |              | -      |   |              |   | 493 |   |
|                                                  |   |              |   |   |              |   |   |   |
| Total      assets from discontinued operations        |   | $                 | 811    |   |              | $      | 1,111 |   |
|                                                  |   |              |   |   |              |   |   |   |
|                                                  |   |              |   |   |              |   |   |   |
| Accounts      payable                                 |   | $                 | 10     |   |              | $      | 154 |   |
| Accrued      liabilities:                             |   |              |   |   |              |   |   |   |
| Payroll      and benefits                             |   |              | 70     |   |              |   | 104 |   |
| Warranty      expenses                                |   |              | 240    |   |              |   | 410 |   |
| Taxes      payable                                    |   |              | -      |   |              |   | 120 |   |
| Other                                                 |   |              | 706    |   |              |   | 616 |   |
|                                                  |   |              |   |   |              |   |   |   |
| Current      liabilities from discontinued operations |   |              | 1,026  |   |              |   | 1,404 |   |
|                                                  |   |              |   |   |              |   |   |   |
| Long-term      liabilities                            |   |              | 37     |   |              |   | 61 |   |
|                                                  |   |              |   |   |              |   |   |   |
| Total      liabilities from discontinued operations   |   | $                 | 1,063  |   |              | $      | 1,465 |   |
|                                                  |   |              |   |   |              |   |   |   |

| (Thousands      of dollars)                     |   | 2009   |   |   | 2008   |   |
|-------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                            |   |   |   |   |   |   |
| Accounts      receivable                        |   | $      | 87,497 |   |   | $      | 138,706 |   |
| Notes      receivable                           |   |   | 482    |   |   |   | 157 |   |
| Other      receivables                          |   |   | 4,767  |   |   |   | 1,015 |   |
| Gross      receivables                          |   |   | 92,746 |   |   |   | 139,878 |   |
|                                            |   |   |   |   |   |   |   |   |
| Allowance      for doubtful accounts receivable |   |   | (240   | )      |   |   | (734 | ) |
| Net      receivables                            |   | $      | 92,506 |   |   | $      | 139,144 |   |
|                                            |   |   |   |   |   |   |   |   |

| (Thousands      of dollars)              |   | 2009   |    |   | 2008   |   |
|------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                     |   |   |    |   |   |   |
| Gross      inventories @ FIFO:           |   |   |    |   |   |   |
| Finished      goods                      |   | $      | 7,545   |   |   | $      | 2,643 |   |
| Work      in progress                    |   |   | 21,435  |   |   |   | 28,230 |   |
| Raw      materials & component parts |   |   | 100,347 |   |   |   | 122,604 |   |
| Maintenance,      tooling & supplies |   |   | 13,882  |   |   |   | 12,611 |   |
| Total      gross inventories @ FIFO      |   |   | 143,209 |   |   |   | 166,088 |   |
| Less      reserves:                      |   |   |    |   |   |   |   |   |
| LIFO                                     |   |   | 29,961  |   |   |   | 32,926 |   |
| Valuation                                |   |   | 2,643   |   |   |   | 4,535 |   |
| Total      inventories as reported       |   | $      | 110,605 |   |   | $      | 128,627 |   |
|                                     |   |   |    |   |   |   |   |   |

| (Thousands      of dollars)                   |   | 2009   |     |   | 2008   |   |
|-----------------------------------------------|--------|--------|----------|--------|--------|--------|
|                                          |   |   |     |   |   |   |
| Land                                          |   | $      | 6,735    |   |   | $      | 6,525 |   |
| Land      improvements                        |   |   | 10,146   |   |   |   | 10,219 |   |
| Buildings                                     |   |   | 92,467   |   |   |   | 75,756 |   |
| Machinery      and equipment                  |   |   | 265,958  |   |   |   | 245,014 |   |
| Furniture      and fixtures                   |   |   | 5,985    |   |   |   | 5,616 |   |
| Computer      equipment and software          |   |   | 15,388   |   |   |   | 14,666 |   |
| Total      property, plant and equipment      |   |   | 396,679  |   |   |   | 357,796 |   |
| Less      accumulated depreciation            |   |   | (236,909 | )      |   |   | (227,717 | ) |
| Total      property, plant and equipment, net |   | $      | 159,770  |   |   | $      | 130,079 |   |
|                                          |   |   |     |   |   |   |   |   |

|                                     |   |           |   |   | Power        |   |   |   |   |
|------------------------------------------|--------|----------------|--------|--------|--------------|--------|--------|--------|--------|
| (Thousands      of dollars)              |   | Oil      Field |   |   | Transmission |   |   | Total  |   |
|                                     |   |           |   |   |         |   |   |   |   |
| Balance      as of 12/31/07              |   | $              | 9,447  |   |         | $      | 2,543  |   |   | $ | 11,990 |   |
|                                     |   |           |   |   |         |   |   |   |   |   |   |   |
| Foreign      currency translation        |   |           | (19    | )      |         |   | (109   | )      |   |   | (128 | ) |
|                                     |   |           |   |   |         |   |   |   |   |   |   |   |
| Balance      as of 12/31/08              |   |           | 9,428  |   |         |   | 2,434  |   |   |   | 11,862 |   |
|                                     |   |           |   |   |         |   |   |   |   |   |   |   |
| Goodwill      acquired during the period |   |           | 28,577 |   |         |   | 4,489  |   |   |   | 33,066 |   |
| Foreign      currency translation        |   |           | 13     |   |         |   | 60     |   |   |   | 73 |   |
|                                     |   |           |   |   |         |   |   |   |   |   |   |   |
| Balance      as of 12/31/09              |   | $              | 38,018 |   |         | $      | 6,983  |   |   | $ | 45,001 |   |
|                                     |   |           |   |   |         |   |   |   |   |   |   |   |

| The      Company amortizes identifiable intangible assets on a straight-line basis      over the periods expected to be benefitted. All of the below      intangible assets relate to the ILS and RMT acquisitions.  The      components of these intangible assets are as follows (in thousands of      dollars): |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                       |   |                   |   |   |         |   |   |   |   |   | Weighted     |   |
|--------------------------------------------|--------|------------------------|--------|--------|--------------|--------|--------|--------|--------|--------|--------------|--------|
|                                       |   | December      31, 2009 |   |   | Average      |   |
|                                       |   | Gross                  |   |   |         |   |   |   |   |   | Amortization |   |
|                                       |   | Carrying               |   |   | Accumulated  |   |   |   |   |   | Period       |   |
|                                       |   | Amount                 |   |   | Amortization |   |   | Net    |   |   | (years)      |   |
|                                       |   |                   |   |   |         |   |   |   |   |   |         |   |
| Non-compete      agreements and trademarks |   | $                      | 2,064  |   |         | $      | 258    |   |   | $      | 1,806        |   |   |   | 7.2 |   |
| Customer      relationships and contracts  |   |                   | 13,216 |   |         |   | 1,043  |   |   |   | 12,173       |   |   |   | 10.0 |   |
|                                       |   |                   |   |   |         |   |   |   |   |   |         |   |   |   |   |   |
|                                       |   | $                      | 15,280 |   |         | $      | 1,301  |   |   | $      | 13,979       |   |   |   | 7.0 |   |
|                                       |   |                   |   |   |         |   |   |   |   |   |         |   |   |   |   |   |

| For      the year ended 12/31/10 |   | $      | 1,672 |   |
|----------------------------------|--------|--------|-------|--------|
| For      the year ended 12/31/11 |   |   | 1,672 |   |
| For      the year ended 12/31/12 |   |   | 1,573 |   |
| For      the year ended 12/31/13 |   |   | 1,553 |   |
| For      the year ended 12/31/14 |   |   | 1,441 |   |
| Thereafter                       |   | $      | 6,068 |   |

| (Thousands      of dollars)                    |   | 2009   |   |   | 2008   |   |
|------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                           |   |   |   |   |   |   |
| Customer      prepayments                      |   | $      | 7,945  |   |   | $      | 12,925 |   |
| Litigation      reserves                       |   |   | 6,637  |   |   |   | 6,000 |   |
| Deferred      compensation & benefit plans |   |   | 5,500  |   |   |   | 4,046 |   |
| Accrued      professional services             |   |   | 548    |   |   |   | 1,097 |   |
| Hold      back consideration                   |   |   | 1,605  |   |   |   | - |   |
| Other      accrued liabilities                 |   |   | 1,912  |   |   |   | 1,272 |   |
| Total      other current accrued liabilities   |   | $      | 24,147 |   |   | $      | 25,340 |   |
|                                           |   |   |   |   |   |   |   |   |

|                                        |   | December      31, |   |   | December      31, |   |
|---------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                        |   | 2009              |   |   | 2008              |   |
|                                        |   |              |   |   |              |   |
| Long-term      notes payable                |   | $                 | 2,888  |   |              | $      | - |   |
|                                        |   |              |   |   |              |   |   |   |
| Less      current portion of long-term debt |   |              | (1,372 | )      |              |   | - |   |
|                                        |   |              |   |   |              |   |   |   |
| Long-term      debt                         |   | $                 | 1,516  |   |              | $      | - |   |
|                                        |   |              |   |   |              |   |   |   |

| 2011   |   | $      | 1,349  |   |
|--------|--------|--------|--------|--------|
| 2012   |   |   | 167    |   |
|   |   |   |   |   |
| Total  |   | $      | 1,516  |   |
|   |   |   |   |   |

|                                         |   | Pension      Benefits |    |   | Other      Benefits |   |
|----------------------------------------------|--------|-----------------------|---------|--------|---------------------|--------|
| (Thousands      of dollars)                  |   | 2009                  |    |   | 2008                |   |   | 2009 |   |   | 2008 |   |
|                                         |   |                  |    |   |                |   |   |   |   |   |   |   |
| Changes      in benefit obligation           |   |                  |    |   |                |   |   |   |   |   |   |   |
|                                         |   |                  |    |   |                |   |   |   |   |   |   |   |
| Benefit      obligation at beginning of year |   | $                     | 187,350 |   |                | $      | 171,445 |   |   | $ | 7,657 |   |   | $ | 7,926 |   |
|                                         |   |                  |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Service      cost                            |   |                  | 4,769   |   |                |   | 4,933 |   |   |   | 145 |   |   |   | 152 |   |
| Interest      cost                           |   |                  | 11,970  |   |                |   | 10,979 |   |   |   | 503 |   |   |   | 455 |   |
| Plan      participants' contributions        |   |                  | -       |   |                |   | - |   |   |   | 880 |   |   |   | 946 |   |
| Plan      change                             |   |                  | -       |   |                |   | 3,143 |   |   |   | 640 |   |   |   | - |   |
| Actuarial      loss (gain)                   |   |                  | 13,844  |   |                |   | 5,583 |   |   |   | 471 |   |   |   | (21 | ) |
| Benefits      paid                           |   |                  | (9,204  | )      |                |   | (8,733 | ) |   |   | (1,569 | ) |   |   | (1,801 | ) |
| Curtailments                                 |   |                  | (1,136  | )      |                |   | - |   |   |   | (241 | ) |   |   | - |   |
| Other                                        |   |                  | 1,154   |   |                |   | - |   |   |   |   |   |   |   | - |   |
|                                         |   |                  |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Benefit      obligation at end of year       |   |                  | 208,747 |   |                |   | 187,350 |   |   |   | 8,486 |   |   |   | 7,657 |   |
|                                         |   |                  |    |   |                |   |   |   |   |   |   |   |   |   |   |   |

| Change      in plan assets                          |   |   |    |   |   |   |    |   |   |   |   |   |
|-----------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|--------|--------|
|                                                |   |   |    |   |   |   |    |   |   |   |   |   |
| Fair      value of plan assets at beginning of year |   |   | 176,477 |   |   |   | 238,975 |   |   |   | -      |   |   |   | - |   |
|                                                |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Actual      return on plan assets                   |   |   | 24,412  |   |   |   | (54,062 | )      |   |   | -      |   |   |   | - |   |
| Employer      contributions                         |   |   | 281     |   |   |   | 297     |   |   |   | 688    |   |   |   | 855 |   |
| Plan      participants' contributions               |   |   | -       |   |   |   | -       |   |   |   | 881    |   |   |   | 946 |   |
| Benefits      paid                                  |   |   | (9,204  | )      |   |   | (8,733  | )      |   |   | (1,569 | )      |   |   | (1,801 | ) |
| Other                                               |   |   | 664     |   |   |   | -       |   |   |   | -      |   |   |   | - |   |
|                                                |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Fair      value of plan assets at end of year       |   |   | 192,630 |   |   |   | 176,477 |   |   |   | -      |   |   |   | - |   |
|                                                |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Funded      (unfunded) status at end of year        |   | $      | (16,117 | )      |   | $      | (10,873 | )      |   | $      | (8,486 | )      |   | $ | (7,657 | ) |
|                                                |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |

|                                   |   | Pension      Benefits |    |   | Other      Benefits |   |
|----------------------------------------|--------|-----------------------|---------|--------|---------------------|--------|
| (Thousands      of dollars)            |   | 2009                  |    |   | 2008                |   |   | 2009 |   |   | 2008 |   |
|                                   |   |                  |    |   |                |   |   |   |   |   |   |   |
| Other      current accrued liabilities |   | $                     | (317    | )      |                | $      | (270 | ) |   | $ | (612 | ) |   | $ | (587 | ) |
| Postretirement      benefits           |   |                  | -       |   |                |   | - |   |   |   | (7,874 | ) |   |   | (7,070 | ) |
| Other      long-term liabilities       |   |                  | (15,800 | )      |                |   | (10,603 | ) |   |   | - |   |   |   | - |   |
|                                   |   |                  |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
|                                   |   | $                     | (16,117 | )      |                | $      | (10,873 | ) |   | $ | (8,486 | ) |   | $ | (7,657 | ) |
|                                   |   |                  |    |   |                |   |   |   |   |   |   |   |   |   |   |   |

|                        |   | Pension      Benefits |   |   | Other      Benefits |   |
|-----------------------------|--------|-----------------------|--------|--------|---------------------|--------|
| (Thousands      of dollars) |   | 2009                  |   |   | 2008                |   |   | 2009 |   |   | 2008 |   |
|                        |   |                  |   |   |                |   |   |   |   |   |   |   |
| Prior      service cost     |   | $                     | 4,369  |   |                | $      | 5,850 |   |   | $ | 323 |   |   | $ | - |   |
| Net      loss (gain)        |   |                  | 40,559 |   |                |   | 43,072 |   |   |   | (1,289 | ) |   |   | (1,709 | ) |
|                        |   |                  |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
|                        |   | $                     | 44,928 |   |                | $      | 48,922 |   |   | $ | (966 | ) |   | $ | (1,709 | ) |
|                        |   |                  |   |   |                |   |   |   |   |   |   |   |   |   |   |   |

|                                    |   | Pension      Benefits |    |   | Other      Benefits |   |
|-----------------------------------------|--------|-----------------------|---------|--------|---------------------|--------|
| (Thousands      of dollars)             |   | 2009                  |    |   | 2008                |   |   | 2007 |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                    |   |                  |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      Periodic Benefit Cost          |   |                  |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    |   |                  |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service      cost                       |   | $                     | 4,769   |   |                | $      | 4,933 |   |   | $ | 5,452 |   |   | $ | 145 |   |   | $ | 151 |   |   | $ | 174 |   |
| Interest      cost                      |   |                  | 11,970  |   |                |   | 10,979 |   |   |   | 9,725 |   |   |   | 503 |   |   |   | 455 |   |   |   | 458 |   |
| Expected      return on plan assets     |   |                  | (12,285 | )      |                |   | (16,664 | ) |   |   | (17,646 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Amortization      of prior service cost |   |                  | 795     |   |                |   | 649 |   |   |   | 566 |   |   |   | 54 |   |   |   | - |   |   |   | - |   |
| Amortization      of net (gain) loss    |   |                  | 4,566   |   |                |   | 181 |   |   |   | 102 |   |   |   | (217 | ) |   |   | (217 | ) |   |   | (227 | ) |
| Amortization      of transition asset   |   |                  | -       |   |                |   | (638 | ) |   |   | (926 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Curtailment                             |   |                  | 1,542   |   |                |   | - |   |   |   | - |   |   |   | (145 | ) |   |   | - |   |   |   | - |   |
|                                    |   |                  |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      periodic benefit cost (income) |   | $                     | 11,357  |   |                | $      | (560 | ) |   | $ | (2,727 | ) |   | $ | 340 |   |   | $ | 389 |   |   | $ | 405 |   |
|                                    |   |                  |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                               |   | Pension      Benefits |              |   | Other      Benefits |   |
|------------------------------------|--------|-----------------------|-------------------|--------|---------------------|--------|
|                               |   | 2009                  |              |   | 2008                |   |   | 2009 |   |   | 2008 |   |
|                               |   |                  |              |   |                |   |   |   |   |   |   |   |
| Discount      rate                 |   |                  | 5.25%      - 5.80 | %      |                |   | 6.18%      - 6.40 | % |   |   | 5.58 | % |   |   | 6.25 | % |
| Rate      of compensation increase |   |                  | 2.0%      - 4.5   | %      |                |   | 4.50 | % |   |   | N/A |   |   |   | N/A |   |
|                               |   |                  |              |   |                |   |   |   |   |   |   |   |   |   |   |   |

|                                                            |   | Pension      Benefits |              |   | Other      Benefits |   |
|-----------------------------------------------------------------|--------|-----------------------|-------------------|--------|---------------------|--------|
|                                                            |   | 2009                  |              |   | 2008                |   |   | 2007 |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                                            |   |                  |              |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discount      rate                                              |   |                  | 6.00%      - 6.40 | %      |                |   | 6.25%      - 6.35 | % |   |   | 5.75 | % |   |   | 6.25 | % |   |   | 6.20 | % |   |   | 5.75 | % |
| Expected      long-term return on plan assets    |   |                  | 7.30              | %      |                |   | 7.30 | % |   |   | 8.00 | % |   |   | N/A |   |   |   | N/A |   |   |   | N/A |   |
| Rate      of compensation increase                              |   |                  | 4.50              | %      |                |   | 4.50 | % |   |   | 4.50 | % |   |   | N/A |   |   |   | N/A |   |   |   | N/A |   |
|                                                            |   |                  |              |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| Fair      Value Measurements at December 31, 2009 (in thousands) |   |
|------------------------------------------------------------------|--------|
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |   |   |   | Quoted      Prices in |   |   | Significant |   |   | Significant |   |
|                                                             |   |   |   |   | Active      markets for |   |   | Observable |   |   | Unobservable |   |
|                                                             |   |   |   |   | Identical      Assets |   |   | Inputs |   |   | Inputs |   |
| Asset Category                                                   |   | Total |   |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
| Cash                                                             |   | $ | 3,019 |   |   | $ | 3,019 |   |   |   |   |   |   |   |
| Equity      securities:                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      stock                                                |   |   | 56,307 |   |   |   | 56,307 |   |   |   |   |   |   |   |
| International      stock - commingled funds (a)                  |   |   | 22,106 |   |   |   |   |   |   | $ | 22,106 |   |   |   |   |
| International      stock - mutual fund                           |   |   | 10,823 |   |   |   | 10,823 |   |   |   |   |   |   |   |   |
| Fixed      income securities:                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S.      Treasuries                                             |   |   | 8,905 |   |   |   | 8,905 |   |   |   |   |   |   |   |   |
| Mortgage-backed      securities                                  |   |   | 17,721 |   |   |   |   |   |   |   | 17,721 |   |   |   |   |
| Collateralized      mortgage obligations                         |   |   | 5,141 |   |   |   |   |   |   |   | 5,141 |   |   |   |   |
| Corporate      bonds (b)                                         |   |   | 21,556 |   |   |   |   |   |   |   | 21,556 |   |   |   |   |
| Other      types of investments:                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity      long/short hedge funds (c)                           |   |   | 34,289 |   |   |   |   |   |   |   |   |   |   | $ | 34,289 |   |
| Insurance      policy (d)                                        |   |   | 664 |   |   |   |   |   |   |   |   |   |   |   | 664 |   |
| Real      Estate (e)                                             |   |   | 12,099 |   |   |   |   |   |   |   |   |   |   |   | 12,099 |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                            |   | $ | 192,630 |   |   | $ | 79,054 |   |   | $ | 66,524 |   |   | $ | 47,052 |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|   | (a) | This      category represents International Equity Commingled Funds which invests in      international stocks.  The benchmark is the MSCI EAFE      Index.                                                                                                                                                                                                                                                                          |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (b) | This      category represents investment grade bonds of U.S. issuers from diverse      industries.                                                                                                                                                                                                                                                                                                                                             |
|   | (c) | This      category includes hedge funds that invest both long and short in primarily      U.S. common stocks.  Management of the hedge funds has the      ability to shift investments from value to growth strategies, from small      to large capitalization stocks, and from a net long position to a net      short position; however it is expected that the equity long/short hedge      funds will have a net long position. |
|   | (d) | This      category includes a private insurance policy used for French retirement      benefits.                                                                                                                                                                                                                                                                                                                                               |
|   | (e) | This      category includes a RREEF America II Fund which consists of commingled      private real estate.                                                                                                                                                                                                                                                                                                                                     |

| Fair      Value Measurements Using Significant Unobservable Inputs (Level      3) |   |
|-----------------------------------------------------------------------------------|--------|
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                              |   | Equity      Long/Short |   |   |   |   |   | Insurance |   |   |   |   |
|                                                                              |   | Hedge      Funds |   |   | Real      Estate |   |   | Contracts |   |   | Total |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      balance at December 31, 2008                                       |   | $ | 29,827 |   |   | $ | 14,747 |   |   | $ | - |   |   | $ | 44,574 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Actual      return on plan assets:                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Relating      to assets still held at the reporting date                          |   |   | 4,462 |   |   |   | (2,648 | ) |   |   |   |   |   |   | 1,814 |   |
| Relating      to assets sold during the period                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Purchases,      sales, and settlements                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                                                                             |   |   |   |   |   |   |   |   |   |   | 664 |   |   |   | 664 |   |
| Transfers      in and/or out of Level 3                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending      balance at December 31, 2009                                          |   | $ | 34,289 |   |   | $ | 12,099 |   |   | $ | 664 |   |   | $ | 47,052 |   |

|                        |   |   | Pension  |   |   | Other    |   |
|-----------------------------|--------|--------|----------|--------|--------|----------|--------|
| (Thousands      of dollars) |   |   | Benefits |   |   | Benefits |   |
|                        |   |   |     |   |   |     |   |
| 2010                        |   |   | $        | 10,420 |   |     | $      | 629 |   |
| 2011                        |   |   |     | 11,167 |   |     |   | 644 |   |
| 2012                        |   |   |     | 11,891 |   |     |   | 659 |   |
| 2013                        |   |   |     | 12,435 |   |     |   | 681 |   |
| 2014                        |   |   |     | 13,275 |   |     |   | 694 |   |
| 2015      - 2019            |   |   |     | 77,102 |   |     |   | 3,582 |   |
|                        |   |   |     |   |   |     |   |   |   |   |

|                                            |   | Pre-Tax |    |   | Tax      (Expense)/ |   |   | Net    |   |
|-------------------------------------------------|--------|---------|---------|--------|---------------------|--------|--------|--------|--------|
| (Thousands      of dollars)                     |   | Amount  |    |   | Benefit             |   |   | Amount |   |
| Year      ended December 31, 2007               |   |    |    |   |                |   |   |   |   |
|                                            |   |    |    |   |                |   |   |   |   |
| Foreign      currency translation adjustments   |   | $       | 5,057   |   |                | $      | -      |   |   | $ | 5,057 |   |
|                                            |   |    |    |   |                |   |   |   |   |   |   |   |
| Defined      benefit pension plans:             |   |    |    |   |                |   |   |   |   |   |   |   |
| Amortization      of net prior service cost     |   |    | 566     |   |                |   | (207   | )      |   |   | 359 |   |
| Amortization      of net loss                   |   |    | 102     |   |                |   | (37    | )      |   |   | 65 |   |
| Amortization      of net transition asset       |   |    | (926    | )      |                |   | 339    |   |   |   | (587 | ) |
| Net      gain arising during period             |   |    | 11,265  |   |                |   | (4,123 | )      |   |   | 7,142 |   |
| Total      defined benefit pension plans        |   |    | 11,007  |   |                |   | (4,028 | )      |   |   | 6,979 |   |
|                                            |   |    |    |   |                |   |   |   |   |   |   |   |
| Defined      benefit postretirement plans:      |   |    |    |   |                |   |   |   |   |   |   |   |
| Amortization      of net gain                   |   |    | (227    | )      |                |   | 83     |   |   |   | (144 | ) |
| Net      gain arising during period             |   |    | 1,022   |   |                |   | (374   | )      |   |   | 648 |   |
| Total      defined benefit postretirement plans |   |    | 795     |   |                |   | (291   | )      |   |   | 504 |   |
|                                            |   |    |    |   |                |   |   |   |   |   |   |   |
| Other      comprehensive income                 |   | $       | 16,859  |   |                | $      | (4,319 | )      |   | $ | 12,540 |   |
|                                            |   |    |    |   |                |   |   |   |   |   |   |   |
| Year      ended December 31, 2008               |   |    |    |   |                |   |   |   |   |   |   |   |
|                                            |   |    |    |   |                |   |   |   |   |   |   |   |
| Foreign      currency translation adjustments   |   | $       | (5,503  | )      |                | $      | -      |   |   | $ | (5,503 | ) |
|                                            |   |    |    |   |                |   |   |   |   |   |   |   |
| Defined      benefit pension plans:             |   |    |    |   |                |   |   |   |   |   |   |   |
| Amortization      of net prior service cost     |   |    | 649     |   |                |   | (238   | )      |   |   | 411 |   |
| Amortization      of net loss                   |   |    | 181     |   |                |   | (66    | )      |   |   | 115 |   |
| Amortization      of net transition asset       |   |    | (638    | )      |                |   | 234    |   |   |   | (404 | ) |
| Net      prior service cost                     |   |    | (3,143  | )      |                |   | 1,154  |   |   |   | (1,989 | ) |
| Net      loss arising during period             |   |    | (76,309 | )      |                |   | 28,034 |   |   |   | (48,275 | ) |
| Total      defined benefit pension plans        |   |    | (79,260 | )      |                |   | 29,118 |   |   |   | (50,142 | ) |
|                                            |   |    |    |   |                |   |   |   |   |   |   |   |
| Defined      benefit postretirement plans:      |   |    |    |   |                |   |   |   |   |   |   |   |
| Amortization      of net gain                   |   |    | (217    | )      |                |   | 80     |   |   |   | (137 | ) |
| Net      gain arising during period             |   |    | 21      |   |                |   | (8     | )      |   |   | 13 |   |
| Total      defined benefit postretirement plans |   |    | (196    | )      |                |   | 72     |   |   |   | (124 | ) |
|                                            |   |    |    |   |                |   |   |   |   |   |   |   |
| Other      comprehensive income                 |   | $       | (84,959 | )      |                | $      | 29,190 |   |   | $ | (55,769 | ) |
|                                            |   |    |    |   |                |   |   |   |   |   |   |   |
| Year      ended December 31, 2009               |   |    |    |   |                |   |   |   |   |   |   |   |
|                                            |   |    |    |   |                |   |   |   |   |   |   |   |
| Foreign      currency translation adjustments   |   | $       | 3,525   |   |                | $      | -      |   |   | $ | 3,525 |   |
|                                            |   |    |    |   |                |   |   |   |   |   |   |   |
| Defined      benefit pension plans:             |   |    |    |   |                |   |   |   |   |   |   |   |
| Amortization      of net prior service cost     |   |    | 795     |   |                |   | (293   | )      |   |   | 502 |   |
| Amortization      of net loss                   |   |    | 4,566   |   |                |   | (1,682 | )      |   |   | 2,884 |   |
| Net      loss arising during period             |   |    | (1,717  | )      |                |   | 632    |   |   |   | (1,085 | ) |
| Other                                           |   |    | 2,678   |   |                |   | (986   | )      |   |   | 1,692 |   |
| Total      defined benefit pension plans        |   |    | 6,322   |   |                |   | (2,329 | )      |   |   | 3,993 |   |
|                                            |   |    |    |   |                |   |   |   |   |   |   |   |
| Defined      benefit postretirement plans:      |   |    |    |   |                |   |   |   |   |   |   |   |
| Amortization      of net prior service cost     |   |    | 54      |   |                |   | (20    | )      |   |   | 34 |   |
| Amortization      of net gain                   |   |    | (217    | )      |                |   | 80     |   |   |   | (137 | ) |
| Net      loss arising during period             |   |    | (471    | )      |                |   | 174    |   |   |   | (297 | ) |
| Net      prior service cost                     |   |    | (640    | )      |                |   | 235    |   |   |   | (405 | ) |
| Other                                           |   |    | 96      |   |                |   | (35    | )      |   |   | 61 |   |
| Total      defined benefit postretirement plans |   |    | (1,178  | )      |                |   | 434    |   |   |   | (744 | ) |
|                                            |   |    |    |   |                |   |   |   |   |   |   |   |
| Other      comprehensive income                 |   | $       | 8,669   |   |                | $      | (1,895 | )      |   | $ | 6,774 |   |

|                        |   |        |   |   | Defined |   |    | Defined        |   |   | Accumulated   |   |
|-----------------------------|--------|-------------|--------|--------|---------|--------|---------|----------------|--------|--------|---------------|--------|
|                        |   | Foreign     |   |   | Benefit |   |    | Benefit        |   |   | Other         |   |
|                        |   | Currency    |   |   | Pension |   |    | Postretirement |   |   | Comprehensive |   |
| (Thousands      of dollars) |   | Translation |   |   | Plans   |   |    | Plans          |   |   | Income        |   |
|                        |   |        |   |   |    |   |    |           |   |   |          |   |
| Balance,      Dec. 31, 2007 |   | $           | 8,015  |   |    | $      | 1,221   |           |   | $      | 1,833         |   |   | $ | 11,069 |   |
|                        |   |        |   |   |    |   |    |           |   |   |          |   |   |   |   |   |
| Current-period      change  |   |        | (5,503 | )      |    |   | (50,142 | )              |   |   | (124          | )      |   |   | (55,769 | ) |
|                        |   |        |   |   |    |   |    |           |   |   |          |   |   |   |   |   |
| Balance,      Dec. 31, 2008 |   |        | 2,512  |   |    |   | (48,921 | )              |   |   | 1,709         |   |   |   | (44,700 | ) |
|                        |   |        |   |   |    |   |    |           |   |   |          |   |   |   |   |   |
| Current-period      change  |   |        | 3,525  |   |    |   | 3,993   |           |   |   | (744          | )      |   |   | 6,774 |   |
|                        |   |        |   |   |    |   |    |           |   |   |          |   |   |   |   |   |
| Balance,      Dec. 31, 2009 |   | $           | 6,037  |   |    | $      | (44,928 | )              |   | $      | 965           |   |   | $ | (37,926 | ) |

|                                                                     |   | 2009   |       |   | 2008   |   |       | 2007   |   |
|--------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Weighted      average common shares outstanding for basic EPS            |   |   | 14,864,937 |   |   |   | 14,788,867 |   |   |   | 14,901,176 |   |
| Effect      of dilutive securities: employee stock options               |   |   | 38,034     |   |   |   | 121,246    |   |   |   | 189,187 |   |
| Adjusted      weighted average common shares outstanding for diluted EPS |   |   | 14,902,971 |   |   |   | 14,910,113 |   |   |   | 15,090,363 |   |
|                                                                     |   |   |       |   |   |   |       |   |   |   |   |   |

| (Thousands      of dollars)                       |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|---------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                              |   |   |   |   |   |   |   |   |   |
| Stock-based      compensation expense             |   | $      | 2,943  |   |   | $      | 3,584  |   |   | $ | 3,682 |   |
| Tax      benefit                                  |   |   | (1,089 | )      |   |   | (1,326 | )      |   |   | (1,362 | ) |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock-based      compensation expense, net of tax |   | $      | 1,854  |   |   | $      | 2,258  |   |   | $ | 2,320 |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                     |   | 2009             |                |   | 2008             |   |                | 2007             |   |
|----------------------------------------------------------|--------|------------------|---------------------|--------|------------------|--------|---------------------|------------------|--------|
|                                                     |   |             |                |   |             |   |                |             |   |
| Expected      dividend yield                             |   |             | 1.73%      - 2.80   | %      |             |   | 1.33%      - 2.20   | %                |   |   | 1.30%      - 1.60 | % |
| Expected      stock price volatility                     |   |             | 46.80%      - 56.30 | %      |             |   | 41.00%      - 49.70 | %                |   |   | 41.10%      - 46.20 | % |
| Risk      free interest rate                             |   |             | 1.09%      - 2.73   | %      |             |   | 1.53%      - 3.27   | %                |   |   | 3.71%      - 4.85 | % |
| Expected      life of options                            |   | 3 -      7 years |                |   | 2 -      6 years |   |                | 3 -      6 years |   |
| Weighted-average      fair value per share at grant date |   | $                | 20.25               |   |             | $      | 19.72               |             |   | $ | 23.48 |   |

|                                  |   |   |    |   |      |   |   | Weighted-   |   |   |      |   |
|---------------------------------------|--------|--------|---------|--------|-----------|--------|--------|-------------|--------|--------|-----------|--------|
|                                  |   |   |    |   | Weighted- |   |   | Average     |   |   | Aggregate |   |
|                                  |   |   |    |   | Average   |   |   | Remaining   |   |   | Intrinsic |   |
|                                  |   |   |    |   | Exercise  |   |   | Contractual |   |   | Value     |   |
| Options                               |   | Shares |    |   | Price     |   |   | Term        |   |   | ($000's)  |   |
|                                  |   |   |    |   |      |   |   |        |   |   |      |   |
| Outstanding      at January 1, 2009   |   |   | 548,639 |   |      | $      | 51.42  |        |   |   |      |   |   |   |
| Granted                               |   |   | 190,500 |   |      |   | 51.34  |        |   |   |      |   |   |   |
| Exercised                             |   |   | (24,625 | )      |      |   | 24.83  |        |   |   |      |   |   |   |
| Forfeited      or expired             |   |   | (5,499  | )      |      |   | 20.65  |        |   |   |      |   |   |   |
| Outstanding      at December 31, 2009 |   |   | 709,015 |   |      | $      | 52.56  |        |   |   | 7.9       |   |   | $ | 14,664 |   |
| Exercisable      at December 31, 2009 |   |   | 379,248 |   |      | $      | 50.69  |        |   |   | 6.9       |   |   | $ | 8,567 |   |
|                                  |   |   |    |   |      |   |   |        |   |   |      |   |   |   |   |   |

| (Thousands      of dollars)             |   | 2009   |   |   | 2008   |   |    | 2007   |   |
|-----------------------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|
|                                    |   |   |   |   |   |   |    |   |   |
| Domestic                                |   | $      | 17,880 |   |   | $      | 112,722 |   |   | $ | 86,650 |   |
| Foreign                                 |   |   | 15,132 |   |   |   | 23,690  |   |   |   | 22,808 |   |
|                                    |   |   |   |   |   |   |    |   |   |   |   |   |
| Total      earnings before income taxes |   | $      | 33,012 |   |   | $      | 136,412 |   |   | $ | 109,458 |   |
|                                    |   |   |   |   |   |   |    |   |   |   |   |   |

| (Thousands      of dollars)              |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                     |   |   |   |   |   |   |   |   |   |
| Current:                                 |   |   |   |   |   |   |   |   |   |
|                                     |   |   |   |   |   |   |   |   |   |
| U.S.      federal and state income taxes |   | $      | 7,286  |   |   | $      | 42,487 |   |   | $ | 23,892 |   |
| Foreign                                  |   |   | 4,793  |   |   |   | 5,514  |   |   |   | 5,763 |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      current                       |   |   | 12,079 |   |   |   | 48,001 |   |   |   | 29,655 |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Deferred:                                |   |   |   |   |   |   |   |   |   |   |   |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S.      federal and state income taxes |   |   | (1,186 | )      |   |   | (823   | )      |   |   | 7,579 |   |
| Foreign                                  |   |   | (360   | )      |   |   | 1,209  |   |   |   | 439 |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      deferred                      |   |   | (1,546 | )      |   |   | 386    |   |   |   | 8,018 |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                    |   | $      | 10,533 |   |   | $      | 48,387 |   |   | $ | 37,673 |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |

| (Thousands      of dollars)                     |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|-------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                            |   |   |   |   |   |   |   |   |   |
| Tax      provision computed at statutory rate   |   | $      | 11,554 |   |   | $      | 47,744 |   |   | $ | 38,310 |   |
| Tax      effect of:                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses      for which no benefit was realized |   |   | 335    |   |   |   | 936    |   |   |   | 459 |   |
| Change      in effective state tax rate         |   |   | (44    | )      |   |   | 115    |   |   |   | 53 |   |
| Tax      credit                                 |   |   | (962   | )      |   |   | (237   | )      |   |   | (459 | ) |
| State      taxes net of federal benefit         |   |   | 504    |   |   |   | 2,351  |   |   |   | 1,261 |   |
| Benefit      of manufacturing deduction         |   |   | (481   | )      |   |   | (1,892 | )      |   |   | (1,105 | ) |
| Other,      net                                 |   |   | (373   | )      |   |   | (630   | )      |   |   | (846 | ) |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      provision for taxes                  |   | $      | 10,533 |   |   | $      | 48,387 |   |   | $ | 37,673 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |

| (Thousands      of dollars)                                |   | 2009   |    |   | 2008   |   |
|------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                       |   |   |    |   |   |   |
| Deferred      income tax assets:                           |   |   |    |   |   |   |
|                                                       |   |   |    |   |   |   |
| Pension      costs                                         |   | $      | 7,523   |   |   | $      | 5,124 |   |
| Payroll      and benefits                                  |   |   | 967     |   |   |   | 927 |   |
| Accrued      warranty expenses                             |   |   | 1,328   |   |   |   | 1,144 |   |
| Postretirement      benefits                               |   |   | 6,543   |   |   |   | 5,209 |   |
| Accrued      liabilities                                   |   |   | 3,295   |   |   |   | 761 |   |
| Other,      net                                            |   |   | 120     |   |   |   | 0 |   |
|                                                       |   |   |    |   |   |   |   |   |
| Total      deferred income tax assets                      |   |   | 19,776  |   |   |   | 13,165 |   |
| Less      valuation allowance                              |   |   | (69     | )      |   |   | (75 | ) |
|                                                       |   |   |    |   |   |   |   |   |
| Total      deferred income tax assets                      |   |   | 19,707  |   |   |   | 13,090 |   |
|                                                       |   |   |    |   |   |   |   |   |
| Noncurrent      deferred income tax liabilities:           |   |   |    |   |   |   |   |   |
|                                                       |   |   |    |   |   |   |   |   |
| Prepaid      expenses                                      |   |   | (335    | )      |   |   | (318 | ) |
| Depreciation                                               |   |   | (18,387 | )      |   |   | (14,857 | ) |
| Inventories                                                |   |   | (730    | )      |   |   | (361 | ) |
| Other,      net                                            |   |   | (5,515  | )      |   |   | (1,270 | ) |
|                                                       |   |   |    |   |   |   |   |   |
| Total      noncurrent deferred income tax liabilities, net |   |   | (24,967 | )      |   |   | (16,806 | ) |
|                                                       |   |   |    |   |   |   |   |   |
| Total      net deferred tax liability                      |   | $      | (5,260  | )      |   | $      | (3,716 | ) |
|                                                       |   |   |    |   |   |   |   |   |
| Current      deferred tax asset                            |   |   |    |   |   |   |   |   |
|                                                       |   |   |    |   |   |   |   |   |
| Continuing      operations                                 |   | $      | 5,198   |   |   | $      | 4,941 |   |
| Discontinued      operations                               |   |   | 492     |   |   |   | 562 |   |
|                                                       |   |   |    |   |   |   |   |   |
| Total      current deferred tax asset                      |   |   | 5,690   |   |   |   | 5,503 |   |
|                                                       |   |   |    |   |   |   |   |   |
| Non-current      deferred tax liability                    |   |   |    |   |   |   |   |   |
|                                                       |   |   |    |   |   |   |   |   |
| Continuing      operations                                 |   |   | (10,950 | )      |   |   | (9,219 | ) |
| Discontinued      operations                               |   |   | -       |   |   |   | - |   |
|                                                       |   |   |    |   |   |   |   |   |
| Total      non-current deferred tax liability              |   |   | (10,950 | )      |   |   | (9,219 | ) |
|                                                       |   |   |    |   |   |   |   |   |
| Total      net deferred tax liability                      |   | $      | (5,260  | )      |   | $      | (3,716 | ) |
|                                                       |   |   |    |   |   |   |   |   |

| (Thousands      of dollars)                            |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|--------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                   |   |   |   |   |   |   |   |   |   |
| Balance      at January 1,                             |   | $      | 1,368  |   |   | $      | 2,743  |   |   | $ | 3,383 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross      increases- current year tax positions       |   |   | 593    |   |   |   | -      |   |   |   | 293 |   |
| Gross      increases- tax positions from prior periods |   |   | 93     |   |   |   | 328    |   |   |   | 21 |   |
| Gross      decreases- tax positions from prior periods |   |   | (372   | )      |   |   | (813   | )      |   |   | (648 | ) |
| Settlements                                            |   |   | (173   | )      |   |   | (890   | )      |   |   | (306 | ) |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      at December 31,                           |   | $      | 1,509  |   |   | $      | 1,368  |   |   | $ | 2,743 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |

| (Thousands      of dollars)       |   | 2009   |   |   | 2008   |   |
|-----------------------------------|--------|--------|--------|--------|--------|--------|
|                              |   |   |   |   |   |   |
| Beginning      balance            |   | $      | 3,586  |   |   | $      | 2,925 |   |
|                              |   |   |   |   |   |   |   |   |
| Claims      paid or accrued       |   |   | (3,793 | )      |   |   | (2,732 | ) |
| Additional      warranties issued |   |   | 3,891  |   |   |   | 3,365 |   |
| Revisions      in estimates       |   |   | 385    |   |   |   | 122 |   |
| Foreign      currency translation |   |   | 151    |   |   |   | (94 | ) |
|                              |   |   |   |   |   |   |   |   |
| Ending      balance               |   | $      | 4,220  |   |   | $      | 3,586 |   |
|                              |   |   |   |   |   |   |   |   |

| (Thousands      of dollars) |   |   |   |
|-----------------------------|--------|--------|--------|
|                        |   |   |   |
| 2010                        |   | $      | 1,800  |   |
| 2011                        |   |   | 1,143  |   |
| 2012                        |   |   | 836    |   |
| 2013                        |   |   | 744    |   |
| 2014                        |   |   | 586    |   |
|                        |   |   |   |   |
| All      years              |   | $      | 9,748  |   |

| (Thousands      of dollars)                                     |   | 2009   |    |   | 2008   |   |    | 2007   |   |
|-----------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Sales      by segment:                                          |   |   |    |   |   |   |    |   |   |
| Oil      Field                                                  |   | $      | 349,168 |   |   | $      | 551,814 |   |   | $ | 397,354 |   |
| Power      Transmission                                         |   |   | 172,191 |   |   |   | 189,380 |   |   |   | 158,452 |   |
| Total      sales                                                |   | $      | 521,359 |   |   | $      | 741,194 |   |   | $ | 555,806 |   |
| Sales      by geographic region:                                |   |   |    |   |   |   |    |   |   |   |   |   |
| United      States                                              |   | $      | 290,924 |   |   | $      | 469,343 |   |   | $ | 318,668 |   |
| Europe                                                          |   |   | 50,362  |   |   |   | 60,463  |   |   |   | 49,350 |   |
| Canada                                                          |   |   | 19,039  |   |   |   | 33,354  |   |   |   | 31,677 |   |
| Latin      America                                              |   |   | 94,972  |   |   |   | 97,310  |   |   |   | 80,604 |   |
| Middle      East/North Africa                                   |   |   | 40,310  |   |   |   | 56,149  |   |   |   | 52,849 |   |
| Other                                                           |   |   | 25,752  |   |   |   | 24,575  |   |   |   | 22,658 |   |
| Total      sales                                                |   | $      | 521,359 |   |   | $      | 741,194 |   |   | $ | 555,806 |   |
| Earnings      (loss) before income taxes:                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Oil      Field                                                  |   | $      | 21,405  |   |   | $      | 116,150 |   |   | $ | 83,737 |   |
| Power      Transmission                                         |   |   | 17,040  |   |   |   | 26,308  |   |   |   | 27,160 |   |
| Corporate      & Other*                                     |   |   | (5,433  | )      |   |   | (4,479  | )      |   |   | 3,626 |   |
| Adjustment**                                                    |   |   | -       |   |   |   | (1,567  | )      |   |   | (5,065 | ) |
| Total      earnings (loss) before income taxes                  |   | $      | 33,012  |   |   | $      | 136,412 |   |   | $ | 109,458 |   |
| Assets      by segment:                                         |   |   |    |   |   |   |    |   |   |   |   |   |
| Oil      Field                                                  |   | $      | 293,140 |   |   | $      | 275,395 |   |   | $ | 226,697 |   |
| Power      Transmission                                         |   |   | 128,789 |   |   |   | 126,912 |   |   |   | 130,008 |   |
| Corporate      & Other*                                     |   |   | 118,850 |   |   |   | 127,300 |   |   |   | 121,361 |   |
| Adjustment**                                                    |   |   | -       |   |   |   | -       |   |   |   | 12,327 |   |
| Total      assets                                               |   | $      | 540,779 |   |   | $      | 529,607 |   |   | $ | 490,393 |   |
| Property,      plant & equipment, net, by geographic region |   |   |    |   |   |   |    |   |   |   |   |   |
| United      States                                              |   | $      | 121,419 |   |   | $      | 96,566  |   |   | $ | 82,643 |   |
| Europe                                                          |   |   | 14,827  |   |   |   | 11,194  |   |   |   | 10,947 |   |
| Canada                                                          |   |   | 9,072   |   |   |   | 9,731   |   |   |   | 13,796 |   |
| Latin      America                                              |   |   | 14,211  |   |   |   | 12,280  |   |   |   | 9,516 |   |
| Other                                                           |   |   | 241     |   |   |   | 308     |   |   |   | 288 |   |
| Total      P, P & E, net                                    |   | $      | 159,770 |   |   | $      | 130,079 |   |   | $ | 117,190 |   |
| Capital      expenditures by segment                            |   |   |    |   |   |   |    |   |   |   |   |   |
| Oil      Field                                                  |   | $      | 27,384  |   |   | $      | 20,786  |   |   | $ | 12,830 |   |
| Power      Transmission                                         |   |   | 12,168  |   |   |   | 7,755   |   |   |   | 5,159 |   |
| Corporate      & Other*                                     |   |   | 273     |   |   |   | 1,011   |   |   |   | 826 |   |
| Total      capital expenditures                                 |   | $      | 39,825  |   |   | $      | 29,552  |   |   | $ | 18,815 |   |
| Depreciation/amortization      by segment:                      |   |   |    |   |   |   |    |   |   |   |   |   |
| Oil      Field                                                  |   | $      | 11,561  |   |   | $      | 9,815   |   |   | $ | 8,578 |   |
| Power      Transmission                                         |   |   | 5,951   |   |   |   | 5,151   |   |   |   | 4,704 |   |
| Corporate      & Other*                                     |   |   | 945     |   |   |   | 733     |   |   |   | 726 |   |
| Total      depreciation/amortization                            |   | $      | 18,457  |   |   | $      | 15,699  |   |   | $ | 14,008 |   |
|                                                            |   |   |    |   |   |   |    |   |   |   |   |   |

| Year Ended December 31,2009                      |   |
|--------------------------------------------------|--------|
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                             |   |   |   |   | Power |   |   | Corporate |   |   |   |   |   |   |   |
| (Thousands      of dollars)                      |   | Oil      Field |   |   | Transmission |   |   | &      Other* |   |   | Adjustment** |   |   | Total |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross      sales                                 |   | $ | 351,766 |   |   | $ | 175,476 |   |   | $ | - |   |   | $ | - |   |   | $ | 527,242 |   |
| Inter-segment      sales                         |   |   | (2,598 | ) |   |   | (3,285 | ) |   |   | - |   |   |   | - |   |   |   | (5,883 | ) |
| Net      sales                                   |   | $ | 349,168 |   |   | $ | 172,191 |   |   | $ | - |   |   | $ | - |   |   | $ | 521,359 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      income (loss)                     |   | $ | 20,458 |   |   | $ | 16,966 |   |   | $ | (6,000 | ) |   | $ | - |   |   | $ | 31,424 |   |
| Other      income (expense), net                 |   |   | 947 |   |   |   | 74 |   |   |   | 567 |   |   |   | - |   |   |   | 1,588 |   |
| Earnings      (loss) before income tax provision |   | $ | 21,405 |   |   | $ | 17,040 |   |   | $ | (5,433 | ) |   | $ | - |   |   | $ | 33,012 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Year Ended December 31,2008                      |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                             |   |   |   |   |   | Power |   |   | Corporate |   |   |   |   |   |   |   |   |   |
| (Thousands      of dollars)                      |   | Oil      Field |   |   | Transmission |   |   | &      Other* |   |   | Adjustment** |   |   | Total |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross      sales                                 |   | $ | 557,669 |   |   | $ | 195,161 |   |   | $ | - |   |   | $ | - |   |   | $ | 752,830 |   |
| Inter-segment      sales                         |   |   | (5,855 | ) |   |   | (5,781 | ) |   |   | - |   |   |   | - |   |   |   | (11,636 | ) |
| Net      sales                                   |   | $ | 551,814 |   |   | $ | 189,380 |   |   | $ | - |   |   | $ | - |   |   | $ | 741,194 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      income (loss)                     |   | $ | 117,535 |   |   | $ | 26,132 |   |   | $ | (6,000 | ) |   | $ | (1,567 | ) |   | $ | 136,100 |   |
| Other      income (expense), net                 |   |   | (1,385 | ) |   |   | 176 |   |   |   | 1,521 |   |   |   | - |   |   |   | 312 |   |
| Earnings      (loss) before income tax provision |   | $ | 116,150 |   |   | $ | 26,308 |   |   | $ | (4,479 | ) |   | $ | (1,567 | ) |   | $ | 136,412 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Year Ended December 31,2007                      |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                             |   |   |   |   |   | Power |   |   | Corporate |   |   |   |   |   |   |   |   |   |
| (Thousands      of dollars)                      |   | Oil      Field |   |   | Transmission |   |   | &      Other* |   |   | Adjustment** |   |   | Total |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross      sales                                 |   | $ | 399,955 |   |   | $ | 161,731 |   |   | $ | - |   |   | $ | - |   |   | $ | 561,686 |   |
| Inter-segment      sales                         |   |   | (2,601 | ) |   |   | (3,279 | ) |   |   | - |   |   |   | - |   |   |   | (5,880 | ) |
| Net      sales                                   |   | $ | 397,354 |   |   | $ | 158,452 |   |   | $ | - |   |   | $ | - |   |   | $ | 555,806 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      income (loss)                     |   | $ | 82,629 |   |   | $ | 27,122 |   |   | $ | - |   |   | $ | (5,065 | ) |   | $ | 104,686 |   |
| Other      income (expense), net                 |   |   | 1,108 |   |   |   | 38 |   |   |   | 3,626 |   |   |   | - |   |   |   | 4,772 |   |
| Earnings      (loss) before income tax provision |   | $ | 83,737 |   |   | $ | 27,160 |   |   | $ | 3,626 |   |   | $ | (5,065 | ) |   | $ | 109,458 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (Thousands      of dollars)              |   | 2009   |    |   | 2008   |   |
|------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                     |   |   |    |   |   |   |
| Assets      from continuing operations   |   | $      | 540,779 |   |   | $      | 529,607 |   |
|                                     |   |   |    |   |   |   |   |   |
| Assets      from discontinued operations |   |   | 811     |   |   |   | 1,111 |   |
|                                     |   |   |    |   |   |   |   |   |
| Total      assets                        |   | $      | 541,590 |   |   | $      | 530,718 |   |
|                                     |   |   |    |   |   |   |   |   |

| Quarterly Financial Data      (Unaudited)         |   |
|---------------------------------------------------|--------|
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              |   | First |   |   | Second |   |   | Third |   |   | Fourth |   |
| (Millions      of dollars, except per share data) |   | Quarter |   |   | Quarter |   |   | Quarter |   |   | Quarter |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| 2009                                              |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Sales                                             |   | $ | 153.1 |   |   | $ | 123.7 |   |   | $ | 117.7 |   |   | $ | 126.8 |   |
| Gross      profit                                 |   |   | 34.2 |   |   |   | 27.0 |   |   |   | 24.9 |   |   |   | 26.4 |   |
| Net      earnings                                 |   |   | 9.1 |   |   |   | 4.7 |   |   |   | 5.1 |   |   |   | 3.6 |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      earnings per share                     |   |   | 0.61 |   |   |   | 0.32 |   |   |   | 0.34 |   |   |   | 0.24 |   |
| Diluted      earnings per share                   |   |   | 0.61 |   |   |   | 0.32 |   |   |   | 0.34 |   |   |   | 0.24 |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2008                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sales                                             |   | $ | 141.1 |   |   | $ | 174.5 |   |   | $ | 195.1 |   |   | $ | 230.5 |   |
| Gross      profit                                 |   |   | 40.5 |   |   |   | 47.8 |   |   |   | 55.8 |   |   |   | 69.9 |   |
| Net      earnings                                 |   |   | 15.6 |   |   |   | 21.2 |   |   |   | 25.0 |   |   |   | 26.6 |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      earnings per share                     |   |   | 1.06 |   |   |   | 1.44 |   |   |   | 1.68 |   |   |   | 1.79 |   |
| Diluted      earnings per share                   |   |   | 1.05 |   |   |   | 1.42 |   |   |   | 1.66 |   |   |   | 1.78 |   |

| (a)    | Documents      filed as part of the report |
|--------|--------------------------------------------|
|   | 1.                                         | Consolidated      Financial Statements |
|   |                                       | Report      of Independent Registered Public Accounting Firm |
|   |                                       | Consolidated      Balance Sheets |
|   |                                       | Consolidated      Statements of Earnings |
|   |                                       | Consolidated      Statements of Shareholders' Equity & Comprehensive    Income |
|   |                                       | Consolidated      Statements of Cash Flows |
|   |                                       | Notes      to Consolidated Financial Statements |
|   | 2.                                         | Financial      Statement Schedules |

|   | 3. | Exhibits |
|--------|----|----------|

| Exhibit      Number |   | Description                                                                                                                                                                                                                                                                                                                                            |
|---------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 3.1                 |   | Fourth      Restated Articles of Incorporation, as amended, included as Exhibit 4.1 to      Lufkin Industries, Inc.’s (the “Company”) registration statement on Form      S-8 filed February 17, 2004 (File No. 333-112890), which exhibit is      incorporated herein by reference.                                                 |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 3.2                 |   | Articles      of Amendment to Fourth Restated Articles of Incorporation, included as      Exhibit 3.1 to the Company’s current report on Form 8-K of the registrant      filed December 10, 1999, which exhibit is incorporated herein by      reference.                                                                                        |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 3.3                 |   | Amended      and Restated Bylaws, included as Exhibit 3.1 to the Company’s current      report on Form 8-K of the registrant filed October 9, 2007 (File No.      0-02612), which exhibit is incorporated herein by    reference.                                                                                                                |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 4.1                 |   | Form      of Common Stock Certificate, included as Exhibit 4.1 to the Company’s      quarterly report on Form 10-Q of the registrant filed May 9, 2005 (File      No. 0-02612), which exhibit is incorporated herein by      reference.                                                                                                          |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.1               |   | 1990      Stock Option Plan, included as Exhibit 4.3 to the Company's registration      statement on Form S-8 dated August 23, 1995 (File No. 33-62021), which      plan is incorporated herein by reference.                                                                                                                                          |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.2               |   | 1996      Nonemployee Director Stock Option Plan, included as Exhibit 4.3 to the      Company's registration statement on Form S-8 dated June 28, 1996 (File No.      333-07129), which plan is incorporated herein by  reference.                                                                                                                     |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.3               |   | Amended      and Restated Incentive Stock Compensation Plan 2000, included as Exhibit      10.1 to the Company's current report on Form 8-K dated August 2, 2007      (File No. 0-02612), which exhibit is incorporated herein by      reference.                                                                                                      |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 10.4                |   | Credit      Agreement, dated December 30, 2002, between Lufkin Industries, Inc.,      JPMorgan Chase Bank and the lenders party thereto, included as Exhibit      10.1 to the Company’s quarterly report on Form 10-Q of the registrant      filed May 9, 2005 (File No. 0-02612), which exhibit is incorporated herein      by reference.       |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 10.5                |   | Agreement      and First Amendment to Credit Agreement, dated June 30, 2004, between      Lufkin Industries, Inc. and JPMorgan Chase Bank, included as Exhibit 10.2      to the Company’s quarterly report on Form 10-Q of the registrant filed May      9, 2005 (File No. 0-02612), which exhibit is incorporated herein by      reference.     |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 10.6                |   | Agreement      and Second Amendment to Credit Agreement, dated February 1, 2005, between      Lufkin Industries, Inc. and JPMorgan Chase Bank, included as Exhibit to      the Company’s quarterly report on 10.3 Form 10-Q of the registrant filed      May 9, 2005 (File No. 0-02612), which exhibit is incorporated herein by      reference. |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 10.7                |   | Agreement      and Third Amendment to Credit Agreement between Lufkin Industries, Inc. and      JPMorgan Chase Bank, National Association, included as Exhibit 10.3      to the Company’s current report on Form 8-K of the registrant filed      February 21, 2006 (File No. 0-02612), which exhibit is incorporated herein      by reference.  |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 10.8                |   | Agreement      and Fourth Amendment to Credit Agreement between Lufkin Industries, Inc. and      JPMorgan Chase Bank, National Association, included as Exhibit 10.1      to the Company’s current report on Form 8-K of the registrant filed      November 30, 2007 (File No. 0-02612), which exhibit is incorporated herein      by reference. |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.9               |   | Form      of Employee Stock Option Agreement for the Company’s 2000 Incentive Stock      Compensation Plan, included as Exhibit 10.5 to the Company’s current      report on Form 8-K dated May 13, 2008 (File No. 0-02612), which exhibit is      incorporated herein by reference.                                                       |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.10              |   | Form      of Director Stock Option Agreement for the Company’s 2000 Incentive Stock      Compensation Plan, included as Exhibit 10.6 to the Company’s current      report on Form 8-K dated May 13, 2008 (File No. 0-02612), which exhibit is      incorporated herein by reference.                                                       |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.11              |   | Thrift      Plan Restoration Plan for Salaried Employees of Lufkin Industries, Inc.,      as amended, included as exhibit 10.13 to the Company's annual report on      Form 10-K of the registrant filed March 1, 2007 (File No. 0-02612), which      exhibit is incorporated herein by reference.                                                     |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.12              |   | Retirement Plan      Restoration Plan for Salaried Employees of Lufkin Industries, Inc,      as amended, included as exhibit 10.14 to the Company's annual report on      Form 10-K of the registrant filed March 1, 2007 (File No. 0-02612), which      exhibit is incorporated herein by reference.                                                  |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.13              |   | Lufkin Industries,      Inc. Supplemental Retirement Plan, as amended, as amended, included      as exhibit 10.15 to the Company's annual report on Form 10-K of the      registrant filed March 1, 2007 (File No. 0-02612), which exhibit is      incorporated herein by reference.                                                                   |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.14              |   | Lufkin      Industries, Inc. 2010 Variable Compensation Plan, included as Exhibit 10.1      to Form 8-K filed February 12, 2010 (File No. 0-02612),      which exhibit is incorporated herein by  reference.                                                                                                                                           |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.15              |   | Amended      and Restated Severance Agreement, dated January 21, 2008, between Lufkin      Industries, Inc. and Mark E. Crews, included as      Exhibit 10.1 to the Company’s current report on Form 8-K      filed on December 31, 2008      (File No. 0-02612), which exhibit is incorporated herein by      reference.                        |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.16              |   | Amended      and Restated Severance Agreement, dated February 12, 2008, between Lufkin      Industries, Inc. and Terry L. Orr, included as      Exhibit 10.2 to the Company’s current report on Form 8-K      filed on December 31, 2008      (File No. 0-02612), which exhibit is incorporated herein by      reference.                        |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.17              |   | Amended      and Restated Severance Agreement, dated March 1, 2008, between Lufkin      Industries, Inc. and John F. Glick, included as      Exhibit 10.3 to the Company’s current report on Form 8-K      filed on December 31, 2008      (File No. 0-02612), which exhibit is incorporated herein by      reference.                           |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.18              |   | Amended      and Restated Severance Agreement, dated May 7, 2008, between Lufkin      Industries, Inc. and Christopher L. Boone, included as      Exhibit 10.4 to the Company’s current report on Form 8-K      filed on December 31, 2008      (File No. 0-02612), which exhibit is incorporated herein by      reference.                      |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.19              |   | Amended      and Restated Severance Agreement, dated January 1, 2005, between Lufkin      Industries, Inc. and Paul G. Perez, included as      Exhibit 10.5 to the Company’s current report on Form 8-K      filed on December 31, 2008      (File No. 0-02612), which exhibit is incorporated herein by      reference.                         |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.20              |   | Amended      and Restated Severance Agreement, dated January 1, 2005, between Lufkin      Industries, Inc. and Scott H. Semlinger, included as      Exhibit 10.6 to the Company’s current report on Form 8-K      filed on December 31, 2008      (File No. 0-02612), which exhibit is incorporated herein by      reference.                    |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.21              |   | Amended      and Restated Employment Agreement, dated as of March 1, 2008, by and      between Lufkin Industries, Inc. and John F. Glick included as Exhibit 10.7      to the Company's current report on Form 8-K filed on December 31, 2008      (File No. 0-02612), which exhibit is incorporated herein by      reference.                         |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.22              |   | Amended      and Restated Employment Agreement, dated as of August 18, 2006, by and      between Lufkin Industries, Inc. and Paul G. Perez included as Exhibit 10.8      to the Company's current report on Form 8-K filed on December 31, 2008      (File No. 0-02612), which exhibit is incorporated herein by      reference.                       |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.23              |   | Amended      and Restated Employment Agreement, dated as of August 18, 2006, by and      between Lufkin Industries, Inc. and Scott H. Semlinger included as Exhibit      10.9 to the Company's current report on Form 8-K filed on December 31,      2008 (File No. 0-02612), which exhibit is incorporated herein by      reference.                  |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 18.1                |   | Accountants'      preferability letter regarding change in accounting      principles.                                                                                                                                                                                                                                                                 |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 21                  |   | Subsidiaries      of the registrant                                                                                                                                                                                                                                                                                                                    |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 23                  |   | Consent      of Independent Registered Public Accounting Firm                                                                                                                                                                                                                                                                                          |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 31.1                |   | Rule      13a-14(a)/15d-14(a) Certification of the Chief Executive      Officer                                                                                                                                                                                                                                                                        |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 31.2                |   | Rule      13a-14(a)/15d-14(a) Certification of the Chief Financial      Officer                                                                                                                                                                                                                                                                        |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 32.1                |   | Section      1350 Certification of the Chief Executive Officer      certification                                                                                                                                                                                                                                                                      |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 32.2                |   | Section      1350 Certification of the Chief Financial Officer      certification                                                                                                                                                                                                                                                                      |

|                                     |   |            |   |   | Additions       |   |   |            |   |   |       |   |
|------------------------------------------|--------|-----------------|--------|--------|-----------------|--------|--------|-----------------|--------|--------|------------|--------|
|                                     |   | Balance      at |   |   |            |   |   | Charged      to |   |   |       |   |   | Balance      at |   |
|                                     |   | Beginning       |   |   | Charged         |   |   | Other           |   |   |       |   |   | End      of |   |
| Description                              |   | of      Year    |   |   | to      Expense |   |   | Accounts        |   |   | Deductions |   |   | Year |   |
|                                     |   |            |   |   |            |   |   |            |   |   |       |   |   |   |   |
| Allowance      for Doubtful Receivables: |   |            |   |   |            |   |   |            |   |   |       |   |   |
|                                     |   |            |   |   |            |   |   |            |   |   |       |   |   |   |   |
| Year      Ended December 31, 2009        |   | $               | 735    |   |            |   | (1,844 | )               |   |   |       |   |   | 1,349 |   |   | $ | 240 |   |
| Year      Ended December 31, 2008        |   |            | 89     |   |            |   | 2,462  |            |   |   | -          |   |   |   | (1,816 | ) |   |   | 735 |   |
| Year      Ended December 31, 2007        |   | $               | 129    |   |            |   | 12     |            |   |   | -          |   |   |   | (52 | ) |   | $ | 89 |   |
|                                     |   |            |   |   |            |   |   |            |   |   |       |   |   |   |   |   |   |   |   |   |
| Inventory:      Valuation Reserves:      |   |            |   |   |            |   |   |            |   |   |       |   |   |   |   |   |   |   |   |   |
|                                     |   |            |   |   |            |   |   |            |   |   |       |   |   |   |   |   |   |   |   |   |
| Year      Ended December 31, 2009        |   | $               | 4,535  |   |            |   | 100    |            |   |   | -          |   |   |   | (1,992 | ) |   | $ | 2,643 |   |
| Year      Ended December 31, 2008        |   |            | 1,579  |   |            |   | 2,964  |            |   |   | -          |   |   |   | (8 | ) |   |   | 4,535 |   |
| Year      Ended December 31, 2007        |   | $               | 1,172  |   |            |   | 446    |            |   |   | -          |   |   |   | (39 | ) |   | $ | 1,579 |   |
|                                     |   |            |   |   |            |   |   |            |   |   |       |   |   |   |   |   |   |   |   |   |
| Inventory:      LIFO Reserves:           |   |            |   |   |            |   |   |            |   |   |       |   |   |   |   |   |   |   |   |   |
|                                     |   |            |   |   |            |   |   |            |   |   |       |   |   |   |   |   |   |   |   |   |
| Year      Ended December 31, 2009        |   | $               | 32,926 |   |            |   | (2,965 | )               |   |   |       |   |   |   | - |   |   | $ | 29,961 |   |
| Year      Ended December 31, 2008        |   |            | 25,184 |   |            |   | 7,742  |            |   |   | -          |   |   |   | - |   |   |   | 32,926 |   |
| Year      Ended December 31, 2007        |   | $               | 23,279 |   |            |   | 1,905  |            |   |   | -          |   |   |   | - |   |   | $ | 25,184 |   |

|   | Name                          | Title                                                 | Date               |
|--------|-------------------------------|-------------------------------------------------------|--------------------|
|   |                          |                                                  |               |
| By     | /s/      J. F. Glick     | President/Chief      Executive Officer                | March      1, 2010 |
|   | J.      F. Glick              | (Principal      Executive Officer)                    |               |
| By     | /s/      C. L. Boone     | Vice      President/Treasurer/Chief Financial Officer | March      1, 2010 |
|   | C.      L. Boone              | (Principal      Financial and Accounting Officer)     |               |
| By     | /s/      D. V. Smith     | Chairman      of the Board of Directors               | March      1, 2010 |
|   | D.      V. Smith              |                                                  |               |
| By     | /s/      J. F. Anderson  | Director                                              | March      1, 2010 |
|   | J.F.      Anderson            |                                                  |               |
| By     | /s/      S. V. Baer           | Director                                              | March      1, 2010 |
|   | S.      V. Baer               |                                                  |               |
| By     | /s/      J. D. Hofmeister     | Director                                              | March      1, 2010 |
|   | J.      D. Hofmeister         |                                                  |               |
| By     | /s/      J. T. Jongebloed     | Director                                              | March      1, 2010 |
|   | J.      T. Jongebloed         |                                                  |               |
| By     | /s/      J. H. Lollar         | Director                                              | March      1, 2010 |
|   | J.      H. Lollar             |                                                  |               |
| By     | /s/      B. H. O’Neal   | Director                                              | March      1, 2010 |
|   | B.      H. O'Neal             |                                                  |               |
| By     | /s/      R. R. Stewart        | Director                                              | March      1, 2010 |
|   | R.      R. Stewart            |                                                  |               |
| By     | /s/      H. J. Trout, Jr.     | Director                                              | March      1, 2010 |
|   | H.      J. Trout, Jr.         |                                                  |               |
| By     | /s/      T. E. Wiener         | Director                                              | March      1, 2010 |
|   | T.      E. Wiener             |                                                  |               |

| Exhibit      Number |   | Description                                                                                                                                                                                                                                                                                                                                            |
|---------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 3.1                 |   | Fourth      Restated Articles of Incorporation, as amended, included as Exhibit 4.1 to      Lufkin Industries, Inc.’s (the “Company”) registration statement on Form      S-8 filed February 17, 2004 (File No. 333-112890), which exhibit is      incorporated herein by reference.                                                 |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 3.2                 |   | Articles      of Amendment to Fourth Restated Articles of Incorporation, included as      Exhibit 3.1 to the Company’s current report on Form 8-K of the registrant      filed December 10, 1999, which exhibit is incorporated herein by      reference.                                                                                        |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 3.3                 |   | Amended      and Restated Bylaws, included as Exhibit 3.1 to the Company’s current      report on Form 8-K of the registrant filed October 9, 2007 (File No.      0-02612), which exhibit is incorporated herein by    reference.                                                                                                                |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 4.1                 |   | Form      of Common Stock Certificate, included as Exhibit 4.1 to the Company’s      quarterly report on Form 10-Q of the registrant filed May 9, 2005 (File      No. 0-02612), which exhibit is incorporated herein by      reference.                                                                                                          |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.1               |   | 1990      Stock Option Plan, included as Exhibit 4.3 to the Company's registration      statement on Form S-8 dated August 23, 1995 (File No. 33-62021), which      plan is incorporated herein by reference.                                                                                                                                          |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.2               |   | 1996      Nonemployee Director Stock Option Plan, included as Exhibit 4.3 to the      Company's registration statement on Form S-8 dated June 28, 1996 (File No.      333-07129), which plan is incorporated herein by  reference.                                                                                                                     |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.3               |   | Amended      and Restated Incentive Stock Compensation Plan 2000, included as Exhibit      10.1 to the Company's current report on Form 8-K dated August 2, 2007      (File No. 0-02612), which exhibit is incorporated herein by      reference.                                                                                                      |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 10.4                |   | Credit      Agreement, dated December 30, 2002, between Lufkin Industries, Inc.,      JPMorgan Chase Bank and the lenders party thereto, included as Exhibit      10.1 to the Company’s quarterly report on Form 10-Q of the registrant      filed May 9, 2005 (File No. 0-02612), which exhibit is incorporated herein      by reference.       |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 10.5                |   | Agreement      and First Amendment to Credit Agreement, dated June 30, 2004, between      Lufkin Industries, Inc. and JPMorgan Chase Bank, included as Exhibit 10.2      to the Company’s quarterly report on Form 10-Q of the registrant filed May      9, 2005 (File No. 0-02612), which exhibit is incorporated herein by      reference.     |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 10.6                |   | Agreement      and Second Amendment to Credit Agreement, dated February 1, 2005, between      Lufkin Industries, Inc. and JPMorgan Chase Bank, included as Exhibit to      the Company’s quarterly report on 10.3 Form 10-Q of the registrant filed      May 9, 2005 (File No. 0-02612), which exhibit is incorporated herein by      reference. |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 10.7                |   | Agreement      and Third Amendment to Credit Agreement between Lufkin Industries, Inc. and      JPMorgan Chase Bank, National Association, included as Exhibit 10.3      to the Company’s current report on Form 8-K of the registrant filed      February 21, 2006 (File No. 0-02612), which exhibit is incorporated herein      by reference.  |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 10.8                |   | Agreement      and Fourth Amendment to Credit Agreement between Lufkin Industries, Inc. and      JPMorgan Chase Bank, National Association, included as Exhibit 10.1      to the Company’s current report on Form 8-K of the registrant filed      November 30, 2007 (File No. 0-02612), which exhibit is incorporated herein      by reference. |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.9               |   | Form      of Employee Stock Option Agreement for the Company’s 2000 Incentive Stock      Compensation Plan, included as Exhibit 10.5 to the Company’s current      report on Form 8-K dated May 13, 2008 (File No. 0-02612), which exhibit is      incorporated herein by reference.                                                       |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.10              |   | Form      of Director Stock Option Agreement for the Company’s 2000 Incentive Stock      Compensation Plan, included as Exhibit 10.6 to the Company’s current      report on Form 8-K dated May 13, 2008 (File No. 0-02612), which exhibit is      incorporated herein by reference.                                                       |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.11              |   | Thrift      Plan Restoration Plan for Salaried Employees of Lufkin Industries, Inc.,      as amended, included as exhibit 10.13 to the Company's annual report on      Form 10-K of the registrant filed March 1, 2007 (File No. 0-02612), which      exhibit is incorporated herein by reference.                                                     |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.12              |   | Retirement Plan      Restoration Plan for Salaried Employees of Lufkin Industries, Inc,      as amended, included as exhibit 10.14 to the Company's annual report on      Form 10-K of the registrant filed March 1, 2007 (File No. 0-02612), which      exhibit is incorporated herein by reference.                                                  |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.13              |   | Lufkin Industries,      Inc. Supplemental Retirement Plan, as amended, as amended, included      as exhibit 10.15 to the Company's annual report on Form 10-K of the      registrant filed March 1, 2007 (File No. 0-02612), which exhibit is      incorporated herein by reference.                                                                   |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.14              |   | Lufkin      Industries, Inc. 2010 Variable Compensation Plan, included as Exhibit 10.1      to Form 8-K filed February 12, 2010 (File No. 0-02612),      which exhibit is incorporated herein by  reference.                                                                                                                                           |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.15              |   | Amended      and Restated Severance Agreement, dated January 21, 2008, between Lufkin      Industries, Inc. and Mark E. Crews, included as      Exhibit 10.1 to the Company’s current report on Form 8-K      filed on December 31, 2008      (File No. 0-02612), which exhibit is incorporated herein by      reference.                        |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.16              |   | Amended      and Restated Severance Agreement, dated February 12, 2008, between Lufkin      Industries, Inc. and Terry L. Orr, included as      Exhibit 10.2 to the Company’s current report on Form 8-K      filed on December 31, 2008      (File No. 0-02612), which exhibit is incorporated herein by      reference.                        |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.17              |   | Amended      and Restated Severance Agreement, dated March 1, 2008, between Lufkin      Industries, Inc. and John F. Glick, included as      Exhibit 10.3 to the Company’s current report on Form 8-K      filed on December 31, 2008      (File No. 0-02612), which exhibit is incorporated herein by      reference.                           |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.18              |   | Amended      and Restated Severance Agreement, dated May 7, 2008, between Lufkin      Industries, Inc. and Christopher L. Boone, included as      Exhibit 10.4 to the Company’s current report on Form 8-K      filed on December 31, 2008      (File No. 0-02612), which exhibit is incorporated herein by      reference.                      |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.19              |   | Amended      and Restated Severance Agreement, dated January 1, 2005, between Lufkin      Industries, Inc. and Paul G. Perez, included as      Exhibit 10.5 to the Company’s current report on Form 8-K      filed on December 31, 2008      (File No. 0-02612), which exhibit is incorporated herein by      reference.                         |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.20              |   | Amended      and Restated Severance Agreement, dated January 1, 2005, between Lufkin      Industries, Inc. and Scott H. Semlinger, included as      Exhibit 10.6 to the Company’s current report on Form 8-K      filed on December 31, 2008      (File No. 0-02612), which exhibit is incorporated herein by      reference.                    |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.21              |   | Amended      and Restated Employment Agreement, dated as of March 1, 2008, by and      between Lufkin Industries, Inc. and John F. Glick included as Exhibit 10.7      to the Company's current report on Form 8-K filed on December 31, 2008      (File No. 0-02612), which exhibit is incorporated herein by      reference.                         |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.22              |   | Amended      and Restated Employment Agreement, dated as of August 18, 2006, by and      between Lufkin Industries, Inc. and Paul G. Perez included as Exhibit 10.8      to the Company's current report on Form 8-K filed on December 31, 2008      (File No. 0-02612), which exhibit is incorporated herein by      reference.                       |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| *10.23              |   | Amended      and Restated Employment Agreement, dated as of August 18, 2006, by and      between Lufkin Industries, Inc. and Scott H. Semlinger included as Exhibit      10.9 to the Company's current report on Form 8-K filed on December 31,      2008 (File No. 0-02612), which exhibit is incorporated herein by      reference.                  |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 18.1                |   | Accountants'      preferability letter regarding change in accounting      principles.                                                                                                                                                                                                                                                                 |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 21                  |   | Subsidiaries      of the registrant                                                                                                                                                                                                                                                                                                                    |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 23                  |   | Consent      of Independent Registered Public Accounting Firm                                                                                                                                                                                                                                                                                          |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 31.1                |   | Rule      13a-14(a)/15d-14(a) Certification of the Chief Executive      Officer                                                                                                                                                                                                                                                                        |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 31.2                |   | Rule      13a-14(a)/15d-14(a) Certification of the Chief Financial      Officer                                                                                                                                                                                                                                                                        |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 32.1                |   | Section      1350 Certification of the Chief Executive Officer      certification                                                                                                                                                                                                                                                                      |
|                |   |                                                                                                                                                                                                                                                                                                                                                   |
| 32.2                |   | Section      1350 Certification of the Chief Financial Officer      certification                                                                                                                                                                                                                                                                      |