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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTION 13 OR

15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




|     |                                                                                                                                       
|---- | --------------------------------------------------------------------------------------------------------------------------------------
|[X]  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
	 SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED 
	 DECEMBER 31, 1999
|    
|[  ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
	 SECURITIES EXCHANGE ACT OF 1934                                           

For the transition period from
         to

Commission file number 0-28040



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BACOU USA, INC.

(Exact name of registrant as specified in its
charter)


|                                         |  |                    
|---------------------------------------- |  | -------------------
|                                        
|                                        
|                                        
|                                        
|Delaware                                 |  | 05-0470688         
|(State or other jurisdiction of          |  | (I.R.S. Employer   
|incorporation or organization)           |  | Identification No.)
|                                        
|                                        
|                                        
|                                        
|                                        
|10 Thurber Boulevard, Smithfield, RI     |  | 02917-1896         
|(Address of principal executive offices) |  | (Zip Code)         

Registrants telephone number, including area code: 
 (401) 233-0333

Securities registered pursuant to Section 12(b) of the
Act: None

Securities registered pursuant to Section 12(g) of the
Act: Common Stock, $.001 Par Value

Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding twelve
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past
90 days.     Yes 
[X]     No  [  ]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained
 herein, and will not be contained, to the best of
registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.  [X]

The aggregate market value of the voting common stock of the
registrant held by non-affiliates of the registrant computed on
the basis of $15  1/4 per share (the closing price of such
stock on March 20, 2000 on The New York Stock Exchange):
$76,513,291.

As of March 20, 2000, there were 17,629,865 shares of Common
 Stock outstanding.



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DOCUMENTS INCORPORATED BY REFERENCE

Proxy Statement for the 2000 Annual Meeting of Stockholders (to
be filed with the Securities and Exchange Commission on or before
 April 30, 2000) is incorporated by reference in
Part III hereof.



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TABLE OF CONTENTS



|         |                                                                                               |  |  |  |  |  |  | 
|-------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I  
|         | Item 1. Business                                                                             
|         | Item 2. Description of Properties                                                            
|         | Item 3. Legal Proceedings                                                                    
|         | Item 4. Submission of Matters to a Vote of Security Holders                                  
|PART II 
|         | Item 5. Market for the Registrants Common Stock and Related Stockholder Matters             
|         | Item 6. Selected Financial Data                                                              
|         | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|         | Item 7A. Quantitative and Qualitative Disclosures about Market Risk                          
|         | Item 8. Financial Statements and Supplementary Data                                          
|         | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|PART III
|         | Item 10. Directors and Executive Officers of the Registrant                                  
|         | Item 11. Executive Compensation                                                              
|         | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|         | Item 13. Certain Relationships and Related Transactions                                      
|         | Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K                     



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TABLE OF CONTENTS

|           |         |             |                                                                                        |             |  |    | 
|---------- | ------- | ----------- | -------------------------------------------------------------------------------------- | ----------- |  | -- | 
|           |         | Description |                                                                                        | Page Number
|           |         |             |                                                                                        |            
|PART I     |         |             |                                                                                        |             |  |   
|          
|          
|          
|          
|           | Item 1  |             | Business                                                                               |             |  | 3  | 
|          
|          
|          
|          
|           | Item 2  |             | Properties                                                                             |             |  | 10 | 
|          
|          
|          
|          
|           | Item 3  |             | Legal Proceedings                                                                      |             |  | 11 | 
|          
|          
|          
|          
|           | Item 4  |             | Submission of Matters to a Vote of Security Holders                                    |             |  | 11 | 
|          
|PART II    |         |             |                                                                                        |             |  |   
|          
|          
|          
|          
|           | Item 5  |             | Market for the Registrants Common Stock and Related
	Stockholder Matters              |             |  | 11 | 
|          
|          
|          
|          
|           | Item 6  |             | Selected Financial Data                                                                |             |  | 12 | 
|          
|          
|          
|          
|           | Item 7  |             | Managements Discussion and Analysis of Financial Condition
	and Results of Operations |             |  | 13 | 
|          
|          
|          
|          
|           | Item 7A |             | Quantitative and Qualitative Disclosures About Market Risk                             |             |  | 20 | 
|          
|          
|          
|          
|           | Item 8  |             | Financial Statements and Supplementary Data                                            |             |  | 21 | 
|          
|          
|          
|          
|           | Item 9  |             | Changes in and Disagreements with Accountants on Accounting and
	Financial Disclosure  |             |  | 39 | 
|          
|PART III   |         |             |                                                                                        |             |  |   
|          
|          
|          
|          
|           | Item 10 |             | Directors and Executive Officers of the Registrant                                     |             |  | 39 | 
|          
|          
|          
|          
|           | Item 11 |             | Executive Compensation                                                                 |             |  | 39 | 
|          
|          
|          
|          
|           | Item 12 |             | Security Ownership of Certain Beneficial Owners and Management                         |             |  | 39 | 
|          
|          
|          
|          
|           | Item 13 |             | Certain Relationships and Related Transactions                                         |             |  | 39 | 
|          
|PART IV    |         |             |                                                                                        |             |  |   
|          
|          
|          
|          
|           | Item 14 |             | Exhibits, Financial Statement Schedules and Reports on Form 8-K                        |             |  | 39 | 
|          
|          
|          
|          
|Signatures |         |             | 43                                                                                     |            

2



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##### Table of Contents






PART I




Item 1.  Business

General

Bacou USA, Inc. (Bacou, we,
our or us) designs, manufactures and
sells safety products that protect the sight, hearing, hands and
respiratory systems of workers against occupational hazards, as
well as related instrumentation including gas monitors and test
equipment for self-contained breathing apparatus. We sell safety
products that are marketed under the brand names
Biosystems, Howard Leight®, Lase-R Shield,
Perfect Fit, Pro-Tech®, Survivair® and uvex®, principally to industrial safety and fire service
 distributors. We also design, manufacture and sell optical
products under the Titmus® brand name, including eyeglass
frames and components which we sell principally to optical
laboratories, and vision screening equipment.

Segment Information

We have three reportable segments  the safety segment,
 the glove segment and the optical frames and instruments
segment. The safety segment includes consumable products
(protective eyewear and hearing protection) and technical
products (respirators and gas monitors), all of which we sell
principally to industrial safety distributors and, to a lesser
extent, fire safety distributors. We began reporting a glove
segment in connection with our April 1, 1999, acquisition of
 Perfect Fit Glove Co., Inc. Glove segment products include cut-
and abrasion-resistant gloves, which we sell principally to
industrial safety distributors. The optical frames and
instruments segment includes eyeglass frames and components, and
vision screening equipment. We sell eyeglass frames and
components principally to optical laboratory customers who fit
frames with prescription lenses to create completed eyewear
products.

You can find financial information about each of our segments and
 sales in geographical areas in Note 10 to our Consolidated
Financial Statements included in Item 8 of this
Form 10-K.

Products  Safety Segment

Protective Eyewear

We sell uvex® brand non-prescription protective
eyewear in a wide variety of styles of spectacles and goggles.
All Uvex products have polycarbonate lenses that provide an
impact resistant barrier. The lenses are protected by proprietary
 coatings, which provide superior resistance to scratches and
fogging. We also sell application specific protective eyewear,
including laser protective eyewear under the uvex®,
LaserVision and Lase-R Shield brands.

Hearing Protection

We sell a full range of Howard Leight® brand hearing
protection products that reduce the risk of long-term hearing
loss from exposure to excessive noise levels. These products
include disposable and reusable ear plugs, corded ear plugs,
banded ear plugs and ear muffs. Additionally, we sell Howard
Leight® brand ear plug dispensers for easy distribution of
hearing protection to workers.

Air Purifying Respirators and Supplied Air
Respirators

We sell a complete line of reusable half mask and full-face mask
air purifying respirators under the Survivair® and
Pro-Tech® brand names, as well as hazard specific cartridges
 and filters for removing various contaminants from the air. We
also sell Survivair® brand self-contained breathing
apparatus for industrial and fire protection applications, as
well as air line respirators. Supplied air respirators provide an
 independent source of breathable air for workers in atmospheres
immediately dangerous to their life or health.

Gas Detectors and Test Equipment for
Self-Contained Breathing Apparatus

We sell Biosystems brand gas monitors and detectors, which
sense and report the levels of certain gases in the atmosphere of
 a work site and identify hazardous conditions. We also sell
PosiChek brand test-

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Products  Glove Segment

We sell Perfect Fit brand cut- and abrasion-resistant
gloves, which products are sold primarily to industrial safety
distributors.

Products  Optical Frames and Instruments Segment

We sell Titmus® brand metal and plastic eyeglass frames and
components for prescription protective eyewear. These products
accommodate corrective lenses and, when completed with lenses,
meet the standards for protective eyewear. We sell Titmus®
brand occupational vision screening equipment, used to determine
whether an eye exam should be administered for prescribing
corrective lenses.

Backlog

We had a total backlog of approximately $10.3 million at
December 31, 1999 and $6.6 million at December 31,
1998.

Marketing, Sales and Distribution

We sell our safety products principally through industrial safety
 distributors. Additional channels of distribution differ by
product line. Laser protective eyewear products are sold in
markets serving medicine, industry, research laboratories and
universities, and worldwide by laser manufacturers as accessories
 with their products. Fire service distributors sell
Survivair® brand self-contained breathing apparatus and
Biosystems brand gas detectors and test equipment for
self-contained breathing apparatus. We market uvex®,
Howard Leight® and Pro-Tech® brand products in the
do-it-yourself retail markets for home safety products. We also
sell Howard Leight® brand products in the sport shooting and
 law enforcement markets. Optical laboratories and optical
retailers are the main channels for distribution of Titmus®
brand eyeglass frames and components for prescription protective
eyewear. We market all of our products internationally, with uvex® brand products contractually limited to
distribution in North, South and Central America. The sale of our
 products to purchasers in France is restricted under a corporate
 opportunities agreement with Bacou S.A., the principal
stockholder of Bacou USA, Inc.

Manufacturing Operations

Protective Eyewear

We use a highly automated injection molding process to
manufacture the frames and lenses of our uvex® brand
non-prescription protective eyewear. We mold frame components in
nylon, propionate and polyvinylchloride, and we mold our lenses
from polycarbonate resin pellets. We operate a highly automated,
integrated assembly and packaging system for our astrospec®
products and other high-volume products.

Disposable and Reusable Ear Plugs and Ear
Muffs

We manufacture our earplug products using proprietary, high
volume automated machinery and equipment which mold polyurethane
foam and polyvinylchloride into earplugs. We use injection
molding to produce head bands for banded earplug products and ear
 muff bodies. We assemble all such products, except for two
product lines of completed ear muffs, for which we contract with
outside vendors.

Air Purifying Respirators and Supplied Air
Respirators

We manufacture respirator bodies, cartridge and filter bodies,
and certain other parts using injection and compression molding
techniques. We produce most of our metal regulator parts using
computer assisted machining operations. We assemble finished
respirators using these manufactured parts and components

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Gas Detectors and Test Equipment for
Self-Contained Breathing Apparatus

We assemble our gas detection products and test equipment for
self-contained breathing apparatus using component parts
manufactured by outside vendors. Component parts are
requisitioned using a just-in-time approach, and material
tracking is based on a work-in-process inventory management
system and electronically initiated inventory replenishment. We
utilize work cells for assembly of these products.

Cut- and Abrasion-Resistant Gloves and
Sleeves

We manufacture four types of seamless knit gloves and woven cloth
 material at our SCHAS facility where knitting machines produce
glove shells to meet order specifications. The finishing
department sews a hem at the bottom of the wrist portion of each
glove to prevent unraveling. We then transport these gloves to
Perfect Fit where our coating operations provide enhancements to
the gloves by applying an oil-based plastisol liquid to the
gloves. This process includes an automated printing and drying
procedure based on the plastisol type and yarn material being
used. The Perfect Fit sewing department also produces cotton and
Kevlar® tubular sleeves that individual users wear on their
arms to help prevent cuts, burns and abrasions.

Eyeglass Frames and Components and Vision
Screening Equipment

We manufacture certain Titmus® brand eyeglass frames and
components for prescription protective eyewear in both metal and
plastic at our Titmus Optical, Inc. (Titmus)
facility. Metal products are made from wire in a process that
includes cutting, bending, shaping, soldering, plating and
colorizing. A computer controlled milling operation produces
plastic products. We assemble vision screeners using component
parts manufactured by outside vendors.

Raw Materials

Although we rely primarily on single sources for the supply of
several raw materials, all of our raw materials are currently
readily available. We currently satisfy substantially all of our
requirements for (i) polycarbonate resin (the primary raw
material used in the production of non-prescription optical
lenses), (ii) polyurethane pre-polymer (the primary raw
material for production of foam hearing protection products) and
(iii) certain sensors (the primary component of gas
detection equipment) through single sources of supply. The loss
of any single source for supply of raw materials, any disruption
in such sources business or its failure to meet our needs
on a timely basis could cause shortages in raw materials and
could have a material adverse effect on our business, financial
condition or results of operations. Although we have plans in
place to deal with such contingencies, there can be no assurance
that such precautions will be adequate or that alternative
sources of supply can be located or developed in a timely manner.

Principal Customers

We had no individual customers that accounted for 10% or more of
consolidated net sales in 1997, 1998 or 1999. However, the loss
of any of our principal customers could have a material adverse
effect on our operations and financial condition.

Competition

The personal protective equipment industry is highly fragmented,
with industry participants ranging in size from small companies
focusing on single types of personal protective equipment, to
several large multinational corporations which manufacture and
supply many types of personal protective equipment. We believe
that participants in the personal protective equipment industry
compete primarily on the basis of product characteristics (such
as design, style, fashion and functional performance), brand name
 recognition, service and price.

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The Uvex astrospec® family of eyewear products has enjoyed
significant success resulting in many competitive copies produced
 overseas, imported to the United States and sold at lower prices
 than comparable uvex® brand products. Although we
have taken steps to introduce new, lower-priced products to
compete in that market segment, copies of our astrospec products
may continue to enjoy success in the marketplace against the
astrospec family of eyewear products. We have taken steps to
institute action against infringers of our patent rights.

To maintain our market position, we must be competitive in the
area of brand image, distribution, design, style, customer
service, quality and price. Individual competitors have
advantages and strengths in different sectors of the industry, in
 different products and in different areas, including
manufacturing and distribution systems, geographic market
presence, customer service and support, breadth of applications,
delivery time and price. There can be no assurance that we will
be able to compete successfully against current and future
competitors or that the competitive pressures we face will not
adversely affect our financial condition or operations.

Intellectual Property

Our policy is to protect our intellectual property through a
range of measures, including trademarks, patents and
confidentiality agreements. We protect these rights through the
filing of applications for and registrations of trademarks and
patents whenever such filings would provide greater protection
than maintaining such information as trade secrets.

We have the right to use the trademark uvex® in
connection with protective eyewear and other safety products in
all countries in North, Central and South America. Uvex Sports
GmbH & Co. KG and Uvex Arbeitsschutz GmbH (together with
their affiliates, Uvex Germany) have the right to use
 the uvex® name in connection with sports products
throughout the world and personal protective equipment products
in countries outside of North, Central and South America.
Pursuant to our agreement with Uvex Germany, we may sell personal
 protective equipment under the uvex® brand name only
 in North, Central and South America. The agreement also
prohibits us from selling sports products, such as sunglasses or
protective eyewear for sport activities, under the uvex® brand name regardless of geographic area.

We also own a number of other patents and trademarks as a result
of the acquisitions of Uvex, Titmus, Survivair, Lase-R Shield,
Biosystems, Howard Leight and Perfect Fit. The Survivair®
name is registered in the United States, Canada and Mexico and
thirteen other countries in Europe and South America. The
Biosystems PosiChek product has received patent protection
in the United States. The Leight name and numerous
other product names associated with Howard Leight are registered
in the United States. Our Titmus subsidiary owns numerous
trademarks under the Titmus® name for many of its products
in the United States and throughout the world. Perfect Fit is
licensed by DuPont to use the Kevlar® name on, and to
utilize yarn made from Kevlar® fiber in, its products.

We also rely upon unpatented trade secrets for the protection of
certain intellectual property rights. We protect our trade
secrets by requiring certain of our employees, consultants and
other suppliers, customers, agents and advisors to execute
confidentiality agreements upon the commencement of employment or
 other relationships with us. These agreements provide that all
confidential information developed by or made known to the
individual or entity during the course of their relationship with
 us is to be kept confidential and not disclosed to third parties
 except in certain specified circumstances. There can be no
assurance, however, that these agreements will provide meaningful
 protection for our proprietary information or adequate remedies
in the event of the unauthorized use or disclosure of such
information. In addition, we can offer no assurance that others
will not independently develop substantially equivalent
proprietary information and technologies, otherwise gain access
to our trade secrets or disclose such technology or that we can
meaningfully protect our rights to unpatented trade secrets.
Further, we can offer no assurance that infringement or
invalidity claims will not be asserted against us in the future.
The costs of defending such claims, or an unfavorable
determination with respect to litigation based on such claims,
could have a material adverse effect on our business and
financial condition.

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Environmental Matters

We are subject to federal, state and local environmental laws,
regulations and ordinances that (i) govern activities or
operations that may have adverse environmental effects (such as
emissions to air, discharges to water, and the generation,
handling, storage and disposal of solid and hazardous wastes) or
(ii) impose liability for the costs of cleanup or other
remediation of contaminated property, including damages from
spills, disposals or other releases of hazardous substances or
wastes, in certain circumstances without regard to fault. Our
manufacturing operations routinely involve the handling of
chemicals and wastes, some of which are or may become regulated
as hazardous substances. We have not incurred, and do not expect
to incur, any significant expenditures or liabilities for
environmental matters. As a result, we believe that our
obligations to comply with environmental regulations will not
have a material adverse effect on our business or financial
condition.

Employees

At December 31, 1999, we employed 2,111 people on a
full-time basis. Approximately 170 employees comprise a
bargaining unit represented by the United Steelworkers of America
 (AFL-CIO-CLC) at our Titmus facility under a contract which
expires on September 13, 2000. We consider the relationship
with our employees to be good and we have not experienced any
work stoppages.

Government Regulation and Industrial Standards

Government regulation mandating the use of personal protective
equipment for certain job classifications and work site
environments is the most significant factor in the creation and
continuation of demand for personal protective equipment in the
United States. The Occupational Safety and Health Administration
(OSHA) generally regulates the workplace environments
 in the United States in which personal protective equipment must
 be worn and specifies the standards which such equipment must
meet. Other United States governmental agencies further regulate
the use of personal protective equipment and issue standards
concerning the design and functionality of such equipment. We
believe we are in compliance in all material respects with the
regulations and standards of these agencies.

Certain regulatory agencies in the United States and Canada each
mandate that our products meet performance standards established
by private groups, such as the American National Standards
Institute (ANSI) and the Canadian Standards
Association (CSA), respectively. Our eyewear products
 are subject to the latest series of applicable standards, which
currently include ANSI Standard Z87.1-1989 and CSA Z94.3-1992.
These standards require that protective eyewear be tested for
optical performance, penetration, high velocity impact, high mass
 impact and other integral product performance features. We
maintain and operate on-site testing labs at our Smithfield,
Rhode Island and Petersburg, Virginia facilities that are
equipped to perform necessary tests. Our hearing protection
products are subject to ANSI Industrial Standard S3.19-1974,
which incorporates by reference S12.6-1997. Our Howard Leight
facility in San Diego, California includes a certified
audiometric testing lab which exceeds standards and procedures
outlined by regulatory requirements and the Audiology Society of
America. We test Perfect Fit brand gloves at certified
independent labs in order to meet standardization class ratings
for tear, puncture, heat and cut resistance by the European
Community.

OSHA specifies that respiratory protective equipment must meet
application-specific performance standards which are set by the
National Institute for Occupational Safety and Health. In
addition, many respiratory products require approval by the
National Fire Protection Association. In order to achieve
regulatory approval, we maintain and operate an on-site lab at
our Santa Ana, California facility that is equipped to conduct
most necessary tests.

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##### Table of Contents



Executive Officers of Bacou

The names, positions, ages and business experiences during the
past five years of the executive officers of Bacou and its
principal subsidiaries or divisions, as of March 20, 2000,
are set forth below:

|                   |  |                                                                                                                                                                                                                                                                                                                                 |  |     |    | 
|------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --- | -- | 
|Name               |  | Position with the Company                                                                                                                                                                                                                                                                                                       |  | Age
|                   |  |                                                                                                                                                                                                                                                                                                                                 |  |    
|Walter Stepan      |  | Co-Chairman, President and Chief Executive Officer
	(CEO) through December 31, 1999; Co-Chairman
	since January 1, 2000; Chairman of Bacou USA Safety, Inc.
	(Bacou Safety), Perfect Fit Glove Co., LLC
	(Perfect Fit) and Titmus                                                                                         |  |     | 61 | 
|                  
|                  
|                  
|                  
|Philip B. Barr     |  | Executive Vice President and Chief Operating Officer
	(COO) through December 31, 1999; President and
	CEO since January 1, 2000; Vice Chairman of Bacou Safety,
	Vice Chairman and CEO of Perfect Fit and Titmus, Chairman and CEO
	 of SCHAS Industries, LLC (SCHAS), Chairman of Uvex
	Safety Manufacturing, Inc. (USM) |  |     | 47 | 
|                  
|                  
|                  
|                  
|Luis Alvarez       |  | Vice President and General Manager of Howard Leight Industries
	division of Bacou Safety                                                                                                                                                                                                                                        |  |     | 39 | 
|                  
|                  
|                  
|                  
|Harvey I. Aronoff  |  | Vice President-Manufacturing of Bacou Safety                                                                                                                                                                                                                                                                                    |  |     | 57 | 
|                  
|                  
|                  
|                  
|John J. Bell       |  | President of Survivair division of Bacou Safety                                                                                                                                                                                                                                                                                 |  |     | 54 | 
|                  
|                  
|                  
|                  
|Alan H. Bennett    |  | Chief Operating Officer; President and CEO of Bacou Safety and
	USM; COO of Perfect Fit, SCHAS and Titmus                                                                                                                                                                                                                       |  |     | 57 | 
|                  
|                  
|                  
|                  
|Jeffrey T. Brown   |  | Vice President-Financial Reporting, Chief Accounting Officer,
	Treasurer and Assistant Secretary                                                                                                                                                                                                                                |  |     | 40 | 
|                  
|                  
|                  
|                  
|John F. Burt, Jr   |  | President of Biosystems division of Bacou Safety                                                                                                                                                                                                                                                                                |  |     | 57 | 
|                  
|                  
|                  
|                  
|Thomas J. Goeltz   |  | President of Titmus                                                                                                                                                                                                                                                                                                             |  |     | 56 | 
|                  
|                  
|                  
|                  
|Adrien W. Hebert   |  | Vice President-Finance and Chief Financial Officer                                                                                                                                                                                                                                                                              |  |     | 49 | 
|                  
|                  
|                  
|                  
|Joseph P. Hoerner  |  | President of Perfect Fit, Executive Vice President of SCHAS                                                                                                                                                                                                                                                                     |  |     | 45 | 
|                  
|                  
|                  
|                  
|Barry J. Kadets    |  | Vice President-Information Systems and Chief Information Officer                                                                                                                                                                                                                                                                |  |     | 57 | 
|                  
|                  
|                  
|                  
|Winfield W. Major  |  | General Counsel, Secretary and Assistant Treasurer                                                                                                                                                                                                                                                                              |  |     | 52 | 
|                  
|                  
|                  
|                  
|Harry D. Neff, II  |  | Senior Vice President-Sales of Bacou Safety (with responsibility
	for Uvex Safety and Howard Leight Industries sales force)                                                                                                                                                                                                     |  |     | 53 | 
|                  
|                  
|                  
|                  
|Frank A. Stucke    |  | President of SCHAS, Executive Vice President of Perfect Fit                                                                                                                                                                                                                                                                     |  |     | 44 | 
|                  
|                  
|                  
|                  
|Steven P. Tolisano |  | Vice President-Corporate Compliance                                                                                                                                                                                                                                                                                             |  |     | 50 | 

Officers are elected annually by the Board of Directors of the
respective entity and serve at the discretion of each such Board.

Mr. Stepan has been Co-Chairman since May 1999. He
served as Vice Chairman from July 1995 to May 1999 and
as President and CEO from July 1995 to December 1999.
Mr. Stepan served as President and CEO of Uvex Safety, Inc.
and its predecessors from 1988 until December 1997 when Uvex
 Safety was merged into Bacou Safety, of which Mr. Stepan
became Chairman, President and CEO from January 1998 until
December 1999 and remains as Chairman. He was Chairman of
Uvex Safety Manufacturing, Inc. (USM) from
January 1998 through December 1999. Mr. Stepan has been
 Chairman of Titmus since September 1995, Chairman of
Perfect Fit since April 1999 and was Chairman of SCHAS from
April 1999 until December 1999. Mr. Stepan is also
 a Director of Bacou S.A., Bacou Far East Ltd., Uvex Winter
Optical, Inc. and Uvex Sports, Inc. Uvex Winter Optical, Inc. and
 Uvex Sports, Inc. are affiliates of Uvex Germany. He is a

8



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##### Table of Contents





Mr. Barr has been President and CEO of Bacou since
January 2000. He served as Executive Vice President from
October 1996 until December 1999 and as COO from
February 1999 through December 1999. He was Vice
President of Bacou from August 1995 until October 1996
and served as Chief Financial Officer and Secretary of Bacou from
 August 1995 until May 1999, and as Treasurer of Bacou
from August 1995 until June 1998. He has served as Vice
 Chairman of Bacou Safety since December 1997. He has been
Vice Chairman of Titmus since 1995 and is currently Vice Chairman
 and CEO. He served as Vice Chairman of USM from
December 1997 until December 1999 and is currently
Chairman. He served as Vice Chairman of Perfect Fit since
April 1999 and was Vice Chairman of SCHAS from
April 1999 through December 1999. He currently serves
as CEO of Perfect Fit and Chairman and CEO of SCHAS. From 1985 to
 1995, Mr. Barr was a Partner of Edwards & Angell,
LLP, our primary outside counsel.

Mr. Alvarez has served as Vice President and General Manager
 of the Howard Leight Industries division since January 24,
2000. Prior to that time, he served as Director of Operations/
Manufacturing for McGladrey & Pullen, LLP, a
manufacturing consultant group, from April 1997 to
January 2000 and as General Manager of Day Runner Inc., a
manufacturing company from October 1994 to March 1997.

Mr. Aronoff has served as Vice President -
Manufacturing of Bacou Safety since January 1, 2000. Prior
to that time, he was President and CEO of HIA &
Associates, Inc., a management consulting and industrial
engineering firm, from 1983 to December 1999, in which
capacity he performed manufacturing consulting work for Bacou.

Mr. Bell has been President of the Survivair division of
Bacou and its predecessors since 1992. He has served as Executive
 Vice President of Bacou Safety from May, 1998.

Mr. Bennett has been COO of Bacou since January 2000.
He was Executive Vice President of Bacou Safety from
February 1999 to December 1999 and has served as
President and CEO since January 2000. Prior to his
employment with Bacou, he was a business consultant from 1995 to
1998 and served as President of Safety Supply America division of
 Figgie International from 1989 to 1994.

Mr. Brown has been Vice President - Financial Reporting
 and Assistant Secretary since May 1999. He served as
Director of Corporate Reporting and Treasurer from May 1998
until May 1999 and has been Treasurer since May 1998.
He served as Corporate Controller from August 1995 until
May 1998 and has been Chief Accounting Officer of Bacou
since August 1995. Prior to joining Bacou, Mr. Brown
was a Senior Manager of KPMG LLP, our independent accountants,
where he was employed from June 1982 to August 1995.

Mr. Burt founded Biosystems in 1981 and served as President
of that company and its successor, the Biosystems division of
Bacou Safety, since that date. He has served as Executive Vice
President of Bacou Safety from May 1998.

Mr. Goeltz has served as President of Titmus since April,
1999. He served as Senior Vice President-Sales of Titmus from
January 1997 until April 1999 and as Vice
President - Sales & Marketing from
January 1993 until January 1997.

Mr. Hebert has served as Vice President - Finance and
Chief Financial Officer since May 1999. He served as Vice
President - Finance and Corporate Controller from
May 1998 until May 1999. He was Manager of Corporate
Development of Bacou from April 1997 to May 1998 and
was a Financial Consultant to Bacou from November 1996 until
 April 1997. Prior to joining Bacou, Mr. Hebert was
Vice President and Chief Financial Officer of Encon Systems, Inc.
 from June 1991 until February 1996.

Mr. Hoerner has served as President of Perfect Fit and its
predecessors since November 1983 and as Executive Vice
President of SCHAS and its predecessors since October 1997.

9



---



##### Table of Contents



Mr. Kadets has served as Vice President - Information
Systems since March 2000 and as Chief Information Officer
since May 1997. Prior to joining Bacou, he served as Chief
Information Officer of Encore Computer, Inc. from
January 1990 through February 1997.

Mr. Major has served as General Counsel since June 1998
 and as Secretary and Assistant Treasurer since May 1999.
From 1994 to 1998 he was Counsel to the law firm of
Edwards & Angell, LLP, our primary outside counsel.

Mr. Neff has been Senior Vice President-Sales for Bacou
Safety since January 1998. He served as Senior Vice
President - Sales of Uvex Safety since 1997, and Vice
President - Sales from 1992 until 1997.

Mr. Stucke has served as President of SCHAS and its
predecessors since October, 1997 and as Executive Vice President
of Perfect Fit and its predecessors since November, 1983.

Mr. Tolisano has served as Vice President - Corporate
Compliance since May 1999. He served as Vice President of Uvex
Safety, Inc. from October 1994 to December 1997 when
Uvex Safety was merged into Bacou Safety. He served as VP Finance
 of the Uvex Safety division of Bacou Safety from
January 1998 until April 1999.




Item 2.  Description of Properties

The following table sets forth the location of the facilities
that Bacou owns or leases, the square footage and the principal
function of each such facility. All facilities are used for the
safety segment other than the Petersburg, Virginia facility,
which is used for the optical frames and instruments segment and
the Cheektowaga, New York and Wilkesboro, North Carolina
facilities, which are used for the glove segment.

|                           |  |                |         |          |  |                                                         |        |                                                                                                                       |  |                                                                                                                                
|-------------------------- |  | -------------- | ------- | -------- |  | ------------------------------------------------------- | ------ | --------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------
|                           |  | Approximate    |         | Owned or |  |                                                        
|Location                   |  | Square Footage |         | Leased   |  | Function                                               
|                           |  |                |         |          |  |                                                        
|Smithfield, Rhode Island   |  |                | 127,000 |          |  | Owned (subject to encumbrance by bond financing agency) |        | Corporate headquarters; manufacturing, assembly, warehouse and
	distribution facility for protective eyewear products
|                          
|                          
|                          
|                          
|San Diego, California      |  |                | 100,000 |          |  |                                                         | Owned  |                                                                                                                       |  | Manufacturing, assembly, warehouse and distribution for hearing
	protection products                                           
|                          
|                          
|                          
|                          
|Tijuana, Mexico            |  |                | 50,000  |          |  |                                                         | Leased |                                                                                                                       |  | Multiple facilities for manufacturing and assembly of hearing
	protection products                                             
|                          
|                          
|                          
|                          
|Petersburg, Virginia       |  |                | 130,000 |          |  |                                                         | Owned  |                                                                                                                       |  | Manufacturing, assembly, warehouse and distribution facility for
	eyeglass frames and components and vision screening equipment
|                          
|                          
|                          
|                          
|Cheektowaga, New York      |  |                | 100,000 |          |  |                                                         | Owned  |                                                                                                                       |  | Manufacturing, assembly, warehouse and distribution facility for
	gloves                                                       
|                          
|                          
|                          
|                          
|Cheektowaga, New York      |  |                | 25,000  |          |  |                                                         | Leased |                                                                                                                       |  | Two warehouse facilities for gloves                                                                                            
|                          
|                          
|                          
|                          
|Wilkesboro, North Carolina |  |                | 115,000 |          |  |                                                         | Leased |                                                                                                                       |  | Multiple facilities for manufacturing, warehouse and distribution
	 for gloves                                                 
|                          
|                          
|                          
|                          
|Santa Ana, California      |  |                | 93,000  |          |  |                                                         | Leased |                                                                                                                       |  | Manufacturing, assembly, warehouse and distribution for
	respiratory protection products                                       
|                          
|                          
|                          
|                          
|Middletown, Connecticut    |  |                | 45,000  |          |  |                                                         | Leased |                                                                                                                       |  | Assembly, warehouse and distribution facility for gas monitors                                                                 

10



---



##### Table of Contents



|                           |  |                |        |          |  |          |        |  |  |                                                                            
|-------------------------- |  | -------------- | ------ | -------- |  | -------- | ------ |  |  | ---------------------------------------------------------------------------
|                           |  | Approximate    |        | Owned or |  |         
|Location                   |  | Square Footage |        | Leased   |  | Function
|                           |  |                |        |          |  |         
|Smithfield, Rhode Island   |  |                | 32,000 |          |  |          | Leased |  |  | Warehouse for protective eyewear products                                  
|                          
|                          
|                          
|                          
|Bollington, Cheshire, U.K. |  |                | 1,400  |          |  |          | Leased |  |  | Sales office for hearing protection products in Europe                     
|                          
|                          
|                          
|                          
|Florence, Kentucky         |  |                | 20,000 |          |  |          | Leased |  |  | Warehouse and distribution facility for hearing protection
	products       
|                          
|                          
|                          
|                          
|Albuquerque, New Mexico    |  |                | 900    |          |  |          | Leased |  |  | Regional sales office for laser protection equipment                       
|                          
|                          
|                          
|                          
|Shafer, Minnesota          |  |                | 700    |          |  |          | Leased |  |  | Regional sales office and administrative operations for
	protective eyewear




Item 3.  Legal Proceedings

We are not aware of any material pending legal proceedings to
which we or any of our affiliates is a party or was a party
during the fiscal year ended December 31, 1999.

On February 22, 2000 we instituted a civil action in the
Rhode Island Superior Court seeking a Declaratory Judgment
interpreting language in a January 12, 1998 letter agreement
 between Bacou USA, Inc. and Director Howard S. Leight
regarding whether Bacou has carried out its obligations under
such agreement.




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

Not applicable.




PART II




Item 5.  Market for the Registrants Common
Stock and Related Stockholder Matters

Our common stock trades on The New York Stock Exchange under the
symbol BAU. The authorized capital stock of Bacou
consists of 50,000,000 shares of Common Stock, $.001 par value
per share, and 5,000,000 shares of Preferred Stock, $.001 par
value per share.

For information regarding the high and low sales prices of our
common stock and dividends for each quarterly period, see
Note 11 to the consolidated financial statements included in
 Item 8 herein. As of March 20, 2000, the closing price
 for our common stock was $15  1/4 per share and there were
approximately 22 holders of record.

11



---



##### Table of Contents






Item 6.  Selected Financial Data

The following table sets forth selected financial data of Bacou
for the periods indicated.

Selected financial data for the year ended July 31, 1995,
the five months ended December 31, 1995, and the years ended
 December 31, 1996, 1997, 1998 and 1999 were derived from
financial statements of Bacou which were audited by KPMG LLP,
independent certified public accountants, whose report with
respect to the years ended December 31, 1997, 1998 and 1999
appears in Item 8. The selected financial data should be
read in conjunction with the Consolidated Financial Statements
and related notes thereto, Managements Discussion and
 Analysis of Financial Condition and Results of Operations
and other financial information included elsewhere herein.

|                                                     |                                               |                                       |        |              |        |              |         |         |        |         |         |         |        |   |         |        |        |   |         |        |        |   |         |        |        | 
|---------------------------------------------------- | --------------------------------------------- | ------------------------------------- | ------ | ------------ | ------ | ------------ | ------- | ------- | ------ | ------- | ------- | ------- | ------ | - | ------- | ------ | ------ | - | ------- | ------ | ------ | - | ------- | ------ | ------ | 
|                                                     |                                               |                                       |        |              |        |             
|                                                     |                                               |                                       |        | Five Months  |        | Year Ended  
|                                                     |                                               | Year Ended                            |        | Ended        |        | December 31,
|                                                     |                                               | July 31,                              |        | December 31, |        |             
|                                                     |                                               | 1995(1)                               |        | 1995(2)      |        | 1996         |         | 1997(3) |        | 1998(4) |         | 1999(5)
|                                                     |                                               |                                       |        |              |        |              |         |         |        |         |         |        
|                                                     |                                               |                                      
|                                                     |                                               | (in thousands, except per share data)
|                                                    
|                                                    
|                                                    
|                                                    
|Statement of Income Data:                            |                                               |                                       |        |              |        |              |         |         |        |         |         |         |        |   |         |        |        |   |         |        |        |   |         |       
|                                                    
|                                                    
|                                                    
|                                                    
|Net sales                                            |                                               | $                                     | 71,988 |              |        | $            | 36,827  |         |        | $       | 109,268 |         |        | $ | 130,869 |        |        | $ | 219,581 |        |        | $ | 272,797 |       
|                                                    
|                                                    
|                                                    
|                                                    
|Cost of sales                                        |                                               |                                       | 31,016 |              |        |              | 18,525  |         |        |         | 47,355  |         |        |   | 64,467  |        |        |   | 105,856 |        |        |   | 145,038 |       
|                                                     |                                               |                                       |        |              |        |              |         |         |        |         |         |         |        |   |         |        |        |   |         |        |        |   |         |       
|Gross profit                                         |                                               |                                       | 40,972 |              |        |              | 18,302  |         |        |         | 61,913  |         |        |   | 66,402  |        |        |   | 113,725 |        |        |   | 127,759 |       
|                                                    
|                                                    
|                                                    
|                                                    
|Operating expenses:                                  |                                               |                                       |        |              |        |              |         |         |        |         |         |         |        |   |         |        |        |   |         |        |        |   |         |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Selling                                       |                                       |        | 9,781        |        |              |         | 5,891   |        |         |         | 17,074  |        |   |         | 21,658 |        |   |         | 35,660 |        |   |         | 39,502 |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | General and administrative                    |                                       |        | 4,080        |        |              |         | 2,609   |        |         |         | 9,176   |        |   |         | 11,184 |        |   |         | 22,895 |        |   |         | 22,597 |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Research and development                      |                                       |        |             |        |              |         |        |        |         |         |        |        |   |         | 1,110  |        |   |         | 4,000  |        |   |         | 5,274  |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Purchased in-process research and development |                                       |        |             |        |              |         |        |        |         |         |        |        |   |         | 3,721  |        |   |         | 4,680  |        |   |         |       |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Amortization of intangibles assets            |                                       |        | 2,506        |        |              |         | 1,515   |        |         |         | 4,039   |        |   |         | 4,095  |        |   |         | 7,748  |        |   |         | 9,440  |       
|                                                     |                                               |                                       |        |              |        |              |         |         |        |         |         |         |        |   |         |        |        |   |         |        |        |   |         |       
|                                                     |                                               | Total operating expenses              |        |              | 16,367 |              |         |         | 10,015 |         |         |         | 30,289 |   |         |        | 41,768 |   |         |        | 74,983 |   |         |        | 76,813 | 
|                                                     |                                               |                                       |        |              |        |              |         |         |        |         |         |         |        |   |         |        |        |   |         |        |        |   |         |       
|Operating income                                     |                                               |                                       | 24,605 |              |        |              | 8,287   |         |        |         | 31,624  |         |        |   | 24,634  |        |        |   | 38,742  |        |        |   | 50,946  |       
|                                                    
|                                                    
|                                                    
|                                                    
|Other expense (income), net                          |                                               |                                       | 1,287  |              |        |              | 1,054   |         |        |         | 45      |         |        |   | (376    | )      |        |   | 6,054   |        |        |   | 8,591   |       
|                                                     |                                               |                                       |        |              |        |              |         |         |        |         |         |         |        |   |         |        |        |   |         |        |        |   |         |       
|Income before income taxes and minority interest     |                                               |                                       | 23,318 |              |        |              | 7,233   |         |        |         | 31,579  |         |        |   | 25,010  |        |        |   | 32,688  |        |        |   | 42,355  |       
|                                                    
|                                                    
|                                                    
|                                                    
|Minority interest share of income                    |                                               |                                       | 1,920  |              |        |              |        |         |        |         |        |         |        |   |        |        |        |   |        |        |        |   |        |       
|                                                    
|                                                    
|                                                    
|                                                    
|Income taxes                                         |                                               |                                       | 8,343  |              |        |              | 2,917   |         |        |         | 12,202  |         |        |   | 10,588  |        |        |   | 11,678  |        |        |   | 15,165  |       
|                                                     |                                               |                                       |        |              |        |              |         |         |        |         |         |         |        |   |         |        |        |   |         |        |        |   |         |       
|Net income(6)                                        |                                               | $                                     | 13,055 |              |        | $            | 4,316   |         |        | $       | 19,377  |         |        | $ | 14,422  |        |        | $ | 21,010  |        |        | $ | 27,190  |       
|                                                     |                                               |                                       |        |              |        |              |         |         |        |         |         |         |        |   |         |        |        |   |         |        |        |   |         |       
|Earnings per share:                                  |                                               |                                       |        |              |        |              |         |         |        |         |         |         |        |   |         |        |        |   |         |        |        |   |         |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Basic and diluted(6)(7)                       |                                       | $      | 0.94         |        |              | $       | 0.31    |        |         | $       | 1.18    |        |   | $       | 0.83   |        |   | $       | 1.19   |        |   | $       | 1.54   |       
|                                                    
|                                                    
|                                                    
|                                                    
|Weighted average shares outstanding:                 |                                               |                                       |        |              |        |              |         |         |        |         |         |         |        |   |         |        |        |   |         |        |        |   |         |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Basic                                         |                                       |        | 13,860       |        |              |         | 13,860  |        |         |         | 16,406  |        |   |         | 17,383 |        |   |         | 17,601 |        |   |         | 17,624 |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Diluted                                       |                                       |        | 13,860       |        |              |         | 13,860  |        |         |         | 16,436  |        |   |         | 17,411 |        |   |         | 17,723 |        |   |         | 17,696 |       
|                                                    
|                                                    
|                                                    
|                                                    
|Balance Sheet Data (end of period):                  |                                               |                                       |        |              |        |              |         |         |        |         |         |         |        |   |         |        |        |   |         |        |        |   |         |       
|                                                    
|                                                    
|                                                    
|                                                    
|Working capital                                      |                                               | $                                     | 11,838 |              |        | $            | 4,406   |         |        | $       | 40,820  |         |        | $ | 34,509  |        |        | $ | 30,910  |        |        | $ | 44,010  |       
|                                                    
|                                                    
|                                                    
|                                                    
|Total assets                                         |                                               |                                       | 76,526 |              |        |              | 104,469 |         |        |         | 125,109 |         |        |   | 152,351 |        |        |   | 293,770 |        |        |   | 371,425 |       
|                                                    
|                                                    
|                                                    
|                                                    
|Total long-term debt, excluding current installments |                                               |                                       | 27,800 |              |        |              | 49,000  |         |        |         |        |         |        |   |        |        |        |   | 92,050  |        |        |   | 120,256 |       
|                                                    
|                                                    
|                                                    
|                                                    
|Common stock subject to a put option                 |                                               |                                       |       |              |        |              |        |         |        |         |        |         |        |   | 9,450   |        |        |   | 9,450   |        |        |   |        |       
|                                                    
|                                                    
|                                                    
|                                                    
|Stockholders equity                                 |                                               |                                       | 41,382 |              |        |              | 45,698  |         |        |         | 112,407 |         |        |   | 122,902 |        |        |   | 144,462 |        |        |   | 181,455 |       




|    |                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes the operating results of Pro-Tech from April 1,
	1995. Amounts also reflect the acquisition of a one-third
	minority interest in the business of Uvex Safety effective
	October 31, 1994.
|   
|(2) | Includes the operating results of Titmus from October 1,
	1995.                                                                                                                                   

12



---



##### Table of Contents





|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Includes operating results of Survivair from May 30, 1997
	and of Biosystems from September 30, 1997.                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(4) | Includes the operating results of Howard Leight from
	February 27, 1998.                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(5) | Includes the operating results of Perfect Fit Glove and
	affiliates from April  1, 1999.                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(6) | Excluding acquisition-related items and a severance charge
	recorded in 1998 in connection with the 1998 termination of the
	President and Chief Operating Officer of Bacou Safety, and
	including the operating results of the acquired companies as
	described above, Bacous net income, and both basic and
	diluted earnings per share, would have been as follows for each
	of the periods presented (see Managements Discussion
	and Analysis of Financial Condition and Results of
	Operations):

|                    |         |                                       |        |              |  |              |       |      |  |      |        |      |  |   |        |      |  |   |        |      |  |   |        |      | 
|------------------- | ------- | ------------------------------------- | ------ | ------------ |  | ------------ | ----- | ---- |  | ---- | ------ | ---- |  | - | ------ | ---- |  | - | ------ | ---- |  | - | ------ | ---- | 
|                    |         |                                       |        |              |  |             
|                    |         |                                       |        | Five Months  |  | Year Ended  
|                    |         | Year Ended                            |        | Ended        |  | December 31,
|                    |         | July 31,                              |        | December 31, |  |             
|                    |         | 1995                                  |        | 1995         |  | 1996         |       | 1997 |  | 1998 |        | 1999
|                    |         |                                       |        |              |  |              |       |      |  |      |        |     
|                    |         |                                      
|                    |         | (in thousands, except per share data)
|                   
|                   
|                   
|                   
|Net income          |         | $                                     | 14,096 |              |  | $            | 5,811 |      |  | $    | 19,377 |      |  | $ | 19,498 |      |  | $ | 25,793 |      |  | $ | 27,544 |     
|                   
|                   
|                   
|                   
|Earnings per share: |         |                                       |        |              |  |              |       |      |  |      |        |      |  |   |        |      |  |   |        |      |  |   |        |     
|                   
|                   
|                   
|                   
|                    | Basic   |                                       | $      | 1.02         |  |              | $     | 0.42 |  |      | $      | 1.18 |  |   | $      | 1.12 |  |   | $      | 1.46 |  |   | $      | 1.56 | 
|                   
|                   
|                   
|                   
|                    | Diluted |                                       |        | 1.02         |  |              |       | 0.42 |  |      |        | 1.18 |  |   |        | 1.12 |  |   |        | 1.46 |  |   |        | 1.56 | 



|    |                                                                                         
|--- | ----------------------------------------------------------------------------------------
|(7) | Bacou neither declared nor paid any cash dividends during any of
	the periods presented.






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

The following discussion of our financial condition and
results of operations should be read in conjunction with our
consolidated financial statements and notes thereto, as well as
our selected financial data, all appearing elsewhere herein.
Statements contained in this discussion or elsewhere in this
filing that are not historical facts are forward-looking
statements that are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. In
addition, words such as believes,
anticipates, expects and similar
expressions are intended to identify forward-looking statements.
We caution you that a number of important factors could cause our
 actual results to differ materially from those expressed in any
forward-looking statements made by us, or on our behalf.
Forward-looking statements involve a number of risks and
uncertainties including, but not limited to, the following:



| |   |                                                                                              
| | - | ---------------------------------------------------------------------------------------------
| |  | continued demand for our current product lines;                                              
|
| |  | the success of our new product introductions;                                                
|
| |  | the success of our acquisition strategy;                                                     
|
| |  | continued availability and favorable pricing of raw materials;                               
|
| |  | our ability and the ability of our key vendors to successfully
	 respond to year 2000 issues;
|
| |  | competitive pressures;                                                                       
|
| |  | general economic conditions, including fluctuations in
	interest rates; and                  
|
| |  | regulatory matters.                                                                          

We cannot assure you that we will be able to anticipate or
respond timely to changes in any of the factors listed above,
which could adversely affect our operating results in one or more
 fiscal periods. Our operating results in any past period should
not be considered indicative of the results to be expected for
future periods. Fluctuations in operating results may also result
 in fluctuations in the price of our common stock.

13



---



##### Table of Contents



Background

Effect of Acquisitions

We are pursuing a business strategy that includes acquisitions as
 an important element. As described more fully below, we
completed seven acquisitions during the past four years, which
significantly increased our product offerings and size. Annual
net sales volume has increased from $72.0 million for the fiscal
year ended July 31, 1995 to $272.8 million for the year
ended December 31, 1999, primarily as a result of
acquisitions. Assuming we owned all acquired businesses on
January 1, 1999, our net sales for the year ended
December 31, 1999, would have been $286.7 million.

Our gross margin and operating margin for the fiscal year ended
July 31, 1995, were 56.9% and 34.2%, respectively.
Historical margins attributable to the operations of businesses
acquired by us have generally been lower than margins at our
platform Uvex Safety business. Inclusion of acquired businesses
with our existing Uvex Safety business has therefore resulted in
a decline in our margins from the fiscal year ended July 31,
 1995.

On April 1, 1999, we purchased substantially all of the
assets and assumed substantially all of the liabilities of
Perfect Fit, a manufacturer and distributor of protective gloves
and other related products for cash consideration of $37.1
million. We agreed to pay additional cash consideration of up to
$6.0 million, to the extent actual consolidated cash flow of the
acquired business for 1999 exceeded certain specified targets,
and in March 2000 paid an additional $5.1 million representing
the total payment due.

Effective February 27, 1998, we purchased substantially all
of the assets and assumed substantially all of the liabilities of
 Howard Leight, a manufacturer of hearing protection products
(including disposable, reusable and banded ear plugs, and ear
muffs) for cash consideration of $125.9 million, $5.9 million of
which represented the refinancing of Howard Leight indebtedness.

We acquired all of the outstanding capital stock of Comasec
Holdings, Inc. on May 30, 1997 for cash consideration of
$27.4 million. The assets of Comasec consisted primarily of its
wholly-owned subsidiary, Survivair, a manufacturer of respiratory
 protection products. On September 30, 1997, we also
acquired all of the capital stock of Biosystems, Inc., a
manufacturer of gas monitors and equipment for testing
self-contained breathing apparatus, in exchange for 826,514
shares of our common stock having a fair market value equal to
$13.5 million. Finally, we acquired Lase-R Shield for $1.0
million in June of 1997.

We acquired all of the outstanding capital stock of Titmus
(effective September 29, 1995) for approximately $27.3
million and substantially all of the assets of Pro-Tech
(effective March 31, 1995) for approximately $6.8 million.

Operating results for each of the above acquisitions have been
included in our consolidated financial statements beginning with
the respective acquisition dates.

Certain non-recurring costs, principally relating to
acquisitions, have been included in our 1997, 1998 and 1999
operating results. In connection with the acquisitions of Howard
Leight, Survivair and Biosystems, we allocated a portion of the
acquisition price to the fair value of purchased in-process
research and development. These amounts, totaling $3.7 million in
 1997 and $4.7 million in 1998, were charged to operating
expenses in full upon the date of acquisition. In connection with
 our acquisitions, acquired inventories were adjusted to fair
values, and these adjustments were subsequently charged to cost
of sales when the acquired inventories were sold. These amounts
were equal to $2.1 million in 1997, $1.0 million in 1998 and $0.6
 million in 1999. We also paid cash bonuses in the amount of $0.6
 million in 1998 to certain senior executives of Howard Leight in
 connection with that acquisition, which have been included with
general and administrative expenses. The following discussion
provides an analysis of our actual operating results, and also
analyzes our operating results excluding the effect of these
acquisition-related items.

14



---



##### Table of Contents



Results Of Operations

The following table presents selected operating data and such
amounts as percentages of net sales for the periods indicated (in
 thousands, except percentages).

|                            |                                                  |                          |         |                   |        |                   |       |      |      |   |         |        |        |  |       |      |      |   |         |        |        |  |       |      |      | 
|--------------------------- | ------------------------------------------------ | ------------------------ | ------- | ----------------- | ------ | ----------------- | ----- | ---- | ---- | - | ------- | ------ | ------ |  | ----- | ---- | ---- | - | ------- | ------ | ------ |  | ----- | ---- | ---- | 
|                            |                                                  |                          |         |                   |        |                  
|                            |                                                  | Year Ended               |         | Year Ended        |        | Year Ended       
|                            |                                                  | December 31, 1997        |         | December 31, 1998 |        | December 31, 1999
|                            |                                                  |                          |         |                   |        |                  
|                            |                                                  |                          |         |                   |        |                   |       |      |      |  
|                           
|                           
|                           
|                           
|Net sales                   |                                                  | $                        | 130,869 |                   |        |                   | 100.0 | %    |      | $ | 219,581 |        |        |  | 100.0 | %    |      | $ | 272,797 |        |        |  | 100.0 | %   
|                           
|                           
|                           
|                           
|Cost of sales(1)            |                                                  |                          | 64,467  |                   |        |                   | 49.3  |      |      |   | 105,856 |        |        |  | 48.2  |      |      |   | 145,038 |        |        |  | 53.2  |     
|                            |                                                  |                          |         |                   |        |                   |       |      |      |   |         |        |        |  |       |      |      |   |         |        |        |  |       |     
|Gross profit                |                                                  |                          | 66,402  |                   |        |                   | 50.7  |      |      |   | 113,725 |        |        |  | 51.8  |      |      |   | 127,759 |        |        |  | 46.8  |     
|                           
|                           
|                           
|                           
|Operating expenses:         |                                                  |                          |         |                   |        |                   |       |      |      |   |         |        |        |  |       |      |      |   |         |        |        |  |       |     
|                           
|                           
|                           
|                           
|                            | Selling                                          |                          |         | 21,658            |        |                   |       | 16.6 |      |   |         | 35,660 |        |  |       | 16.2 |      |   |         | 39,502 |        |  |       | 14.5 |     
|                           
|                           
|                           
|                           
|                            | General and administrative(2)                    |                          |         | 11,184            |        |                   |       | 8.6  |      |   |         | 22,895 |        |  |       | 10.4 |      |   |         | 22,597 |        |  |       | 8.3  |     
|                           
|                           
|                           
|                           
|                            | Research and development                         |                          |         | 1,110             |        |                   |       | 0.8  |      |   |         | 4,000  |        |  |       | 1.8  |      |   |         | 5,274  |        |  |       | 1.9  |     
|                           
|                           
|                           
|                           
|                            | Purchased in-process research and development(3) |                          |         | 3,721             |        |                   |       | 2.8  |      |   |         | 4,680  |        |  |       | 2.1  |      |   |         |       |        |  |       |     |     
|                           
|                           
|                           
|                           
|                            | Amortization of intangible assets                |                          |         | 4,095             |        |                   |       | 3.1  |      |   |         | 7,748  |        |  |       | 3.6  |      |   |         | 9,440  |        |  |       | 3.4  |     
|                            |                                                  |                          |         |                   |        |                   |       |      |      |   |         |        |        |  |       |      |      |   |         |        |        |  |       |     
|                            |                                                  | Total operating expenses |         |                   | 41,768 |                   |       |      | 31.9 |   |         |        | 74,983 |  |       |      | 34.1 |   |         |        | 76,813 |  |       |      | 28.1 | 
|                            |                                                  |                          |         |                   |        |                   |       |      |      |   |         |        |        |  |       |      |      |   |         |        |        |  |       |     
|Operating income            |                                                  |                          | 24,634  |                   |        |                   | 18.8  |      |      |   | 38,742  |        |        |  | 17.7  |      |      |   | 50,946  |        |        |  | 18.7  |     
|                           
|                           
|                           
|                           
|Other expense (income), net |                                                  |                          | (376    | )                 |        |                   | (0.3  | )    |      |   | 6,054   |        |        |  | 2.8   |      |      |   | 8,591   |        |        |  | 3.2   |     
|                            |                                                  |                          |         |                   |        |                   |       |      |      |   |         |        |        |  |       |      |      |   |         |        |        |  |       |     
|Income before income taxes  |                                                  |                          | 25,010  |                   |        |                   | 19.1  |      |      |   | 32,688  |        |        |  | 14.9  |      |      |   | 42,355  |        |        |  | 15.5  |     
|                           
|                           
|                           
|                           
|Income taxes                |                                                  |                          | 10,588  |                   |        |                   | 8.1   |      |      |   | 11,678  |        |        |  | 5.3   |      |      |   | 15,165  |        |        |  | 5.5   |     
|                            |                                                  |                          |         |                   |        |                   |       |      |      |   |         |        |        |  |       |      |      |   |         |        |        |  |       |     
|Net income                  |                                                  | $                        | 14,422  |                   |        |                   | 11.0  | %    |      | $ | 21,010  |        |        |  | 9.6   | %    |      | $ | 27,190  |        |        |  | 10.0  | %   
|                            |                                                  |                          |         |                   |        |                   |       |      |      |   |         |        |        |  |       |      |      |   |         |        |        |  |       |     




|    |                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes acquisition-related costs totaling $2,053,000 (1.6% of
	net sales) for the year ended December 31, 1997, $1,013,000
	(0.5% of net sales) for the year ended December 31, 1998,
	and $590,000 (0.2% of net sales) for the year ended
	December 31, 1999.
|   
|(2) | Includes non-recurring charges for termination benefits totaling
	$1,425,000 (0.6% of net sales) and acquisition-related bonuses
	totaling $600,000 (0.3% of net sales) for the year ended
	December 31, 1998.                                                  
|   
|(3) | Amounts for all periods represent acquisition-related charges for
	 acquired in-process research and development.                                                                                                                                               

15



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##### Table of Contents



Year Ended December 31, 1999 Compared
to Year Ended December 31, 1998

Net Sales. Our net sales increased 24.2% from $219.6
million for the year ended December 31, 1998 to $272.8
million for the year ended December 31, 1999. Net sales in
1999 included sales totaling $39.8 million for our glove segment,
 consisting entirely of the Perfect Fit business (acquired by us
on April 1, 1999), accounting for an increase of 18.1%. Net
sales for our safety segment increased 6.5% from $189.4 million
in 1998 to $201.7 million in 1999, while net sales for our
optical frames and instruments segment increased 3.5% from $30.2
million in 1998 to $31.3 million in 1999.

Cost of Sales. Our cost of sales increased 37.0% from
$105.9 million for the year ended December 31, 1998 to
$145.0 million for the year ended December 31, 1999,
primarily due to inclusion of operating results of acquired
businesses.

Gross Profit. Our gross profit increased 12.3% from $113.7
 million for the year ended December 31, 1998 to $127.8
million for the year ended December 31, 1999. Our overall
gross margin (excluding non-recurring items in both periods)
declined from 52.3% in 1998 to 47.0% in 1999, principally due to
lower gross margins attributable to our newly acquired glove
segment.

Operating Expenses. Our operating expenses increased 2.4%
from $75.0 million for the year ended December 31, 1998 to
$76.8 million for the year ended December 31, 1999.
Excluding non-recurring items in 1998, operating expenses
increased 12.5% from $68.3 million in the 1998 period to $76.8
million in the 1999 period. This increase resulted principally
from inclusion of operating expenses of acquired businesses.

Excluding amortization expense and non-recurring items, our
operating expenses were 27.6% of net sales in 1998 and 24.7% of
net sales in 1999. Our ratio of operating expenses to net sales
declined principally due to inclusion in 1999 of the operating
results of our Perfect Fit business, which has historically had
lower selling, general and administrative costs as a percentage
of its net sales.

Operating Income. Principally as a result of non-recurring
 items in the 1998 period, our operating income of $50.9 million
for the year ended December 31, 1999, was 31.5% higher than
our operating income of $38.7 million for the year ended
December 31, 1998. Excluding non-recurring items in both
periods, our operating income increased 10.9% from $46.5 million
in the 1998 period to $51.5 million in the 1999 period, while our
 operating margin declined from 21.2% in 1998 to 18.9% in 1999.
Inclusion of the operating results of our newly acquired glove
segment during 1999 was the principal cause for the decline in
our consolidated operating margin from 1998 to 1999.

Other Expense. Other expense increased 41.9% from $6.1
million for the year ended December 31, 1998 to $8.6 million
 for the year ended December 31, 1999. Other expense
consists principally of net interest expense totaling $6.2
million in the 1998 period and $8.3 million in the 1999 period.
The increase in net interest expense from 1998 to 1999 is due to
additional borrowings we made in connection with our recent
acquisitions.

Income Taxes. Our effective income tax rate was 35.7% in
1998 and 35.8% in 1999. The effective rate in both periods was
higher than the federal statutory rate of 35.0% due to state and
local income taxes.

Net Income. Principally as a result of non-recurring items
 in the 1998 period, our net income of $27.2 million for the year
 ended December 31, 1999, was 29.4% higher than our net
income of $21.0 million for the year ended December 31,
1998. Excluding non-recurring items in both periods, our net
income increased 6.8% from $25.8 million in the 1998 period to
$27.5 million in the 1999 period.

Year Ended December 31, 1998 Compared
to Year Ended December 31, 1997

Net Sales.Our net sales increased 67.8% from $130.9
million for the year ended December 31, 1997 to $219.6
million for the year ended December 31, 1998. Net sales in
our safety segment increased 90.5% from $99.4 million in 1997 to
$189.4 million in 1998, principally the result of acquired
businesses and new product introductions, while net sales in our
optical frames and instruments segment declined by 4.0% from
$31.5 million in 1997 to $30.2 million in 1998.

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##### Table of Contents



Of the $90.0 million increase in net sales of safety products,
$75.4 million was the result of acquired businesses. Operating
results of Howard Leight were included for ten months in 1998 and
 results of Survivair and Biosystems were included for the full
year in 1998, compared to the 1997 period, which only included
Survivair for seven months and Biosystems for three months. The
remaining growth in sales of safety products of 14.7% was
principally the result of new product introductions, including
uvex® lines of astrospec 3000 protective eyewear with
 the colors and logos of National Football League teams, Bandit
and Bandido protective eyewear, the Survivair 7000 series air
purifying respirator line, and the Panther self-contained
breathing apparatus.

Cost of Sales.Our cost of sales increased 64.2% from
$64.5 million for the year ended December 31, 1997, to
$105.9 million for the year ended December 31, 1998,
primarily as a result of higher sales volume.

Gross Profit.Our gross profit increased 71.3% from $66.4
million for the year ended December 31, 1997, to $113.7
million for the year ended December 31, 1998. Excluding
acquisition-related items, our gross margin was approximately
52.3% in both 1997 and 1998. Because of relatively higher margins
 attributable to hearing protection products, our acquisition of
the Howard Leight business improved our overall gross margin.
This improvement however, was offset by the effect of our
acquisition of the Biosystems and Survivair businesses, due to
the lower margins attributable to respiratory and gas monitoring
products.

Operating Expenses.Our operating expenses increased 79.5%
 from $41.8 million for the year ended December 31, 1997 to
$75.0 million for the year ended December 31, 1998,
primarily as a result of operating expenses attributable to
acquired businesses. In June 1998, we announced the
termination of employment of the president and chief operating
officer of Bacou Safety. The 1998 period includes a charge equal
to $1.4 million for termination payments due to this former
officer. In addition, the 1998 period includes
acquisition-related charges for acquired in-process research and
development totaling $4.7 million and acquisition-related bonuses
 totaling $0.6 million. The 1997 period also includes
acquisition-related charges for acquired in-process research and
development totaling $3.7 million. Excluding these charges,
operating expenses as a percentage of net sales increased from
29.1% for the year ended December 31, 1997 to 31.1% for the
year ended December 31, 1998. This increase was due
primarily to higher levels of spending for research and
development at acquired businesses and increased amortization
expense. Amortization expense increased 89.2% from $4.1 million
in 1997 to $7.7 million in 1998 as a result of additions to
intangible assets in connection with businesses we acquired.

Operating Income.Our operating income increased 57.3%
from $24.6 million for the year ended December 31, 1997 to
$38.7 million for the year ended December 31, 1998.
Excluding acquisition-related items in both years and excluding
the 1998 termination benefits discussed above, our operating
income increased 52.0% from $30.6 million for the year ended
December 31, 1997 to $46.5 million for the year ended
December 31, 1998 and our operating margin declined from
23.4% for the year ended December 31, 1997 to 21.2% for the
year ended December 31, 1998.

Other Expense (Income), Net.Other expense (income), net
was ($376,000) for the year ended December 31, 1997 and $6.1
 million for the year ended December 31, 1998. The 1998
period includes net interest expense totaling $6.2 million,
whereas the 1997 period includes net interest income totaling
($216,000). The increase in net interest expense from 1997 to
1998 is due principally to debt we incurred in connection with
the acquisition of Howard Leight.

Income Taxes.Our effective income tax rate was 42.3% in
1997 and 35.7% in 1998. Our effective rate in both periods was
higher than the federal statutory rate of 35.0% due to state and
local income taxes. In addition, our effective rate in the 1997
period was higher because a tax benefit could not be recorded for
 charges totaling $3.7 million relating to acquired in-process
research and development.

Net Income.Our net income increased 45.7% from $14.4
million for the year ended December 31, 1997 to $21.0
million for the year ended December 31, 1998. Excluding
acquisition-related items in both years and excluding the 1998
termination benefits discussed above, our net income increased
32.3% from $19.5 million in 1997 to $25.8 million in 1998.

17



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##### Table of Contents



Liquidity and Capital Resources

Our liquidity historically has been derived from cash flow
provided by operations and, periodically, from bank borrowings
utilized to finance the acquisition of businesses and certain
capital expenditures. We utilize EBITDA (earnings before
interest, taxes, depreciation and amortization) as a measure of
our cash flow provided by operations. As used by Bacou, EBITDA
represents operating income plus depreciation and amortization,
adjusted for non-recurring items. EBITDA should not be considered
 in isolation or as a substitute for net earnings or cash
provided by operating activities, each prepared in accordance
with generally accepted accounting principles. Our EBITDA
increased 13.5% from $60.6 million for the year ended
December 31, 1998 to $68.8 million for the year ended
December 31, 1999. This increase was principally due to
inclusion of the operating results of Perfect Fit.

Our working capital increased by $13.1 million from $30.9 million
 at December 31, 1998, to $44.0 million at December 31,
 1999, primarily due to increases in trade receivables. Trade
receivables increased due to higher sales volume, the effect of
eliminating early-pay discounts at our Howard Leight division,
and increased by $6.3 million as a result of the acquisition of
Perfect Fit Glove.

We used cash equal to $59.1 million during the year ended
December 31, 1999, and $135.7 million during the year ended
December 31, 1998, for investing activities. The 1999 period
 included $37.1 million expended for the acquisition of Perfect
Fit and included $18.9 million for capital expenditures. The 1998
 period included $120.0 million expended for the acquisition of
Howard Leight and included $14.4 million for capital
expenditures.

In July of 1999 we purchased our manufacturing facility in Rhode
Island, and adjacent land, for approximately $5.8 million. We are
 constructing a 44,000 square foot addition to this facility with
 a 6,000 square foot mezzanine area for office space, at a cost
equal to approximately $3.0 million, and expect the addition to
be completed by the second quarter of 2000. As discussed more
fully below, we are financing these costs through additional bank
 borrowings.

In March 2000, we paid additional cash consideration equal
to $5.1 million to the former shareholders of Perfect Fit. This
amount was accrued at December 31, 1999, and represents the
final payment due for the purchase of this business. In
connection with our acquisition of Biosystems we granted to
former shareholders of Biosystems put options covering 578,560
shares of Bacou common stock issued in connection with that
acquisition. None of the put options were exercised and thus all
such options expired on September 30, 1999. The initial
purchase price for Biosystems may be increased based upon a
sliding scale if the operating results of this business during
the year ending December 31, 2000, exceed certain defined
thresholds. The amount of additional purchase price, if any, is
not currently estimable.

In February 1998, we entered into a credit agreement with
Banque Nationale de Paris (BNP) pursuant to
which the bank made a term loan (the First BNP Loan)
to Bacou in the principal amount of $110.0 million, in connection
 with our acquisition of Howard Leight. The First BNP Loan
requires quarterly interest payments at an annual rate equal to
three-month LIBOR plus 0.5% and requires principal repayments in
equal quarterly installments over seven years.

In March 1999, we entered into a second credit agreement
with BNP pursuant to which the bank made a term loan (the
Second BNP Loan) to Bacou in the principal amount of
$50.0 million, in connection with our acquisition of Perfect Fit.
 The Second BNP Loan requires quarterly interest payments at an
annual rate equal to three-month LIBOR plus 0.60% and requires
principal repayments in equal quarterly installments over seven
years.

18



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##### Table of Contents



On August 24, 1999, we entered into a credit agreement with
BankBoston, N.A. as agent for participating banks
(BankBoston). Under this credit agreement, BankBoston
 established a revolving line of credit facility with a maximum
principal limit of $36.0 million (the BankBoston Revolving
Facility). Principal outstanding under the BankBoston
Revolving Facility will bear interest at our option at either
(a) a fixed rate equal to LIBOR plus 0.70%, or (b) a
floating rate equal to BankBostons base rate. According to
its terms, the facility is scheduled for repayment on
August 24, 2001. At December 31, 1999, there was no
balance outstanding under the BankBoston Revolving Facility.

BankBoston has also agreed to purchase up to $30.0 million of
economic development revenue bonds issued by Rhode Island
Industrial Facilities Corporation (the RIIFC Revenue
Bonds) and in August 1999, we received proceeds
totaling $11.2 million. Principal outstanding under the RIIFC
Revenue Bonds bears interest at fixed rates ranging from LIBOR
plus 0.70% to LIBOR plus 0.95% during its term. Proceeds from
these revenue bonds were used to fund the acquisition of our
Rhode Island manufacturing facility in July 1999, are being
used to fund the construction of an addition to such facility and
 will be used for the purchase of machinery and equipment at our
Rhode Island facility over a three-year period. Repayment of
principal under the RIIFC Revenue Bonds is due in quarterly
installments of $500,000 beginning February 1, 2002,
increasing to $1,500,000 beginning February 1, 2005, with a
final payment of any remaining principal due on August 1,
2006.

In connection with the closing of the BankBoston Credit Facility,
 we repaid all amounts outstanding, totaling $8.9 million, under
a revolving credit facility with Citizens Bank of Rhode Island
and terminated that facility.

In connection with our acquisition of Perfect Fit, we assumed
indebtedness outstanding under Wilkes County Industrial
Development Revenue Bonds in the principal amount of $6.3
million. Principal outstanding under these revenue bonds bears
interest at a variable rate, equal to approximately 3.5% during
1999. Sinking fund installments, ranging from $780,000 to
$1,100,000, were due on June 1 of each year of its term
through 2005. In March 2000, we restructured the repayment terms
of these bonds to an interest-only status with principal due in
full on December 31, 2006.

We are pursuing a business strategy that includes acquisitions as
 an important element. As a result, we may incur additional
indebtedness, may be required to negotiate additional credit
facilities, or may issue additional common or preferred stock in
order to fund potential future investments resulting from our
acquisition strategy. We believe we would have access to
sufficient capital to consummate future acquisitions. Except for
cash requirements to fund acquisitions, we believe that our cash
flow provided by operating activities together with unused
borrowing capacity will be sufficient to fund our working capital
 requirements, debt service requirements and capital expenditures
 for the foreseeable future.

Seasonality

Our business has been subject to slight seasonal variations,
which we have attributed to fluctuations in industrial activity
and annual weather patterns. Historically, our sales from
November through February have been somewhat lower than other
periods due to anticipated lower demand in the more inclement
winter months and planned inventory reductions by major
distributors. In addition to seasonality, our business has been
variable period to period due to other factors, including
promotional activity undertaken by us in response to competitive
pressures, market demand, production capacity, inventory levels
and other considerations.

Effects of Inflation

Inflation during recent years has been modest and has not had a
material impact upon the results of our operations.

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##### Table of Contents



Year 2000 Compliance

We initiated a comprehensive project in June 1997 to address
 our year 2000 compliance and we have now completed all phases of
 this project. The project considered both our primary
information systems (software for all financial systems, network
software and equipment, personal computers and incumbent
software, etc.) and other applications dependent upon embedded
software (manufacturing equipment, telephone systems, security
systems, etc.).

Results of the assessment phase identified applications,
principally at our Survivair and Uvex Safety divisions, which
were not year 2000 compliant. During 1997, we initiated a project
 to install and implement common software at all of our business
units and we signed a license agreement with
J.D. Edwards & Company for such software in
September 1997. Full implementation of this software was
completed at our Survivair division on January 1, 1999, and
at our Uvex Safety division on April 1, 1999.
J.D. Edwards & Company has represented that this
software is year 2000 compliant and that its processes used to
achieve year 2000 readiness are certified by the Information
Technology Association of America.

We have incurred costs totaling approximately $3.5 million
through December 31, 1999 for implementation of the software
 at our Survivair and Uvex Safety business units, and we have no
remaining costs necessary to complete full implementation. Except
 for the cost of training, these costs are being capitalized and
depreciated over the estimated useful life of the software.
Training is complete and the related cost was expensed as
incurred.

As of the date of this filing, we have encountered no material
problems related to year 2000 compliance in our systems or in
those of our outside vendors.




Item 7A.  Quantitative and Qualitative
Disclosures about Market Risk

Market risk can result from fluctuations in interest rates,
foreign currency exchange rates, commodity prices or other market
 exposures. Uncertainties that are either non-financial or
non-quantifiable, such as political, economic, tax, other
regulatory or credit risks are not included in the following
assessment of our market risks.

We believe our only material market risk exposure is the risk of
adverse fluctuations in interest rates. At December 31,
1999, we had debt outstanding totaling $143.9 million. Interest
rates on principally all of this debt are variable based upon
three-month LIBOR. Three-month LIBOR approximated 6.04% at
December 31, 1999.

A 10% adverse change in the prevailing interest rates during 1999
 would have resulted in a reduction of our after-tax earnings of
approximately $510,000 or $0.03 per share. We have prepared
sensitivity analyses of our interest rate exposure to assess the
future impact of hypothetical changes in interest rates. Based
upon the results of these analyses, we believe that a 10% adverse
 change from the December 31, 1999, interest rates would
result in the potential loss of after-tax earnings over the next
twelve months equal to approximately $480,000 or $0.03 per share.

20



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##### Table of Contents






Item 8.  Financial Statements and Supplementary
Data

INDEX TO FINANCIAL STATEMENTS

|                                                |  |      |    | 
|----------------------------------------------- |  | ---- | -- | 
|                                                |  | Page
|                                                |  |     
|Independent Auditors Report                    |  |      | 22 | 
|                                               
|                                               
|                                               
|                                               
|Consolidated Balance Sheets                     |  |      | 23 | 
|                                               
|                                               
|                                               
|                                               
|Consolidated Statements of Income               |  |      | 24 | 
|                                               
|                                               
|                                               
|                                               
|Consolidated Statements of Stockholders Equity |  |      | 25 | 
|                                               
|                                               
|                                               
|                                               
|Consolidated Statements of Cash Flows           |  |      | 26 | 
|                                               
|                                               
|                                               
|                                               
|Notes to Consolidated Financial Statements      |  |      | 27 | 

21



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##### Table of Contents



INDEPENDENT AUDITORS REPORT

The Board of Directors and Stockholders



We have audited the accompanying consolidated balance sheets of
Bacou USA, Inc. and subsidiaries as of December 31, 1998 and
 1999 and the related consolidated statements of income,
stockholders equity, and cash flows for each of the years
in the three-year period ended December 31, 1999. These
consolidated financial statements are the responsibility of the
Companys management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
 audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
 above present fairly, in all material respects, the financial
position of Bacou USA, Inc. and subsidiaries as of
December 31, 1998 and 1999 and the results of their
operations and their cash flows for each of the years in the
three-year period ended December 31, 1999, in conformity
with generally accepted accounting principles.



| |         
| | --------
| | KPMG LLP

Providence, Rhode Island



22



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


|                                     |                                                                                                                                               |                                            |         |        |         |  |         |         |         | 
|------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ------ | ------- |  | ------- | ------- | ------- | 
|                                     |                                                                                                                                               |                                           
|                                     |                                                                                                                                               | December 31,                              
|                                     |                                                                                                                                               |                                           
|                                     |                                                                                                                                               | 1998                                       |         | 1999  
|                                     |                                                                                                                                               |                                            |         |       
|ASSETS                               |                                                                                                                                               |                                            |         |        |         |  |         |        
|                                    
|                                    
|                                    
|                                    
|Current assets:                      |                                                                                                                                               |                                            |         |        |         |  |         |        
|                                    
|                                    
|                                    
|                                    
|                                     | Cash and cash equivalents                                                                                                                     |                                            | $       | 1,090  |         |  | $       | 10,272  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Trade accounts receivable, net                                                                                                                |                                            |         | 27,110 |         |  |         | 41,653  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Inventories                                                                                                                                   |                                            |         | 38,246 |         |  |         | 42,433  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Other current assets                                                                                                                          |                                            |         | 1,069  |         |  |         | 1,634   |        
|                                    
|                                    
|                                    
|                                    
|                                     | Deferred income taxes                                                                                                                         |                                            |         | 2,138  |         |  |         | 3,733   |        
|                                     |                                                                                                                                               |                                            |         |        |         |  |         |        
|                                     |                                                                                                                                               | Total current assets                       |         |        | 69,653  |  |         |         | 99,725  | 
|                                    
|                                    
|                                    
|                                    
|Property and equipment, net          |                                                                                                                                               |                                            | 53,998  |        |         |  | 74,410  |        
|                                    
|                                    
|                                    
|                                    
|Intangible assets, net               |                                                                                                                                               |                                            | 169,937 |        |         |  | 194,258 |        
|                                    
|                                    
|                                    
|                                    
|Other assets                         |                                                                                                                                               |                                            | 182     |        |         |  | 3,032   |        
|                                     |                                                                                                                                               |                                            |         |        |         |  |         |        
|                                     |                                                                                                                                               | Total assets                               |         | $      | 293,770 |  |         | $       | 371,425 | 
|                                     |                                                                                                                                               |                                            |         |        |         |  |         |        
|LIABILITIES AND STOCKHOLDERS EQUITY |                                                                                                                                               |                                            |         |        |         |  |         |        
|                                    
|                                    
|                                    
|                                    
|Current liabilities:                 |                                                                                                                                               |                                            |         |        |         |  |         |        
|                                    
|                                    
|                                    
|                                    
|                                     | Current installments of long-term debt                                                                                                        |                                            | $       | 15,714 |         |  | $       | 23,637  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Accounts payable                                                                                                                              |                                            |         | 8,959  |         |  |         | 10,559  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Accrued compensation and benefits                                                                                                             |                                            |         | 8,234  |         |  |         | 8,408   |        
|                                    
|                                    
|                                    
|                                    
|                                     | Other accrued expenses                                                                                                                        |                                            |         | 4,008  |         |  |         | 12,084  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Income taxes payable                                                                                                                          |                                            |         | 1,828  |         |  |         | 1,027   |        
|                                     |                                                                                                                                               |                                            |         |        |         |  |         |        
|                                     |                                                                                                                                               | Total current liabilities                  |         |        | 38,743  |  |         |         | 55,715  | 
|                                    
|                                    
|                                    
|                                    
|Long-term debt                       |                                                                                                                                               |                                            | 92,050  |        |         |  | 120,256 |        
|                                    
|                                    
|                                    
|                                    
|Deferred income taxes                |                                                                                                                                               |                                            | 6,311   |        |         |  | 11,550  |        
|                                    
|                                    
|                                    
|                                    
|Other liabilities                    |                                                                                                                                               |                                            | 2,754   |        |         |  | 2,449   |        
|                                     |                                                                                                                                               |                                            |         |        |         |  |         |        
|                                     |                                                                                                                                               | Total liabilities                          |         |        | 139,858 |  |         |         | 189,970 | 
|                                     |                                                                                                                                               |                                            |         |        |         |  |         |        
|Common stock subject to a put option |                                                                                                                                               |                                            | 9,450   |        |         |  |        |        
|                                     |                                                                                                                                               |                                            |         |        |         |  |         |        
|Stockholders equity:                |                                                                                                                                               |                                            |         |        |         |  |         |        
|                                    
|                                    
|                                    
|                                    
|                                     | Preferred stock, $.001 par value, 5,000,000 shares authorized,
	no shares issued and outstanding                                              |                                            |         |       |         |  |         |        |        
|                                    
|                                    
|                                    
|                                    
|                                     | Common stock, $.001 par value, 50,000,000 shares authorized,
	17,610,465 shares in 1998 and 17,629,865 shares in 1999 issued
	and outstanding |                                            |         | 17     |         |  |         | 18      |        
|                                    
|                                    
|                                    
|                                    
|                                     | Additional paid-in capital                                                                                                                    |                                            |         | 63,258 |         |  |         | 73,060  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Retained earnings                                                                                                                             |                                            |         | 81,187 |         |  |         | 108,377 |        
|                                     |                                                                                                                                               |                                            |         |        |         |  |         |        
|                                     |                                                                                                                                               | Total stockholders equity                 |         |        | 144,462 |  |         |         | 181,455 | 
|                                     |                                                                                                                                               |                                            |         |        |         |  |         |        
|                                     |                                                                                                                                               | Total liabilities and stockholders equity |         | $      | 293,770 |  |         | $       | 371,425 | 
|                                     |                                                                                                                                               |                                            |         |        |         |  |         |        

See accompanying notes to consolidated financial statements.

23



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)


|                                     |                                               |                                   |         |        |        |      |         |         |        |   |         |         |        | 
|------------------------------------ | --------------------------------------------- | --------------------------------- | ------- | ------ | ------ | ---- | ------- | ------- | ------ | - | ------- | ------- | ------ | 
|                                     |                                               |                                  
|                                     |                                               | Years Ended December 31,         
|                                     |                                               |                                  
|                                     |                                               | 1997                              |         | 1998   |        | 1999
|                                     |                                               |                                   |         |        |        |     
|Net sales                            |                                               | $                                 | 130,869 |        |        | $    | 219,581 |         |        | $ | 272,797 |        
|                                    
|                                    
|                                    
|                                    
|Cost of sales                        |                                               |                                   | 64,467  |        |        |      | 105,856 |         |        |   | 145,038 |        
|                                     |                                               |                                   |         |        |        |      |         |         |        |   |         |        
|                                     | Gross profit                                  |                                   |         | 66,402 |        |      |         | 113,725 |        |   |         | 127,759 |       
|                                    
|                                    
|                                    
|                                    
|Operating expenses:                  |                                               |                                   |         |        |        |      |         |         |        |   |         |        
|                                    
|                                    
|                                    
|                                    
|                                     | Selling                                       |                                   |         | 21,658 |        |      |         | 35,660  |        |   |         | 39,502  |       
|                                    
|                                    
|                                    
|                                    
|                                     | General and administrative                    |                                   |         | 11,184 |        |      |         | 22,895  |        |   |         | 22,597  |       
|                                    
|                                    
|                                    
|                                    
|                                     | Research and development                      |                                   |         | 1,110  |        |      |         | 4,000   |        |   |         | 5,274   |       
|                                    
|                                    
|                                    
|                                    
|                                     | Purchased in-process research and development |                                   |         | 3,721  |        |      |         | 4,680   |        |   |         |        |       
|                                    
|                                    
|                                    
|                                    
|                                     | Amortization of intangible assets             |                                   |         | 4,095  |        |      |         | 7,748   |        |   |         | 9,440   |       
|                                     |                                               |                                   |         |        |        |      |         |         |        |   |         |        
|                                     |                                               | Total operating expenses          |         |        | 41,768 |      |         |         | 74,983 |   |         |         | 76,813 | 
|                                     |                                               |                                   |         |        |        |      |         |         |        |   |         |        
|Operating income                     |                                               |                                   | 24,634  |        |        |      | 38,742  |         |        |   | 50,946  |        
|                                    
|                                    
|                                    
|                                    
|Other expenses (income):             |                                               |                                   |         |        |        |      |         |         |        |   |         |        
|                                    
|                                    
|                                    
|                                    
|                                     | Interest expense                              |                                   |         | 156    |        |      |         | 6,291   |        |   |         | 8,496   |       
|                                    
|                                    
|                                    
|                                    
|                                     | Interest income                               |                                   |         | (372   | )      |      |         | (112    | )      |   |         | (189    | )     
|                                    
|                                    
|                                    
|                                    
|                                     | Other, net                                    |                                   |         | (160   | )      |      |         | (125    | )      |   |         | 284     |       
|                                     |                                               |                                   |         |        |        |      |         |         |        |   |         |        
|                                     |                                               | Total other expense (income), net |         |        | (376   | )    |         |         | 6,054  |   |         |         | 8,591  | 
|                                     |                                               |                                   |         |        |        |      |         |         |        |   |         |        
|Income before income taxes           |                                               |                                   | 25,010  |        |        |      | 32,688  |         |        |   | 42,355  |        
|                                    
|                                    
|                                    
|                                    
|Income taxes                         |                                               |                                   | 10,588  |        |        |      | 11,678  |         |        |   | 15,165  |        
|                                     |                                               |                                   |         |        |        |      |         |         |        |   |         |        
|                                     |                                               | Net income                        |         | $      | 14,422 |      |         | $       | 21,010 |   |         | $       | 27,190 | 
|                                     |                                               |                                   |         |        |        |      |         |         |        |   |         |        
|Basic earnings per share             |                                               | $                                 | 0.83    |        |        | $    | 1.19    |         |        | $ | 1.54    |        
|                                     |                                               |                                   |         |        |        |      |         |         |        |   |         |        
|Diluted earnings per share           |                                               | $                                 | 0.83    |        |        | $    | 1.19    |         |        | $ | 1.54    |        
|                                     |                                               |                                   |         |        |        |      |         |         |        |   |         |        
|Weighted average shares outstanding: |                                               |                                   |         |        |        |      |         |         |        |   |         |        
|                                    
|                                    
|                                    
|                                    
|Basic                                |                                               |                                   | 17,383  |        |        |      | 17,601  |         |        |   | 17,624  |        
|                                     |                                               |                                   |         |        |        |      |         |         |        |   |         |        
|Diluted                              |                                               |                                   | 17,411  |        |        |      | 17,723  |         |        |   | 17,696  |        
|                                     |                                               |                                   |         |        |        |      |         |         |        |   |         |        

See accompanying notes to consolidated financial statements.

24



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

(in thousands)


|                                                                        |  |        |        |        |  |            |    |          |  |               |        |   |  |   |         |   |  |   |         |  
|----------------------------------------------------------------------- |  | ------ | ------ | ------ |  | ---------- | -- | -------- |  | ------------- | ------ | - |  | - | ------- | - |  | - | ------- | -
|                                                                        |  |        |        |        |  | Additional |    |          |  |              
|                                                                        |  | Common |        | Common |  | Paid-in    |    | Retained |  | Stockholders
|                                                                        |  | Shares |        | Stock  |  | Capital    |    | Earnings |  | Equity       
|                                                                        |  |        |        |        |  |            |    |          |  |              
|Balances at December 31, 1996                                           |  |        | 17,312 |        |  | $          | 17 |          |  | $             | 66,515 |   |  | $ | 45,875  |   |  | $ | 112,407 |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Repurchase of shares; retirement of shares to authorized and
	unissued  |  |        | (554   | )      |  |            | (1 | )        |  |               | (8,038 | ) |  |   |        |   |  |   | (8,039  | )
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Issuance of common stock, net of expenses of issuance                   |  |        | 827    |        |  |            | 1  |          |  |               | 4,012  |   |  |   |        |   |  |   | 4,013   |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Stock options exercised                                                 |  |        | 6      |        |  |            |   |          |  |               | 99     |   |  |   |        |   |  |   | 99      |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Net income                                                              |  |        |       |        |  |            |   |          |  |               |       |   |  |   | 14,422  |   |  |   | 14,422  |  
|                                                                        |  |        |        |        |  |            |    |          |  |               |        |   |  |   |         |   |  |   |         |  
|Balances at December 31, 1997                                           |  |        | 17,591 |        |  |            | 17 |          |  |               | 62,588 |   |  |   | 60,297  |   |  |   | 122,902 |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Repurchase of shares; retirement of shares to authorized and
	unissued  |  |        | (3     | )      |  |            |   |          |  |               | (46    | ) |  |   |        |   |  |   | (46     | )
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Fair value of stock options granted pursuant to a consulting
	agreement |  |        |       |        |  |            |   |          |  |               | 337    |   |  |   |        |   |  |   | 337     |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Stock options exercised                                                 |  |        | 22     |        |  |            |   |          |  |               | 379    |   |  |   |        |   |  |   | 379     |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Other                                                                   |  |        |       |        |  |            |   |          |  |               |       |   |  |   | (120    | ) |  |   | (120    | )
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Net income                                                              |  |        |       |        |  |            |   |          |  |               |       |   |  |   | 21,010  |   |  |   | 21,010  |  
|                                                                        |  |        |        |        |  |            |    |          |  |               |        |   |  |   |         |   |  |   |         |  
|Balances at December 31, 1998                                           |  |        | 17,610 |        |  |            | 17 |          |  |               | 63,258 |   |  |   | 81,187  |   |  |   | 144,462 |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Expiration of put option                                                |  |        |       |        |  |            | 1  |          |  |               | 9,449  |   |  |   |        |   |  |   | 9,450   |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Stock options exercised                                                 |  |        | 20     |        |  |            |   |          |  |               | 353    |   |  |   |        |   |  |   | 353     |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Net income                                                              |  |        |       |        |  |            |   |          |  |               |       |   |  |   | 27,190  |   |  |   | 27,190  |  
|                                                                        |  |        |        |        |  |            |    |          |  |               |        |   |  |   |         |   |  |   |         |  
|Balances at December 31, 1999                                           |  |        | 17,630 |        |  | $          | 18 |          |  | $             | 73,060 |   |  | $ | 108,377 |   |  | $ | 181,455 |  
|                                                                        |  |        |        |        |  |            |    |          |  |               |        |   |  |   |         |   |  |   |         |  

See accompanying notes to consolidated financial statements.

25



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


|                                                     |                                                                                          |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |         |        |        |         |  
|---------------------------------------------------- | ---------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | -------------------------------------- | --------------------------------------------------- | ----- | ------ | ------- | -------- | ------ | ------- | -------- | ------- | ------ | ------ | ------- | -
|                                                     |                                                                                          |                                                                         
|                                                     |                                                                                          | Years Ended December 31,                                                
|                                                     |                                                                                          |                                                                         
|                                                     |                                                                                          | 1997                                                                     |                                        | 1998                                                |       | 1999  
|                                                     |                                                                                          |                                                                          |                                        |                                                     |       |       
|Cash flows from operating activities:                |                                                                                          |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |        
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Net income                                                                               |                                                                          | $                                      | 14,422                                              |       |        | $       | 21,010   |        |         | $        | 27,190  |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Adjustments to reconcile net income to net cash provided by
	operating activities:       |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |         |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                          | Depreciation and amortization                                            |                                        |                                                     | 8,618 |        |         |          | 14,154 |         |          |         | 17,287 |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                          | Deferred income taxes                                                    |                                        |                                                     | (289  | )      |         |          | (176   | )       |          |         | 3,621  |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                          | Purchased in-process research and development                            |                                        |                                                     | 3,721 |        |         |          | 4,680  |         |          |         |       |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                          | Loss on sale or write down of assets                                     |                                        |                                                     | 160   |        |         |          |       |         |          |         |       |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                          | Change in assets and liabilities, net of effects of acquired
	companies: |                                        |                                                     |       |        |         |          |        |         |          |         |        |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                          |                                                                          | Trade accounts receivable              |                                                     |       | (98    | )       |          |        | (6,677  | )        |         |        | (8,206 | )      
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                          |                                                                          | Inventories                            |                                                     |       | 2,185  |         |          |        | (10,162 | )        |         |        | 5,718  |        
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                          |                                                                          | Other current assets                   |                                                     |       | (1,114 | )       |          |        | 2,997   |          |         |        | 415    |        
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                          |                                                                          | Accounts payable                       |                                                     |       | (103   | )       |          |        | 1,949   |          |         |        | (1,229 | )      
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                          |                                                                          | Accrued expenses and other liabilities |                                                     |       | (1,063 | )       |          |        | 4,745   |          |         |        | 747    |        
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                          |                                                                          | Income taxes                           |                                                     |       | (767   | )       |          |        | 797     |          |         |        | (602   | )      
|                                                     |                                                                                          |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |        
|                                                     |                                                                                          |                                                                          |                                        | Net cash provided by operating activities           |       |        | 25,672  |          |        |         | 33,317   |         |        |        | 44,941  |  
|                                                     |                                                                                          |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |        
|Cash flows from investing activities:                |                                                                                          |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |        
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Increase in other assets                                                                 |                                                                          |                                        |                                                    |       |        |         | (182     | )      |         |          | (2,850  | )     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Capital expenditures                                                                     |                                                                          |                                        | (6,837                                              | )     |        |         | (14,386  | )      |         |          | (18,873 | )     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Acquisition of businesses, including direct costs of acquisition,
	 net of cash acquired |                                                                          |                                        | (28,566                                             | )     |        |         | (121,094 | )      |         |          | (37,381 | )     
|                                                     |                                                                                          |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |        
|                                                     |                                                                                          |                                                                          |                                        | Net cash used in investing activities               |       |        | (35,403 | )        |        |         | (135,662 | )       |        |        | (59,104 | )
|                                                     |                                                                                          |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |        
|Cash flows from financing activities:                |                                                                                          |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |        
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Repayment of long-term debt                                                              |                                                                          |                                        | (8,000                                              | )     |        |         | (17,725  | )      |         |          | (21,806 | )     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Proceeds from long-term debt                                                             |                                                                          |                                        | 8,000                                               |       |        |         | 110,000  |        |         |          | 61,160  |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Advances (repayments) under notes payable, net                                           |                                                                          |                                        | (2,085                                              | )     |        |         | 9,550    |        |         |          | (16,362 | )     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Repurchase of common stock                                                               |                                                                          |                                        | (8,039                                              | )     |        |         | (46      | )      |         |          |        |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Proceeds from issuance of common stock, net of expenses                                  |                                                                          |                                        | 99                                                  |       |        |         | 379      |        |         |          | 353     |       
|                                                     |                                                                                          |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |        
|                                                     |                                                                                          |                                                                          |                                        | Net cash provided by (used in) financing activities |       |        | (10,025 | )        |        |         | 102,158  |         |        |        | 23,345  |  
|                                                     |                                                                                          |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |        
|Net increase (decrease) in cash and cash equivalents |                                                                                          |                                                                          | (19,756                                | )                                                   |       |        | (187    | )        |        |         | 9,182    |        
|                                                    
|                                                    
|                                                    
|                                                    
|Cash and cash equivalents at beginning of year       |                                                                                          |                                                                          | 21,033                                 |                                                     |       |        | 1,277   |          |        |         | 1,090    |        
|                                                     |                                                                                          |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |        
|Cash and cash equivalents at end of year             |                                                                                          | $                                                                        | 1,277                                  |                                                     |       | $      | 1,090   |          |        | $       | 10,272   |        
|                                                     |                                                                                          |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |        
|Supplemental disclosures of cash flow information:   |                                                                                          |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |        
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Cash paid during the year for interest                                                   |                                                                          | $                                      | 155                                                 |       |        | $       | 5,796    |        |         | $        | 8,356   |       
|                                                     |                                                                                          |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |        
|                                                     | Cash paid during the year for income taxes                                               |                                                                          | $                                      | 11,989                                              |       |        | $       | 11,308   |        |         | $        | 12,605  |       
|                                                     |                                                                                          |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |        
|                                                     | Expiration of put option                                                                 |                                                                          | $                                      |                                                    |       |        | $       |         |        |         | $        | 9,450   |       
|                                                     |                                                                                          |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |        
|                                                     | Fair value of stock options granted pursuant to a consulting
	agreement                  |                                                                          | $                                      |                                                    |       |        | $       | 337      |        |         | $        |        |       
|                                                     |                                                                                          |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |        
|                                                     | Fair value of common stock issued in connection with the
	acquisition of a business      |                                                                          | $                                      | 13,500                                              |       |        | $       |         |        |         | $        |        |       
|                                                     |                                                                                          |                                                                          |                                        |                                                     |       |        |         |          |        |         |          |        

See accompanying notes to consolidated financial statements.

26



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)  Summary of Significant Accounting Policies

(a)  Nature of Business and Principles
 of Consolidation

The accompanying consolidated financial statements include the
accounts of Bacou USA, Inc. (Bacou) and its wholly owned
subsidiaries (collectively, the Company). All significant
intercompany transactions and balances have been eliminated in
consolidation.

The Company designs, manufactures and sells leading brands of
products that protect the sight, hearing, respiratory systems and
 hands of workers against occupational hazards. The Company
relies on single sources for the supply of several raw materials.
 The loss of any such source, any disruption in such
sources business or failure by it to meet the
Companys needs on a timely basis, could cause shortages in
raw materials and could have a material adverse effect on the
Companys results of operations. The Company has 170
employees (representing approximately 8% of total employees) that
 are covered under a collective bargaining agreement that expires
 September 13, 2000.

Bacou, S.A., a company domiciled in Valence, France, owns a
controlling interest (approximately 72% at December 31,
1999) in Bacou. The Company purchases certain inventory items
from Bacou, S.A. and its subsidiaries. These purchases totaled
$207,000 in 1997, $24,000 in 1998 and $1,049,000 in 1999. Sales
by the Company to Bacou, S.A. totaled $270,000 in 1997, $967,000
in 1998 and $1,925,000 in 1999.

(b)  Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company
considers all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash equivalents.

(c)  Revenue and Trade Receivables

The Company recognizes revenue upon shipment of merchandise to
its customers. The Companys sales are primarily domestic
with customers located throughout the United States. Pursuant to
an agreement with the former owner of the Uvex Safety business,
the Company may sell personal protective equipment under the
uvex® brand name only in North, Central and South America.
The agreement also prohibits the Company from selling sports
products such as sunglasses or protective eyewear for sports
activities under the uvex® brand name regardless of
geographic area.

Financial instruments that potentially subject the Company to
concentrations of credit risk consist primarily of trade
receivables. The Company performs ongoing credit evaluations of
its customers and generally does not require collateral. The
Company estimates an allowance for doubtful accounts based on the
 credit worthiness of its customers as well as general economic
conditions. Consequently, an adverse change in those factors
could affect the Companys estimate. The allowance for
doubtful accounts was $945,000 at December 31, 1997,
$1,150,000 at December 31, 1998 and $1,168,000 at
December 31, 1999.

(d)  Inventories

Inventories are stated at the lower of cost (first-in, first-out)
 or market (net realizable value). Inventories include the cost
of raw materials, direct labor and manufacturing overhead.

(e)  Property and Equipment

Property and equipment are stated at cost. Assets to be disposed
of are reported at the lower of carrying amount or estimated fair
 value less costs to sell. Depreciation is provided over the
estimated useful lives of the respective assets using the
straight-line method. Leasehold improvements are amortized over
the shorter of the lease term or estimated useful life of the
asset.

27



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

(f)  Intangible Assets

Intangible assets consist principally of intellectual property
and patents, customer relationships, tradenames and goodwill.
Goodwill represents the excess of purchase price over fair value
of net assets acquired in connection with purchase business
combinations. Intangible assets are amortized using the
straight-line method over the estimated periods benefited.

The Company evaluates impairment of intangible assets annually,
or more frequently if events or changes in circumstances indicate
 that carrying amounts may no longer be recoverable. Goodwill
associated with assets acquired in a purchase business
combination is included in impairment evaluations when events or
circumstances exist that indicate the carrying amount of those
assets may not be recoverable. Recoverability of intangible
assets is determined based upon the excess of carrying amounts
over expected future net cash flows (undiscounted) of the
underlying business or product line. The assessment of the
recoverability of intangible assets will be impacted if estimated
 future net cash flows are not achieved.

(g)  Income Taxes

The Company accounts for income taxes using the asset and
liability method. Under the asset and liability method, deferred
tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
 their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable
 income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.

(h)  Foreign Currency

The Company periodically enters into forward foreign exchange
contracts in connection with purchases denominated in foreign
currencies. Other than these contracts, the Company has no other
involvement with derivative financial instruments. Transaction
gains and losses were not material during any period presented in
 the accompanying financial statements. The Company had no
material open currency contracts at December 31, 1999.

(i)  Employee Benefit Plans

The Company grants stock options pursuant to certain stock
incentive plans. Stock option grants to employees and directors
are accounted for using the intrinsic value-based method.

The Company sponsors defined contribution plans that cover
substantially all employees. The Company also sponsors a defined
benefit pension plan for bargaining unit employees, which is
funded in accordance with the requirements of the Employee
Retirement Income Security Act, and has assets that consist
principally of mutual funds.

(j)  Earnings Per Share

Basic earnings per share are computed by dividing income
available to common stockholders by the weighted-average number
of common shares outstanding during the period. Diluted earnings
per share are computed by increasing the weighted-average number
of common shares by the dilutive potential common shares that
were outstanding during the period.

Dilutive potential common shares during all periods presented
were limited to the effect of outstanding stock options
determined by application of the treasury stock method. Dilutive
stock options included in the computation of diluted earnings per
 share totaled 27,597 in 1997, 121,812 in 1998 and 72,305 in
1999. Based

28



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

on a purchase agreement with the stockholders of Biosystems, if
certain earnings targets are met, the Company may have to issue
common stock to these former stockholders. The Company has not
included any such contingent shares in the computation of
earnings per share because the necessary conditions for issuance
of these shares had not been satisfied.

(k)  Financial Instruments

Financial instruments of the Company consist of cash, accounts
receivable, accounts payable and long-term debt. The carrying
amounts of these financial instruments approximate their fair
value.

(l)  Research and Development

Research and development costs are expensed as incurred and
totaled $1,110,000 in 1997, $4,000,000 in 1998 and $5,274,000 in
1999.

(m)  Use of Estimates

Management of the Company has made a number of estimates and
assumptions relating to the reporting of assets and liabilities
and the disclosure of contingent assets and liabilities to
prepare these financial statements in conformity with generally
accepted accounting principles. Actual results could differ from
those estimates.

(2)  Acquisitions

On April 1, 1999, the Company purchased the assets and
assumed substantially all liabilities of Perfect Fit Glove Co.,
Inc. and certain affiliates (Perfect Fit), a
manufacturer and distributor of protective gloves and other
related products, for cash consideration of $37.1 million. The
Company agreed to pay additional cash consideration of up to $6.0
 million, to the extent actual consolidated cash flow of the
acquired business for 1999 exceeded certain specified targets,
and in March 2000 the Company paid $5.1 million representing
 the total payment due. Other accrued expenses in the
accompanying balance sheet includes an accrual at
December 31, 1999, equal to the contingent consideration
paid in March 2000.

Effective February 27, 1998, the Company acquired
substantially all assets and assumed substantially all
liabilities of Howard Leight Industries (Howard
Leight), a manufacturer of hearing protection products
(including disposable, reusable and banded ear plugs, and ear
muffs) for cash consideration of $125.9 million, $5.9 million of
which represented the refinancing of Howard Leight indebtedness.

Effective September 30, 1997, the Company acquired all of
the capital stock of Biosystems, Inc. (Biosystems), a
 manufacturer of gas monitors and equipment for testing
self-contained breathing apparatus, in exchange for 826,514
shares of its common stock having a fair market value equal to
$13.5 million. The initial acquisition price may be increased
according to a sliding scale if the operating results of
Biosystems in the year 2000 exceed certain defined thresholds.
The Company also acquired all of the outstanding capital stock of
 Comasec Holdings, Inc. (Comasec) on May 30,
1997 for cash consideration of $27.4 million. The assets of
Comasec consisted primarily of its wholly owned subsidiary,
Survivair, Inc. (Survivair), a manufacturer of
respiratory protection products.

In accordance with generally accepted accounting principles, the
cash paid and fair value of common stock issued to effect these
acquisitions was allocated to the fair value of assets purchased
and liabilities assumed. In each case, the excess of acquisition
price over fair value of net assets acquired was recorded as
goodwill and is being amortized over 30-40 years.

29



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

The fair value of purchased in-process research and development
was $4.7 million for Howard Leight, $2.4 million for Biosystems
and $1.3 million for Survivair. Acquired in-process research and
development projects had not yet reached technological
feasibility and had no alternative future uses, accordingly, the
fair value assigned to these projects was expensed as of the
respective acquisition dates. There were no individually
significant in-process research and development projects, except
for a project to develop a new generation of Howard Leight Air
Soft ear plugs. The value of this project was determined
based upon future cash flows expected to result from development
of the project, discounted at a risk-adjusted rate equal to 21%,
and based upon an assumption that the project was 73% complete as
 of the date of acquisition. The percent complete was based upon
an assessment of (i) cost incurred through the acquisition
date, (ii) estimated remaining cost to complete,
(iii) complexity of the work completed to date and
(iv) difficulty of completing the remaining development.

The purchase price for the acquisitions of Perfect Fit and Howard
 Leight has been allocated approximately as shown in the
following table (in thousands).

|                                              |  |             |        |               |  |   |        |  
|--------------------------------------------- |  | ----------- | ------ | ------------- |  | - | ------ | -
|                                              |  | Perfect Fit |        | Howard Leight
|                                              |  |             |        |              
|Working capital                               |  | $           | 5,400  |               |  | $ | 6,200  |  
|                                             
|                                             
|                                             
|                                             
|Property and equipment                        |  |             | 9,400  |               |  |   | 10,100 |  
|                                             
|                                             
|                                             
|                                             
|Identifiable intangible assets                |  |             | 800    |               |  |   | 89,000 |  
|                                             
|                                             
|                                             
|                                             
|Purchased in-process research and development |  |             |       |               |  |   | 4,700  |  
|                                             
|                                             
|                                             
|                                             
|Long-term debt                                |  |             | (6,300 | )             |  |   | (5,900 | )
|                                             
|                                             
|                                             
|                                             
|Goodwill                                      |  |             | 32,900 |               |  |   | 15,900 |  

The acquisition of Perfect Fit has been accounted for as a
purchase and, accordingly, operating results have been included
in the accompanying financial statements of the Company beginning
 with the acquisition date. The following table presents pro
forma results of operations of the Company as if the acquisition
of Perfect Fit had occurred as of January 1, 1998. The pro
forma operating results include results of operations for the
indicated periods adjusted to include amortization of intangible
assets and assumed interest expense on the cash purchase price.
The pro forma information given is unaudited, does not purport to
 be indicative of the results that actually would have been
obtained if the operations were combined during the periods
presented, and is not intended to be a projection of future
results or trends.

|                                      |  |                         |         |      |  |   |         | 
|------------------------------------- |  | ----------------------- | ------- | ---- |  | - | ------- | 
|                                      |  |                        
|                                      |  | Year Ended December 31,
|                                      |  |                        
|                                      |  | 1998                    |         | 1999
|(in thousands, except per share data) |  |                         |         |     
|Net sales                             |  | $                       | 266,900 |      |  | $ | 286,700 | 
|                                     
|                                     
|                                     
|                                     
|Net income                            |  |                         | 22,250  |      |  |   | 27,800  | 
|                                     
|                                     
|                                     
|                                     
|Basic and diluted earnings per share  |  |                         | 1.26    |      |  |   | 1.57    | 

(3)  Inventories

Inventories included the following at December 31 (in
thousands):

|                           |  |      |        |      |  |   |        | 
|-------------------------- |  | ---- | ------ | ---- |  | - | ------ | 
|                           |  | 1998 |        | 1999
|                           |  |      |        |     
|Raw materials and supplies |  | $    | 16,407 |      |  | $ | 16,137 | 
|                          
|                          
|                          
|                          
|Work-in-process            |  |      | 5,165  |      |  |   | 4,629  | 
|                          
|                          
|                          
|                          
|Finished goods             |  |      | 16,674 |      |  |   | 21,667 | 
|                           |  |      |        |      |  |   |        | 
|                           |  | $    | 38,246 |      |  | $ | 42,433 | 
|                           |  |      |        |      |  |   |        | 

30



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

(4)  Property and Equipment

Property and equipment included the following at December 31
 (in thousands):

|                                               |  |               |       |      |  |      |        |  |  |   |        | 
|---------------------------------------------- |  | ------------- | ----- | ---- |  | ---- | ------ |  |  | - | ------ | 
|                                               |  | Estimated     |       |      |  |     
|                                               |  | Useful        |       |      |  |     
|                                               |  | Lives (Years) |       | 1998 |  | 1999
|                                               |  |               |       |      |  |     
|Machinery and equipment                        |  |               | 5-10  |      |  | $    | 28,622 |  |  | $ | 41,470 | 
|                                              
|                                              
|                                              
|                                              
|Dies and molds                                 |  |               | 5     |      |  |      | 13,274 |  |  |   | 15,156 | 
|                                              
|                                              
|                                              
|                                              
|Buildings and leasehold improvements           |  |               | 10-40 |      |  |      | 15,337 |  |  |   | 24,393 | 
|                                              
|                                              
|                                              
|                                              
|Computer equipment and software                |  |               | 5-10  |      |  |      | 2,897  |  |  |   | 8,216  | 
|                                              
|                                              
|                                              
|                                              
|Furniture and fixtures                         |  |               | 10    |      |  |      | 2,576  |  |  |   | 3,344  | 
|                                              
|                                              
|                                              
|                                              
|Vehicles                                       |  |               | 3     |      |  |      | 249    |  |  |   | 373    | 
|                                              
|                                              
|                                              
|                                              
|Deposits and construction in progress          |  |               |       |      |  |      | 8,997  |  |  |   | 6,898  | 
|                                               |  |               |       |      |  |      |        |  |  |   |        | 
|                                               |  |               |       |      |  |      | 71,952 |  |  |   | 99,850 | 
|                                              
|                                              
|                                              
|                                              
|Less accumulated depreciation and amortization |  |               |       |      |  |      | 17,954 |  |  |   | 25,440 | 
|                                               |  |               |       |      |  |      |        |  |  |   |        | 
|                                               |  |               |       |      |  | $    | 53,998 |  |  | $ | 74,410 | 
|                                               |  |               |       |      |  |      |        |  |  |   |        | 

Depreciation and amortization of property and equipment totaled
$4,523,000 in 1997, $6,406,000 in 1998 and $7,847,000 in 1999.

(5)  Intangible Assets

The value of identifiable intangible assets is generally
determined by independent appraisal at the date of acquisition.
Intangible assets included the following at December 31 (in
thousands):

|                                  |  |               |       |      |  |      |         |  |  |   |         | 
|--------------------------------- |  | ------------- | ----- | ---- |  | ---- | ------- |  |  | - | ------- | 
|                                  |  | Estimated     |       |      |  |     
|                                  |  | Useful        |       |      |  |     
|                                  |  | Lives (Years) |       | 1998 |  | 1999
|                                  |  |               |       |      |  |     
|Intellectual property and patents |  |               | 9-30  |      |  | $    | 102,371 |  |  | $ | 102,371 | 
|                                 
|                                 
|                                 
|                                 
|Customer relationships            |  |               | 10-20 |      |  |      | 19,523  |  |  |   | 19,523  | 
|                                 
|                                 
|                                 
|                                 
|Tradenames and other intangibles  |  |               | 6-30  |      |  |      | 4,618   |  |  |   | 5,418   | 
|                                 
|                                 
|                                 
|                                 
|Goodwill                          |  |               | 20-40 |      |  |      | 63,926  |  |  |   | 96,950  | 
|                                  |  |               |       |      |  |      |         |  |  |   |         | 
|                                  |  |               |       |      |  |      | 190,438 |  |  |   | 224,262 | 
|                                 
|                                 
|                                 
|                                 
|Less accumulated amortization     |  |               |       |      |  |      | 20,501  |  |  |   | 30,004  | 
|                                  |  |               |       |      |  |      |         |  |  |   |         | 
|                                  |  |               |       |      |  | $    | 169,937 |  |  | $ | 194,258 | 
|                                  |  |               |       |      |  |      |         |  |  |   |         | 

31



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

(6)  Income Taxes

Total federal and state income tax expense included the following
 (in thousands):

|                              |         |         |        |          |  |       |       |       |   |   |        |        | 
|----------------------------- | ------- | ------- | ------ | -------- |  | ----- | ----- | ----- | - | - | ------ | ------ | 
|                              |         | Current |        | Deferred |  | Total
|                              |         |         |        |          |  |      
|Year ended December 31, 1997: |         |         |        |          |  |       |       |       |   |   |        |       
|                             
|                             
|                             
|                             
|                              | Federal |         | $      | 9,600    |  |       | $     | (259  | ) |   | $      | 9,341  | 
|                             
|                             
|                             
|                             
|                              | State   |         |        | 1,277    |  |       |       | (30   | ) |   |        | 1,247  | 
|                              |         |         |        |          |  |       |       |       |   |   |        |       
|                              |         | $       | 10,877 |          |  | $     | (289  | )     |   | $ | 10,588 |       
|                              |         |         |        |          |  |       |       |       |   |   |        |       
|Year ended December 31, 1998: |         |         |        |          |  |       |       |       |   |   |        |       
|                             
|                             
|                             
|                             
|                              | Federal |         | $      | 10,735   |  |       | $     | (149  | ) |   | $      | 10,586 | 
|                             
|                             
|                             
|                             
|                              | State   |         |        | 1,119    |  |       |       | (27   | ) |   |        | 1,092  | 
|                              |         |         |        |          |  |       |       |       |   |   |        |       
|                              |         | $       | 11,854 |          |  | $     | (176  | )     |   | $ | 11,678 |       
|                              |         |         |        |          |  |       |       |       |   |   |        |       
|Year ended December 31, 1999: |         |         |        |          |  |       |       |       |   |   |        |       
|                             
|                             
|                             
|                             
|                              | Federal |         | $      | 10,890   |  |       | $     | 3,259 |   |   | $      | 14,149 | 
|                             
|                             
|                             
|                             
|                              | State   |         |        | 654      |  |       |       | 362   |   |   |        | 1,016  | 
|                              |         |         |        |          |  |       |       |       |   |   |        |       
|                              |         | $       | 11,544 |          |  | $     | 3,621 |       |   | $ | 15,165 |       
|                              |         |         |        |          |  |       |       |       |   |   |        |       

Actual income tax expense differs from expected income tax
expense (computed by applying the statutory U.S. Federal
corporate income tax rate to income before income taxes) as
follows (in thousands, except percentages):

|                                                             |  |                          |        |      |  |      |        |   |  |   |        |  
|------------------------------------------------------------ |  | ------------------------ | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                                             |  |                         
|                                                             |  | Years Ended December 31,
|                                                             |  |                         
|                                                             |  | 1997                     |        | 1998 |  | 1999
|                                                             |  |                          |        |      |  |     
|Computed expected tax expense                                |  | $                        | 8,754  |      |  | $    | 11,441 |   |  | $ | 14,824 |  
|                                                            
|                                                            
|                                                            
|                                                            
|State income taxes, net of federal income tax benefit        |  |                          | 810    |      |  |      | 710    |   |  |   | 660    |  
|                                                            
|                                                            
|                                                            
|                                                            
|Non-deductible purchased in-process research and development |  |                          | 1,302  |      |  |      |       |   |  |   |       |  
|                                                            
|                                                            
|                                                            
|                                                            
|Net tax benefit of foreign sales corporation                 |  |                          | (187   | )    |  |      | (394   | ) |  |   | (369   | )
|                                                            
|                                                            
|                                                            
|                                                            
|Other                                                        |  |                          | (91    | )    |  |      | (79    | ) |  |   | 50     |  
|                                                             |  |                          |        |      |  |      |        |   |  |   |        |  
|                                                             |  | $                        | 10,588 |      |  | $    | 11,678 |   |  | $ | 15,165 |  
|                                                             |  |                          |        |      |  |      |        |   |  |   |        |  
|Effective rate                                               |  |                          | 42.3   | %    |  |      | 35.7   | % |  |   | 35.8   | %
|                                                             |  |                          |        |      |  |      |        |   |  |   |        |  

32



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BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

The tax effects of temporary differences that generate deferred
tax assets and liabilities at December 31 are as follows (in
 thousands):

|                          |                                                  |                                 |  |          |          |  |  |          |          | 
|------------------------- | ------------------------------------------------ | ------------------------------- |  | -------- | -------- |  |  | -------- | -------- | 
|                          |                                                  | 1998                            |  | 1999    
|                          |                                                  |                                 |  |         
|Deferred tax assets:      |                                                  |                                 |  |          |          |  |  |         
|                         
|                         
|                         
|                         
|                          | Allowance for doubtful accounts                  |                                 |  | $    412 |          |  |  | $    375 |         
|                         
|                         
|                         
|                         
|                          | Inventory related items                          |                                 |  | 1,241    |          |  |  | 1,344    |         
|                         
|                         
|                         
|                         
|                          | Pension and compensation related expenses        |                                 |  | 954      |          |  |  | 963      |         
|                         
|                         
|                         
|                         
|                          | Accrued costs                                    |                                 |  | 722      |          |  |  | 971      |         
|                         
|                         
|                         
|                         
|                          | Other                                            |                                 |  | 402      |          |  |  | 392      |         
|                          |                                                  |                                 |  |          |          |  |  |         
|                          |                                                  | Total gross deferred tax assets |  |          | 3,731    |  |  |          | 4,045    | 
|                         
|                         
|                         
|                         
|                          |                                                  | Less valuation allowance        |  |          |         |  |  |          |         | 
|                          |                                                  |                                 |  |          |          |  |  |         
|                          |                                                  | Net deferred tax assets         |  |          | 3,731    |  |  |          | 4,045    | 
|                          |                                                  |                                 |  |          |          |  |  |         
|Deferred tax liabilities: |                                                  |                                 |  |          |          |  |  |         
|                         
|                         
|                         
|                         
|                          | Basis differences in fixed and intangible assets |                                 |  | 7,787    |          |  |  | 11,370   |         
|                         
|                         
|                         
|                         
|                          | Other                                            |                                 |  | 117      |          |  |  | 492      |         
|                          |                                                  |                                 |  |          |          |  |  |         
|                          |                                                  | Total deferred tax liabilities  |  |          | 7,904    |  |  |          | 11,862   | 
|                          |                                                  |                                 |  |          |          |  |  |         
|                          |                                                  | Net deferred tax liability      |  |          | $  4,173 |  |  |          | $  7,817 | 
|                          |                                                  |                                 |  |          |          |  |  |         

(7)  Long-term Debt

Long-term debt at December 31 consisted of the following (in
 thousands):

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |      |         |      |  |   |         | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 1998 |         | 1999
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |      |         |     
|Term note with Banque Nationale de Paris in the original
	principal amount of $110,000,000; principal payments due in equal
	 quarterly installments over seven years through
	February 2005; interest due quarterly at an annual rate
	equal to three-month LIBOR (6.04% at December 31, 1999) plus
	 0.50%                                                                                                                                                                                                           |  | $    | 98,214  |      |  | $ | 82,500  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Term note with Banque Nationale de Paris in the original
	principal amount of $50,000,000; principal payments due in equal
	quarterly installments over seven years through March  2006;
	 interest due quarterly at an annual rate equal to three-month
	LIBOR plus 0.60%                                                                                                                                                                                                                                             |  |      |        |      |  |   | 44,643  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Rhode Island Industrial Facilities Corporation
	(RIIFC) Revenue Bonds in the maximum principal amount
	 of $30,000,000; principal outstanding is due in quarterly
	installments of $500,000 beginning February 1, 2002, increasing
	to $1,500,000 beginning February 1, 2005, with a final
	payment of any remaining principal due on August 1, 2006;
	bearing interest at rates ranging from LIBOR plus 0.70% to LIBOR
	plus 0.95% during its term; secured by property and equipment
	purchased with bond proceeds |  |      |        |      |  |   | 11,160  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Wilkes County Industrial Facilities (Wilkes County)
	Revenue Bonds; mandatory annual sinking fund payments equal to
	$735,000 in 1999 and increasing to a final payment of $1,100,000
	in 2005; interest payable quarterly at a variable rate (averaging
	 3.5% during 1999); secured by an irrevocable letter of credit                                                                                                                                                                                             |  |      |        |      |  |   | 5,590   | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Revolving line of credit facility; due in full on May 31,
	2000, repaid and terminated in 1999; bearing interest at an
	annual rate equal to three-month LIBOR plus 0.7%                                                                                                                                                                                                                                                                                                                                               |  |      | 9,550   |      |  |   |        | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |      |         |      |  |   |         | 
|Total long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |      | 107,764 |      |  |   | 143,893 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Current installments of long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |      | 15,714  |      |  |   | 23,637  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |      |         |      |  |   |         | 
|Long-term debt, excluding current installments                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | $    | 92,050  |      |  | $ | 120,256 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |      |         |      |  |   |         | 

33



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

The Company also maintains a $36.0 million revolving line of
credit facility with Fleet National Bank (f/k/a BankBoston, N.A.)
 and KeyBank National Association (Banks). This
facility is available to fund acquisitions and for other general
corporate purposes, bears interest at a rate per annum equal to,
at the election of the Company, either (a) LIBOR plus 0.7%,
or (b) the Banks floating rate, and is due in full on
August 24, 2001. No amounts were outstanding under this
facility at December 31, 1999.

Aggregate maturities of long-term debt and sinking fund
requirements, for each of the five years subsequent to
December 31, 1999, are as follows:
2000  $23,637,000; 2001  $23,687,000;
2002  $25,747,000; 2003  $25,817,000;
2004  $25,887,000; and thereafter $19,118,000.

(8)  Commitments and Contingencies

The Company leases production, office and warehouse space, and
certain equipment under non-cancelable operating leases. Minimum
future rentals under non-cancelable operating leases, by year,
are approximately as follows: 2000  $1,850,000;
2001  $1,267,000; 2002  $877,000;
2003  $547,000; 2004  $187,000; and
thereafter  $186,000. Rent expense totaled
approximately $1,522,000 in 1997, $1,920,000 in 1998 and
$1,871,000 in 1999.

Outstanding commitments as of December 31, 1999 for the
purchase of property, machinery and equipment were approximately
$3,414,000. The Company had outstanding letters of credit,
including an irrevocable letter of credit to secure payment of
outstanding principal on the Wilkes County Revenue Bonds, equal
to approximately $6,885,000 at December 31, 1999.

The Company is currently involved as a defendant in litigation
incidental to its business, which the Company believes is without
 merit or is adequately covered by insurance. In the opinion of
management, the ultimate resolution of such litigation will not
have a material adverse effect on the Companys financial
position, results of operations or cash flows.

(9)  Employee Benefit Plans

(a)  Defined Contribution Plans

The Company sponsors defined contribution plans for all eligible
employees. Employer contribution expense totaled approximately
$453,000 in 1997, $836,000 in 1998 and $982,000 in 1999.
Increases in contribution expense have occurred principally as a
result of greater numbers of participants resulting from the
acquisitions described in note 2.

(b)  Defined Benefit Plan

The Company sponsors a defined benefit pension plan covering
bargaining unit employees. Benefits are based on years of service
 multiplied by a predetermined monthly amount. The Companys
 policy is to fund the minimum required contribution subject to
any full funding limitation. Assumptions used to develop the
projected benefit obligation were a discount rate of 7.75% in
1997, 6.75% in 1998, and 7.5% in 1999, and a long-term rate of
return on assets of 8.5% during all years presented.

34



---



##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

The following table sets forth the benefit obligation, assets at
fair value, and funded status of the plan at December 31 (in
 thousands):

|                                                        |  |      |       |      |  |   |       |  
|------------------------------------------------------- |  | ---- | ----- | ---- |  | - | ----- | -
|                                                        |  | 1998 |       | 1999
|                                                        |  |      |       |     
|Benefit Obligation                                      |  |      |       |      |  |   |       |  
|                                                       
|                                                       
|                                                       
|                                                       
|Benefit obligation at beginning of year                 |  | $    | 1,410 |      |  | $ | 1,761 |  
|                                                       
|                                                       
|                                                       
|                                                       
|Service cost                                            |  |      | 47    |      |  |   | 56    |  
|                                                       
|                                                       
|                                                       
|                                                       
|Interest cost                                           |  |      | 109   |      |  |   | 118   |  
|                                                       
|                                                       
|                                                       
|                                                       
|Benefit payments                                        |  |      | (29   | )    |  |   | (40   | )
|                                                       
|                                                       
|                                                       
|                                                       
|Actuarial (gain) loss                                   |  |      | 224   |      |  |   | (229  | )
|                                                        |  |      |       |      |  |   |       |  
|Benefit obligation at end of year                       |  | $    | 1,761 |      |  | $ | 1,666 |  
|                                                        |  |      |       |      |  |   |       |  
|Assets at Fair Value                                    |  |      |       |      |  |   |       |  
|                                                       
|                                                       
|                                                       
|                                                       
|Fair value of assets at beginning of year               |  | $    | 843   |      |  | $ | 1,041 |  
|                                                       
|                                                       
|                                                       
|                                                       
|Actual return on assets                                 |  |      | 71    |      |  |   | 48    |  
|                                                       
|                                                       
|                                                       
|                                                       
|Contributions                                           |  |      | 156   |      |  |   | 191   |  
|                                                       
|                                                       
|                                                       
|                                                       
|Benefit payments                                        |  |      | (29   | )    |  |   | (40   | )
|                                                        |  |      |       |      |  |   |       |  
|Fair value of assets at end of year                     |  | $    | 1,041 |      |  | $ | 1,240 |  
|                                                        |  |      |       |      |  |   |       |  
|Funded Status                                           |  |      |       |      |  |   |       |  
|                                                       
|                                                       
|                                                       
|                                                       
|Benefit obligation                                      |  | $    | 1,761 |      |  | $ | 1,666 |  
|                                                       
|                                                       
|                                                       
|                                                       
|Assets at fair value                                    |  |      | 1,041 |      |  |   | 1,240 |  
|                                                        |  |      |       |      |  |   |       |  
|Net underfunded obligation                              |  | $    | 720   |      |  | $ | 426   |  
|                                                        |  |      |       |      |  |   |       |  
|Accrued benefit liability included in the balance sheet |  | $    | 720   |      |  | $ | 426   |  
|                                                        |  |      |       |      |  |   |       |  

Periodic pension cost during the years ended December 31,
1997, 1998 and 1999 included the following (in thousands):

|                              |  |      |     |      |  |      |     |   |  |   |     |  
|----------------------------- |  | ---- | --- | ---- |  | ---- | --- | - |  | - | --- | -
|                              |  | 1997 |     | 1998 |  | 1999
|                              |  |      |     |      |  |     
|Service cost                  |  | $    | 48  |      |  | $    | 47  |   |  | $ | 56  |  
|                             
|                             
|                             
|                             
|Interest cost                 |  |      | 96  |      |  |      | 109 |   |  |   | 118 |  
|                             
|                             
|                             
|                             
|Actual return on assets       |  |      | (89 | )    |  |      | (71 | ) |  |   | (48 | )
|                             
|                             
|                             
|                             
|Net amortization and deferral |  |      | 33  |      |  |      | (1  | ) |  |   | (36 | )
|                              |  |      |     |      |  |      |     |   |  |   |     |  
|Periodic pension cost         |  | $    | 88  |      |  | $    | 84  |   |  | $ | 90  |  
|                              |  |      |     |      |  |      |     |   |  |   |     |  

(c)  Stock Incentive Plans

The Bacou USA, Inc. 1996 Stock Incentive Plan (the Employee
 Plan) provides for stock-based incentive awards to be
granted to key employees, including incentive stock options,
non-qualified stock options, restricted stock, stock appreciation
 rights and stock unit awards. In the aggregate, 1,350,000 shares
 of the Companys common stock have been reserved for
issuance under the Employee Plan. Options granted under the
Employee Plan generally become fully vested after four years from
 the date of grant and have a ten-year term. The Company also
sponsors the Bacou USA, Inc. 1996 Non-Employee Director Stock
Option Plan (the Director Plan) and the 1998 Howard
S. Leight Stock Option Plan (the Leight Plan). In the
 aggregate, 300,000 shares of common stock have been reserved for
 issuance under the Director Plan and 50,000 shares have been
reserved under the Leight Plan. Options granted under the
Director Plan and the Leight Plan became fully vested on the date
 of grant and have a ten-year term.

35



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

Following is a summary of stock option activity in all three
plans:

|                                 |  |           |         |                  |  |           |       |                  |  |           |         |                  |  |   |       |  |  |  |         |   |  |   |       | 
|-------------------------------- |  | --------- | ------- | ---------------- |  | --------- | ----- | ---------------- |  | --------- | ------- | ---------------- |  | - | ----- |  |  |  | ------- | - |  | - | ----- | 
|                                 |  |           |         |                  |  |          
|                                 |  | 1997      |         | 1998             |  | 1999     
|                                 |  |           |         |                  |  |          
|                                 |  | Number of |         | Weighted Average |  | Number of |       | Weighted Average |  | Number of |         | Weighted Average
|                                 |  | Shares    |         | Exercise Price   |  | Shares    |       | Exercise Price   |  | Shares    |         | Exercise Price  
|                                 |  |           |         |                  |  |           |       |                  |  |           |         |                 
|Outstanding at beginning of year |  |           | 388,700 |                  |  | $         | 15.13 |                  |  |           | 577,900 |                  |  | $ | 15.23 |  |  |  | 988,400 |   |  | $ | 16.27 | 
|                                
|                                
|                                
|                                
|Granted                          |  |           | 235,000 |                  |  |           | 15.35 |                  |  |           | 470,000 |                  |  |   | 17.52 |  |  |  | 95,000  |   |  |   | 16.99 | 
|                                
|                                
|                                
|                                
|Exercised                        |  |           | (6,400  | )                |  |           | 15.00 |                  |  |           | (22,500 | )                |  |   | 15.53 |  |  |  | (19,400 | ) |  |   | 15.78 | 
|                                
|                                
|                                
|                                
|Canceled                         |  |           | (39,400 | )                |  |           | 15.00 |                  |  |           | (37,000 | )                |  |   | 16.28 |  |  |  | (92,600 | ) |  |   | 17.45 | 
|                                 |  |           |         |                  |  |           |       |                  |  |           |         |                  |  |   |       |  |  |  |         |   |  |   |       | 
|Outstanding at end of year       |  |           | 577,900 |                  |  | $         | 15.23 |                  |  |           | 988,400 |                  |  | $ | 16.27 |  |  |  | 971,400 |   |  | $ | 16.24 | 
|                                 |  |           |         |                  |  |           |       |                  |  |           |         |                  |  |   |       |  |  |  |         |   |  |   |       | 
|Exercisable at end of year       |  |           | 299,200 |                  |  | $         | 15.26 |                  |  |           | 525,500 |                  |  | $ | 15.90 |  |  |  | 721,250 |   |  | $ | 16.11 | 
|                                 |  |           |         |                  |  |           |       |                  |  |           |         |                  |  |   |       |  |  |  |         |   |  |   |       | 

Following is a summary of options outstanding at
December 31, 1999 in all three plans:

|                    |  |                     |         |                     |  |                |      |             |  |                |       |  |  |  |         |  |  |   |       | 
|------------------- |  | ------------------- | ------- | ------------------- |  | -------------- | ---- | ----------- |  | -------------- | ----- |  |  |  | ------- |  |  | - | ----- | 
|                    |  |                    
|Options Outstanding |  | Options Exercisable
|                    |  |                    
|                    |  | Weighted Average    |         | Weighted            |  |                |      | Weighted   
|Range of            |  | Number              |         | Remaining Years     |  | Average        |      | Number      |  | Average       
|Exercise Prices     |  | Outstanding         |         | of Contractual Life |  | Exercise Price |      | Exercisable |  | Exercise Price
|                    |  |                     |         |                     |  |                |      |             |  |               
|$13.00  15.00      |  |                     | 416,000 |                     |  |                | 6.73 |             |  | $              | 14.85 |  |  |  | 314,500 |  |  | $ | 14.92 | 
|15.63  17.31       |  |                     | 194,600 |                     |  |                | 8.19 |             |  |                | 16.38 |  |  |  | 191,600 |  |  |   | 16.37 | 
|17.50  23.75       |  |                     | 360,800 |                     |  |                | 8.17 |             |  |                | 17.77 |  |  |  | 215,150 |  |  |   | 17.62 | 
|                    |  |                     |         |                     |  |                |      |             |  |                |       |  |  |  |         |  |  |   |       | 
|$13.00  23.75      |  |                     | 971,400 |                     |  |                | 7.56 |             |  | $              | 16.24 |  |  |  | 721,250 |  |  | $ | 16.11 | 
|                    |  |                     |         |                     |  |                |      |             |  |                |       |  |  |  |         |  |  |   |       | 

The Company accounts for employee and director stock option
grants using the intrinsic value-based method and, accordingly,
no compensation cost has been recognized for such stock options
in the financial statements. Had the Company determined
compensation cost based on the fair value at the grant date for
its stock options, the Companys net income, and earnings
per share (basic and diluted), would have been reduced to
$13,362,000 or $0.77 per share in 1997, $19,729,000 or $1.12 per
share in 1998 and to $26,150,000 or $1.48 per share in 1999. The
per share weighted-average fair value of stock options granted
was $6.73 in 1997, $7.42 in 1998 and $7.45 in 1999. The Black
Scholes option pricing model was used to determine the fair value
 of stock options, including the following weighted-average
assumptions: expected dividend yield 0.0%; risk-free interest
rate of 5.75% in 1997, 4.75% in 1998 and 6.0% in 1999; expected
volatility of 0.40; and an expected life of 5 years.

(10)  Segment Data

The Company has three reportable segments, which include the
safety products segment, the glove segment and the optical frames
 and instruments segment. The safety products segment consists of
 businesses that manufacture consumable products (protective
eyewear and hearing protection) and technical products
(respirators and gas monitors), all of which are sold principally
 to industrial and fire safety distributors. The Company began
reporting a glove segment in connection with its April 1,
1999 acquisition of Perfect Fit. Glove segment products include
protective gloves and related items, which are sold principally
to industrial safety distributors. The optical frames and
instruments segment includes eyeglass frames and components, and
vision screening equipment. Eyeglass frames and components are
principally purchased by optical laboratory customers who fit
frames with prescription lenses to create completed eyewear
products.

36



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

The Company evaluates segment performance based upon a measure of
 profit represented by operating income prior to non-recurring
gains and losses, intangible amortization expense, interest and
taxes. Accounting policies for reportable segments are consistent
 with the policies described in note 1 to the consolidated
financial statements.

Presented below is a summary of financial data for the
Companys reportable segments. Adjustments to reconcile
segment operating income to consolidated operating income include
 amortization expense totaling $4,095,000 in 1997, $7,748,000 in
1998 and $9,440,000 in 1999, and also include non-recurring items
 totaling $5,924,000 in 1997, $7,716,000 in 1998 and $590,000 in
1999. Information presented below as All Other
includes all non-operating entities. Effective January 1,
2000, the Company began to charge-back as an operating expense
management fees for legal, human resource and information system
services provided by Bacou to its subsidiaries. Segment operating
 results shown below have been restated to conform to the new
policy. Amounts shown below for total assets exclude intercompany
 receivables and investments in wholly-owned subsidiaries.

|                         |  |         |         |         |  |             |        |           |  |             |        |              |  |   |        |   |  |   |         |   |  |   |         | 
|------------------------ |  | ------- | ------- | ------- |  | ----------- | ------ | --------- |  | ----------- | ------ | ------------ |  | - | ------ | - |  | - | ------- | - |  | - | ------- | 
|                         |  |         |         |         |  | Optical     |        |           |  |             |        |             
|                         |  |         |         |         |  | Frames and  |        |           |  |             |        |             
|                         |  | Safety  |         | Glove   |  | Instruments |        |           |  | Reconciling |        | Consolidated
|                         |  | Segment |         | Segment |  | Segment     |        | All Other |  | Adjustments |        | Total       
|(in thousands)           |  |         |         |         |  |             |        |           |  |             |        |             
|1997                     |  |         |         |         |  |             |        |           |  |             |        |              |  |   |        |   |  |   |         |   |  |   |         | 
|                        
|                        
|                        
|                        
|Net sales                |  | $       | 99,378  |         |  | $           |       |           |  | $           | 31,491 |              |  | $ |       |   |  | $ |        |   |  | $ | 130,869 | 
|                        
|                        
|                        
|                        
|Segment operating income |  |         | 34,035  |         |  |             |       |           |  |             | 3,056  |              |  |   | (2,438 | ) |  |   | (10,019 | ) |  |   | 24,634  | 
|                        
|                        
|                        
|                        
|Depreciation             |  |         | 3,487   |         |  |             |       |           |  |             | 1,020  |              |  |   | 16     |   |  |   |        |   |  |   | 4,523   | 
|                        
|                        
|                        
|                        
|Total assets             |  |         | 113,694 |         |  |             |       |           |  |             | 35,266 |              |  |   | 3,391  |   |  |   |        |   |  |   | 152,351 | 
|                        
|                        
|                        
|                        
|Capital expenditures     |  |         | 4,488   |         |  |             |       |           |  |             | 2,092  |              |  |   | 257    |   |  |   |        |   |  |   | 6,837   | 
|                        
|                        
|                        
|                        
|1998                     |  |         |         |         |  |             |        |           |  |             |        |              |  |   |        |   |  |   |         |   |  |   |         | 
|                        
|                        
|                        
|                        
|Net sales                |  | $       | 189,363 |         |  | $           |       |           |  | $           | 30,218 |              |  | $ |       |   |  | $ |        |   |  | $ | 219,581 | 
|                        
|                        
|                        
|                        
|Segment operating income |  |         | 56,741  |         |  |             |       |           |  |             | 2,481  |              |  |   | (5,016 | ) |  |   | (15,464 | ) |  |   | 38,742  | 
|                        
|                        
|                        
|                        
|Depreciation             |  |         | 5,194   |         |  |             |       |           |  |             | 1,185  |              |  |   | 27     |   |  |   |        |   |  |   | 6,406   | 
|                        
|                        
|                        
|                        
|Total assets             |  |         | 250,172 |         |  |             |       |           |  |             | 41,938 |              |  |   | 1,660  |   |  |   |        |   |  |   | 293,770 | 
|                        
|                        
|                        
|                        
|Capital expenditures     |  |         | 12,381  |         |  |             |       |           |  |             | 1,742  |              |  |   | 263    |   |  |   |        |   |  |   | 14,386  | 
|                        
|                        
|                        
|                        
|1999                     |  |         |         |         |  |             |        |           |  |             |        |              |  |   |        |   |  |   |         |   |  |   |         | 
|                        
|                        
|                        
|                        
|Net sales                |  | $       | 201,719 |         |  | $           | 39,804 |           |  | $           | 31,274 |              |  | $ |       |   |  | $ |        |   |  | $ | 272,797 | 
|                        
|                        
|                        
|                        
|Segment operating income |  |         | 59,179  |         |  |             | 5,567  |           |  |             | 2,964  |              |  |   | (6,734 | ) |  |   | (10,030 | ) |  |   | 50,946  | 
|                        
|                        
|                        
|                        
|Depreciation             |  |         | 6,179   |         |  |             | 327    |           |  |             | 1,315  |              |  |   | 26     |   |  |   |        |   |  |   | 7,847   | 
|                        
|                        
|                        
|                        
|Total assets             |  |         | 254,813 |         |  |             | 62,088 |           |  |             | 37,552 |              |  |   | 16,972 |   |  |   |        |   |  |   | 371,425 | 
|                        
|                        
|                        
|                        
|Capital expenditures     |  |         | 14,974  |         |  |             | 1,067  |           |  |             | 2,390  |              |  |   | 442    |   |  |   |        |   |  |   | 18,873  | 

There were no sales to any individual customer during any of the
years in the three-year period ended December 31, 1999 that
represented 10% or more of consolidated sales. The Company has no
 material long-lived assets located in foreign countries. The
Company attributes net sales to an individual country based upon
the location of the customer and sales to all foreign countries
totaled $15,087,000 in 1997, $33,102,000 in 1998 and $36,950,000
in 1999. The Company had no material foreign sales to an
individual country.

37



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

(11)  Quarterly Financial Results and Market Data
(Unaudited)

Following is a summary of quarterly operating results and share
data. There were no dividends paid or declared during any period
presented and the Company anticipates that it will continue to
retain earnings for use in its business and not pay cash
dividends for the foreseeable future.

|                                      |         |         |        |        |     |       |        |        |       |           |        |      |      |   |        |      |     |   |         |      |    
|------------------------------------- | ------- | ------- | ------ | ------ | --- | ----- | ------ | ------ | ----- | --------- | ------ | ---- | ---- | - | ------ | ---- | --- | - | ------- | ---- | ---
|                                      |         |         |        |       
|                                      |         | Quarter |        |       
|                                      |         |         |        |       
|                                      |         | First   |        | Second |     | Third |        | Fourth |       | Full Year
|(in thousands, except per share data) |         |         |        |        |     |       |        |        |       |          
|1998                                  |         |         |        |        |     |       |        |        |       |           |        |      |      |   |        |      |     |   |         |     
|                                     
|                                     
|                                     
|                                     
|Net sales                             |         | $       | 49,515 |        |     | $     | 58,864 |        |       | $         | 56,899 |      |      | $ | 54,303 |      |     | $ | 219,581 |     
|                                     
|                                     
|                                     
|                                     
|Gross profit                          |         |         | 24,816 |        |     |       | 31,017 |        |       |           | 30,161 |      |      |   | 27,731 |      |     |   | 113,725 |     
|                                     
|                                     
|                                     
|                                     
|Income before income taxes            |         |         | 4,138  |        |     |       | 9,572  |        |       |           | 10,486 |      |      |   | 8,492  |      |     |   | 32,688  |     
|                                     
|                                     
|                                     
|                                     
|Net income                            |         |         | 2,736  |        |     |       | 6,099  |        |       |           | 6,675  |      |      |   | 5,500  |      |     |   | 21,010  |     
|                                     
|                                     
|                                     
|                                     
|Earnings per share:                   |         |         |        |        |     |       |        |        |       |           |        |      |      |   |        |      |     |   |         |     
|                                     
|                                     
|                                     
|                                     
|                                      | Basic   |         | $      | 0.15   |     |       | $      | 0.35   |       |           | $      | 0.38 |      |   | $      | 0.31 |     |   | $       | 1.19 |    
|                                     
|                                     
|                                     
|                                     
|                                      | Diluted |         | $      | 0.15   |     |       | $      | 0.35   |       |           | $      | 0.38 |      |   | $      | 0.31 |     |   | $       | 1.19 |    
|                                     
|                                     
|                                     
|                                     
|Market price:                         |         |         |        |        |     |       |        |        |       |           |        |      |      |   |        |      |     |   |         |     
|                                     
|                                     
|                                     
|                                     
|                                      | High    |         |        | 18     | 1/8 |       |        | 22     | 3/4   |           |        | 25   | 3/8  |   |        | 21   | 7/8 |   |         | 25   | 3/8
|                                     
|                                     
|                                     
|                                     
|                                      | Low     |         |        | 15     | 3/4 |       |        | 15     | 7/8   |           |        | 17   | 1/8  |   |        | 15   |     |   |         | 15   |    
|                                     
|                                     
|                                     
|                                     
|1999                                  |         |         |        |        |     |       |        |        |       |           |        |      |      |   |        |      |     |   |         |     
|                                     
|                                     
|                                     
|                                     
|Net sales                             |         | $       | 54,575 |        |     | $     | 73,907 |        |       | $         | 72,940 |      |      | $ | 71,375 |      |     | $ | 272,797 |     
|                                     
|                                     
|                                     
|                                     
|Gross profit                          |         |         | 26,887 |        |     |       | 33,736 |        |       |           | 34,763 |      |      |   | 32,373 |      |     |   | 127,759 |     
|                                     
|                                     
|                                     
|                                     
|Income before income taxes            |         |         | 8,536  |        |     |       | 12,335 |        |       |           | 11,926 |      |      |   | 9,558  |      |     |   | 42,355  |     
|                                     
|                                     
|                                     
|                                     
|Net income                            |         |         | 5,474  |        |     |       | 7,908  |        |       |           | 7,635  |      |      |   | 6,173  |      |     |   | 27,190  |     
|                                     
|                                     
|                                     
|                                     
|Earnings per share:                   |         |         |        |        |     |       |        |        |       |           |        |      |      |   |        |      |     |   |         |     
|                                     
|                                     
|                                     
|                                     
|                                      | Basic   |         | $      | 0.31   |     |       | $      | 0.45   |       |           | $      | 0.43 |      |   | $      | 0.35 |     |   | $       | 1.54 |    
|                                     
|                                     
|                                     
|                                     
|                                      | Diluted |         | $      | 0.31   |     |       | $      | 0.45   |       |           | $      | 0.43 |      |   | $      | 0.35 |     |   | $       | 1.54 |    
|                                     
|                                     
|                                     
|                                     
|Market price:                         |         |         |        |        |     |       |        |        |       |           |        |      |      |   |        |      |     |   |         |     
|                                     
|                                     
|                                     
|                                     
|                                      | High    |         |        | 24     |     |       |        | 19     | 11/16 |           |        | 18   | 3/16 |   |        | 17   |     |   |         | 24   |    
|                                     
|                                     
|                                     
|                                     
|                                      | Low     |         |        | 12     | 3/8 |       |        | 12     | 5/8   |           |        | 16   | 5/16 |   |        | 14   | 3/4 |   |         | 12   | 3/8

The Company completed its acquisition of Perfect Fit Glove Co.,
Inc. and affiliates on April 1, 1999, and its acquisition of
 Howard S. Leight & Associates, Inc. on
February 27, 1998. For comparative purposes, net income and
earnings per share (basic and diluted) excluding non-recurring
items related to these acquisitions and excluding a severance
charge equal to $1.4 million in 1998, would have been as follows:

|                                      |  |         |       |        |  |       |       |        |  |           |       |  |  |   |       |  |  |   |        | 
|------------------------------------- |  | ------- | ----- | ------ |  | ----- | ----- | ------ |  | --------- | ----- |  |  | - | ----- |  |  | - | ------ | 
|                                      |  |         |       |       
|                                      |  | Quarter |       |       
|                                      |  |         |       |       
|                                      |  | First   |       | Second |  | Third |       | Fourth |  | Full Year
|(in thousands, except per share data) |  |         |       |        |  |       |       |        |  |          
|1998                                  |  |         |       |        |  |       |       |        |  |           |       |  |  |   |       |  |  |   |        | 
|                                     
|                                     
|                                     
|                                     
|Net income                            |  | $       | 6,425 |        |  | $     | 7,196 |        |  | $         | 6,675 |  |  | $ | 5,500 |  |  | $ | 25,796 | 
|                                     
|                                     
|                                     
|                                     
|Earnings per share                    |  | $       | 0.36  |        |  | $     | 0.41  |        |  | $         | 0.38  |  |  | $ | 0.31  |  |  | $ | 1.46   | 
|                                     
|                                     
|                                     
|                                     
|1999                                  |  |         |       |        |  |       |       |        |  |           |       |  |  |   |       |  |  |   |        | 
|                                     
|                                     
|                                     
|                                     
|Net income                            |  | $       | 5,474 |        |  | $     | 8,262 |        |  | $         | 7,635 |  |  | $ | 6,173 |  |  | $ | 27,544 | 
|                                     
|                                     
|                                     
|                                     
|Earnings per share                    |  | $       | 0.31  |        |  | $     | 0.47  |        |  | $         | 0.43  |  |  | $ | 0.35  |  |  | $ | 1.56   | 

38



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)








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

None.




PART III




Item 10.  Directors and Executive Officers
of the Registrant

The sections Election of Directors,
Compensation of Directors and Officers, and
Section 16(a) Beneficial Ownership Reporting
Compliance included in Bacous proxy statement for its
 2000 Annual Meeting of Stockholders to be filed with the
Securities and Exchange Commission on or before April 30,
2000 are hereby incorporated by reference.




Item 11.  Executive Compensation

The section Compensation of Directors and Officers
included in Bacous proxy statement for its 2000 Annual
Meeting of Stockholders to be filed with the Securities and
Exchange Commission on or before April 30, 2000 is hereby
incorporated by reference.




Item 12.  Security Ownership of Certain
Beneficial Owners and Management

The sections Introduction and Security
Ownership of Certain Beneficial Owners and Management
included in Bacous proxy statement for its 2000 Annual
Meeting of Stockholders to be filed with the Securities and
Exchange Commission on or before April 30, 2000 are hereby
incorporated by reference.




Item 13.  Certain Relationships and Related
Transactions

The section Certain Transactions included in
Bacous proxy statement for its 2000 Annual Meeting of
Stockholders to be filed with the Securities and Exchange
Commission on or before April 30, 2000 is hereby
incorporated by reference.




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

(a)  1.  List of Financial Statements

The following financial statements are included in Item 8
herein:



| |  |                                                                                                                                                                                                                                                                                 
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Independent Auditors Report on Consolidated Financial
	Statements 
	 Consolidated Balance Sheets 
	 Consolidated Statements of Income 
	 Consolidated Statements of Stockholders Equity 
	 Consolidated Statements of Cash Flows 
	 Notes to Consolidated Financial Statements

2.  Financial Statement Schedules

Schedule II            Valuation
 and Qualifying Accounts

All other schedules are omitted, since the required information
is not present or is not present in amounts sufficient to require
 submission of the schedule, or because the information required
is included in the consolidated financial statements, and notes
thereto.

Independent Auditors Report on Financial Statement Schedule

3.  Exhibits

39



---



##### Table of Contents



FORM 10-K EXHIBITS

|        |        |   |  |                        |  |                                                                                                                                                                                                                                                                                            
|------- | ------ | - |  | ---------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |   |  |                       
|Number  |        |   |  | Description of Exhibit
|        |        |   |  |                       
|        | 2.1    |   |  |                       |  | Agreement and Plan of Merger dated as of September 30, 1997
	by and among Bacou USA, Inc., ISH Transaction, Inc., Biosystems,
	Inc. and the Shareholders of Biosystems, Inc. (incorporated by
	reference to Exhibit 2(a) of the Companys
	Form 8-K filed October 15, 1997)                
|        | 2.2    |   |  |                       |  | Asset Purchase Agreement dated December 31, 1997 between
	Bacou USA Safety, Inc. and Howard S. Leight &
	Associates, Inc. (d/b/a Howard Leight Industries) (incorporated
	by reference to Exhibit 2(a) of the Companys
	Form 8-K filed on March 13, 1998)                                 
|        | 2.3    |   |  |                       |  | Letter Agreement by and between Howard S. Leight and Bacou
	USA, Inc. (incorporated by reference to Exhibit 2(b) of the
	Companys Form 8-K filed on March 13, 1998)                                                                                                                       
|        | 2.4    |   |  |                       |  | Letter Agreement by and among Howard S. Leight, Bacou S.A.
	and Engineering Bacou S.A. (incorporated by reference to
	Exhibit 2(c) of the Companys Form 8-K filed on
	March 13, 1998)                                                                                                     
|        | 2.5    |   |  |                       |  | First Amendment to Asset Purchase Agreement dated February 
	27, 1998 (incorporated by reference to Exhibit 2(d) of the
	Companys Form 8-K filed on March 13, 1998)                                                                                                                       
|        | 2.6    |   |  |                       |  | Asset Purchase Agreement dated as of February 24, 1999 by
	and among Perfect Fit Glove Co., Inc. and other related parties
	and Bacou USA Safety, Inc. (incorporated by reference to
	Exhibit 2(a) of the Companys Form 10-K filed on
	March 30, 1999)                                    
|        | 3.1    |   |  |                       |  | Amended and Restated Certificate of Incorporation (incorporated
	by reference to Exhibit 3(a) of the Companys
	Registration Statement filed on Form  S-1(Commission File
	No. 333-00470) (the Companys Registration
	Statement))                                                       
|        | 3.2    |   |  |                       |  | Bylaws (incorporated by reference to Exhibit 3(b) of the
	Companys Registration Statement)                                                                                                                                                                                                
|        | 4.1    |   |  |                       |  | Credit Line Agreement by and between Bacou USA, Inc. and Banque
	Nationale de Paris (BNP) dated February 19, 1998
	 (incorporated by reference to Exhibit 10(a) of the
	Companys Form 8-K filed on March 13, 1998)                                                                      
|        | 4.2    |   |  |                       |  | Credit Line Agreement by and between Bacou USA, Inc. and BNP
	dated March 25, 1999                                                                                                                                                                                                         
|        | 4.3    |   |  |                       |  | Credit Agreement dated as of August 24, 1999 by and among
	Bacou USA, Inc., Uvex Safety Manufacturing, Inc.
	(USM), BankBoston, N.A.(BKB) (n/k/a Fleet
	 National Bank) and KeyBank N.A. (incorporated by reference to
	Exhibit 4(a) of the Companys Form 10-Q filed on
	May 13, 1999)
|        | 4.4    |   |  |                       |  | Bond Purchase Agreement dated as of August 24, 1999 by and
	among Bacou USA, Inc., USM, BKB and the Rhode Island Industrial
	Facilities Corporation (incorporated by reference to
	Exhibit 4(b) of the Companys Form 10-Q filed on
	May  13, 1999)                                        
|        | 10.1.1 | * |  |                       |  | Employment Agreement dated as of January 1, 1996 by and
	between the Company and Walter Stepan (incorporated by reference
	to Exhibit 10(w) of Companys Registration Statement)                                                                                                           
|        | 10.1.2 | * |  |                       |  | First Amendment to Employment Agreement with Walter Stepan
	(incorporated by reference to Exhibit 4(g) of Companys
	 Form 10-Q filed November 14, 1997)                                                                                                                                   
|        | 10.1.3 | * |  |                       |  | Second Amendment to Employment Agreement with Walter Stepan dated
	 as of August 25, 1998 (incorporated by reference to
	Exhibit 10.2 of the Companys Form 10-Q filed
	November  14, 1998)                                                                                                
|        | 10.1.4 | * |  |                       |  | Amended and Restated Employment Agreement with Walter Stepan
	dated as of December 1, 1999                                                                                                                                                                                                 
|        | 10.2.1 | * |  |                       |  | Employment Agreement dated May 8, 1995 by and between the
	Company and Philip B. Barr (incorporated by reference to
	Exhibit 10(b) of Companys Registration Statement)                                                                                                                    

40



---



##### Table of Contents



|        |        |   |  |                        |  |                                                                                                                                                                                                                                                                                                                     
|------- | ------ | - |  | ---------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |   |  |                       
|Number  |        |   |  | Description of Exhibit
|        |        |   |  |                       
|        | 10.2.2 | * |  |                       |  | First Amendment to Employment Agreement with Philip B. Barr
	(incorporated by reference to Exhibit 10(x) to Amendment
	No. 1 to the Companys Registration Statement)                                                                                                                                               
|        | 10.2.3 | * |  |                       |  | Second Amendment to Employment Agreement with Philip B. Barr
	 (incorporated by reference to Exhibit 10(y) to Amendment
	No. 1 to the Companys Registration Statement)                                                                                                                                             
|        | 10.2.4 | * |  |                       |  | Third Amendment to Employment Agreement with Philip B. Barr
	(incorporated by reference to Exhibit 4(h) of the
	Companys Form 10-Q filed November 14, 1997)                                                                                                                                                        
|        | 10.2.5 | * |  |                       |  | Employment Agreement with Philip B. Barr effective
	January  1, 2000                                                                                                                                                                                                                                                
|        | 10.3.1 | * |  |                       |  | Employment Agreement with Alan H. Bennett dated
	February  1, 1999 (incorporated by reference to
	Exhibit 10.9 of the Companys Form 10-K filed
	March 30, 1999)                                                                                                                                                    
|        | 10.3.2 | * |  |                       |  | Employment Agreement with Alan H. Bennett effective
	January 1, 2000                                                                                                                                                                                                                                                
|        | 10.4*  |   |  |                       |  | Employment Agreement dated October 1, 1997 between
	Biosystems, Inc. and John F. Burt, Jr. (incorporated by
	 reference to Exhibit 4(d) of the Companys
	Form 10-Q filed November 14, 1997)                                                                                                                        
|        | 10.5*  |   |  |                       |  | Employment Agreement with Adrien W. Hebert effective
	January 1, 2000                                                                                                                                                                                                                                               
|        | 10.6   |   |  |                       |  | Registration Rights Agreement dated July 31, 1994 by and
	between Walter Stepan and the Company (incorporated by reference
	to Exhibit 10(h)(i) of Companys Registration
	Statement)                                                                                                                               
|        | 10.7   |   |  |                       |  | Form of Registration Rights Agreement dated
	February    1996 among the Principal Stockholder
	Figa, S.A., Walter Stepan, Heidemarie Stepan, Bettina Stepan,
	Axel Stepan and the Company (incorporated by reference to
	Exhibit 10(i) to Amendment No. 1 of Companys
	Registration Statement)                     
|        | 10.8   |   |  |                       |  | Registration Rights Agreement dated September 30, 1997 by
	and among Bacou USA, Inc. and each person identified therein
	(incorporated by reference to Exhibit 2(b) of the
	Companys Form 8-K filed October 15, 1997)                                                                                              
|        | 10.9   |   |  |                       |  | Corporate Opportunities Agreement dated as of January 1,
	1996 between the Principal Stockholder and the Company
	(incorporated by reference to Exhibit 10(j) of
	Companys Registration Statement)                                                                                                                 
|        | 10.10  |   |  |                       |  | Amended and Restated Agreement of Transfer, Trademarks, Know-How
	and Related Matters dated November 2, 1995 by and among Uvex
	 Winter Optik GmbH, Uvex Arbeitsschutz GmbH & Co., KG,
	Uvex Winter Optical, Inc. and Uvex Safety (incorporated by
	reference to Exhibit 10(k) of Companys Registration
	Statement)
|        | 10.11  |   |  |                       |  | License Agreement dated June 1, 1986 between Uvex Winter
	Optik GmbH and Uvex Winter Optical, Inc., as amended by a First
	Amendment dated October 31, 1994 (incorporated by reference
	to Exhibit 10(l) of Companys Registration Statement)                                                                       
|        | 10.12  |   |  |                       |  | License Agreement dated July 1, 1992 between Uvex Winter
	Optik GmbH and Uvex Winter Optical, Inc., as amended by a First
	Amendment dated October 31, 1994 (incorporated by reference
	to Exhibit 10(m) of Companys Registration Statement)                                                                       
|        | 10.13  |   |  |                       |  | Cooperation Agreement among Uvex Safety, Laservision GmbH, Uvex
	Winter Optik GmbH and Rupp & Hubrach KG dated March  18,
	 1991 (incorporated by reference to Exhibit 10(n) of
	Companys Registration Statement)                                                                                                  
|        | 10.14* |   |  |                       |  | Bacou USA, Inc. 1996 Stock Incentive Plan (incorporated by
	reference to Exhibit 10(g) of the Companys
	Registration Statement)                                                                                                                                                                                    
|        | 10.15* |   |  |                       |  | Bacou USA, Inc. 1996 Non-Employee Director Stock Option Plan
	(incorporated by reference to Exhibit 10(x) of the
	Companys Form 10-K filed March 31, 1997)                                                                                                                                                         
|        | 10.16* |   |  |                       |  | 1998 Howard S. Leight Stock Option Plan (incorporated by
	reference to Exhibit 10.35 to the Companys
	Form 10-K filed March 27, 1998)                                                                                                                                                                              

41



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##### Table of Contents



|        |        |  |  |                        |  |                                                                                                                                                                                                                                  
|------- | ------ |  |  | ---------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |  |  |                       
|Number  |        |  |  | Description of Exhibit
|        |        |  |  |                       
|        | 10.17  |  |  |                       |  | Lease Agreement dated February 27, 1998 by and between
	Howard S. Leight and Bacou USA Safety, Inc. (incorporated by
	 reference to Exhibit 10.38 of the Companys
	Form 10-K filed March 27, 1998)                              
|        | 10.18* |  |  |                       |  | Bonus Plan for Executives of Subsidiaries and Divisions of Bacou
	USA, Inc. for 1998 and 1999 (incorporated by reference to
	Exhibit 10.39 of the Companys Form 10-K filed
	March  27, 1998)                                    
|        | 10.19* |  |  |                       |  | Bonus and Option Plan for CEO, COO and CFO of Bacou USA, Inc. for
	 2000                                                                                                                                                         
|        | 10.20* |  |  |                       |  | Bonus Plan for Executives of Bacou USA, Inc. for 2000                                                                                                                                                                            
|        | 10.21* |  |  |                       |  | Bonus Plan for Executives of Subsidiaries and Divisions of Bacou
	USA, Inc. for 2000                                                                                                                                             
|        | 10.22* |  |  |                       |  | Consulting Agreement dated as of February 27, 1998 between
	Howard S. Leight and Bacou USA Safety, Inc. (incorporated by
	 reference to Exhibit 99(e) of the Companys
	Form 8-K filed March 13, 1998)                           
|        | 10.23  |  |  |                       |  | Purchase and Sale Agreement dated November 20, 1998 by and
	between Uvex Winter Optical, Inc. and Uvex Safety Manufacturing,
	Inc. (incorporated by reference to Exhibit  10.22 of the
	Companys Form 10-K filed March 30, 1999)
|        | 21     |  |  |                       |  | Subsidiaries of the Company                                                                                                                                                                                                      
|        | 23     |  |  |                       |  | Accountants Consent                                                                                                                                                                                                             
|        | 27     |  |  |                       |  | Financial Data Schedule                                                                                                                                                                                                          




|  |                                                        
|- | -------------------------------------------------------
|* | Management contract or compensatory plan or arrangement



|    |                    
|--- | -------------------
|(b) | Reports on Form 8-K

The Company filed no reports on Form 8-K during the
quarterly period ended December 31, 1999.

42



---



##### Table of Contents



Item 14(a) 2.  Financial Statement Schedules

Financial Statement Schedule II


Valuation and Qualifying Accounts

|                                  |                              |            |  |            |  |             |  |               |  |            |  |     |  |  |  |     |  |  |  |       | 
|--------------------------------- | ---------------------------- | ---------- |  | ---------- |  | ----------- |  | ------------- |  | ---------- |  | --- |  |  |  | --- |  |  |  | ----- | 
|                                  |                              |            |  | Additions  |  | Additions   |  |               |  |           
|                                  |                              | Balance at |  | Charged to |  | Charged to  |  |               |  | Balance at
|                                  |                              | Beginning  |  | Cost and   |  | Other       |  |               |  | End of    
|Description                       |                              | of Period  |  | Expenses   |  | Accounts(1) |  | Deductions(2) |  | Period    
|                                  |                              |            |  |            |  |             |  |               |  |           
|Bad debt allowance (in thousands) |                              |            |  |            |  |             |  |               |  |            |  |     |  |  |  |     |  |  |  |      
|                                 
|                                 
|                                 
|                                 
|                                  | Year ended December 31 1997  |            |  | 792        |  |             |  | 211           |  |            |  | 209 |  |  |  | 267 |  |  |  | 945   | 
|                                 
|                                 
|                                 
|                                 
|                                  | Year ended December 31, 1998 |            |  | 945        |  |             |  | 266           |  |            |  | 150 |  |  |  | 211 |  |  |  | 1,150 | 
|                                 
|                                 
|                                 
|                                 
|                                  | Year ended December 31, 1999 |            |  | 1,150      |  |             |  | 110           |  |            |  | 100 |  |  |  | 192 |  |  |  | 1,168 | 




|    |                                                                                                
|--- | -----------------------------------------------------------------------------------------------
|(1) | Represents the beginning bad debt allowance of businesses
	acquired during the period.         
|   
|(2) | Deductions consist of uncollectible accounts charged-off during
	the period, net of recoveries.

All other schedules for which provisions are made in the
applicable accounting regulations of the Securities and Exchange
Commission are not required under the related instructions, are
inapplicable or are not material and therefore have been omitted.

43



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##### Table of Contents



SIGNATURES

Pursuant to the requirements of Section 13 or 15(a) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Town of Smithfield, State of
Rhode Island, on this 20th day of March, 2000.



| |                
| | ---------------
| | BACOU USA, INC.



| |    |                    
| | -- | -------------------
| | By | /s/ADRIEN W. HEBERT

| |                                                      
| | -----------------------------------------------------
| |                                                      
| | Adrien W. Hebert                                     
| | Vice President - Finance and Chief
	Financial Officer



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

|                                             |  |                                                                              
|-------------------------------------------- |  | -----------------------------------------------------------------------------
|Signature                                    |  | Title                                                                        
|                                             |  |                                                                              
|/s/ WALTER STEPANWalter Stepan               |  | Co-Chairman, Director                                                        
|                                            
|/s/ PHILIP B. BARRPhilip B. Barr             |  | President and Chief Executive Officer, Director                              
|                                            
|/s/ JEFFREY T. BROWNJeffrey T. Brown         |  | Vice President - Financial Reporting, Treasurer and Chief
	Accounting Officer
|                                            
|/s/ PHILIPPE BACOUPhilippe Bacou             |  | Co-Chairman of the Board, Director                                           
|                                            
|/s/ CHRISTOPHE BACOUChristophe Bacou         |  | Director                                                                     
|                                            
|/s/ KARL F. ERICSONKarl F. Ericson           |  | Director                                                                     
|                                            
|/s/ HOWARD S. LEIGHTHoward S. Leight         |  | Director                                                                     
|                                            
|/s/ GILBERT VANDEPUTTEGilbert Vandeputte     |  | Director                                                                     
|                                            
|/s/ ALFRED J. VERRECCHIAAlfred J. Verrecchia |  | Director                                                                     

44



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##### Table of Contents



FORM 10-K EXHIBITS INDEX

|        |         |  |  |                        |  |                                                                                                                                                                                                                                                                                         
|------- | ------- |  |  | ---------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |         |  |  |                       
|Number  |         |  |  | Description of Exhibit
|        |         |  |  |                       
|        | 2.1     |  |  |                       |  | Agreement and Plan of Merger dated as of September 30, 1997
	by and among Bacou USA, Inc., ISH Transaction, Inc., Biosystems,
	Inc. and the Shareholders of Biosystems, Inc. (incorporated by
	reference to Exhibit 2(a) of the Companys
	Form 8-K filed October 15, 1997)             
|        | 2.2     |  |  |                       |  | Asset Purchase Agreement dated December 31, 1997 between
	Bacou USA Safety, Inc. and Howard S. Leight &
	Associates, Inc. (d/b/a Howard Leight Industries) (incorporated
	by reference to Exhibit 2(a) of the Companys
	Form 8-K filed on March 13, 1998)                              
|        | 2.3     |  |  |                       |  | Letter Agreement by and between Howard S. Leight and Bacou USA,
	Inc. (incorporated by reference to Exhibit 2(b) of the
	Companys Form 8-K filed on March 13, 1998)                                                                                                                    
|        | 2.4     |  |  |                       |  | Letter Agreement by and among Howard S. Leight, Bacou S.A.
	and Engineering Bacou S.A. (incorporated by reference to
	Exhibit 2(c) of the Companys Form 8-K filed on
	March 13, 1998)                                                                                                  
|        | 2.5     |  |  |                       |  | First Amendment to Asset Purchase Agreement dated February 
	27, 1998 (incorporated by reference to Exhibit 2(d) of the
	Companys Form 8-K filed on March 13, 1998)                                                                                                                    
|        | 2.6     |  |  |                       |  | Asset Purchase Agreement dated as of February 24, 1999 by
	and among Perfect Fit Glove Co., Inc. and other related parties
	and Bacou USA Safety, Inc. (incorporated by reference to
	Exhibit 2(a) of the Companys Form 10-K filed
	March 30, 1999)                                    
|        | 3.1     |  |  |                       |  | Amended and Restated Certificate of Incorporation (incorporated
	by reference to Exhibit 3(a) of the Companys
	Registration Statement filed on Form S-1(Commission File
	No. 333-00470) (the Companys Registration
	Statement))                                                     
|        | 3.2     |  |  |                       |  | Bylaws (incorporated by reference to Exhibit 3(b) of the
	Companys Registration Statement)                                                                                                                                                                                             
|        | 4.1     |  |  |                       |  | Credit Line Agreement by and between Bacou USA, Inc. and Banque
	Nationale de Paris (BNP) dated February 19, 1998
	 (incorporated by reference to Exhibit 10(a) of the
	Companys Form 8-K filed on March 13, 1998)                                                                   
|        | 4.2     |  |  |                       |  | Credit Line Agreement by and between Bacou USA, Inc. and BNP
	dated March 25, 1999                                                                                                                                                                                                      
|        | 4.3     |  |  |                       |  | Credit Agreement dated as of August 24, 1999 by and among
	Bacou USA, Inc., Uvex Safety Manufacturing, Inc.
	(USM), BankBoston, N.A. (BKB) (n/k/a
	Fleet National Bank) and KeyBank N.A. (incorporated by reference
	to Exhibit 4(a) of the Companys Form 10-Q filed
	May 13, 1999)
|        | 4.4     |  |  |                       |  | Bond Purchase Agreement dated as of August 24, 1999 by and
	among Bacou USA, Inc., USM, BKB and the Rhode Island Industrial
	Facilities Corporation (incorporated by reference to
	Exhibit 4(b) of the Companys Form 10-Q filed
	May 13, 1999)                                         
|        | 10.1.1* |  |  |                       |  | Employment Agreement dated as of January 1, 1996 by and
	between the Company and Walter Stepan (incorporated by reference
	to Exhibit 10(w) of Companys Registration Statement)                                                                                                        
|        | 10.1.2* |  |  |                       |  | First Amendment to Employment Agreement with Walter Stepan
	(incorporated by reference to Exhibit 4(g) of Companys
	 Form 10-Q filed November 14, 1997)                                                                                                                                
|        | 10.1.3* |  |  |                       |  | Second Amendment to Employment Agreement with Walter Stepan dated
	 as of August 25, 1998 (incorporated by reference to
	Exhibit 10.2 of the Companys Form 10-Q filed
	November  14, 1998)                                                                                             
|        | 10.1.4* |  |  |                       |  | Amended and Restated Employment Agreement with Walter Stepan
	dated as of December 1, 1999                                                                                                                                                                                              
|        | 10.2.1* |  |  |                       |  | Employment Agreement dated May 8, 1995 by and between the
	Company and Philip B. Barr (incorporated by reference to
	Exhibit 10(b) of Companys Registration Statement)                                                                                                                 



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##### Table of Contents



|        |         |  |  |                        |  |                                                                                                                                                                                                                                                                                                                     
|------- | ------- |  |  | ---------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |         |  |  |                       
|Number  |         |  |  | Description of Exhibit
|        |         |  |  |                       
|        | 10.2.2* |  |  |                       |  | First Amendment to Employment Agreement with Philip B. Barr
	(incorporated by reference to Exhibit 10(x) to Amendment
	No. 1 to the Companys Registration Statement)                                                                                                                                               
|        | 10.2.3* |  |  |                       |  | Second Amendment to Employment Agreement with Philip B. Barr
	 (incorporated by reference to Exhibit 10(y) to Amendment
	No. 1 to the Companys Registration Statement)                                                                                                                                             
|        | 10.2.4* |  |  |                       |  | Third Amendment to Employment Agreement with Philip B. Barr
	(incorporated by reference to Exhibit 4(h) of the
	Companys Form 10-Q filed November 14, 1997)                                                                                                                                                        
|        | 10.2.5* |  |  |                       |  | Employment Agreement with Philip B. Barr effective as of
	January 1, 2000                                                                                                                                                                                                                                           
|        | 10.3.1* |  |  |                       |  | Employment Agreement with Alan H. Bennett dated
	February  1, 1999 (incorporated by reference to
	Exhibit 10.9 of the Companys Form 10-K filed
	March 30, 1999)                                                                                                                                                    
|        | 10.3.2* |  |  |                       |  | Employment Agreement with Alan H. Bennett effective
	January 1, 2000                                                                                                                                                                                                                                                
|        | 10.4*   |  |  |                       |  | Employment Agreement dated October 1, 1997 between
	Biosystems, Inc. and John F. Burt, Jr. (incorporated by
	 reference to Exhibit 4(d) of the Companys
	Form 10-Q filed November 14, 1997)                                                                                                                        
|        | 10.5*   |  |  |                       |  | Employment Agreement with Adrien W. Hebert effective
	January 1, 2000                                                                                                                                                                                                                                               
|        | 10.6    |  |  |                       |  | Registration Rights Agreement dated July 31, 1994 by and
	between Walter Stepan and the Company (incorporated by reference
	to Exhibit 10(h)(i) of Companys Registration
	Statement)                                                                                                                               
|        | 10.7    |  |  |                       |  | Form of Registration Rights Agreement dated
	February    1996 among the Principal Stockholder
	Figa, S.A., Walter Stepan, Heidemarie Stepan, Bettina Stepan,
	Axel Stepan and the Company (incorporated by reference to
	Exhibit 10(i) to Amendment No. 1 of Companys
	Registration Statement)                     
|        | 10.8    |  |  |                       |  | Registration Rights Agreement dated September 30, 1997 by
	and among Bacou USA, Inc. and each person identified therein
	(incorporated by reference to Exhibit 2(b) of the
	Companys Form 8-K filed October 15, 1997)                                                                                              
|        | 10.9    |  |  |                       |  | Corporate Opportunities Agreement dated as of January 1,
	1996 between the Principal Stockholder and the Company
	(incorporated by reference to Exhibit 10(j) of
	Companys Registration Statement)                                                                                                                 
|        | 10.10   |  |  |                       |  | Amended and Restated Agreement of Transfer, Trademarks, Know-How
	and Related Matters dated November 2, 1995 by and among Uvex
	 Winter Optik GmbH, Uvex Arbeitsschutz GmbH & Co., KG,
	Uvex Winter Optical, Inc. and Uvex Safety (incorporated by
	reference to Exhibit 10(k) of Companys Registration
	Statement)
|        | 10.11   |  |  |                       |  | License Agreement dated June 1, 1986 between Uvex Winter
	Optik GmbH and Uvex Winter Optical, Inc., as amended by a First
	Amendment dated October 31, 1994 (incorporated by reference
	to Exhibit 10(l) of Companys Registration Statement)                                                                       
|        | 10.12   |  |  |                       |  | License Agreement dated July 1, 1992 between Uvex Winter
	Optik GmbH and Uvex Winter Optical, Inc., as amended by a First
	Amendment dated October 31, 1994 (incorporated by reference
	to Exhibit 10(m) of Companys Registration Statement)                                                                       
|        | 10.13   |  |  |                       |  | Cooperation Agreement among Uvex Safety, Laservision GmbH, Uvex
	Winter Optik GmbH and Rupp & Hubrach KG dated
	March  18, 1991 (incorporated by reference to
	Exhibit 10(n) of Companys Registration Statement)                                                                                                   
|        | 10.14*  |  |  |                       |  | Bacou USA, Inc. 1996 Stock Incentive Plan (incorporated by
	reference to Exhibit 10(g) of the Companys
	Registration Statement)                                                                                                                                                                                    
|        | 10.15*  |  |  |                       |  | Bacou USA, Inc. 1996 Non-Employee Director Stock Option Plan
	(incorporated by reference to Exhibit 10(x) of the
	Companys Form 10-K filed March 31, 1997)                                                                                                                                                         
|        | 10.16*  |  |  |                       |  | 1998 Howard S. Leight Stock Option Plan (incorporated by
	reference to Exhibit 10.35 of the Companys
	Form 10-K filed March 30, 1998)                                                                                                                                                                              



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##### Table of Contents



|        |        |  |  |                        |  |                                                                                                                                                                                                                                  
|------- | ------ |  |  | ---------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |  |  |                       
|Number  |        |  |  | Description of Exhibit
|        |        |  |  |                       
|        | 10.17  |  |  |                       |  | Lease Agreement dated February 27, 1998 by and between
	Howard S. Leight and Bacou USA Safety, Inc. (incorporated by
	 reference to Exhibit 10.38 of the Companys
	Form 10-K filed March 27, 1998)                              
|        | 10.18* |  |  |                       |  | Bonus Plan for Executives of Subsidiaries and Divisions of Bacou
	USA, Inc. for 1998 and 1999 (incorporated by reference to
	Exhibit 10.39 of the Companys Form 10-K filed
	March  27, 1998)                                    
|        | 10.19* |  |  |                       |  | Bonus and Option Plan for CEO, COO and CFO of Bacou USA, Inc. for
	 2000                                                                                                                                                         
|        | 10.20* |  |  |                       |  | Bonus Plan for Executives of Bacou USA, Inc. for 2000                                                                                                                                                                            
|        | 10.21* |  |  |                       |  | Bonus Plan for Executives of Subsidiaries and Divisions of Bacou
	USA, Inc. for 2000                                                                                                                                             
|        | 10.22* |  |  |                       |  | Consulting Agreement dated as of February 27, 1998 between
	Howard S. Leight and Bacou USA Safety, Inc. (incorporated by
	 reference to Exhibit 99(e) of the Companys Form 8-K
	filed March 13, 1998)                           
|        | 10.23  |  |  |                       |  | Purchase and Sale Agreement dated November 20, 1998 by and
	between Uvex Winter Optical, Inc. and Uvex Safety Manufacturing,
	Inc. (incorporated by reference to Exhibit  10.22 of the
	Companys Form 10-K filed March 30, 1999)
|        | 21     |  |  |                       |  | Subsidiaries of the Company                                                                                                                                                                                                      
|        | 23     |  |  |                       |  | Accountants Consent                                                                                                                                                                                                             
|        | 27     |  |  |                       |  | Financial Data Schedule                                                                                                                                                                                                          




|  |                                                        
|- | -------------------------------------------------------
|* | Management contract or compensatory plan or arrangement