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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, 2000
|    
|[  ] | 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
	incorporation or organization) |  | (I.R.S. Employer
	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:

Title of each class: Common Stock, $.001 Par Value


Name of each exchange on which registered: New York Stock
Exchange

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

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 $25.70 per share (the closing price of such stock
on March 20, 2001 on The New York Stock Exchange):
$130,077,081.

As of March 20, 2001, there were 17,673,965 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, 2001) 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 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                     
|License and Distribution Agreement       
|Bonus Plan for Executives                
|Bonus Plan for Executives of Subsidiaries
|Subsidiaries                             
|Consent of KPMG  LLP                     



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TABLE OF CONTENTS

|           |          |             |                                                                                        |             |  |    | 
|---------- | -------- | ----------- | -------------------------------------------------------------------------------------- | ----------- |  | -- | 
|           |          | Description |                                                                                        | Page Number
|           |          |             |                                                                                        |            
|PART I     |          |             |                                                                                        |             |  |   
|          
|          
|          
|          
|           | Item  1  |             | Business                                                                               |             |  | 3  | 
|          
|          
|          
|          
|           | Item  2  |             | Properties                                                                             |             |  | 11 | 
|          
|          
|          
|          
|           | Item  3  |             | Legal Proceedings                                                                      |             |  | 12 | 
|          
|          
|          
|          
|           | Item  4  |             | Submission of Matters to a Vote of Security Holders                                    |             |  | 13 | 
|PART II    |          |             |                                                                                        |             |  |   
|          
|          
|          
|          
|           | Item  5  |             | Market for the Registrants Common Stock and Related
	Stockholder Matters              |             |  | 13 | 
|          
|          
|          
|          
|           | Item  6  |             | Selected Financial Data                                                                |             |  | 14 | 
|          
|          
|          
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|           | Item  7  |             | Managements Discussion and Analysis of Financial Condition
	and Results of Operations |             |  | 15 | 
|          
|          
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|          
|           | Item  7A |             | Quantitative and Qualitative Disclosures About Market Risk                             |             |  | 22 | 
|          
|          
|          
|          
|           | Item  8  |             | Financial Statements and Supplementary Data                                            |             |  | 23 | 
|          
|          
|          
|          
|           | Item  9  |             | Changes in and Disagreements with Accountants on Accounting and
	Financial Disclosure  |             |  | 41 | 
|          
|PART III   |          |             |                                                                                        |             |  |   
|          
|          
|          
|          
|           | Item  10 |             | Directors and Executive Officers of the Registrant                                     |             |  | 41 | 
|          
|          
|          
|          
|           | Item  11 |             | Executive Compensation                                                                 |             |  | 41 | 
|          
|          
|          
|          
|           | Item  12 |             | Security Ownership of Certain Beneficial Owners and Management                         |             |  | 41 | 
|          
|          
|          
|          
|           | Item  13 |             | Certain Relationships and Related Transactions                                         |             |  | 41 | 
|          
|PART IV    |          |             |                                                                                        |             |  |   
|          
|          
|          
|          
|           | Item  14 |             | Exhibits, Financial Statement Schedules and Reports on
	Form  8-K                      |             |  | 41 | 
|          
|          
|          
|          
|Signatures |          |             | 45                                                                                     |            

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PART I




Item 1.  Business

General

Bacou USA, Inc. (Bacou, we,
our or us, as applicable) 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®, uvex® and Whiting+Davis®,
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.

Recent Developments

Strategic Review

We announced on July 10, 2000 that both we and our majority
shareholder, Bacou S.A., would engage investment bankers to
explore strategic alternatives to enhance value for our
respective shareholders. Bacou S.A. owns 12.6 million shares, or
approximately 71.4%, of Bacou USA and is controlled by four
members of the Bacou family (Bacou Family). In the
event of a sale by the Bacou Family of its direct and indirect
interests in Bacou S.A., a buyer also would own indirectly the
12.6 million shares of Bacou USA that are held by Bacou S.A.,
thereby obtaining indirect control of Bacou USA.

Walter Stepan, a Director and Co-Chairman of Bacou USA, former
President and CEO of Bacou USA and a Director of Bacou S.A., was
selected to lead the internal task force on behalf of both
companies to evaluate our strategic alternatives together with
investment bankers.

On July 14, 2000, we announced that Bacou USA and the Bacou
Family had engaged Deutsche Bank Securities as financial advisor
in connection with this review of strategic alternatives. At the
same time, we announced an agreement with the Bacou Family that
any offer for their interests in Bacou S.A. also would contain
an undertaking to purchase the shares of the minority
stockholders of Bacou USA and that any such purchase would be on
substantially similar terms as those applicable to any sale by
the Bacou Family of their indirect interests in Bacou USA. Terms
of the agreements with Deutsche Bank Securities and the Bacou
Family were detailed in a Form 8-K filing with the
Securities and Exchange Commission on July 14, 2000. In
addition, we have retained the investment banking firm of
PaineWebber Incorporated (now known as UBS Warburg) to provide
advice to the Oversight Committee of the Board of Directors
regarding the fairness of any consideration offered to the
minority public shareholders of Bacou USA.

At the time of our announcement on July 14, we expected a
decision to be reached, and any resulting transaction to be
consummated, at the end of 2000 or the beginning of 2001. In
December 2000, we announced that the process would continue
into 2001. In February 2001, Bacou USA announced that the review
of strategic alternatives was ongoing but was not expected to be
concluded (nor any transaction consummated) during the first
quarter of 2001. The process is still ongoing, and the outcome
of the review cannot be determined at this time. Moreover, there
can be no assurance that any transaction will result from the
review of strategic alternatives and if achieved, when such
transaction would be consummated.

National Economic Conditions

During the first quarter of 2001, leading economic indicators
have pointed to a slowdown in the United States economy. A
number of manufacturing companies and other businesses,
including some companies that use our products, have announced
layoffs and projections for reduced output in 2001. While it is
premature to know the ultimate impact of such events on Bacou
USA, it is possible that such actions could affect the volume of
purchases of our products by these companies and as a result,
there could be an adverse effect on our business and results of
operations in 2001.

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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. and certain
affiliates (Perfect Fit). Glove segment products
include cut- and abrasion-resistant gloves, protective sleeves,
liquid-proof gloves and metal mesh gloves and apparel, 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 laboratories, which
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
ear plug products 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 lives or
health.

Gas Detectors and Test Equipment for
Self-Contained Breathing Apparatus

We sell Biosystems brand gas monitors and gas detectors,
which sense and report levels of certain gases in the atmosphere
of work sites and identify hazardous conditions. We also sell
PosiChek brand test-benches, which are computer
controlled, automatic testing systems that dynamically evaluate
the proper performance of self-contained breathing apparatus.

Products  Glove Segment

We sell Perfect Fit brand cut- and abrasion-resistant
gloves, protective sleeves, MAPA Professional brand liquid-proof
gloves and Whiting+Davis® brand metal mesh gloves and
apparel, which products are sold primarily to industrial safety
distributors.

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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
appropriate lenses, meet the standards for protective eyewear.
We sell Titmus® brand occupational vision screening
equipment that is used to determine whether an eye exam should
be administered for prescribing corrective lenses.

Backlog

We had a total backlog of approximately $11.3 million at
December 31, 2000 and $10.3 million at December 31,
1999. We expect to fill all orders outstanding at
December 31, 2000 during 2001.

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.

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. Perfect Fit cut- and
abrasion-resistant gloves and sleeves, MAPA Professional
liquid-proof gloves and Whiting+Davis® metal mesh gloves
and apparel are also sold to companies in the meat packing,
poultry, and food processing industries. 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 at our Uvex Safety
Manufacturing, Inc. (USM) facility. 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 safety eyewear products, such as the astrospec® 3000
family of products and other high-volume products.

Disposable and Reusable Ear Plugs and Ear
Muffs

We manufacture earplug products at our Howard Leight Industries
(HLI) facility 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 in our own facilities,
except for two product lines of completed ear muffs, for which
we contract with outside vendors.

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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 at our Survivair facility. We produce most of our
metal regulator parts using computer-assisted machining
operations. We assemble finished respirators using these
manufactured parts and components manufactured by outside
vendors. Cartridges and filters for air purifying respirators
are filled using high-speed, automated folding, filling and
sealing machines.

Gas Detectors and Test Equipment for
Self-Contained Breathing Apparatus

We assemble gas detection products and test equipment for
self-contained breathing apparatus at our Biosystems facility
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.

Protective Gloves, Sleeves and Apparel

We manufacture four types of seamless knit gloves and woven
cloth material at our SCHAS Industries, LLC (SCHAS)
facility where knitting machines produce glove shells and 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 apply
an oil-based plastisol liquid to the gloves, which are then put
through an automated printing and drying process. 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.

We manufacture metal mesh gloves and apparel at our
Whiting+Davis, Inc. facility where high-speed custom built
machinery cuts and forms stainless steel and titanium wire into
U-shaped staples. These rings are placed
side-by-side and then forged into a circle shape that is then
welded. These rings are formed into sheets of interlocked rings
and are patterned for gloves, sleeves, aprons or tunics. The cut
patterns are assembled on semiautomatic machines that join seams
by inserting a U form into mating seam rings,
closing the form after insertion and then welding the completed
ring.

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. Our computer controlled milling operation produces
plastic products. We assemble vision screening equipment 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.

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Principal Customers

We had no individual customers that accounted for 10% or more of
consolidated net sales in 1998, 1999 or 2000. 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.

The Uvex astrospec® family of eyewear products has enjoyed
significant success, resulting in many competitive copies of our
products that are manufactured 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, including litigation, to
deter infringers from violating 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 by filing
applications for and registering 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 with 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 Safety, Inc., Titmus Optical, Inc.,
Survivair, Inc., Lase-R Shield, Inc., Biosystems, Inc., Howard
S. Leight & Associates, Inc., Perfect Fit Glove Co., Inc.
and Whiting+Davis Safety. 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. The
Whiting+Davis® name is registered in the United States.

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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 relationship 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.

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 into the air, discharges into the 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, 2000, we employed 2,460 people on a
full-time basis. Approximately 91 employees comprise a
bargaining unit represented by the United Steelworkers of
America (AFL-CIO-CLC) at our Titmus facility under a contract
which was renewed on September 14, 2000 and runs for a
period of two years. Approximately 85 employees comprise a
bargaining unit represented by the United Steelworkers of
America at our Whiting+Davis facility under a contract which
runs until March 6, 2003. 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 workplace environments in
the United States in which personal protective equipment must be
worn and specifies the standards that 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 comply 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 safety eyewear
products are subject to the latest applicable standards, which
currently include ANSI Standard Z87.1-1989 and CSA Standard
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

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OSHA specifies that respiratory protection products must meet
application-specific performance standards that are set by
NIOSH. 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.

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, 2001,
are set forth below:

|                   |  |                                                                                                                                                                                                                                  |  |     |    | 
|------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --- | -- | 
|Name               |  | Position with the Company                                                                                                                                                                                                        |  | Age
|                   |  |                                                                                                                                                                                                                                  |  |    
|Walter Stepan      |  | Co-Chairman. Chairman of Bacou USA Safety, Inc. (Bacou
	Safety), Perfect Fit and Titmus                                                                                                                                        |  |     | 62 | 
|                  
|                  
|                  
|                  
|Philip B. Barr     |  | President and Chief Executive Officer (CEO). Vice
	Chairman of Bacou Safety, Vice Chairman and CEO of Perfect Fit
	and Titmus, Chairman and CEO of Platinum Protective Products,
	Inc. (Platinum) and SCHAS, Chairman of USM |  |     | 49 | 
|                  
|                  
|                  
|                  
|Luis Alvarez       |  | Vice President and General Manager of the HLI division of Bacou
	Safety                                                                                                                                                          |  |     | 40 | 
|                  
|                  
|                  
|                  
|Harvey I. Aronoff  |  | Vice President-Manufacturing of Bacou Safety                                                                                                                                                                                     |  |     | 58 | 
|                  
|                  
|                  
|                  
|John J. Bell       |  | President of Survivair division of Bacou Safety. Executive Vice
	President (EVP) of Bacou Safety                                                                                                                               |  |     | 55 | 
|                  
|                  
|                  
|                  
|Alan H. Bennett    |  | Chief Operating Officer (COO). President and CEO of
	Bacou Safety and USM; President of the Uvex Safety division of
	Bacou Safety; COO of Perfect Fit, Platinum, SCHAS and Titmus                                              |  |     | 58 | 
|                  
|                  
|                  
|                  
|Jeffrey T. Brown   |  | Vice President-Financial Reporting, Chief Accounting Officer,
	Treasurer and Assistant Secretary                                                                                                                                 |  |     | 41 | 
|                  
|                  
|                  
|                  
|John F. Burt, Jr.  |  | President of Biosystems division of Bacou Safety. EVP of Bacou
	Safety                                                                                                                                                           |  |     | 58 | 
|                  
|                  
|                  
|                  
|Thomas J. Goeltz   |  | President of Titmus                                                                                                                                                                                                              |  |     | 57 | 
|                  
|                  
|                  
|                  
|Adrien W. Hebert   |  | Vice President-Finance and Chief Financial Officer                                                                                                                                                                               |  |     | 50 | 
|                  
|                  
|                  
|                  
|Barry J. Kadets    |  | Vice President-Information Systems and Chief Information Officer                                                                                                                                                                 |  |     | 57 | 
|                  
|                  
|                  
|                  
|Winfield W. Major  |  | General Counsel, Secretary and Assistant Treasurer                                                                                                                                                                               |  |     | 53 | 
|                  
|                  
|                  
|                  
|Harry D. Neff, II  |  | Senior Vice President-Sales of Bacou Safety (with responsibility
	for Uvex Safety and HLI sales force)                                                                                                                           |  |     | 54 | 
|                  
|                  
|                  
|                  
|Frank A. Stucke    |  | President of Perfect Fit, SCHAS and Platinum                                                                                                                                                                                     |  |     | 45 | 
|                  
|                  
|                  
|                  
|Steven P. Tolisano |  | Vice President-Corporate Compliance                                                                                                                                                                                              |  |     | 51 | 

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

9



---



##### Table of Contents



Mr. Stepan has been Co-Chairman since May 1999. He
served as Vice Chairman from February 1995 to May 1999 and as
President and CEO from February 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 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 a Director of
Bacou S.A. and its affiliate, Bacou
Industrial & Trading (Shanghai) Co., Ltd. He is a
Director of Uvex Safety Australia Pty Ltd. and Uvex (UK)
Limited, joint ventures among Uvex Germany, Bacou International
B.V. (an affiliate of Bacou S.A.) and Bacou USA.

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
has 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 as Chairman
and CEO of Platinum and SCHAS.

Mr. Alvarez has served as Vice President and General
Manager of HLI 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 Survivair since May 1997 and
of its predecessor company, Survivair, Inc., since 1992. He has
served as Executive Vice President of Bacou Safety since 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. He serves as COO of Perfect Fit, Platinum, SCHAS
and Titmus and as President and CEO of USM. 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 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.

Mr. Burt founded Biosystems, Inc. in 1981 and served as
President of that company until its merger into Bacou Safety in
March 1998. He has been President of the Biosystems division of
Bacou Safety since that date. He has served as Executive Vice
President of Bacou Safety since May 1998.

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

10



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##### 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 as Vice
President - Sales from 1992 until 1997.

Mr. Stucke has served as President of Perfect Fit since
January 2001 and as President of SCHAS and its predecessors
since October 1997. He was Executive Vice President of Perfect
Fit and its predecessors from November 1983 through December
2000.

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 it 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, Wilkesboro, North Carolina and
Attleboro Falls, Massachusetts facilities, which are used for
the glove segment.

|                           |  |                |         |          |  |                                                         |  |                                                                                                                                                                                                        
|-------------------------- |  | -------------- | ------- | -------- |  | ------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                           |  | Approximate    |         | Owned or |  |                                                        
|Location                   |  | Square Footage |         | Leased   |  | Function                                               
|                           |  |                |         |          |  |                                                        
|Smithfield, Rhode Island   |  |                | 170,000 |          |  | 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                                                  |  | Manufacturing and assembly facilities for hearing protection and
	respiratory products                                                                                                                 
|                          
|                          
|                          
|                          
|Petersburg, Virginia       |  |                | 130,000 |          |  | Owned                                                   |  | Manufacturing, assembly, warehouse and distribution facility for
	eyeglass frames and components and vision screening equipment in
	115,000 sq. ft. with 2nd floor of building leased to a third
	party
|                          
|                          
|                          
|                          
|Cheektowaga, New York      |  |                | 100,000 |          |  | Owned                                                   |  | Manufacturing, assembly, warehouse and distribution facility for
	protective gloves                                                                                                                    
|                          
|                          
|                          
|                          
|Cheektowaga, New York      |  |                | 80,000  |          |  | Leased                                                  |  | Warehouse and distribution facility for protective gloves                                                                                                                                              
|                          
|                          
|                          
|                          
|Wilkesboro, North Carolina |  |                | 115,000 |          |  | Leased                                                  |  | Manufacturing, warehouse and distribution facilities for
	protective gloves                                                                                                                            

11



---



##### Table of Contents



|                               |  |                |        |          |  |          |  |                                                                                                         
|------------------------------ |  | -------------- | ------ | -------- |  | -------- |  | --------------------------------------------------------------------------------------------------------
|                               |  | Approximate    |        | Owned or |  |         
|Location                       |  | Square Footage |        | Leased   |  | Function
|                               |  |                |        |          |  |         
|Santa Ana, California          |  |                | 93,000 |          |  | Leased   |  | Manufacturing, assembly, warehouse and distribution facility for
	respiratory protection products       
|                              
|                              
|                              
|                              
|Middletown, Connecticut        |  |                | 45,000 |          |  | Leased   |  | Assembly, warehouse and distribution facility for gas monitors                                          
|                              
|                              
|                              
|                              
|Smithfield, Rhode Island       |  |                | 32,000 |          |  | Leased   |  | Warehouse for protective eyewear products                                                               
|                              
|                              
|                              
|                              
|Attleboro Falls, Massachusetts |  |                | 36,000 |          |  | Leased   |  | Manufacturing, assembly, office, warehouse and distribution
	facility for metal mesh protective 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 and administrative office for protective eyewear
	and hearing protection products        

Recent Developments

The following information is provided with respect to our two
manufacturing and assembly operations in California, the
Survivair respiratory products facility in Santa Ana, and the
HLI hearing protection products facility in San Diego:

In recent months, there have been instances of electricity
shortages in the State of California. The two leading electric
utility companies in the state, Pacific Gas & Electric Co.
and Southern California Edison Co., have been unable to meet the
demands of all their customers for power supply, have reported
poor financial results and potential problems meeting their
outstanding financial obligations. In particular, California has
experienced temporary localized electricity outages, or rolling
blackouts, which may continue or worsen into blackouts of longer
duration in the future. In order to limit our exposure at our
two California facilities, we have maintained inventory levels
at approximately six weeks at Survivair and 3.5 weeks at
HLI. Our key supplies of cylinders for self-contained breathing
apparatus and carbon for cartridges at Survivair are
manufactured in California, however, as a reserve against
interruptions, we maintain approximately one month supply of
safety stocks of these key products at Survivair. Our critical
supplies of polyurethane prepolymer and latex for HLI are
produced outside of California.

We have not experienced blackouts at either of our California
facilities to date, but blackouts have interrupted the
operations of some of our suppliers and customers.
Notwithstanding the foregoing, blackouts in California, even of
relatively short duration, could impair or temporarily interrupt
our operations in those locations, not only with respect to
oversight of existing operations, but also in research and
development of new products. We could not readily or
inexpensively relocate these manufacturing operations to other
sites outside of California.




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, 2000.

12



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##### Table of Contents



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 carried out its obligations under
such agreement. Continental Polymers, Inc., a company in which
Mr. Leight owns a 40% interest, has been added as a party
and has filed a counterclaim for $4 million against Bacou
USA and Bacou Safety. Both Bacou entities have denied the
allegations in the counterclaim. The case has been removed to
U.S. District Court for the District of Rhode Island and is
currently in discovery. The case is expected to reach trial by
the fourth quarter of 2001.




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, 2001, the closing
price for our common stock was $25.70 per share and there were
approximately 31 holders of record.

13



---



##### 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 each of
the years in the five-year period ended December 31, 2000
were derived from financial statements of Bacou which were
audited by KPMG LLP, independent certified public accountants,
whose report with respect to the three-year period ended
December 31, 2000 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.

|                                                     |                                                             |                                       |         |         |        |         |         |         |        |         |         |        |        |   |         |        |        |   |         |        |        | 
|---------------------------------------------------- | ----------------------------------------------------------- | ------------------------------------- | ------- | ------- | ------ | ------- | ------- | ------- | ------ | ------- | ------- | ------ | ------ | - | ------- | ------ | ------ | - | ------- | ------ | ------ | 
|                                                     |                                                             |                                      
|                                                     |                                                             | Year Ended December 31,              
|                                                     |                                                             |                                      
|                                                     |                                                             | 1996                                  |         | 1997(1) |        | 1998(2) |         | 1999(3) |        | 2000(4)
|                                                     |                                                             |                                       |         |         |        |         |         |         |        |        
|                                                     |                                                             |                                      
|                                                     |                                                             | (in thousands, except per share data)
|                                                    
|                                                    
|                                                    
|                                                    
|Statement of Income Data:                            |                                                             |                                       |         |         |        |         |         |         |        |         |         |        |        |   |         |        |        |   |         |       
|                                                    
|                                                    
|                                                    
|                                                    
|Net sales(5)                                         |                                                             | $                                     | 110,065 |         |        | $       | 132,156 |         |        | $       | 221,093 |        |        | $ | 274,658 |        |        | $ | 319,724 |       
|                                                    
|                                                    
|                                                    
|                                                    
|Cost of sales                                        |                                                             |                                       | 47,355  |         |        |         | 64,467  |         |        |         | 105,856 |        |        |   | 145,038 |        |        |   | 172,638 |       
|                                                     |                                                             |                                       |         |         |        |         |         |         |        |         |         |        |        |   |         |        |        |   |         |       
|Gross profit                                         |                                                             |                                       | 62,710  |         |        |         | 67,689  |         |        |         | 115,237 |        |        |   | 129,620 |        |        |   | 147,086 |       
|                                                    
|                                                    
|                                                    
|                                                    
|Operating expenses:                                  |                                                             |                                       |         |         |        |         |         |         |        |         |         |        |        |   |         |        |        |   |         |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Selling(5)                                                  |                                       |         | 17,871  |        |         |         | 22,945  |        |         |         | 37,172 |        |   |         | 41,363 |        |   |         | 49,926 |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | General and administrative                                  |                                       |         | 9,176   |        |         |         | 11,184  |        |         |         | 22,895 |        |   |         | 22,597 |        |   |         | 22,231 |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Non-recurring costs  evaluation of strategic
	alternatives |                                       |         |        |        |         |         |        |        |         |         |       |        |   |         |       |        |   |         | 1,126  |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Research and development                                    |                                       |         |        |        |         |         | 1,110   |        |         |         | 4,000  |        |   |         | 5,274  |        |   |         | 5,643  |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Purchased in-process research and development               |                                       |         |        |        |         |         | 3,721   |        |         |         | 4,680  |        |   |         |       |        |   |         |       |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Amortization of intangibles assets                          |                                       |         | 4,039   |        |         |         | 4,095   |        |         |         | 7,748  |        |   |         | 9,440  |        |   |         | 9,850  |       
|                                                     |                                                             |                                       |         |         |        |         |         |         |        |         |         |        |        |   |         |        |        |   |         |       
|                                                     |                                                             | Total operating expenses              |         |         | 31,086 |         |         |         | 43,055 |         |         |        | 76,495 |   |         |        | 78,674 |   |         |        | 88,776 | 
|                                                     |                                                             |                                       |         |         |        |         |         |         |        |         |         |        |        |   |         |        |        |   |         |       
|Operating income                                     |                                                             |                                       | 31,624  |         |        |         | 24,634  |         |        |         | 38,742  |        |        |   | 50,946  |        |        |   | 58,310  |       
|                                                    
|                                                    
|                                                    
|                                                    
|Other expense (income), net                          |                                                             |                                       | 45      |         |        |         | (376    | )       |        |         | 6,054   |        |        |   | 8,591   |        |        |   | 9,497   |       
|                                                     |                                                             |                                       |         |         |        |         |         |         |        |         |         |        |        |   |         |        |        |   |         |       
|Income before income taxes                           |                                                             |                                       | 31,579  |         |        |         | 25,010  |         |        |         | 32,688  |        |        |   | 42,355  |        |        |   | 48,813  |       
|                                                    
|                                                    
|                                                    
|                                                    
|Income taxes                                         |                                                             |                                       | 12,202  |         |        |         | 10,588  |         |        |         | 11,678  |        |        |   | 15,165  |        |        |   | 17,933  |       
|                                                     |                                                             |                                       |         |         |        |         |         |         |        |         |         |        |        |   |         |        |        |   |         |       
|Net income(6)                                        |                                                             | $                                     | 19,377  |         |        | $       | 14,422  |         |        | $       | 21,010  |        |        | $ | 27,190  |        |        | $ | 30,880  |       
|                                                     |                                                             |                                       |         |         |        |         |         |         |        |         |         |        |        |   |         |        |        |   |         |       
|Earnings per share:                                  |                                                             |                                       |         |         |        |         |         |         |        |         |         |        |        |   |         |        |        |   |         |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Basic(6)(7)                                                 |                                       | $       | 1.18    |        |         | $       | 0.83    |        |         | $       | 1.19   |        |   | $       | 1.54   |        |   | $       | 1.75   |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Diluted(6)(7)                                               |                                       | $       | 1.18    |        |         | $       | 0.83    |        |         | $       | 1.19   |        |   | $       | 1.54   |        |   | $       | 1.73   |       
|                                                    
|                                                    
|                                                    
|                                                    
|Weighted average shares outstanding:                 |                                                             |                                       |         |         |        |         |         |         |        |         |         |        |        |   |         |        |        |   |         |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Basic                                                       |                                       |         | 16,406  |        |         |         | 17,383  |        |         |         | 17,601 |        |   |         | 17,624 |        |   |         | 17,652 |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Diluted                                                     |                                       |         | 16,436  |        |         |         | 17,411  |        |         |         | 17,723 |        |   |         | 17,696 |        |   |         | 17,835 |       
|                                                    
|                                                    
|                                                    
|                                                    
|Balance Sheet Data (end of period):                  |                                                             |                                       |         |         |        |         |         |         |        |         |         |        |        |   |         |        |        |   |         |       
|                                                    
|                                                    
|                                                    
|                                                    
|Working capital                                      |                                                             | $                                     | 40,820  |         |        | $       | 34,509  |         |        | $       | 30,910  |        |        | $ | 44,010  |        |        | $ | 51,109  |       
|                                                    
|                                                    
|                                                    
|                                                    
|Total assets                                         |                                                             |                                       | 125,109 |         |        |         | 152,351 |         |        |         | 293,770 |        |        |   | 371,425 |        |        |   | 379,530 |       
|                                                    
|                                                    
|                                                    
|                                                    
|Total long-term debt, excluding current installments |                                                             |                                       |        |         |        |         |        |         |        |         | 92,050  |        |        |   | 120,256 |        |        |   | 98,178  |       
|                                                    
|                                                    
|                                                    
|                                                    
|Common stock subject to a put option                 |                                                             |                                       |        |         |        |         | 9,450   |         |        |         | 9,450   |        |        |   |        |        |        |   |        |       
|                                                    
|                                                    
|                                                    
|                                                    
|Stockholders equity                                 |                                                             |                                       | 112,407 |         |        |         | 122,902 |         |        |         | 144,462 |        |        |   | 181,455 |        |        |   | 213,075 |       




|    |                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------
|(1) | Includes operating results of Survivair from May 30, 1997
	and of Biosystems from September 30, 1997
|   
|(2) | Includes operating results of HLI from February 27, 1998                                            
|   
|(3) | Includes operating results of Perfect Fit and affiliates from
	April 1, 1999                        
|   
|(4) | Includes operating results of Whiting+Davis from July 1,
	2000                                      

14



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##### Table of Contents





|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(5) | Amounts have been adjusted to conform to the requirements of
	Emerging Issues Task Force Issue No. 00-10,
	Accounting for Shipping and Handling Fees and Costs
	(EITF No.  00-10)  see
	note 1(d) to the consolidated financial statements included
	with Item 8 herein                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(6) | Operating results of Bacou for the years 1997-2000, include
	various non-recurring items consisting of acquisition-related
	costs and charges, a 1998 severance charge equal to $1.4
	million, and costs equal to $1.1 million in 2000 incurred in
	connection with our evaluation of strategic alternatives.
	Excluding non-recurring items, and including 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):

|                    |         |                         |        |      |  |      |        |      |  |      |        |      |  |   |        |      |  |   |        |      | 
|------------------- | ------- | ----------------------- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ | ---- |  | - | ------ | ---- |  | - | ------ | ---- | 
|                    |         |                        
|                    |         | Year Ended December 31,
|                    |         |                        
|                    |         | 1996                    |        | 1997 |  | 1998 |        | 1999 |  | 2000
|                    |         |                         |        |      |  |      |        |      |  |     
|Net income          |         | $                       | 19,377 |      |  | $    | 19,498 |      |  | $    | 25,793 |      |  | $ | 27,544 |      |  | $ | 32,132 |     
|                   
|                   
|                   
|                   
|Earnings per share: |         |                         |        |      |  |      |        |      |  |      |        |      |  |   |        |      |  |   |        |     
|                   
|                   
|                   
|                   
|                    | Basic   |                         | $      | 1.18 |  |      | $      | 1.12 |  |      | $      | 1.46 |  |   | $      | 1.56 |  |   | $      | 1.82 | 
|                   
|                   
|                   
|                   
|                    | Diluted |                         | $      | 1.18 |  |      | $      | 1.12 |  |      | $      | 1.46 |  |   | $      | 1.56 |  |   | $      | 1.80 | 



|    |                                                                                         
|--- | ----------------------------------------------------------------------------------------
|(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:



| |   |                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------
| |  | the impact of our ongoing evaluation of certain strategic
	alternatives, including the possible sale of Bacou USA and Bacou
	S.A.;    
|
| |  | general economic conditions, including the effect of
	reductions in the number of employees in industries which
	utilize our products;
|
| |  | continued demand for our current product lines;                                                                                       
|
| |  | the success of our new product introductions;                                                                                         
|
| |  | the success of our acquisition strategy, including our
	ability to integrate new businesses;                                          
|
| |  | continued availability and favorable pricing of raw
	materials;                                                                       
|
| |  | the effect of any work stoppages;                                                                                                     
|
| |  | the effect of any business interruption resulting from
	electricity shortages;                                                        
|
| |  | competitive pressures;                                                                                                                
|
| |  | 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.

15



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##### 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 five acquisitions during the past four years, which
have significantly increased our product offerings and size.
Annual net sales volume has increased from $110.1 million for
the year ended December 31, 1996 to $319.7 million for the
year ended December 31, 2000. Our gross margin and
operating margin for the year ended December 31, 1996, were
57.0% and 28.7%, respectively. Historical margins attributable
to the operations of businesses acquired by us have generally
been lower than margins at our platform Uvex Safety business. As
such, inclusion of acquired businesses with our existing Uvex
Safety business has also resulted in a decline in our margins
during the five-year period ended December 31, 2000.

On June 30, 2000, we purchased substantially all of the
assets and assumed substantially all of the liabilities of
Whiting+Davis, a manufacturer and distributor of metal mesh
gloves, sleeves and apparel.

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. We paid cash consideration of $42.2
million for the acquisition of the Perfect Fit business.

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, Inc., 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.

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, 1999 and
2000 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, $0.6 million in 1999 and $0.2 million in 2000.
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 acquisition-related
and other non-recurring items.

16



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##### 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, 1998        |         | December 31, 1999 |        | December 31, 2000
|                           |                                                             |                          |         |                   |        |                  
|                           |                                                             |                          |         |                   |        |                   |       |      |      |  
|                          
|                          
|                          
|                          
|Net sales(1)               |                                                             | $                        | 221,093 |                   |        |                   | 100.0 | %    |      | $ | 274,658 |        |        |  | 100.0 | %    |      | $ | 319,724 |        |        |  | 100.0 | %   
|                          
|                          
|                          
|                          
|Cost of sales(2)           |                                                             |                          | 105,856 |                   |        |                   | 47.9  |      |      |   | 145,038 |        |        |  | 52.8  |      |      |   | 172,638 |        |        |  | 54.0  |     
|                           |                                                             |                          |         |                   |        |                   |       |      |      |   |         |        |        |  |       |      |      |   |         |        |        |  |       |     
|Gross profit               |                                                             |                          | 115,237 |                   |        |                   | 52.1  |      |      |   | 129,620 |        |        |  | 47.2  |      |      |   | 147,086 |        |        |  | 46.0  |     
|                          
|                          
|                          
|                          
|Operating expenses:        |                                                             |                          |         |                   |        |                   |       |      |      |   |         |        |        |  |       |      |      |   |         |        |        |  |       |     
|                          
|                          
|                          
|                          
|                           | Selling(1)                                                  |                          |         | 37,172            |        |                   |       | 16.7 |      |   |         | 41,363 |        |  |       | 15.1 |      |   |         | 49,926 |        |  |       | 15.6 |     
|                          
|                          
|                          
|                          
|                           | General and administrative(3)                               |                          |         | 22,895            |        |                   |       | 10.4 |      |   |         | 22,597 |        |  |       | 8.2  |      |   |         | 22,231 |        |  |       | 7.0  |     
|                          
|                          
|                          
|                          
|                           | Non-recurring costs  evaluation of strategic
	alternatives |                          |         |                  |        |                   |       |     |      |   |         |       |        |  |       |     |      |   |         | 1,126  |        |  |       | 0.3  |     
|                          
|                          
|                          
|                          
|                           | Research and development                                    |                          |         | 4,000             |        |                   |       | 1.8  |      |   |         | 5,274  |        |  |       | 1.9  |      |   |         | 5,643  |        |  |       | 1.8  |     
|                          
|                          
|                          
|                          
|                           | Purchased in-process research and development               |                          |         | 4,680             |        |                   |       | 2.1  |      |   |         |       |        |  |       |     |      |   |         |       |        |  |       |     |     
|                          
|                          
|                          
|                          
|                           | Amortization of intangible assets                           |                          |         | 7,748             |        |                   |       | 3.5  |      |   |         | 9,440  |        |  |       | 3.4  |      |   |         | 9,850  |        |  |       | 3.1  |     
|                           |                                                             |                          |         |                   |        |                   |       |      |      |   |         |        |        |  |       |      |      |   |         |        |        |  |       |     
|                           |                                                             | Total operating expenses |         |                   | 76,495 |                   |       |      | 34.5 |   |         |        | 78,674 |  |       |      | 28.6 |   |         |        | 88,776 |  |       |      | 27.8 | 
|                           |                                                             |                          |         |                   |        |                   |       |      |      |   |         |        |        |  |       |      |      |   |         |        |        |  |       |     
|Operating income           |                                                             |                          | 38,742  |                   |        |                   | 17.6  |      |      |   | 50,946  |        |        |  | 18.6  |      |      |   | 58,310  |        |        |  | 18.2  |     
|                          
|                          
|                          
|                          
|Other expense, net         |                                                             |                          | 6,054   |                   |        |                   | 2.8   |      |      |   | 8,591   |        |        |  | 3.2   |      |      |   | 9,497   |        |        |  | 3.0   |     
|                           |                                                             |                          |         |                   |        |                   |       |      |      |   |         |        |        |  |       |      |      |   |         |        |        |  |       |     
|Income before income taxes |                                                             |                          | 32,688  |                   |        |                   | 14.8  |      |      |   | 42,355  |        |        |  | 15.4  |      |      |   | 48,813  |        |        |  | 15.2  |     
|                          
|                          
|                          
|                          
|Income taxes               |                                                             |                          | 11,678  |                   |        |                   | 5.3   |      |      |   | 15,165  |        |        |  | 5.5   |      |      |   | 17,933  |        |        |  | 5.5   |     
|                           |                                                             |                          |         |                   |        |                   |       |      |      |   |         |        |        |  |       |      |      |   |         |        |        |  |       |     
|Net income                 |                                                             | $                        | 21,010  |                   |        |                   | 9.5   | %    |      | $ | 27,190  |        |        |  | 9.9   | %    |      | $ | 30,880  |        |        |  | 9.7   | %   
|                           |                                                             |                          |         |                   |        |                   |       |      |      |   |         |        |        |  |       |      |      |   |         |        |        |  |       |     




|    |                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Amounts have been adjusted to conform to the requirements of
	EITF No. 00-10 (see note 1(d) to the consolidated
	financial statements included with Item 8 herein).  
|   
|(2) | Includes acquisition-related costs totaling $1,013,000 in 1998,
	$590,000 in 1999 and $204,000 in 2000.                                                              
|   
|(3) | Includes non-recurring charges for termination benefits totaling
	$1,425,000 and acquisition-related bonuses totaling $600,000 for
	the year ended December 31, 1998.

17



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##### Table of Contents



Year Ended December 31, 2000 Compared to
Year Ended December 31, 1999

Net Sales. Our net sales increased 16.4% from $274.6
million for the year ended December 31, 1999 to $319.7
million for the year ended December 31, 2000. Net sales for
our safety segment increased 9.0% from $202.7 million in 1999 to
$221.0 million in 2000, entirely as a result of internal growth
in units shipped. Net sales for our glove segment increased
70.8% from $39.9 million in 1999 to $68.1 million in 2000.
Operating results of our Perfect Fit business have been included
for a full year and operating results of our Whiting +
Davis business for six months in 2000, compared with the
1999-period which only included operating results of Perfect Fit
and only for nine months. The increase in glove segment sales of
$28.3 million includes internal growth equal to
$8.6 million (21.5%), and an increase of $19.7 million
(49.3%) attributable to the acquisition of these businesses. Net
sales for our optical frames and instruments segment declined
from $32.0 million in 1999 to $30.6 million in 2000. The
combined international sales of all three segments increased
23.2% from $37.0 million in 1999 to $45.5 million in 2000.

Cost of Sales. Our cost of sales increased 19.0% from
$145.0 million for the year ended December 31, 1999 to
$172.6 million for the year ended December 31, 2000, due to
increased sales volume.

Gross Profit. Our gross profit increased 13.5% from
$129.6 million for the year ended December 31, 1999 to
$147.1 million for the year ended December 31, 2000.
Excluding acquisition-related inventory adjustments, our gross
margin was 47.4% for the year ended December 31, 1999 and
46.1% for the year ended December 31, 2000. The reduction
in our gross margin was primarily attributable to substantial
increases in the sales of our glove products, which have lower
gross margins than our other product lines.

Operating Expenses. Our operating expenses increased
12.8% from $78.7 million for the year ended December 31,
1999 to $88.8 million for the year ended December 31, 2000.
This increase resulted principally from inclusion of operating
expenses of both our Perfect Fit and Whiting + Davis
businesses for a longer period in 2000, from volume-related
increases in our selling expenses, and due to non-recurring
costs totaling $1.1 million incurred in connection with our
ongoing evaluation of certain strategic alternatives. Excluding
these non-recurring costs, our operating expenses were 28.6% of
net sales in 1999 and 27.5% of net sales in 2000. Our ratio of
operating expenses to net sales declined due to higher sales
volume in 2000 and our ability to limit increases in general and
administrative expenses.

We are continuing our evaluation of strategic alternatives and
expect to incur additional costs during 2001 in connection with
this process.

Operating Income. As a result of the foregoing, our
operating income increased 14.5% from $50.9 million for the year
ended December 31, 1999 to $58.3 million for the year ended
December 31, 2000.

Other Expense. Other expense increased 10.5% from $8.6
million for the year ended December 31, 1999 to $9.5
million for the year ended December 31, 2000. Other expense
consists principally of net interest expense totaling
$8.3 million in 1999 and $9.4 million in 2000. The
increase in net interest expense from 1999 to 2000 is due to
higher average debt balances outstanding in 2000, as a result of
borrowings we made in connection with our acquisitions of
Perfect Fit and Whiting + Davis, and also due to higher average
interest rates in 2000.

Income Taxes. Our effective income tax rate was 35.8% in
1999 and 36.7% in 2000. The effective rate in both periods was
higher than the federal statutory rate of 35.0% due to state and
local income taxes. We have not recorded a tax benefit on any of
the costs incurred in connection with our evaluation of
strategic alternatives, thereby resulting in an increase to our
effective tax rate from 1999 to 2000.

Net Income. As a result of the foregoing, our net income
increased 13.6% from $27.2 million for the year ended
December 31, 1999 to $30.9 million for the year ended
December 31, 2000, and our diluted earnings per share
increased 12.3% from $1.54 in 1999 to $1.73 in 2000. Our net
income (excluding non-recurring items in both periods) increased
16.7% from $27.5 million for the year ended December 31,
1999 to $32.1 million for the year ended December 31, 2000.
Our diluted earnings per share, again excluding non-recurring
items, increased 15.4% from $1.56 in 1999 to $1.80 in 2000.

18



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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 $221.1
million for the year ended December 31, 1998 to $274.6
million for the year ended December 31, 1999. Net sales in
1999 included sales totaling $39.9 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 6.6% from $190.1
million in 1998 to $202.7 million in 1999, while net sales for
our optical frames and instruments segment increased 3.5% from
$31.0 million in 1998 to $32.0 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 12.5% from
$115.2 million for the year ended December 31, 1998 to
$129.6 million for the year ended December 31, 1999. Our
overall gross margin (excluding non-recurring items in both
periods) declined from 52.6% in 1998 to 47.4% in 1999,
principally due to lower gross margins attributable to the glove
segment.

Operating Expenses. Our operating expenses increased 2.9%
from $76.5 million for the year ended December 31, 1998 to
$78.7 million for the year ended December 31, 1999. Excluding
non-recurring items in 1998, operating expenses increased 12.7%
from $69.8 million in the 1998 period to $78.7 million in the
1999 period. This increase resulted principally from inclusion
of operating expenses of acquired businesses.

Excluding non-recurring items, our operating expenses were 31.6%
of net sales in 1998 and 28.6% 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 21.0% in 1998 to 18.8%
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 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.

19



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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. 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. EBITDA
as reported by us is equal to operating income plus depreciation
and amortization, adjusted (when applicable) for non-recurring
items. Principally due to increased profitability, our EBITDA
increased 14.8% from $68.8 million for the year ended
December 31, 1999 to $79.0 million for the year ended
December 31, 2000.

Our working capital increased by $7.1 million from $44.0 million
at December 31, 1999, to $51.1 million at December 31,
2000, primarily due to increases in trade receivables. Our trade
receivables have increased principally as a result of higher
sales volume.

We used cash equal to $28.4 million during the year ended
December 31, 2000, and $59.1 million during the year ended
December 31, 1999, for investing activities 
primarily capital expenditures and investments in new
businesses. Capital expenditures totaled $11.9 million (net of
cash received from insurance proceeds and asset disposals)
during the year ended December 31, 2000, and $18.9 million
during the year ended December 31, 1999. In connection with
our acquisition of Perfect Fit, we paid cash consideration
totaling $37.1 million in 1999. We used cash equal to $16.7
million in 2000 consisting principally of a final payment of
contingent consideration due on the acquisition of Perfect Fit
and amounts paid to acquire Whiting+Davis.

Pursuant to our stock purchase agreement with Biosystems, Inc.,
the initial purchase price for our 1997 acquisition of that
company may be increased if the operating results of this
business during the year ended December 31, 2000, exceed
certain defined thresholds of profitability. If defined
profitability levels are not achieved, no contingent payment is
required. If, however, the operating results of this business
meet these defined profitability levels then a minimum
contingent payment equal to $5.0 million will be due,
increasing based upon a sliding scale thereafter. Preliminary
indications are that a contingent payment is not due, but, if
due, would not exceed $5.0 million. According to the
purchase agreement, a final determination on this matter is not
required to be made until April 15, 2001 and may be subject
to arbitration provisions after that date. Contingent payments
(if any) would be payable in unregistered shares of our common
stock, except that the former stockholders of Biosystems, Inc.
have the option to receive all or part of any payment in cash.
Any contingent payment would be due in 2001 and would result in
additional goodwill. We expect to finance the cash portion of
any such payment from operations or bank borrowings.

In connection with certain acquisitions, we entered into two
credit agreements with Banque Nationale de Paris
(BNP). Pursuant to the credit agreements, BNP made
term loans to Bacou USA in the original principal amount of
$110.0 million (in February 1998) and $50.0 million (in March
1999). Both loans require principal repayments in equal
quarterly installments over seven years and require quarterly
interest payments at annual rates equal to three-month LIBOR
plus 0.50% and 0.60%, respectively.

We have entered into a credit agreement with Fleet National Bank
(f/k/a BankBoston, N.A.) as agent for participating banks
(Fleet). Under this credit agreement the bank
established a revolving line of credit facility with a maximum
principal limit of $36.0 million (Fleet Revolving
Facility). Principal outstanding under the Fleet 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 Fleets base rate. Principal outstanding on
the Fleet Revolving Facility at December 31, 2000 was equal
to $5.2 million and is scheduled for repayment on
August 24, 2001.

Fleet also has agreed to purchase up to $30.0 million of
economic development revenue bonds issued by Rhode Island
Industrial Facilities Corporation (RIIFC Revenue
Bonds). At December 31, 2000, there was a principal
balance outstanding equal to $11.2 million under the RIIFC
Revenue Bonds. Principal outstanding bears interest at fixed
rates ranging from LIBOR plus 0.70% to LIBOR plus 0.95%.
Proceeds from these revenue bonds were used to fund the
acquisition of our Rhode Island manufacturing facility in July
1999, to fund the construction of an addition to such facility
(which has recently been completed) and for the purchase

20



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##### Table of Contents





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, which averaged 4.3%
during the year ended December 31, 2000. In March 2000, we
restructured the repayment terms of these bonds such that the
remaining principal balance of $5.6 million is now 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 preferred stock or additional common
stock in order to fund potential future acquisitions. We believe
we would have access to sufficient capital to consummate future
acquisitions. Except for cash requirements to fund acquisitions,
we believe that cash flow provided by our 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.

New Accounting Pronouncements

In September 1998, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting
Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities. This statement
requires companies to recognize derivatives as either assets or
liabilities on the balance sheet and measure those instruments
at fair value. We were required to adopt the provisions of this
statement January 1, 2001. Adoption of this pronouncement
did not have a material impact on our financial condition or
results of operations.

In September 2000 the FASB Emerging Issues Task Force
discussed Issue No. 00-22 Accounting for Points and
Certain Other Time-Based or Volume-Based Sales Incentive Offers,
and Offers for Free Products or Services to Be Delivered in the
Future, and Issue No. 00-25 Accounting for
Consideration from a Vendor to a Retailer in Connection with the
Purchase or Promotion of the Vendors Products. A
consensus has not yet been reached on either matter. Issue No.
00-22 addresses the accounting for future offers to customers of
free product, discounts or rebates which will be awarded only if
the customer completes a specified cumulative level of revenue
transactions or remains a customer for a specified time period.
Issue No. 00-25 addresses whether certain consideration
offered by a vendor to a distributor, including slotting fees,
cooperative advertising arrangements and buy-down
programs, should be characterized as operating expenses or
reductions of revenue. These pronouncements may result in a
reclassification of certain costs within our income statement,
but are not expected to have a material impact on our financial
condition or results of operations.

21



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##### Table of Contents



In February 2001, the FASB issued a revised exposure draft,
Business Combinations and Intangible Assets 
Accounting for Goodwill. As currently drafted, this
pronouncement would become effective for us during our first
fiscal quarter after its issuance and would require that
goodwill be periodically tested for impairment but no longer be
amortized.

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,
2000, we had debt outstanding totaling $126.2 million. Interest
rates on principally all of this debt are variable based upon
three-month LIBOR. Three-month LIBOR approximated 6.4% at
December 31, 2000.

A 10% adverse change in the prevailing interest rates during
2000 would have resulted in a reduction of our after-tax
earnings of approximately $600,000, or $0.03 per diluted 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,
2000, interest rates would result in the potential loss of
after-tax earnings over the next twelve months equal to
approximately $500,000, or $0.03 per diluted share.

22



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##### Table of Contents








|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data

INDEX TO FINANCIAL STATEMENTS

|                                                |  |      |    | 
|----------------------------------------------- |  | ---- | -- | 
|                                                |  | Page
|                                                |  |     
|Independent Auditors Report                    |  |      | 24 | 
|                                               
|                                               
|                                               
|                                               
|Consolidated Balance Sheets                     |  |      | 25 | 
|                                               
|                                               
|                                               
|                                               
|Consolidated Statements of Income               |  |      | 26 | 
|                                               
|                                               
|                                               
|                                               
|Consolidated Statements of Stockholders Equity |  |      | 27 | 
|                                               
|                                               
|                                               
|                                               
|Consolidated Statements of Cash Flows           |  |      | 28 | 
|                                               
|                                               
|                                               
|                                               
|Notes to Consolidated Financial Statements      |  |      | 29 | 

23



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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, 1999
and 2000 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, 2000. 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 auditing standards
generally accepted in the United States of America. 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 fairly present, in all material respects, the financial
position of Bacou USA, Inc. and subsidiaries as of
December 31, 1999 and 2000 and the results of their
operations and their cash flows for each of the years in the
three-year period ended December 31, 2000, in conformity
with accounting principles generally accepted in the United
States of America.



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

Providence, Rhode Island



24



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


|                                     |                                                                                                                                               |                                            |         |         |         |  |         |         |         | 
|------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ------- | ------- |  | ------- | ------- | ------- | 
|                                     |                                                                                                                                               |                                           
|                                     |                                                                                                                                               | December 31,                              
|                                     |                                                                                                                                               |                                           
|                                     |                                                                                                                                               | 1999                                       |         | 2000   
|                                     |                                                                                                                                               |                                            |         |        
|ASSETS                               |                                                                                                                                               |                                            |         |         |         |  |         |        
|                                    
|                                    
|                                    
|                                    
|Current assets:                      |                                                                                                                                               |                                            |         |         |         |  |         |        
|                                    
|                                    
|                                    
|                                    
|                                     | Cash and cash equivalents                                                                                                                     |                                            | $       | 10,272  |         |  | $       | 980     |        
|                                    
|                                    
|                                    
|                                    
|                                     | Trade accounts receivable, net                                                                                                                |                                            |         | 41,653  |         |  |         | 53,275  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Inventories                                                                                                                                   |                                            |         | 42,433  |         |  |         | 45,504  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Other current assets                                                                                                                          |                                            |         | 1,634   |         |  |         | 2,024   |        
|                                    
|                                    
|                                    
|                                    
|                                     | Deferred income taxes                                                                                                                         |                                            |         | 3,733   |         |  |         | 1,952   |        
|                                     |                                                                                                                                               |                                            |         |         |         |  |         |        
|                                     |                                                                                                                                               | Total current assets                       |         |         | 99,725  |  |         |         | 103,735 | 
|                                    
|                                    
|                                    
|                                    
|Property and equipment, net          |                                                                                                                                               |                                            | 74,410  |         |         |  | 78,392  |        
|                                    
|                                    
|                                    
|                                    
|Intangible assets, net               |                                                                                                                                               |                                            | 194,258 |         |         |  | 194,456 |        
|                                    
|                                    
|                                    
|                                    
|Other assets                         |                                                                                                                                               |                                            | 3,032   |         |         |  | 2,947   |        
|                                     |                                                                                                                                               |                                            |         |         |         |  |         |        
|                                     |                                                                                                                                               | Total assets                               |         | $       | 371,425 |  |         | $       | 379,530 | 
|                                     |                                                                                                                                               |                                            |         |         |         |  |         |        
|LIABILITIES AND STOCKHOLDERS EQUITY |                                                                                                                                               |                                            |         |         |         |  |         |        
|                                    
|                                    
|                                    
|                                    
|Current liabilities:                 |                                                                                                                                               |                                            |         |         |         |  |         |        
|                                    
|                                    
|                                    
|                                    
|                                     | Current installments of long-term debt                                                                                                        |                                            | $       | 23,637  |         |  | $       | 28,057  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Accounts payable                                                                                                                              |                                            |         | 10,559  |         |  |         | 11,239  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Accrued compensation and benefits                                                                                                             |                                            |         | 8,408   |         |  |         | 6,186   |        
|                                    
|                                    
|                                    
|                                    
|                                     | Other accrued expenses                                                                                                                        |                                            |         | 12,084  |         |  |         | 5,602   |        
|                                    
|                                    
|                                    
|                                    
|                                     | Income taxes payable                                                                                                                          |                                            |         | 1,027   |         |  |         | 1,542   |        
|                                     |                                                                                                                                               |                                            |         |         |         |  |         |        
|                                     |                                                                                                                                               | Total current liabilities                  |         |         | 55,715  |  |         |         | 52,626  | 
|                                    
|                                    
|                                    
|                                    
|Long-term debt                       |                                                                                                                                               |                                            | 120,256 |         |         |  | 98,178  |        
|                                    
|                                    
|                                    
|                                    
|Deferred income taxes                |                                                                                                                                               |                                            | 11,550  |         |         |  | 13,852  |        
|                                    
|                                    
|                                    
|                                    
|Other liabilities                    |                                                                                                                                               |                                            | 2,449   |         |         |  | 1,799   |        
|                                     |                                                                                                                                               |                                            |         |         |         |  |         |        
|                                     |                                                                                                                                               | Total liabilities                          |         |         | 189,970 |  |         |         | 166,455 | 
|                                     |                                                                                                                                               |                                            |         |         |         |  |         |        
|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,
	17,629,865 shares in 1999 and 17,671,465 shares in 2000 issued
	and outstanding |                                            |         | 18      |         |  |         | 18      |        
|                                    
|                                    
|                                    
|                                    
|                                     | Additional paid-in capital                                                                                                                    |                                            |         | 73,060  |         |  |         | 73,800  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Retained earnings                                                                                                                             |                                            |         | 108,377 |         |  |         | 139,257 |        
|                                     |                                                                                                                                               |                                            |         |         |         |  |         |        
|                                     |                                                                                                                                               | Total stockholders equity                 |         |         | 181,455 |  |         |         | 213,075 | 
|                                     |                                                                                                                                               |                                            |         |         |         |  |         |        
|                                     |                                                                                                                                               | Total liabilities and stockholders equity |         | $       | 371,425 |  |         | $       | 379,530 | 
|                                     |                                                                                                                                               |                                            |         |         |         |  |         |        

See accompanying notes to consolidated financial statements.

25



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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,
|                                     |                                                             |                         
|                                     |                                                             | 1998                     |         | 1999    |        | 2000
|                                     |                                                             |                          |         |         |        |     
|Net sales                            |                                                             | $                        | 221,093 |         |        | $    | 274,658 |         |        | $ | 319,724 |        
|                                    
|                                    
|                                    
|                                    
|Cost of sales                        |                                                             |                          | 105,856 |         |        |      | 145,038 |         |        |   | 172,638 |        
|                                     |                                                             |                          |         |         |        |      |         |         |        |   |         |        
|                                     | Gross profit                                                |                          |         | 115,237 |        |      |         | 129,620 |        |   |         | 147,086 |       
|                                    
|                                    
|                                    
|                                    
|Operating expenses:                  |                                                             |                          |         |         |        |      |         |         |        |   |         |        
|                                    
|                                    
|                                    
|                                    
|                                     | Selling                                                     |                          |         | 37,172  |        |      |         | 41,363  |        |   |         | 49,926  |       
|                                    
|                                    
|                                    
|                                    
|                                     | General and administrative                                  |                          |         | 22,895  |        |      |         | 22,597  |        |   |         | 22,231  |       
|                                    
|                                    
|                                    
|                                    
|                                     | Non-recurring costs  evaluation of strategic
	alternatives |                          |         |        |        |      |         |        |        |   |         | 1,126   |       
|                                    
|                                    
|                                    
|                                    
|                                     | Research and development                                    |                          |         | 4,000   |        |      |         | 5,274   |        |   |         | 5,643   |       
|                                    
|                                    
|                                    
|                                    
|                                     | Purchased in-process research and development               |                          |         | 4,680   |        |      |         |        |        |   |         |        |       
|                                    
|                                    
|                                    
|                                    
|                                     | Amortization of intangible assets                           |                          |         | 7,748   |        |      |         | 9,440   |        |   |         | 9,850   |       
|                                     |                                                             |                          |         |         |        |      |         |         |        |   |         |        
|                                     |                                                             | Total operating expenses |         |         | 76,495 |      |         |         | 78,674 |   |         |         | 88,776 | 
|                                     |                                                             |                          |         |         |        |      |         |         |        |   |         |        
|Operating income                     |                                                             |                          | 38,742  |         |        |      | 50,946  |         |        |   | 58,310  |        
|                                    
|                                    
|                                    
|                                    
|Other expenses (income):             |                                                             |                          |         |         |        |      |         |         |        |   |         |        
|                                    
|                                    
|                                    
|                                    
|                                     | Interest expense                                            |                          |         | 6,291   |        |      |         | 8,496   |        |   |         | 9,632   |       
|                                    
|                                    
|                                    
|                                    
|                                     | Interest income                                             |                          |         | (112    | )      |      |         | (189    | )      |   |         | (207    | )     
|                                    
|                                    
|                                    
|                                    
|                                     | Other, net                                                  |                          |         | (125    | )      |      |         | 284     |        |   |         | 72      |       
|                                     |                                                             |                          |         |         |        |      |         |         |        |   |         |        
|                                     |                                                             | Total other expense, net |         |         | 6,054  |      |         |         | 8,591  |   |         |         | 9,497  | 
|                                     |                                                             |                          |         |         |        |      |         |         |        |   |         |        
|Income before income taxes           |                                                             |                          | 32,688  |         |        |      | 42,355  |         |        |   | 48,813  |        
|                                    
|                                    
|                                    
|                                    
|Income taxes                         |                                                             |                          | 11,678  |         |        |      | 15,165  |         |        |   | 17,933  |        
|                                     |                                                             |                          |         |         |        |      |         |         |        |   |         |        
|                                     |                                                             | Net income               |         | $       | 21,010 |      |         | $       | 27,190 |   |         | $       | 30,880 | 
|                                     |                                                             |                          |         |         |        |      |         |         |        |   |         |        
|Basic earnings per share             |                                                             | $                        | 1.19    |         |        | $    | 1.54    |         |        | $ | 1.75    |        
|                                     |                                                             |                          |         |         |        |      |         |         |        |   |         |        
|Diluted earnings per share           |                                                             | $                        | 1.19    |         |        | $    | 1.54    |         |        | $ | 1.73    |        
|                                     |                                                             |                          |         |         |        |      |         |         |        |   |         |        
|Weighted average shares outstanding: |                                                             |                          |         |         |        |      |         |         |        |   |         |        
|                                    
|                                    
|                                    
|                                    
|Basic                                |                                                             |                          | 17,601  |         |        |      | 17,624  |         |        |   | 17,652  |        
|                                     |                                                             |                          |         |         |        |      |         |         |        |   |         |        
|Diluted                              |                                                             |                          | 17,723  |         |        |      | 17,696  |         |        |   | 17,835  |        
|                                     |                                                             |                          |         |         |        |      |         |         |        |   |         |        

See accompanying notes to consolidated financial statements.

26



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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, 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 |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Stock options exercised                                                 |  |        | 41     |        |  |            |   |          |  |               | 740    |   |  |   |        |   |  |   | 740     |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Net income                                                              |  |        |       |        |  |            |   |          |  |               |       |   |  |   | 30,880  |   |  |   | 30,880  |  
|                                                                        |  |        |        |        |  |            |    |          |  |               |        |   |  |   |         |   |  |   |         |  
|Balances at December 31, 2000                                           |  |        | 17,671 |        |  | $          | 18 |          |  | $             | 73,800 |   |  | $ | 139,257 |   |  | $ | 213,075 |  
|                                                                        |  |        |        |        |  |            |    |          |  |               |        |   |  |   |         |   |  |   |         |  

See accompanying notes to consolidated financial statements.

27



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


|                                                     |                                                                                         |                                                                          |                                        |                                                     |        |         |          |         |        |        |         |         |        |         |         |  
|---------------------------------------------------- | --------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | -------------------------------------- | --------------------------------------------------- | ------ | ------- | -------- | ------- | ------ | ------ | ------- | ------- | ------ | ------- | ------- | -
|                                                     |                                                                                         |                                                                         
|                                                     |                                                                                         | Years Ended December 31,                                                
|                                                     |                                                                                         |                                                                         
|                                                     |                                                                                         | 1998                                                                     |                                        | 1999                                                |        | 2000   
|                                                     |                                                                                         |                                                                          |                                        |                                                     |        |        
|Cash flows from operating activities:                |                                                                                         |                                                                          |                                        |                                                     |        |         |          |         |        |        |         |        
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Net income                                                                              |                                                                          | $                                      | 21,010                                              |        |         | $        | 27,190  |        |        | $       | 30,880  |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Adjustments to reconcile net income to net cash provided by
	operating activities:      |                                                                          |                                        |                                                     |        |         |          |         |        |        |         |         |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                         | Depreciation and amortization                                            |                                        |                                                     | 14,154 |         |          |         | 17,287 |        |         |         | 19,398 |        
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                         | Deferred income taxes                                                    |                                        |                                                     | (176   | )       |          |         | 3,621  |        |         |         | 3,886  |        
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                         | Purchased in-process research and development                            |                                        |                                                     | 4,680  |         |          |         |       |        |         |         |       |        
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                         | Change in assets and liabilities, net of effects of acquired
	companies: |                                        |                                                     |        |         |          |         |        |        |         |         |        |        
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                         |                                                                          | Trade accounts receivable              |                                                     |        | (6,677  | )        |         |        | (8,206 | )       |         |        | (10,958 | )      
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                         |                                                                          | Inventories                            |                                                     |        | (10,162 | )        |         |        | 5,718  |         |         |        | (2,145  | )      
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                         |                                                                          | Other current assets                   |                                                     |        | 2,997   |          |         |        | 415    |         |         |        | (241    | )      
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                         |                                                                          | Accounts payable                       |                                                     |        | 1,949   |          |         |        | (1,229 | )       |         |        | (765    | )      
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                         |                                                                          | Accrued expenses and other liabilities |                                                     |        | 4,745   |          |         |        | 747    |         |         |        | (4,469  | )      
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                         |                                                                          | Income taxes                           |                                                     |        | 797     |          |         |        | (602   | )       |         |        | 811     |        
|                                                     |                                                                                         |                                                                          |                                        |                                                     |        |         |          |         |        |        |         |        
|                                                     |                                                                                         |                                                                          |                                        | Net cash provided by operating activities           |        |         | 33,317   |         |        |        | 44,941  |         |        |         | 36,397  |  
|                                                     |                                                                                         |                                                                          |                                        |                                                     |        |         |          |         |        |        |         |        
|Cash flows from investing activities:                |                                                                                         |                                                                          |                                        |                                                     |        |         |          |         |        |        |         |        
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Decrease (increase) in other assets                                                     |                                                                          |                                        | (182                                                | )      |         |          | (2,850  | )      |        |         | 85      |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Capital expenditures                                                                    |                                                                          |                                        | (14,386                                             | )      |         |          | (18,873 | )      |        |         | (13,403 | )     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Cash received from insurance proceeds and asset disposals                               |                                                                          |                                        |                                                    |        |         |          |        |        |        |         | 1,556   |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Acquisition of businesses, including direct costs of
	acquisition, net of cash acquired |                                                                          |                                        | (121,094                                            | )      |         |          | (37,381 | )      |        |         | (16,661 | )     
|                                                     |                                                                                         |                                                                          |                                        |                                                     |        |         |          |         |        |        |         |        
|                                                     |                                                                                         |                                                                          |                                        | Net cash used in investing activities               |        |         | (135,662 | )       |        |        | (59,104 | )       |        |         | (28,423 | )
|                                                     |                                                                                         |                                                                          |                                        |                                                     |        |         |          |         |        |        |         |        
|Cash flows from financing activities:                |                                                                                         |                                                                          |                                        |                                                     |        |         |          |         |        |        |         |        
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Repayment of long-term debt                                                             |                                                                          |                                        | (17,725                                             | )      |         |          | (21,806 | )      |        |         | (23,206 | )     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Proceeds from long-term debt                                                            |                                                                          |                                        | 110,000                                             |        |         |          | 61,160  |        |        |         |        |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Advances (repayments) under notes payable, net                                          |                                                                          |                                        | 9,550                                               |        |         |          | (16,362 | )      |        |         | 5,200   |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Proceeds from issuance of common stock                                                  |                                                                          |                                        | 333                                                 |        |         |          | 353     |        |        |         | 740     |       
|                                                     |                                                                                         |                                                                          |                                        |                                                     |        |         |          |         |        |        |         |        
|                                                     |                                                                                         |                                                                          |                                        | Net cash provided by (used in) financing activities |        |         | 102,158  |         |        |        | 23,345  |         |        |         | (17,266 | )
|                                                     |                                                                                         |                                                                          |                                        |                                                     |        |         |          |         |        |        |         |        
|Net increase (decrease) in cash and cash equivalents |                                                                                         |                                                                          | (187                                   | )                                                   |        |         | 9,182    |         |        |        | (9,292  | )      
|                                                    
|                                                    
|                                                    
|                                                    
|Cash and cash equivalents at beginning of year       |                                                                                         |                                                                          | 1,277                                  |                                                     |        |         | 1,090    |         |        |        | 10,272  |        
|                                                     |                                                                                         |                                                                          |                                        |                                                     |        |         |          |         |        |        |         |        
|Cash and cash equivalents at end of year             |                                                                                         | $                                                                        | 1,090                                  |                                                     |        | $       | 10,272   |         |        | $      | 980     |        
|                                                     |                                                                                         |                                                                          |                                        |                                                     |        |         |          |         |        |        |         |        
|Supplemental disclosures of cash flow information:   |                                                                                         |                                                                          |                                        |                                                     |        |         |          |         |        |        |         |        
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Cash paid during the year for interest                                                  |                                                                          | $                                      | 5,796                                               |        |         | $        | 8,356   |        |        | $       | 9,942   |       
|                                                     |                                                                                         |                                                                          |                                        |                                                     |        |         |          |         |        |        |         |        
|                                                     | Cash paid during the year for income taxes                                              |                                                                          | $                                      | 11,308                                              |        |         | $        | 12,605  |        |        | $       | 12,993  |       
|                                                     |                                                                                         |                                                                          |                                        |                                                     |        |         |          |         |        |        |         |        
|                                                     | Expiration of put option                                                                |                                                                          | $                                      |                                                    |        |         | $        | 9,450   |        |        | $       |        |       
|                                                     |                                                                                         |                                                                          |                                        |                                                     |        |         |          |         |        |        |         |        
|                                                     | Fair value of stock options granted pursuant to a consulting
	agreement                 |                                                                          | $                                      | 337                                                 |        |         | $        |        |        |        | $       |        |       
|                                                     |                                                                                         |                                                                          |                                        |                                                     |        |         |          |         |        |        |         |        

See accompanying notes to consolidated financial statements.

28



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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, 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 176
employees (representing approximately 7% of total employees)
that are covered under two collective bargaining agreements that
expire on September 13, 2002 with respect to 91 employees
and on March 6, 2003 with respect to 85 employees.

Bacou S.A., a company domiciled in Valence, France, owns a
controlling interest (approximately 71% at December 31,
2000) in Bacou. The Company purchases certain inventory items
from Bacou S.A. and its subsidiaries. These purchases totaled
$24,000 in 1998, $1,049,000 in 1999 and $3,843,000 in 2000.
Sales by the Company to Bacou S.A. totaled $967,000 in 1998,
$1,925,000 in 1999 and $4,239,000 in 2000.

(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. Rebates or discounts offered to customers at the
point of sale are recorded as a reduction of revenue. 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 $1,150,000 at December 31, 1998,
$1,168,000 at December 31, 1999 and $1,391,000 at
December 31, 2000.

(d)  Shipping-Handling Fees and
Costs

Shipping and handling costs include payments to third parties
for the delivery of products to customers, as well as internal
salaries and overhead costs incurred to store, move and prepare
finished products for shipment. Shipping and handling costs are
included with selling expenses in the accompanying consolidated
income statements and totaled $7,400,000 in 1998, $9,027,000 in
1999 and $11,623,000 in 2000. The Company generally only
recovers a small portion of its total shipping and handling
costs from customers. In September 2000, the Financial
Accounting Standards Board Emerging Issues Task Force reached a
consensus on Issue No. 00-10 Accounting for Shipping
and Handling Fees and Costs. This pronouncement was

29



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

effective for the Company beginning on October 1, 2000, and
required that amounts billed to customers for shipping and
handling should be classified as sales. Prior to the effective
date, reimbursements received from customers for shipping and
handling costs had been classified as a reduction of the related
expense. As required by this pronouncement, the Company has
reclassified reimbursements for all prior periods presented to
sales, including reimbursements totaling $1,512,000 in 1998,
$1,861,000 in 1999 and $2,495,000 in 2000.

(e)  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.

(f)  Property and Equipment

Property and equipment are stated at cost. The Company
capitalizes payments to third-parties, and certain internal
costs, incurred to obtain internal-use software. 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. Costs to repair and maintain property
and equipment are charged to operating expenses when incurred.

(g)  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 may be affected if estimated
future net cash flows are subsequently changed.

(h)  Investments in Affiliated
Companies

Other non-current assets include investments in Uvex (UK)
Limited and Uvex Safety Australia Pty. Limited, representing 15%
of the outstanding common shares of each company. Investments
are accounted for by the cost method.

(i)  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.

30



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

(j)  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, 2000.

(k)  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 certain 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.

(l)  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 121,812 in 1998, 72,305 in 1999 and 183,261 in
2000. Based on the purchase agreement with the stockholders of
Biosystems, Inc., if certain earnings targets are met, the
Company may have to issue common stock to these former
stockholders. We have 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.

(m)  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.

(n)  Research and Development

Research and development costs are expensed as incurred and
totaled $4,000,000 in 1998, $5,274,000 in 1999 and $5,643,000 in
2000.

(o)  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.

31



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

(2)  Acquisitions

Effective June 30, 2000, the Company purchased
substantially all the assets and assumed substantially all
liabilities of the Whiting+Davis Safety division of WDC
Holdings, Inc. (Whiting+Davis), a manufacturer and
distributor of metal mesh protective gloves, sleeves and apparel.

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. In
accordance with provisions of the related asset purchase
agreement, the Company paid additional contingent cash
consideration equal to $5.1 million in March 2000. 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 S. Leight & Associates, Inc.
(HLA), 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 HLA indebtedness.

Effective September 30, 1997, the Company 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 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. Preliminary indications are that a
contingent payment is not due, however, a final determination on
this matter is not required to be made until April 15, 2001
and may be subject to arbitration provisions after that date.

In accordance with generally accepted accounting principles, the
cash paid and 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. In connection with the
1998 acquisition of HLA, the fair value of purchased in-process
research and development was $4.7 million. This value was
determined based upon future cash flows expected to result from
development of the related 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.
Acquired in-process research and development had not yet reached
technological feasibility and had no alternative future uses,
accordingly, the fair value assigned to the project was expensed
as of the acquisition date.

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

|                               |  |             |        |  
|------------------------------ |  | ----------- | ------ | -
|                               |  | Perfect Fit
|                               |  |            
|Working capital                |  | $           | 5,400  |  
|                              
|                              
|                              
|                              
|Property and equipment         |  |             | 9,400  |  
|                              
|                              
|                              
|                              
|Identifiable intangible assets |  |             | 800    |  
|                              
|                              
|                              
|                              
|Long-term debt                 |  |             | (6,300 | )
|                              
|                              
|                              
|                              
|Goodwill                       |  |             | 32,900 |  

Disclosure of the allocation of purchase price for
Whiting+Davis, and pro forma operating results relating to the
Perfect Fit and Whiting+Davis acquisitions, have been omitted
because such information was not material.

32



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

(3)  Inventories

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

|                           |  |      |        |      |  |   |        | 
|-------------------------- |  | ---- | ------ | ---- |  | - | ------ | 
|                           |  | 1999 |        | 2000
|                           |  |      |        |     
|Raw materials and supplies |  | $    | 16,137 |      |  | $ | 16,103 | 
|                          
|                          
|                          
|                          
|Work-in-process            |  |      | 4,629  |      |  |   | 6,008  | 
|                          
|                          
|                          
|                          
|Finished goods             |  |      | 21,667 |      |  |   | 23,393 | 
|                           |  |      |        |      |  |   |        | 
|                           |  | $    | 42,433 |      |  | $ | 45,504 | 
|                           |  |      |        |      |  |   |        | 

(4)  Property and Equipment

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

|                                               |  |               |       |      |  |      |        |  |  |   |         | 
|---------------------------------------------- |  | ------------- | ----- | ---- |  | ---- | ------ |  |  | - | ------- | 
|                                               |  | Estimated     |       |      |  |     
|                                               |  | Useful        |       |      |  |     
|                                               |  | Lives (Years) |       | 1999 |  | 2000
|                                               |  |               |       |      |  |     
|Machinery and equipment                        |  |               | 5-10  |      |  | $    | 41,470 |  |  | $ | 50,238  | 
|                                              
|                                              
|                                              
|                                              
|Dies and molds                                 |  |               | 5     |      |  |      | 15,156 |  |  |   | 17,605  | 
|                                              
|                                              
|                                              
|                                              
|Buildings and leasehold improvements           |  |               | 10-40 |      |  |      | 24,393 |  |  |   | 29,458  | 
|                                              
|                                              
|                                              
|                                              
|Computer equipment and software                |  |               | 5-10  |      |  |      | 8,216  |  |  |   | 10,580  | 
|                                              
|                                              
|                                              
|                                              
|Furniture, fixtures and other                  |  |               | 3-10  |      |  |      | 3,717  |  |  |   | 3,390   | 
|                                              
|                                              
|                                              
|                                              
|Deposits and construction in progress          |  |               |       |      |  |      | 6,898  |  |  |   | 1,536   | 
|                                               |  |               |       |      |  |      |        |  |  |   |         | 
|                                               |  |               |       |      |  |      | 99,850 |  |  |   | 112,807 | 
|                                              
|                                              
|                                              
|                                              
|Less accumulated depreciation and amortization |  |               |       |      |  |      | 25,440 |  |  |   | 34,415  | 
|                                               |  |               |       |      |  |      |        |  |  |   |         | 
|                                               |  |               |       |      |  | $    | 74,410 |  |  | $ | 78,392  | 
|                                               |  |               |       |      |  |      |        |  |  |   |         | 

Depreciation expense was $6,406,000 in 1998, $7,847,000 in 1999
and $9,548,000 in 2000.

(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) |       | 1999 |  | 2000
|                                  |  |               |       |      |  |     
|Intellectual property and patents |  |               | 9-30  |      |  | $    | 102,371 |  |  | $ | 102,371 | 
|                                 
|                                 
|                                 
|                                 
|Customer relationships            |  |               | 10-20 |      |  |      | 19,523  |  |  |   | 19,523  | 
|                                 
|                                 
|                                 
|                                 
|Tradenames and other intangibles  |  |               | 6-30  |      |  |      | 5,418   |  |  |   | 5,418   | 
|                                 
|                                 
|                                 
|                                 
|Goodwill                          |  |               | 20-40 |      |  |      | 96,950  |  |  |   | 107,067 | 
|                                  |  |               |       |      |  |      |         |  |  |   |         | 
|                                  |  |               |       |      |  |      | 224,262 |  |  |   | 234,379 | 
|                                 
|                                 
|                                 
|                                 
|Less accumulated amortization     |  |               |       |      |  |      | 30,004  |  |  |   | 39,923  | 
|                                  |  |               |       |      |  |      |         |  |  |   |         | 
|                                  |  |               |       |      |  | $    | 194,258 |  |  | $ | 194,456 | 
|                                  |  |               |       |      |  |      |         |  |  |   |         | 

33



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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, 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 |       
|                              |         |         |        |          |  |       |       |       |   |   |        |       
|Year ended December 31, 2000: |         |         |        |          |  |       |       |       |   |   |        |       
|                             
|                             
|                             
|                             
|                              | Federal |         | $      | 13,043   |  |       | $     | 3,529 |   |   | $      | 16,572 | 
|                             
|                             
|                             
|                             
|                              | State   |         |        | 1,004    |  |       |       | 357   |   |   |        | 1,361  | 
|                              |         |         |        |          |  |       |       |       |   |   |        |       
|                              |         | $       | 14,047 |          |  | $     | 3,886 |       |   | $ | 17,933 |       
|                              |         |         |        |          |  |       |       |       |   |   |        |       

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,
|                                                      |  |                         
|                                                      |  | 1998                     |        | 1999 |  | 2000
|                                                      |  |                          |        |      |  |     
|Computed expected tax expense                         |  | $                        | 11,441 |      |  | $    | 14,824 |   |  | $ | 17,084 |  
|                                                     
|                                                     
|                                                     
|                                                     
|State income taxes, net of federal income tax benefit |  |                          | 710    |      |  |      | 660    |   |  |   | 885    |  
|                                                     
|                                                     
|                                                     
|                                                     
|Estimated non-deductible capital costs                |  |                          |       |      |  |      |       |   |  |   | 394    |  
|                                                     
|                                                     
|                                                     
|                                                     
|Net tax benefit of foreign sales corporation          |  |                          | (394   | )    |  |      | (369   | ) |  |   | (441   | )
|                                                     
|                                                     
|                                                     
|                                                     
|Other                                                 |  |                          | (79    | )    |  |      | 50     |   |  |   | 11     |  
|                                                      |  |                          |        |      |  |      |        |   |  |   |        |  
|                                                      |  | $                        | 11,678 |      |  | $    | 15,165 |   |  | $ | 17,933 |  
|                                                      |  |                          |        |      |  |      |        |   |  |   |        |  
|Effective rate                                        |  |                          | 35.7   | %    |  |      | 35.8   | % |  |   | 36.7   | %
|                                                      |  |                          |        |      |  |      |        |   |  |   |        |  

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

|                          |                                                  |                                 |   |        |        |  |   |        |        | 
|------------------------- | ------------------------------------------------ | ------------------------------- | - | ------ | ------ |  | - | ------ | ------ | 
|                          |                                                  | 1999                            |   | 2000  
|                          |                                                  |                                 |   |       
|Deferred tax assets:      |                                                  |                                 |   |        |        |  |   |       
|                         
|                         
|                         
|                         
|                          | Allowance for doubtful accounts                  |                                 | $ | 375    |        |  | $ | 468    |       
|                         
|                         
|                         
|                         
|                          | Inventory related items                          |                                 |   | 1,344  |        |  |   | 1,595  |       
|                         
|                         
|                         
|                         
|                          | Pension and compensation related expenses        |                                 |   | 963    |        |  |   | 664    |       
|                         
|                         
|                         
|                         
|                          | Accrued costs                                    |                                 |   | 971    |        |  |   | 695    |       
|                         
|                         
|                         
|                         
|                          | Other                                            |                                 |   | 392    |        |  |   | 494    |       
|                          |                                                  |                                 |   |        |        |  |   |       
|                          |                                                  | Total gross deferred tax assets |   |        | 4,045  |  |   |        | 3,916  | 
|                         
|                         
|                         
|                         
|                          |                                                  | Less valuation allowance        |   |        |       |  |   |        |       | 
|                          |                                                  |                                 |   |        |        |  |   |       
|                          |                                                  | Net deferred tax assets         |   |        | 4,045  |  |   |        | 3,916  | 
|                          |                                                  |                                 |   |        |        |  |   |       
|Deferred tax liabilities: |                                                  |                                 |   |        |        |  |   |       
|                         
|                         
|                         
|                         
|                          | Basis differences in fixed and intangible assets |                                 |   | 11,370 |        |  |   | 14,825 |       
|                         
|                         
|                         
|                         
|                          | Other                                            |                                 |   | 492    |        |  |   | 991    |       
|                          |                                                  |                                 |   |        |        |  |   |       
|                          |                                                  | Total deferred tax liabilities  |   |        | 11,862 |  |   |        | 15,816 | 
|                          |                                                  |                                 |   |        |        |  |   |       
|                          |                                                  | Net deferred tax liability      |   | $      | 7,817  |  |   | $      | 11,900 | 
|                          |                                                  |                                 |   |        |        |  |   |       

34



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

(7)  Long-term Debt

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |      |         |      |  |   |         | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 1999 |         | 2000
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |      |         |     
|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 (6.4% at December 31, 2000) plus
	0.50%                                                                                                                                                                                                   |  | $    | 82,500  |      |  | $ | 66,785  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|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  |      |  |   | 37,500  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Rhode Island Industrial Facilities Corporation 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  |      |  |   | 11,160  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Wilkes County Industrial Facilities (Wilkes County)
	Revenue Bonds; interest payable quarterly at a variable rate
	(averaging 4.3% during 2000); secured by an irrevocable letter
	of credit; principal payment due in full on December  31,
	2006                                                                                                                                                                                                                                                        |  |      | 5,590   |      |  |   | 5,590   | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Revolving line of credit facility with Fleet National Bank in
	the maximum principal amount of $36,000,000; due in full on
	August 24, 2001, bearing interest at an annual rate equal
	to, at the election of the Company, either (a) LIBOR
	plus 0.70%, or (b) the banks floating rate                                                                                                                                                                                                                    |  |      |        |      |  |   | 5,200   | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |      |         |      |  |   |         | 
|Total long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |      | 143,893 |      |  |   | 126,235 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Current installments of long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |      | 23,637  |      |  |   | 28,057  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |      |         |      |  |   |         | 
|Long-term debt, excluding current installments                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | $    | 120,256 |      |  | $ | 98,178  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |      |         |      |  |   |         | 

Aggregate maturities of long-term debt for each of the five
years subsequent to December 31, 2000, are as
follows: 2001  $28,057,000; 2002 
$24,857,000; 2003  $24,857,000; 2004 
$24,857,000; 2005  $16,231,000; and thereafter
$7,376,000.

(8)  Commitments and Contingencies

The Company leases production, office and warehouse space, and
certain vehicles and equipment, under non-cancelable operating
leases. Minimum future rentals under non-cancelable operating
leases, by year, are approximately as follows: 2001 
$1,961,000; 2002  $1,460,000; 2003 
$907,000; 2004  $188,000; and 2005 
$187,000. Rent expense totaled approximately $1,920,000 in 1998,
$1,871,000 in 1999 and $1,975,000 in 2000.

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 $5,791,000 at December 31, 2000.

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

35



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

ultimate resolution of such litigation will not have a material
adverse effect on the Companys financial position, results
of operations or cash flows.

The Company is self-insured for certain workers
compensation claims and records a provision for estimated claims
incurred but not reported.

(9)  Employee Benefit Plans

(a)  Defined Contribution Plans

The Company sponsors defined contribution plans for all eligible
employees. Employer contribution expense totaled approximately
$836,000 in 1998, $982,000 in 1999 and $983,000 in 2000.

(b)  Defined Benefit Plan

The Company sponsors a defined benefit pension plan covering
certain 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 6.75% in 1998, 7.5% in 1999 and 2000, and a long-term
rate of return on assets of 8.5% during all years presented. The
following table sets forth the benefit obligation, assets at
fair value, and funded status of the plan at December 31
(in thousands):

|                                                        |  |      |       |      |  |   |       |  
|------------------------------------------------------- |  | ---- | ----- | ---- |  | - | ----- | -
|                                                        |  | 1999 |       | 2000
|                                                        |  |      |       |     
|Benefit Obligation                                      |  |      |       |      |  |   |       |  
|                                                       
|                                                       
|                                                       
|                                                       
|Benefit obligation at beginning of year                 |  | $    | 1,761 |      |  | $ | 1,666 |  
|                                                       
|                                                       
|                                                       
|                                                       
|Service cost                                            |  |      | 56    |      |  |   | 40    |  
|                                                       
|                                                       
|                                                       
|                                                       
|Interest cost                                           |  |      | 118   |      |  |   | 123   |  
|                                                       
|                                                       
|                                                       
|                                                       
|Benefit payments                                        |  |      | (40   | )    |  |   | (48   | )
|                                                       
|                                                       
|                                                       
|                                                       
|Actuarial (gain) loss                                   |  |      | (229  | )    |  |   | 91    |  
|                                                        |  |      |       |      |  |   |       |  
|Benefit obligation at end of year                       |  | $    | 1,666 |      |  | $ | 1,872 |  
|                                                        |  |      |       |      |  |   |       |  
|Assets at Fair Value                                    |  |      |       |      |  |   |       |  
|                                                       
|                                                       
|                                                       
|                                                       
|Fair value of assets at beginning of year               |  | $    | 1,041 |      |  | $ | 1,240 |  
|                                                       
|                                                       
|                                                       
|                                                       
|Actual return on assets                                 |  |      | 48    |      |  |   | (17   | )
|                                                       
|                                                       
|                                                       
|                                                       
|Contributions                                           |  |      | 191   |      |  |   | 211   |  
|                                                       
|                                                       
|                                                       
|                                                       
|Benefit payments                                        |  |      | (40   | )    |  |   | (48   | )
|                                                        |  |      |       |      |  |   |       |  
|Fair value of assets at end of year                     |  | $    | 1,240 |      |  | $ | 1,386 |  
|                                                        |  |      |       |      |  |   |       |  
|Funded Status                                           |  |      |       |      |  |   |       |  
|                                                       
|                                                       
|                                                       
|                                                       
|Benefit obligation                                      |  | $    | 1,666 |      |  | $ | 1,872 |  
|                                                       
|                                                       
|                                                       
|                                                       
|Assets at fair value                                    |  |      | 1,240 |      |  |   | 1,386 |  
|                                                        |  |      |       |      |  |   |       |  
|Net underfunded obligation                              |  | $    | 426   |      |  | $ | 486   |  
|                                                        |  |      |       |      |  |   |       |  
|Accrued benefit liability included in the balance sheet |  | $    | 426   |      |  | $ | 486   |  
|                                                        |  |      |       |      |  |   |       |  

36



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

Periodic pension cost during the years ended December 31,
1998, 1999 and 2000 included the following (in thousands):

|                              |  |      |     |      |  |      |     |   |  |   |      |  
|----------------------------- |  | ---- | --- | ---- |  | ---- | --- | - |  | - | ---- | -
|                              |  | 1998 |     | 1999 |  | 2000
|                              |  |      |     |      |  |     
|Service cost                  |  | $    | 47  |      |  | $    | 56  |   |  | $ | 40   |  
|                             
|                             
|                             
|                             
|Interest cost                 |  |      | 109 |      |  |      | 118 |   |  |   | 123  |  
|                             
|                             
|                             
|                             
|Actual return on assets       |  |      | (71 | )    |  |      | (48 | ) |  |   | 17   |  
|                             
|                             
|                             
|                             
|Net amortization and deferral |  |      | (1  | )    |  |      | (36 | ) |  |   | (120 | )
|                              |  |      |     |      |  |      |     |   |  |   |      |  
|Periodic pension cost         |  | $    | 84  |      |  | $    | 90  |   |  | $ | 60   |  
|                              |  |      |     |      |  |      |     |   |  |   |      |  

(c) Stock Incentive Plans

The Bacou USA, Inc. 1996 Stock Incentive Plan (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; however,
options become fully vested upon any change in control of the
Company. The Company also sponsors the Bacou USA, Inc. 1996
Non-Employee Director Stock Option Plan (Director
Plan) and the 1998 Howard S. Leight Stock Option Plan
(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.

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

|                                 |  |           |         |                  |  |           |       |                  |  |           |         |                  |  |   |       |  |  |  |         |   |  |   |       | 
|-------------------------------- |  | --------- | ------- | ---------------- |  | --------- | ----- | ---------------- |  | --------- | ------- | ---------------- |  | - | ----- |  |  |  | ------- | - |  | - | ----- | 
|                                 |  |           |         |                  |  |          
|                                 |  | 1998      |         | 1999             |  | 2000     
|                                 |  |           |         |                  |  |          
|                                 |  | 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 |  |           | 577,900 |                  |  | $         | 15.23 |                  |  |           | 988,400 |                  |  | $ | 16.27 |  |  |  | 980,400 |   |  | $ | 16.25 | 
|                                
|                                
|                                
|                                
|Granted                          |  |           | 470,000 |                  |  |           | 17.52 |                  |  |           | 95,000  |                  |  |   | 16.99 |  |  |  | 55,000  |   |  |   | 19.14 | 
|                                
|                                
|                                
|                                
|Exercised                        |  |           | (22,500 | )                |  |           | 15.53 |                  |  |           | (19,400 | )                |  |   | 15.78 |  |  |  | (41,600 | ) |  |   | 16.94 | 
|                                
|                                
|                                
|                                
|Canceled                         |  |           | (37,000 | )                |  |           | 16.28 |                  |  |           | (83,600 | )                |  |   | 17.42 |  |  |  | (24,200 | ) |  |   | 16.36 | 
|                                 |  |           |         |                  |  |           |       |                  |  |           |         |                  |  |   |       |  |  |  |         |   |  |   |       | 
|Outstanding at end of year       |  |           | 988,400 |                  |  | $         | 16.27 |                  |  |           | 980,400 |                  |  | $ | 16.25 |  |  |  | 969,600 |   |  | $ | 16.39 | 
|                                 |  |           |         |                  |  |           |       |                  |  |           |         |                  |  |   |       |  |  |  |         |   |  |   |       | 
|Exercisable at end of year       |  |           | 525,500 |                  |  | $         | 15.90 |                  |  |           | 721,250 |                  |  | $ | 16.11 |  |  |  | 839,700 |   |  | $ | 16.27 | 
|                                 |  |           |         |                  |  |           |       |                  |  |           |         |                  |  |   |       |  |  |  |         |   |  |   |       | 

Following is a summary of options outstanding at
December 31, 2000 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 |                     |  |                     | 399,200 |                |  |             | 5.75 |                |  | $ | 14.88 |  |  |  | 374,200 |  |  | $ | 14.90 | 
|                    | 15.50 - 17.75 |                     |  |                     | 525,400 |                |  |             | 7.19 |                |  |   | 17.06 |  |  |  | 428,000 |  |  |   | 17.00 | 
|                    | 21.00 - 23.75 |                     |  |                     | 45,000  |                |  |             | 8.94 |                |  |   | 21.92 |  |  |  | 37,500  |  |  |   | 21.55 | 
|                    |               |                     |  |                     |         |                |  |             |      |                |  |   |       |  |  |  |         |  |  |   |       | 
|$                   | 13.00 - 23.75 |                     |  |                     | 969,600 |                |  |             | 6.68 |                |  | $ | 16.39 |  |  |  | 839,700 |  |  | $ | 16.27 | 
|                    |               |                     |  |                     |         |                |  |             |      |                |  |   |       |  |  |  |         |  |  |   |       | 

37



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##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

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, would have been reduced to $19,729,000 or $1.12 per
share in 1998, $26,150,000 or $1.48 per share in 1999 and
$30,271,000 or $1.72 per share (basic) and $1.70 per share
(diluted) in 2000. The per share weighted-average fair
value of stock options granted was $7.42 in 1998, $7.45 in 1999
and $8.17 in 2000. 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 4.75% in 1998, 6.0% in 1999 and
5.0% in 2000; expected volatility of 0.40; and an expected life
of 5 years.

(d)  Change-in-Control
Arrangements

Effective January 1, 2000, the Company entered into new
employment agreements with four key executives. Three agreements
were for a three-year term with renewal provisions for
successive two-year terms, and the remaining agreement was for a
three-year term with renewal provisions for additional one-year
terms. Among other benefits, the agreements provide for payments
to these four individuals in the event there is a change in
control of the Company. Guaranteed minimum payments are payable
at the time of such change in control and would be equal to the
sum of (1) salary at the then-current rate payable for the
remainder of the term, (2) the maximum cash bonus available
to each employee under his agreement for the remainder of the
term, (3) the maximum stock options available to each
employee under his agreement for the remainder of the term and
to be granted at a per share price of $15.375 and (4) the
present value of all other benefits under the agreement through
the end of the term. The Company also has agreements with
certain other employees that would provide retention bonuses
equal to approximately $3,000,000 in the aggregate.

(10)  Segment Data

The Company has three reportable segments, which include the
safety segment, the glove segment and the optical frames and
instruments segment. The safety 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 consist of protective
gloves, sleeves, apparel 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.

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. The Company allocates certain operating expenses for
legal, human resource and information system services provided
by Bacou to each segment. 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 $7,748,000 in 1998,
$9,440,000 in 1999 and $9,850,000 in 2000, and also include
non-recurring items totaling $7,716,000 in 1998, $590,000 in
1999 and $1,330,000 in 2000. Information presented below as
all other includes all non-operating entities.
Amounts included below for all other capital
expenditures in 2000 have been reduced by $1,193,000 for
inter-segment transfers to the safety and glove segments.
Segment assets exclude intercompany receivables and investments
in wholly-owned subsidiaries.

38



---



##### Table of Contents



BACOU USA, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

|                         |  |         |         |         |  |             |        |           |  |             |        |              |  |   |        |   |  |   |         |   |  |   |         | 
|------------------------ |  | ------- | ------- | ------- |  | ----------- | ------ | --------- |  | ----------- | ------ | ------------ |  | - | ------ | - |  | - | ------- | - |  | - | ------- | 
|                         |  |         |         |         |  | Optical     |        |           |  |             |        |             
|                         |  |         |         |         |  | Frames and  |        |           |  |             |        |             
|                         |  | Safety  |         | Glove   |  | Instruments |        |           |  | Reconciling |        | Consolidated
|                         |  | Segment |         | Segment |  | Segment     |        | All Other |  | Adjustments |        | Total       
|(in thousands)           |  |         |         |         |  |             |        |           |  |             |        |             
|1998                     |  |         |         |         |  |             |        |           |  |             |        |              |  |   |        |   |  |   |         |   |  |   |         | 
|                        
|                        
|                        
|                        
|Net sales                |  | $       | 190,148 |         |  | $           |       |           |  | $           | 30,945 |              |  | $ |       |   |  | $ |        |   |  | $ | 221,093 | 
|                        
|                        
|                        
|                        
|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                |  | $       | 202,723 |         |  | $           | 39,905 |           |  | $           | 32,030 |              |  | $ |       |   |  | $ |        |   |  | $ | 274,658 | 
|                        
|                        
|                        
|                        
|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  | 
|                        
|                        
|                        
|                        
|2000                     |  |         |         |         |  |             |        |           |  |             |        |              |  |   |        |   |  |   |         |   |  |   |         | 
|                        
|                        
|                        
|                        
|Net sales                |  | $       | 221,007 |         |  | $           | 68,151 |           |  | $           | 30,566 |              |  | $ |       |   |  | $ |        |   |  | $ | 319,724 | 
|                        
|                        
|                        
|                        
|Segment operating income |  |         | 60,974  |         |  |             | 9,369  |           |  |             | 3,743  |              |  |   | (4,596 | ) |  |   | (11,180 | ) |  |   | 58,310  | 
|                        
|                        
|                        
|                        
|Depreciation             |  |         | 7,188   |         |  |             | 1,040  |           |  |             | 1,115  |              |  |   | 205    |   |  |   |        |   |  |   | 9,548   | 
|                        
|                        
|                        
|                        
|Total assets             |  |         | 260,075 |         |  |             | 81,343 |           |  |             | 25,982 |              |  |   | 12,130 |   |  |   |        |   |  |   | 379,530 | 
|                        
|                        
|                        
|                        
|Capital expenditures     |  |         | 11,743  |         |  |             | 2,359  |           |  |             | 211    |              |  |   | (910   | ) |  |   |        |   |  |   | 13,403  | 

There were no sales to any individual customer during any of the
years in the three-year period ended December 31, 2000 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 $33,102,000 in 1998, $36,950,000 in 1999 and $45,528,000
in 2000. The Company had no material foreign sales to an
individual country.

39



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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. Certain quarterly amounts
previously reported by the Company have been adjusted to conform
to the requirements of Emerging Issues Task Force Issue
No. 00-10 (see note 1(d)).

|                                      |         |         |        |        |  |       |        |        |  |           |        |       |  |   |        |       |  |   |         |       | 
|------------------------------------- | ------- | ------- | ------ | ------ |  | ----- | ------ | ------ |  | --------- | ------ | ----- |  | - | ------ | ----- |  | - | ------- | ----- | 
|                                      |         |         |        |       
|                                      |         | Quarter |        |       
|                                      |         |         |        |       
|                                      |         | First   |        | Second |  | Third |        | Fourth |  | Full Year
|(in thousands, except per share data) |         |         |        |        |  |       |        |        |  |          
|1999                                  |         |         |        |        |  |       |        |        |  |           |        |       |  |   |        |       |  |   |         |      
|                                     
|                                     
|                                     
|                                     
|Net sales                             |         | $       | 55,010 |        |  | $     | 74,419 |        |  | $         | 73,417 |       |  | $ | 71,812 |       |  | $ | 274,658 |      
|                                     
|                                     
|                                     
|                                     
|Gross profit                          |         |         | 27,322 |        |  |       | 34,248 |        |  |           | 35,240 |       |  |   | 32,810 |       |  |   | 129,620 |      
|                                     
|                                     
|                                     
|                                     
|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    |         | $      | 24.00  |  |       | $      | 19.69  |  |           | $      | 18.19 |  |   | $      | 17.00 |  |   | $       | 24.00 | 
|                                     
|                                     
|                                     
|                                     
|                                      | Low     |         | $      | 12.38  |  |       | $      | 12.63  |  |           | $      | 16.31 |  |   | $      | 14.75 |  |   | $       | 12.38 | 
|                                     
|                                     
|                                     
|                                     
|2000                                  |         |         |        |        |  |       |        |        |  |           |        |       |  |   |        |       |  |   |         |      
|                                     
|                                     
|                                     
|                                     
|Net sales                             |         | $       | 74,825 |        |  | $     | 82,178 |        |  | $         | 82,064 |       |  | $ | 80,657 |       |  | $ | 319,724 |      
|                                     
|                                     
|                                     
|                                     
|Gross profit                          |         |         | 34,562 |        |  |       | 39,697 |        |  |           | 36,567 |       |  |   | 36,260 |       |  |   | 147,086 |      
|                                     
|                                     
|                                     
|                                     
|Income before income taxes            |         |         | 11,071 |        |  |       | 14,763 |        |  |           | 13,211 |       |  |   | 9,768  |       |  |   | 48,813  |      
|                                     
|                                     
|                                     
|                                     
|Net income                            |         |         | 7,065  |        |  |       | 9,372  |        |  |           | 8,466  |       |  |   | 5,977  |       |  |   | 30,880  |      
|                                     
|                                     
|                                     
|                                     
|Earnings per share:                   |         |         |        |        |  |       |        |        |  |           |        |       |  |   |        |       |  |   |         |      
|                                     
|                                     
|                                     
|                                     
|                                      | Basic   |         | $      | 0.40   |  |       | $      | 0.53   |  |           | $      | 0.48  |  |   | $      | 0.34  |  |   | $       | 1.75  | 
|                                     
|                                     
|                                     
|                                     
|                                      | Diluted |         | $      | 0.40   |  |       | $      | 0.53   |  |           | $      | 0.47  |  |   | $      | 0.33  |  |   | $       | 1.73  | 
|                                     
|                                     
|                                     
|                                     
|Market price:                         |         |         |        |        |  |       |        |        |  |           |        |       |  |   |        |       |  |   |         |      
|                                     
|                                     
|                                     
|                                     
|                                      | High    |         | $      | 17.44  |  |       | $      | 22.13  |  |           | $      | 26.63 |  |   | $      | 27.75 |  |   | $       | 27.75 | 
|                                     
|                                     
|                                     
|                                     
|                                      | Low     |         | $      | 14.50  |  |       | $      | 15.38  |  |           | $      | 19.31 |  |   | $      | 21.81 |  |   | $       | 14.50 | 

The Company completed its acquisition of Whiting+Davis effective
June 30, 2000 and its acquisition of Perfect Fit and
affiliates on April 1, 1999. During the fourth quarter of
2000 the Company incurred costs in connection with its
evaluation of various strategic alternatives totaling
$1.1 million. For comparative purposes, net income and
earnings per share excluding non-recurring items related to
these acquisitions and excluding the non-recurring costs
incurred during the fourth quarter of 2000, would have been as
follows:

|                                      |  |         |       |        |  |       |       |        |  |           |       |  |  |   |       |  |  |   |        | 
|------------------------------------- |  | ------- | ----- | ------ |  | ----- | ----- | ------ |  | --------- | ----- |  |  | - | ----- |  |  | - | ------ | 
|                                      |  |         |       |       
|                                      |  | Quarter |       |       
|                                      |  |         |       |       
|                                      |  | First   |       | Second |  | Third |       | Fourth |  | Full Year
|(in thousands, except per share data) |  |         |       |        |  |       |       |        |  |          
|1999                                  |  |         |       |        |  |       |       |        |  |           |       |  |  |   |       |  |  |   |        | 
|                                     
|                                     
|                                     
|                                     
|Net income                            |  | $       | 5,474 |        |  | $     | 8,262 |        |  | $         | 7,635 |  |  | $ | 6,173 |  |  | $ | 27,544 | 
|                                     
|                                     
|                                     
|                                     
|Basic earnings per share              |  | $       | 0.31  |        |  | $     | 0.47  |        |  | $         | 0.43  |  |  | $ | 0.35  |  |  | $ | 1.56   | 
|                                     
|                                     
|                                     
|                                     
|Diluted earnings per share            |  | $       | 0.31  |        |  | $     | 0.47  |        |  | $         | 0.43  |  |  | $ | 0.35  |  |  | $ | 1.56   | 
|                                     
|                                     
|                                     
|                                     
|2000                                  |  |         |       |        |  |       |       |        |  |           |       |  |  |   |       |  |  |   |        | 
|                                     
|                                     
|                                     
|                                     
|Net income                            |  | $       | 7,065 |        |  | $     | 9,372 |        |  | $         | 8,592 |  |  | $ | 7,103 |  |  | $ | 32,132 | 
|                                     
|                                     
|                                     
|                                     
|Basic earnings per share              |  | $       | 0.40  |        |  | $     | 0.53  |        |  | $         | 0.49  |  |  | $ | 0.40  |  |  | $ | 1.82   | 
|                                     
|                                     
|                                     
|                                     
|Diluted earnings per share            |  | $       | 0.40  |        |  | $     | 0.53  |        |  | $         | 0.48  |  |  | $ | 0.39  |  |  | $ | 1.80   | 

40



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##### Table of Contents








|        |                                                                                      
|------- | -------------------------------------------------------------------------------------
|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 2001 Annual Meeting of Stockholders to be filed with the
Securities and Exchange Commission on or before April 30,
2001 are hereby incorporated by reference.




Item 11.  Executive Compensation

The section Compensation of Directors and Officers
included in Bacous proxy statement for its 2001 Annual
Meeting of Stockholders to be filed with the Securities and
Exchange Commission on or before April 30, 2001 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 2001 Annual
Meeting of Stockholders to be filed with the Securities and
Exchange Commission on or before April 30, 2001 are hereby
incorporated by reference.




Item 13.  Certain Relationships and Related
Transactions

The section Certain Transactions included in
Bacous proxy statement for its 2001 Annual Meeting of
Stockholders to be filed with the Securities and Exchange
Commission on or before April 30, 2001 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

41



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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   |  |  |                       |  | Purchase Agreement dated as of February 24, 1999 by and
	among Perfect Fit Glove Co., Inc. and other parties and Bacou
	USA Safety, Inc. (incorporated by reference to Exhibit 2(a)
	of the Companys Form 10-K filed on March  27,
	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 (incorporated by reference to Exhibit
	4.2 of Companys Form 10-K filed March 21, 2000)                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 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), as amended by First Modification to
	Credit Agreement dated as of March  1, 2000 in connection
	with Letter of Credit by Fleet with respect to reissuance of
	$5,590,000 industrial revenue bond for SCHAS (incorporated by
	reference to Exhibit 4.1 of the Companys Form 10-Q filed
	on May 11, 2000)
|        | 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)                                                                                                                                                                                                                                                                                                                                                 
|        | 4.5   |  |  |                       |  | Pledge Agreement, dated as of March 1, 2000, by and among
	SCHAS Industries, LLC and Fleet National Bank (incorporated by
	reference to Exhibit 4.2 to the Companys Form 10-Q filed
	May 11, 2000)                                                                                                                                                                                                                                                                                                                                                                                                 
|        | 4.6   |  |  |                       |  | Reimbursement Agreement dated as of March 1, 2000, by and
	among Bacou USA, Inc., SCHAS Industries, LLC and Fleet National
	Bank (incorporated by reference to Exhibit 4.3 of the
	Companys Form 10-Q filed May 11, 2000)                                                                                                                                                                                                                                                                                                                                                                          
|        | 10.1* |  |  |                       |  | Amended and Restated Employment Agreement with Walter Stepan
	dated as of December 1, 1999 (incorporated by reference to
	Exhibit 10.1.4 of Companys Form 10-K filed March 21,
	2000)                                                                                                                                                                                                                                                                                                                                                                                                              

42



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##### Table of Contents



|        |        |  |  |                        |  |                                                                                                                                                                                                                                                                                                                  
|------- | ------ |  |  | ---------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |  |  |                       
|Number  |        |  |  | Description of Exhibit
|        |        |  |  |                       
|        | 10.2*  |  |  |                       |  | Employment Agreement with Philip B. Barr dated as of
	January 1, 2000 (incorporated by reference to Exhibit
	10.2.5 of Companys Form 10-K filed March 21, 2000)                                                                                                                                                 
|        | 10.3   |  |  |                       |  | Registration Rights Agreement dated July 31, 1994 by and
	between Walter Stepan and Bacou (incorporated by reference to
	Exhibit 10(h)(i) of Bacous Registration Statement)                                                                                                                                     
|        | 10.4   |  |  |                       |  | Form of Registration Rights Agreement dated
	February   , 1996 among the Principal Stockholder
	Figa, S.A., Walter Stepan, Heidemarie Stepan, Bettina Stepan,
	Axel Stepan and Bacou (incorporated by reference to
	Exhibit 10(i) to Amendment No. 1 of Bacous
	Registration Statement)                         
|        | 10.5   |  |  |                       |  | Registration Rights Agreement dated September 30, 1997 by
	and among Bacou USA and each person identified therein
	(incorporated by reference to Exhibit 2(b) of Bacous
	Form  8-K filed October 15, 1997)                                                                                                      
|        | 10.6   |  |  |                       |  | Corporate Opportunities Agreement dated as of January 1,
	1996 between the Principal Stockholder and Bacou (incorporated
	by reference to Exhibit 10(j) of Bacous Registration
	Statement)                                                                                                                      
|        | 10.7   |  |  |                       |  | 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 Bacous Registration
	Statement)
|        | 10.8   |  |  |                       |  | 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 Bacous Registration Statement)                                                                      
|        | 10.9   |  |  |                       |  | 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 Bacous Registration Statement)                                                                      
|        | 10.10  |  |  |                       |  | 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
	Bacous Registration Statement)                                                                                                  
|        | 10.11  |  |  |                       |  | License and Distribution Agreement dated as of January 1,
	2001 between Bacou S.A. and Perfect Fit                                                                                                                                                                                                               
|        | 10.12* |  |  |                       |  | Bacou USA, Inc. 1996 Stock Incentive Plan (incorporated by
	reference to Exhibit 10(g) of Bacous Registration
	Statement)                                                                                                                                                                                       
|        | 10.13* |  |  |                       |  | Bacou USA, Inc. 1996 Non-Employee Director Stock Option Plan
	(incorporated by reference to Exhibit 10(x) of Bacous
	Form 10-K filed March 31, 1997)                                                                                                                                                            
|        | 10.14  |  |  |                       |  | 1998 Howard S. Leight Stock Option Plan (incorporated by
	reference to Exhibit 10.35 to Bacous Form 10-K
	filed March 27, 1998)                                                                                                                                                                                 
|        | 10.15  |  |  |                       |  | Lease Agreement dated February 27, 1998 by and between
	Howard S. Leight and Bacou Safety (incorporated by
	reference to Exhibit 10.38 of the Companys Form 10-K filed
	March 27, 1998)                                                                                                                         
|        | 10.16* |  |  |                       |  | Bonus and Option Plan for CEO, COO and CFO of Bacou USA, Inc.
	for 2000-2002 (incorporated by reference to Exhibit 10.16 to
	Companys Form 10-K filed March 21, 2000)                                                                                                                                           
|        | 10.17* |  |  |                       |  | Bonus Plan for Executives of Bacou USA, Inc. for 2001                                                                                                                                                                                                                                                            
|        | 10.18* |  |  |                       |  | Bonus Plan for Executives of Subsidiaries and Divisions of Bacou
	USA, Inc. for 2001                                                                                                                                                                                                                             

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##### Table of Contents



|        |        |  |  |                        |  |                                                                                                                                                                                            
|------- | ------ |  |  | ---------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |  |  |                       
|Number  |        |  |  | Description of Exhibit
|        |        |  |  |                       
|        | 10.19* |  |  |                       |  | Consulting Agreement dated as of February 27, 1998 between
	Howard S. Leight and Bacou Safety (incorporated by
	reference to Exhibit 99(e) of Bacous Form 8-K
	filed March 13, 1998)      
|        | 10.20* |  |  |                       |  | Employment Agreement with Alan H. Bennett effective
	January  1, 2000 (incorporated by reference to the
	Companys Form 10-K filed March 21, 2000)                                         
|        | 10.21* |  |  |                       |  | Employment Agreement with Adrien W. Hebert effective
	January 1, 2000 (incorporated by reference to the
	Companys Form 10-K filed March 21, 2000)                                         
|        | 10.22* |  |  |                       |  | 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)
|        | 10.23  |  |  |                       |  | Engagement Letter dated July 13, 2000 with Deutsche Bank
	Securities, Inc. (incorporated by reference to the
	Companys Form 8-K filed on July 14, 2000)                                   
|        | 10.24  |  |  |                       |  | Letter Agreement between Bacou USA, Inc. and the Bacou Family
	dated July 13, 2000 (incorporated by reference to the
	Companys Form 8-K filed on July 14, 2000)                           
|        | 21     |  |  |                       |  | Subsidiaries of Bacou                                                                                                                                                                      
|        | 23     |  |  |                       |  | Accountants Consent                                                                                                                                                                       




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



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

Bacou filed two reports on Form 8-K during the quarterly
period ended December 31, 2000:



| |                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------
| | The first report, dated October 29, 2000, reported the
	Companys sales and earnings for the third quarter of 2000.                 
|
| | The second report, dated December 28, 2000, reported that
	the Companys review of strategic alternatives was
	continuing into 2001.

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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 29th day of March, 2001.



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



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

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

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##### 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    
|                                  |                              | of Period  |   | Expenses   |  | Accounts(1) |   | Deductions(2) |  | Period    
|                                  |                              |            |   |            |  |             |   |               |  |           
|Bad debt allowance (in thousands) |                              |            |   |            |  |             |   |               |  |            |   |     |  |  |   |     |  |  |   |      
|                                 
|                                 
|                                 
|                                 
|                                  | Year ended December 31 1998  |            | $ | 945        |  |             | $ | 266           |  |            | $ | 150 |  |  | $ | 211 |  |  | $ | 1,150 | 
|                                 
|                                 
|                                 
|                                 
|                                  | Year ended December 31, 1999 |            |   | 1,150      |  |             |   | 110           |  |            |   | 100 |  |  |   | 192 |  |  |   | 1,168 | 
|                                 
|                                 
|                                 
|                                 
|                                  | Year ended December 31, 2000 |            |   | 1,168      |  |             |   | 445           |  |            |   | 50  |  |  |   | 272 |  |  |   | 1,391 | 




|    |                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------
|(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 Commission are not
required under the related instructions, are inapplicable or are
not material and therefore have been omitted.

46