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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

(Mark One)

    [X]           Annual report pursuant to Section 13 or 15(d) of the
                  Securities Exchange Act of 1934 for the fiscal year ended
                  December 31, 2001

    [ ]           Transition report pursuant to Section 13 of 15(d) of the
                  Securities Exchange Act of 1934 For the transition period from
                  _____________ to _______________

                        Commission file number: 333-51355

                             NUMATICS, INCORPORATED
             (Exact Name of Registrant as Specified in Its Charter)

<TABLE>
<CAPTION>
<S>                                                                       <C>
                    Michigan                                              38-2955710
(State or Other Jurisdiction of Incorporation or           (I.R.S. Employer Identification Number)
                 Organization)
</TABLE>

                1450 North Milford Road, Milford, Michigan 48357
               (Address of Principal Executive Offices) (Zip Code)

                                 (248) 887-4111
              (Registrant's Telephone Number, Including Area Code)

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

        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 12 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]

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant. $0 (Registrant's common equity has no
trading market.)

Indicate the number of shares outstanding of each of registrant's classes of
common stock, as of the latest practicable date: Common Stock 2,397,235 shares
as of March 29, 2002

                    DOCUMENTS INCORPORATED BY REFERENCE: None

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                  CAUTIONS REGARDING FORWARD-LOOKING STATEMENTS

     This Form 10-K report, including the information provided under item 1 and
under item 7, contains forward-looking statements, which can be identified by
the use of the future tense or other forward-looking terms such as "may,"
"intend," "will," "expect," "anticipate," "plan," "management believes,"
"estimate," "continue," "should," "strategy," or "position" or the negatives of
those terms or other variations on them or by comparable terminology. In
particular, any statements, express or implied, concerning future operating
results or the ability to generate net sales, income, future compliance with
debt covenants, or cash flow to service indebtedness are forward-looking
statements. Investors are cautioned that reliance on any of those
forward-looking statements involves risks and uncertainties and that, although
Numatics' management believes that the assumptions on which those
forward-looking statements are based are reasonable, any of those assumptions
could prove to be inaccurate. As a result, the forward-looking statements based
on those assumptions also could be incorrect, and actual results may differ
materially from any results indicated or suggested by those assumptions. The
uncertainties in this regard include, but are not limited to, those identified
in "Risk Factors" under item 1. In light of these and other uncertainties, the
inclusion of a forward-looking statement in this report should not be regarded
as a representation by Numatics that its plans and objectives will be achieved.
All forward-looking statements are expressly qualified by the cautionary
statements contained in this paragraph and in "Risk Factors" below. Numatics
undertakes no duty to update any forward-looking statements.

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                                     PART I

ITEM 1.  BUSINESS

         Numatics, Incorporated ("Numatics" and, together with its subsidiaries,
the "Company") is a global manufacturer and marketer, both directly and through
its subsidiaries, of pneumatic valves, actuators, and related specialty
products. The Company's principal market is the United States, in which it is
the largest manufacturer in its core product: directional control, base mounted,
4-way pneumatic valves. The Company also conducts operations in several foreign
countries, including Canada, Germany, England, Italy, France, the Netherlands,
Hungary, Taiwan and Mexico.

         Numatics was incorporated in 1990 to purchase the assets of its
predecessor corporation. Its common stock is privately held, principally by
management.

         In 1998, in an exchange offer registered under the Securities Act of
1933, Numatics issued $115.0 million of Series B 9 5/8% senior subordinated
notes (the "Series B Notes") in exchange for a substantially identical series of
senior subordinated notes it had issued in a private placement earlier that
year. The Series B Notes are guaranteed by all of Numatics' domestic
subsidiaries. Some additional information concerning the Series B Notes and the
indenture under which they were issued is provided below under "Risk Factors
--Leverage," "--Subordination," and "--Possible Inability to Repurchase Series B
Notes Upon a Change in Control," and in Note 2 to the Company's 2001
consolidated audited financial statements. More extensive information concerning
the Series B Notes is contained in the Form S-4 registration statement (SEC File
No. 333-51355) under which the Series B Notes were registered for purposes of
the exchange offer, which can be found at the SEC's web site (www.sec.gov).

Risk Factors
------------

         As noted above under "Cautions Regarding Forward-Looking Statements,"
the information provided under this item 1, as well as elsewhere in this Form
10-K report, includes forward-looking statements. Although management believes
that the plans, intentions, and expectations concerning the Company reflected in
those forward-looking statements are reasonable, it can give no assurance that
those plans, intentions, or expectations will be achieved. Important factors
that could cause actual results to differ materially from those included in or
suggested by any forward-looking statements are set forth below and elsewhere in
this report. All forward-looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their entirety by the
Risk Factors set forth below.

         Leverage. The Company is highly leveraged. On December 31, 2001, the
Company had total indebtedness of approximately $161.8 million and an
accumulated

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deficiency of approximately $78.7 million. As of that date, the aggregate debt
of the Company to which the Series B Notes are subordinated ("Senior Debt"),
which includes borrowings under its term loan and revolving credit facilities,
was approximately $42.7 million, and approximately $18.5 million would have been
available for additional borrowing under the revolving credit facility, subject
to borrowing base limitations. The indenture governing the Series B Notes
permits the incurrence of additional indebtedness, including Senior Debt, by
Numatics and its subsidiaries in the future, subject to certain limitations.

         The Company's current annual debt service requirement is approximately
$17.8 million. The Company's ability to make scheduled payments of principal of
or interest on, or to refinance, its indebtedness (including the Series B Notes)
will depend on its future performance, which to some extent is subject to
general economic, financial, competitive, legislative, regulatory, and other
factors that are beyond its control. Based upon the Company's current level of
operations and future business which has been awarded, management believes that
cash flow from operations and available cash, together with available borrowings
under the revolving credit facility, will be adequate to meet the Company's
future liquidity needs until the scheduled expiration of the credit facilities
at which time the Company would expect to replace the credit facilities.
However, there can be no assurance that the Company's business will generate
sufficient cash flow from operations, that anticipated growth opportunities and
operating improvements will be realized, or that future borrowings will be
available under the revolving credit facility, or a replacement credit facility,
in an amount sufficient to enable the Company to service its indebtedness,
including the Series B Notes, or to fund its other liquidity needs. The credit
facilities, the revolving and term loans under them, and a $2.5 million
industrial revenue bond for which the Company is responsible under the revolving
credit facility mature prior to the maturity of the Series B Notes, and there
can be no assurance that the Company will be able to replace the credit
facilities, or refinance any other indebtedness, on commercially reasonable
terms or at all.

         The degree to which the Company is leveraged could have important
consequences to investors, including, but not limited to, making it more
difficult for the Company to satisfy its obligations with respect to the Series
B Notes, increasing the Company's vulnerability to general adverse economic and
industry conditions, limiting the Company's ability to obtain additional
financing to fund future working capital, capital expenditures, and other
general corporate requirements, or to fund acquisitions, requiring the
dedication of a substantial portion of the Company's cash flow from operations
to the payment of principal of, and interest on, its indebtedness, thereby
reducing the availability of such cash flow to fund working capital, capital
expenditures, research and development or other general corporate purposes,
limiting the Company's flexibility in planning for, or reacting to, changes in
its business and the industries it serves, and placing the Company at a
competitive disadvantage compared to less leveraged competitors. In addition,
the indenture governing the Series B Notes and the credit facilities contain
financial and other restrictive covenants that limit the ability of the Company
to, among other things, borrow additional funds. Failure by the Company to
comply with such covenants could result in an event of default which, if not
cured or waived, could have a material adverse effect on the

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Company.

         Subordination. The Series B Notes are subordinated in right of payment
to all of Numatics' current and future Senior Debt (as defined in the indenture
governing the Series B Notes), and the guarantees of the Series B Notes by the
Guarantors (the "Subsidiary Guarantees") are subordinated in right of payment to
all current and future Senior Debt of the Guarantors. As defined in the
governing indenture, the term Senior Debt includes the credit facilities and the
Guarantors' guarantees of those facilities. The credit facilities are secured by
substantially all of the assets of Numatics, its domestic subsidiaries, all of
the outstanding voting stock of Numatics' domestic, Canadian and German
subsidiaries, and 66% of the capital stock of Numatics' foreign subsidiaries.
Due to these subordination provisions, upon any distribution to creditors of
Numatics or any Guarantor in a liquidation or dissolution of Numatics or the
Guarantor or in a bankruptcy, reorganization, insolvency, receivership, or
similar proceeding relating to Numatics, a Guarantor, or the property of
Numatics or a Guarantor, the holders of Senior Debt of Numatics or the
Guarantor, respectively, will be entitled to be paid in full before any payment
may be made with respect to the Series B Notes or the related Subsidiary
Guarantee. In addition, under the governing indenture, payments with respect to
the Series B Notes and the Subsidiary Guarantees will be blocked in the event of
a payment default on Designated Senior Debt (defined in the indenture to include
the credit facilities and the related guarantees of those facilities) and may be
blocked for up to 179 days each year in the event of certain non-payment
defaults on Designated Senior Debt.

         In the event of a bankruptcy, liquidation, or reorganization of
Numatics or a Guarantor, holders of the Series B Notes will participate ratably
with all holders of subordinated indebtedness of Numatics or the Guarantor that
is deemed to be of the same class as the Series B Notes, and potentially with
all general creditors of Numatics or the Guarantor other than holders of Senior
Debt, based upon the respective amounts owed to each holder or creditor, in the
remaining assets of Numatics or the Guarantor. In any of the foregoing events,
there can be no assurance that Numatics or any or all of the Guarantors would
have sufficient assets to pay amounts due on the Series B Notes. As a result,
holders of Series B Notes may receive less, ratably, than the holders of other
debt of Numatics or of a Guarantor, including Senior Debt.

         The Company derives a significant portion of its revenue from Numatics'
foreign subsidiaries, which have not guaranteed the Series B Notes. Holders of
indebtedness of, and trade creditors of, those foreign subsidiaries generally
would be entitled to payment of their claims from the assets of the affected
subsidiaries before any of those assets are made available for distribution to
Numatics. The indenture governing the Series B Notes permits the incurrence of
substantial additional indebtedness by Numatics' foreign subsidiaries and
permits investments by Numatics or other subsidiaries in those subsidiaries. In
the event of a bankruptcy, liquidation, or reorganization of a subsidiary that
has not guaranteed the Series B Notes, holders of any of that subsidiary's
indebtedness will have a claim to the assets of the subsidiary that is prior to
Numatics'

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interest in those assets. As of December 31, 2001, the total liabilities of
subsidiaries that have not guaranteed the Series B Notes was $9.7 million.

         Dependence upon John Welker. The Company's continued success will be
substantially dependent upon the efforts of John Welker. Mr. Welker has been
Numatics' Chairman, President, and Chief Executive Officer since 1990. He also
owns over 80% and controls the vote of over 93% of Numatics' outstanding common
stock, which means he is in a position to elect its Board of Directors and to
control its management, policies, and operations. When he acts in his capacity
as a Numatics shareholder, Mr. Welker does not owe fiduciary duties to holders
of Series B Notes or other Numatics' investors.

         The Company could be adversely affected if Mr. Welker were to become
unwilling or unable to continue as head of Numatics' management team. It is an
event of default under the credit facilities if Mr. Welker ceases to be the
President and Chief Executive Officer of Numatics or ceases to have the ability
to elect a majority of its directors and if he is not replaced by a person
satisfactory to the credit facility lenders. The Company maintains $27.5 million
of key-man life insurance on Mr. Welker's life, but that amount would not be
sufficient to retire all existing indebtedness under the credit facilities
should it become necessary to do so.

         Possible Inability to Repurchase Series B Notes upon a Change in
Control. The indenture governing the Series B Notes requires Numatics to offer
to repurchase all outstanding Series B Notes at 101% of their principal amount
plus accrued and unpaid interest to the date of repurchase if a Change in
Control (as defined in the indenture) should occur. However, there can be no
assurance that sufficient funds will be available at the time of any Change of
Control to make any required repurchases of Series B Notes tendered or that
restrictions in the credit facility will allow Numatics to make the required
repurchases.

         The Company also is permitted under the indenture to enter into certain
transactions, including certain recapitalizations, which would not constitute a
Change of Control but would increase the amount of outstanding Senior Debt or
indebtedness on parity with the Series B Notes.

         Absence of Patent Protection. The Company relies on unpatented
proprietary technology to produce its core products, particularly its "lapped
spool and sleeve" pneumatic valve manufacturing technology. To protect its trade
secrets and other proprietary information, the Company requires employees,
consultants, advisors, and collaborators who have access to this technology to
enter into confidentiality agreements and limits access to certain of its
proprietary processes. However, there can be no assurance that these agreements
or procedures will provide meaningful protection for the Company's trade
secrets, know-how, or other proprietary information in the event of any
unauthorized use, misappropriation, or disclosure of such trade secrets,
know-how, or other proprietary information. If the Company is unable to maintain
the proprietary nature

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of its technology, particularly its "lapped spool and sleeve" valve
manufacturing technology, the Company could be materially adversely affected.

Industry Overview
-----------------

         The fluid power industry has grown out of manufacturers' needs to
automate repetitive tasks that previously had been performed manually. The
industry can generally be divided into two major segments: hydraulics (use of
liquids) and pneumatics (use of air or inert gas). While hydraulics can produce
higher forces and, in some applications, better control, pneumatics generally
provide faster speeds, lower cost, greater ease of use, and a more
environmentally clean process. The Company competes only in the pneumatic
segment of the fluid power market.

         Major components utilized in the pneumatic fluid power process include
valves, actuators (cylinders), and air preparation equipment. A pneumatic system
begins when air enters a compressor and the volume of air is reduced. The air
then flows through a dryer and excess moisture is removed. (Typically, a
pneumatic system contains a single compressor and an air dryer.) The dry air
then flows through a system header to multiple workstations in a plant. At a
workstation, the dry air flows initially through an FRL (filter, regulator, and
lubricator). In the FRL, a filter removes particulates from the air, a regulator
reduces and stabilizes downstream pressure, and a lubricator adds the
appropriate amount of oil to the air, when necessary. This conditioned air then
enters a valve.

         A valve is the primary pneumatic component that controls the intake and
withdrawal of air into the actuator, with the valve's movement typically
controlled by a solenoid. In the Company's "lapped spool and sleeve" valve, the
position of the spool determines the direction of the air as it flows into the
actuator. The flow of air from the valve causes the actuator rod to extend or
retract, thereby moving a specific load. In many cases, an automated component,
such as a gripper or guiding unit, may be attached to the actuator for material
handling purposes.

         Certain market segments to which the Company sells its products have
been reducing the number of suppliers they deal with, including pneumatic
component suppliers. As a result, companies within these market segments
increasingly have used suppliers that can provide a full line of pneumatic
components. Continuing the product line expansion begun by the Company's
predecessor in the late 1980s, the Company now offers its customers a full line
of pneumatic components, including valves, actuators, and specialty products
such as air preparation products, specialty valves, and grippers and guiding
units.

         Applications for pneumatic fluid power are numerous and diverse. Some
of the largest industries that use pneumatic fluid power systems include
packaging, automotive, machine tool, material handling, food and beverage,
textile, printing,

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electronics/semiconductor, robotics, paper, and medical equipment. Pneumatic
components primarily are used in automated manufacturing applications, but also
can serve other functions, as do certain of the Company's specialty valves used
in oxygen concentrators sold by medical equipment manufacturers.

Products
--------

          The Company offers a complete line of pneumatic components, which can
be described in three groups: valves, motion control products, and air
preparation products. The Company's core product historically has been pneumatic
valves. Over recent years, the Company has expanded into additional product
lines, decreasing its dependence on valves through its product diversification
strategy. The table that follows illustrates this diversification trend since
1996.

                                                1996                 2001
                                         ---------------------------------------
             Net Sales                     $132.0 million       $113.6 million

             Valves                            71.5%                65.0%
             Motion Control Products           10.9%                18.6%
             Air Preparation Products          17.6%                16.4%
                                         ---------------------------------------
             Total                            100.0%               100.0%

         Valves. The Company is widely regarded as a leading manufacturer of
high quality pneumatic valves used in fluid power applications. In a pneumatic
system, the valve controls the flow of compressed air to an actuator (cylinder).
The valve is the most important and complex component in any pneumatic system.

         The Company's success is largely derived from its proprietary "lapped
spool and sleeve" technology developed by the Company's founder in the 1950s.
The original design is used in the Company's valves today, although the
manufacturing process has been improved continuously. The inner (spool) and
outer (sleeve) components are a matched set, with the sleeve remaining
stationary and the spool moving inside it to produce the switching of air flow.
The sealing of the spool and sleeve is accomplished by the minute clearance
between the two parts, measured in millionths of an inch, rather than by using
soft rubber seals as in other designs. This minute clearance provides an air
bearing, which avoids any metal-to-metal contact and allows frictionless
movements, virtually eliminating heat and wear. This results in extremely long
product life.

         The patent on the "lapped spool and sleeve" product expired in 1973.
However, the process for manufacturing the "lapped spool and sleeve" to the
required tolerances remains a trade secret. The Company continues to closely
guard this trade secret and limits the number of visitors and employees who have
access to the manufacturing process. Several competitors have attempted to
imitate the process, but management

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believes none has been able to duplicate the "lapped spool and sleeve" to the
same high quality tolerances.

         The Company manufactures a wide variety of valves, most of which can
broadly be described as directional control, 4-way valves. Additionally, the
Company manufactures and markets 3-way valves and a variety of other valves for
specific customer applications.

         The Company's valve sales were $92.8 million, $94.7 million, and $73.8
million in 1999, 2000, and 2001, respectively.

         Motion Control Products. In a pneumatic system, the actuator (or
cylinder) serves as an "arm" for an automated task, allowing an object to be
moved. Grippers and guiding units are material handling components, often
serving as the "hands" of an automated process.

         The Company's actuator line includes: standard tie-rod cylinders, made
to National Fluid Power Association specifications, its "M" series actuator, a
non-repairable miniature cylinder, a rodless cylinder based on technology it
acquired in connection with its purchase of 12% of the stock of Univer, a large
manufacturer of pneumatic products in Italy, rotary actuators, and a variety of
small actuators.

         The Company's motion control sales were $22.7 million, $27.1 million,
and $21.1 million in 1999, 2000, and 2001, respectively.

         Air Preparation Products. The Company's air preparation products
include FRLs and air dryers. Air preparation products condition the air for use
in the pneumatic system.

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         The Company's air preparation products sales were $24.7 million, $24.0
million, and $18.7 million in 1999, 2000, and 2001, respectively.

Engineering
-----------

         The Company is widely recognized as an innovator in the design,
engineering, and manufacture of pneumatic components. The Company has a
dedicated group of engineers, both domestically and internationally. Beginning
with the "lapped spool and sleeve," the Company has continued to produce
engineering innovations which include the following:

     .   On-board electronics, which allow electronic signals to be passed
         through a single input/output source at faster transmission speeds

     .   Electrical plug-in connections, which allow assembly of systems without
         the need for costly wiring

     .   Integral speed controls and integral pressure controls, which are
         mounted between the valve and manifold to provide a complete control
         package

     .   Manifolding, which reduces piping and space and allows factory
         assembly, reducing cost

     .   Direct solenoid, which eliminates unnecessary pilot valves, improving
         reliability due to fewer parts

     .   Die cast magnesium valves, providing maximum weight reduction and cost
         savings

     .   "Nu-Plex," the first fully integrated serial control system for fluid
         power applications

     .   Aluminum cast valve bodies, which reduces the weight and cost of valves
         that had previously been made of bronze, cast iron, and brass

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     .   "Numasizing," the first precise method of determining component size so
         as to accurately match desired performance with a valve configuration
         that uses the smallest amount of energy to get the job done

     The Numasizing process is based on a computerized database containing
empirical data from more than 250,000 test firings of pneumatic cylinders under
different conditions. Numasizing is used at all of the Company's locations
throughout the world. The Company conducts seminars on Numasizing for its
customers and offers its distributors a proprietary program to enable them to
use Numasizing in helping to design efficient systems for their customers.

Customers, Marketing, and Distribution
--------------------------------------

         The Company's customers consist of end users, machinery manufacturers
(which incorporate the Company's products in their machines), and distributors.
As is common practice in the U.S. market, end users and machinery manufacturers
generally purchase the Company's products through its network of distributors.
Alternatively, in international markets, customers typically purchase directly
from the Company. In some cases, the end user will specify the Company's
products, regardless of distribution channel. The products sold by the Company
are utilized in a diverse group of industries, and no one customer accounted for
more than 2.3 % of total net sales in 2001.

         Approximately 63.0% of the Company's net sales in 2001 were from sales
to distributors. The Company believes it maintains excellent relationships with
its distributor network, which consists of over 115 distributors, including over
75 in North America, 14 in Europe, 15 in Asia and 8 in South America.

         The Company's North American distributors are pneumatics specialists
who sell only pneumatic components and do not sell hydraulic components. In most
cases, the Company's products represent these distributors' principal source of
income. Additionally, the only pneumatic valves these distributors carry are
Numatics' valves. The Company maintains an interactive relationship with its
distributors, conducting periodic meetings in several cities and intensive
training programs while encouraging feedback. The Company employs nine regional
managers in North America to train and assist its distributors. The Company's
distributors purchase products from the Company and maintain their own
inventories.

         The Company has a direct sales force of 133 employees, who sell to over
9,000 direct customers worldwide, of which a significant portion are outside the
United States. The Company also has maintained direct selling efforts with
certain large end users and machinery manufacturers in North America.

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Manufacturing
-------------

         The Company has six domestic manufacturing facilities, including four
in Michigan and one each in Ohio and Tennessee. The Company also has
manufacturing plants in Ontario, Canada and Germany. The Company's core valve
products primarily are manufactured in its Highland, Michigan facility, which
also is the Company's headquarters. The final machining and matching of the
Company's proprietary "lapped spool and sleeve" valve components are carried out
in a specially designed, temperature and humidity controlled area. This process
is highly confidential. Visitors and employees who do not require access are not
permitted in the facility, nor are equipment suppliers. All equipment setup for
such operations is performed by the Company's own employees.

         The Company stresses quality control in all of its manufacturing and
distribution facilities, and each valve is individually tested to meet specific
tolerances before it can be shipped. Currently, the facilities in Germany and
Canada are ISO certified. Additionally, all of the Company's domestic
manufacturing facilities were ISO certified by the end of 2001. The Company
believes that the achievement of ISO certification at each of its manufacturing
facilities is a significant factor in maintaining its competitive position.

Components and Raw Materials
----------------------------

         The principal raw materials and components used in manufacturing the
Company's products are aluminum castings, stainless steel, solenoids, and screw
machine parts. All of these items are readily available from multiple suppliers,
and the Company also produces a substantial portion of its own requirements of
solenoids and screw machine parts. The Company purchases a significant portion
of its aluminum castings from Taiwanese suppliers through its subsidiary in
Taiwan. The Company has never experienced significant difficulty in acquiring
needed parts and raw materials, and management believes the Company is not
substantially dependent on any particular supplier.

Competition
-----------

         The markets in which the Company operates are highly competitive.
Competition is based primarily on quality, price, timely delivery, service, and
breadth of product line. The markets in which the Company competes are highly
fragmented, and many of its competitors do not currently offer the full range of
products sold by the Company. However, some of the Company's competitors are
significantly larger and have greater financial and other resources than the
Company.

         The Company has the largest U.S. market share in its core product of
directional control, base mounted, 4-way pneumatic valves. The Company's most
significant competitors in North America are Parker Hannifin, SMC Pneumatics and
MAC Valves. Some of the Company's major competitors in the valve market outside
North America are SMC Pneumatics, Festo, and CKD. The motion control and air
preparations products markets have

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different competitors such as Norgren IMI, Wilkerson, Phd., Robohand, Lee, and
Clippard.

International Operations
------------------------

         Numatics, Ltd. in Ontario, Canada and Numatics GmbH in Germany operate
manufacturing facilities, both of which are ISO certified. Numatics, Ltd.
markets a full line of the Company's products to the Canadian market and
manufactures, among other products, lockout valves for the Company's worldwide
needs. Numatics GmbH manufactures some of the Company's products and markets a
full line of Numatics' components to customers in Europe and Africa. Numatics
GmbH maintains a dedicated engineering staff, which works together with the
Company's North American engineering personnel. Numatics' other foreign
operations primarily are sales and distribution facilities.

         International sales accounted for approximately 17.2% of the Company's
2001 net sales, and international assets accounted for approximately 15.3% of
its total assets as of December 31, 2001. For additional financial information
regarding foreign sales and exports, see Note 7 of the notes to the Company's
audited consolidated financial statements filed as exhibit 99.1 to this Form
10-K.

Employees
---------

         At December 31, 2001, the Company had 685 employees. Approximately 75
of those employees at that time were represented by the United Auto Workers
under a contract expiring on March 20, 2005. The Company considers its employee
relations to be good.

Environmental Matters
---------------------

         The Company's plant on North Milford Road in Highland, Michigan, is the
site of a groundwater contamination problem that became known in the early
1980s. The contamination was caused by a chemical (trichloroethylene) that was
used for many years to degrease parts but which has not been used at the site
since the early 1970s. A soil vapor extraction system was used to clean up the
soil contamination, and a pump and treat system has been installed to purge the
groundwater. The soil cleanup has been completed, but completion of the
groundwater remediation is expected to take approximately another six years.
Based on past expenditures and its current evaluation of site conditions,
management expects to spend approximately $70,000 annually to complete the
groundwater remediation. The Company has recorded a reserve for these future
expenditures, which at December 31, 2001 was approximately $425,000. Management
believes this reserve will be adequate to complete the remediation, although
actual expenditures will depend on actual site conditions and other factors and
are subject to change.

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         In 1989, a fluid spill site containing PCBs was discovered at the
Company's East Highland Road facility in Highland, Michigan. The source of the
PCBs is believed to be a transformer that was accidentally ruptured in 1973
while sitting on the ground awaiting disposal. The area of the spill has been
disturbed by subsequent paving of a portion of the area and soil removal
following a non-PCB waste oil spill. Management estimates that future soils
remedial work at this site will cost approximately $200,000, and has reserved
this amount in the Company's December 31, 2001 financial statements.

         The sites discussed above are the only sites where the Company to date
has identified any environmental contamination. However, most of the Company's
facilities have been in operation for many years, and several of the facilities
have undergone little or no invasive testing to determine the presence or
absence of environmental contamination. Except as discussed above concerning the
two identified sites, compliance by the Company with federal, state, and local
laws and regulations pertaining to the discharge of material into the
environment has not had any material effect upon the Company in conducting its
business, and management currently does not anticipate that compliance with
these laws and regulations in the future will have any material effect upon the
Company in conducting its business. However, due to the nature of its current
operations (and those of its predecessor), and the history of industrial uses at
some of its facilities, the Company does face some risk of additional exposure
to environmentally-related liabilities.

Page 14

<PAGE>

ITEM 2.  PROPERTIES

         The Company conducts its business in Company-owned facilities, totaling
approximately 348,150 square feet, and leased facilities, totaling approximately
77,968 square feet, of office, engineering, manufacturing and warehouse space.
All of these facilities are suitable to meet the current capacity needs of the
Company's various business units. Leases expire at various times through 2006,
and the Company generally has extension options.

         The table that follows provides additional information concerning each
of these facilities.

<TABLE>
<CAPTION>
                                   SQUARE      TYPE OF
 LOCATION                           FEET       INTEREST      USES
----------------------------------------------------------------------------------------------------
<S>                               <C>          <C>          <C>
 United States
 N. Milford Rd., Highland, MI      76,000       Owned        Company headquarters; valve components
 Franklin, TN                      68,000       Owned        Actuators
 Sandusky, MI                      57,300       Owned        Valves and solenoids
 Lapeer, MI                        41,600       Owned        FRLs and air dryers
 Wixom, MI                         12,400       Leased       Specialty valves
 E. Highland Rd., Highland,
 MI                                12,250       Owned        Warehousing
 Westlake, OH                      12,000       Leased       Grippers and guiding units
 Forrester, MI                     10,000       Leased       Warehousing
 Wixom, MI                          8,400       Owned        Distribution facility
 Phoenix, AZ                        3,300       Leased       Electronic componentry design and
                                                             fabrication
 Rochester, NY                      2,700       Leased       Distribution facility

 International
 St. Augustin, Germany             33,300       Owned        Valves and actuators
 London, ON, Canada                40,000       Owned        Valves and actuators
 Leighton, Buzzard, England        11,300       Owned        Distribution and sales
 Taipei, Taiwan                     8,000       Leased       Distribution and sales
 Brescia, Italy                     7,700       Leased       Distribution and sales
 Vancouver, BC, Canada              6,000       Leased       Distribution and sales
 Puebla, Mexico                     5,000       Leased       Distribution and sales
 Montreal, QB, Canada               3,600       Leased       Distribution and sales
 Paris, France                      3,400       Leased       Distribution and sales
 Waardenburg, The
 Netherlands                        1,600       Leased       Distribution and sales
 Saltillo, Mexico                   1,307       Leased       Distribution and sales
 Budapest, Hungary                    600       Leased       Distribution and sales
 Barcelona, Spain                     361       Leased       Sales
</TABLE>

Page 15

<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

         Various legal matters arising during the normal course of business are
pending against the Company. Management does not expect that the ultimate
liability, if any, of these matters will have a material effect on future
consolidated financial statements.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matter was submitted to a vote of Numatics' shareholders during the
quarter ended December 31, 2001.

Page 16

<PAGE>

                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS

     Numatics' only authorized class of equity security is its common stock. On
March 29, 2002, there were six holders of the outstanding shares of the common
stock, all but one of whom were Numatics employees. The common stock has no
public trading market, all outstanding shares are subject to transfer
restrictions, and the shares held by employees are subject to a Numatics
repurchase option. See "Compensation Committee Interlocks and Insider
Participation" under item 11.

     The common stock of the Company was split on the basis of 125 shares for
each issued and outstanding share effective May 15, 2000. In connection with the
stock split, the authorized share capital was changed from the previously
authorized 250,000 shares of common stock to 9,950,000 shares of common stock.

         To date, no dividends have been paid on the common stock, except for a
$6 million extraordinary dividend paid on March 26, 1998. The agreements
governing the credit facilities and the indenture governing the Series B Notes
substantially limit the payment of future dividends on the common stock, and no
such dividends are expected to be declared or paid for the foreseeable future.

Page 17

<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

Selected Financial Data (in thousands)

<TABLE>
<CAPTION>
                                                        Year ended December 31
                                       2001         2000         1999         1998         1997
                                  -----------------------------------------------------------------
<S>                                 <C>          <C>          <C>          <C>          <C>
INCOME STATEMENT DATA
Net sales                           $ 113,563    $ 145,861    $ 140,120    $ 139,415    $ 147,097
Cost of products sold                  70,528       92,328       87,686       87,956       93,785
                                  -----------------------------------------------------------------
Gross profit                           43,035       53,533       52,434       51,459       53,312
Marketing, engineering, general
   and administrative expenses         27,428       34,350       31,843       30,771       31,830
Michigan single business tax (1)          (62)         219          391         (609)         945
                                  -----------------------------------------------------------------
Operating income                       15,669       18,964       20,200       21,297       20,537
Interest and other financing
   expenses                            16,345       16,819       16,062       15,927       17,021
Other expense                           1,176        1,729        1,732          236        1,348
                                  -----------------------------------------------------------------
Income (loss) before income taxes
   and extraordinary item              (1,852)         416        2,406        5,134        2,168
Income taxes                             (372)       1,075        1,520        2,283          904
                                  -----------------------------------------------------------------
Income (loss) before
   extraordinary item                  (1,480)        (659)         886        2,851        1,264
Extraordinary item, net of income
   tax (2)                               (304)          --           --       (4,918)          --
                                  -----------------------------------------------------------------
Net income (loss)                   $  (1,784)   $    (659)   $     886    $  (2,067)   $   1,264
                                  =================================================================

                                                        Year ended December 31
                                       2001         2000         1999         1998         1997
                                  -----------------------------------------------------------------
OTHER FINANCIAL DATA
Cash provided by operating
   activities                       $   9,410    $   3,146    $   4,294    $   7,578    $  11,047
Cash used in investing activities      (2,013)      (5,330)      (6,403)      (6,913)      (7,808)
Cash provided by (used in)
   financing activities                (6,785)       1,987        2,502         (139)      (3,314)
EBITDA (3)                             21,095       25,320       26,036       26,137       25,931
Depreciation and amortization           5,488        6,137        5,444        5,449        5,000
Capital expenditures                    1,972        5,588        6,407        6,605        7,881

BALANCE SHEET DATA
Working capital                     $  41,337    $  44,283    $  41,161    $  37,724    $  27,469
Total assets                          104,943      114,564      114,553      109,212       98,535
Total long-term debt                  161,847      164,199      162,392      160,375      135,696
Total shareholders' deficit           (78,737)     (74,850)     (73,894)     (75,292)     (69,930)
Common stock dividend                      --           --           --        6,000           --
</TABLE>

Page 18

<PAGE>

(1)  The Michigan Single Business Tax is a state tax which is calculated based
     on operating activity and capital expenditure levels and is in lieu of a
     state income tax.

(2)  For 2001, represents write off of deferred financing costs, net of tax. For
     1998, represents $1.6 million (net of income taxes) write off of deferred
     financing costs, $2.1 million (net of income taxes) for the amortization of
     the previously unamortized discount on a series of subordinated notes that
     was prepaid during the year and $1.2 million (net of income taxes) for
     associated prepayment penalties.

(3)  "EBITDA" represents the sum of operating income plus depreciation and
     amortization (less amortization of deferred financing costs) and Michigan
     Single Business Tax. Information regarding EBITDA is presented because
     management believes (i) it is a widely accepted financial indicator of a
     company's ability to incur and service debt, (ii) it reflects the non-cash
     effect on earnings of amortization and depreciation expense, and (iii) it
     is the basis on which compliance with certain of the financial covenants
     contained in the credit facility is principally determined. However, EBITDA
     does not purport to represent cash provided by operating activities as
     reflected in the Company's consolidated statements of cash flow, is not a
     measure of financial performance under generally accepted accounting
     principles and should not be considered in isolation or as a substitute for
     measures of performance prepared in accordance with generally accepted
     accounting principles. Also, the measure of EBITDA may not be comparable to
     similar measures reported by other companies.

Page 19

<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         The following discussion should be read in conjunction with the
Company's financial statements and the notes thereto, included elsewhere in this
report.

Overview
--------

     The Company is a leading global manufacturer and marketer of pneumatic
components. The Company's net sales are principally derived from the sale of its
products worldwide to over 9,000 customers, including a network of over 115
distributors. In recent years, the Company has diversified its revenue base
through its expanded product lines and an increase in its percentage of
international sales. In the U.S., the Company's products are principally sold
through a network of 45 distributors who purchase and stock Numatics' products.
In non-U.S. markets, a majority of sales are derived from direct customers.

         The Company's cost of products sold consists primarily of raw
materials, labor, manufacturing overhead and purchased product costs. The
Company has generally had success in passing through price increases in raw
materials to its customers, although there can be no assurance that it will be
able to continue to do so.

Results of Operations
---------------------

Year Ended December 31, 2001 Compared with Year Ended December 31, 2000

         Net Sales. The Company's net sales for 2001 decreased 22.1%, or $32.3
million, from $145.9 million in 2000 to $113.6 million in 2001 as a result of
the recession and general economic slowdown. Net sales in North America
decreased 24.2%, or $30.0 million, while international sales decreased 10.5%, or
$2.3 million, approximately $0.4 million of which was a result of currency
translation losses. The slowdown was experienced first in the United States,
which suffered a decline of 25.7%. The drop in sales in Canada and Mexico began
early 2001, bringing their total sales decreases to 18.2% and 11.1%,
respectively. The international group sales began falling mid-year for the total
drop in international sales of 10.5%. The sales decline was spread equally among
products groups with valves, motion control, and air preparation products all
down 22% for the year.

         Gross Profit. Gross profit for 2001 increased to 37.9% of net sales
from 36.7% in 2000. Cost savings and containment programs implemented in
response to the economic downturn were responsible for the overall improvement
in gross profit. These cost savings included decreases in direct and indirect
labor as a result of an overall 28% headcount reduction, depreciation savings on
reduced capital expenditures, reduced scrap costs and the elimination of
discretionary spending in manufacturing overhead.

         Marketing, Engineering, General and Administrative. Marketing,
engineering, general and administrative expenses decreased $6.9 million in 2001,
ending the year at $27.4 million. This decrease was a result of cost savings and
containment programs implemented in response to the economic downturn. In
addition to an overall 28% headcount reduction, the Company eliminated or
reduced discretionary spending to offset the effects of the lower sales volume,
including the elimination of management bonuses. Unusual expenditures in 2000,
such as the $0.7 million for implementation and enhancement of the computer
system, did not recur in 2001.

Page 20

<PAGE>

     Single Business Tax. Single business tax for 2001 was a credit of $0.1
million compared to an expense of $0.2 million in 2000 as a result of the loss
in 2001.

         Operating Income. Operating income in 2001 was $15.7 million, or 13.8%
of sales, compared to $19.0 million, or 13.0% of sales, in 2000. This $3.3
million decrease was a direct result of the lower sales volume.

         Interest and Other Financing Expenses. Interest expense decreased $0.5
million from $16.8 million in 2000 to $16.3 million in 2001 as a result of the
general decrease in interest rates and less long-term debt.

         Other Expense. Other expense consisted primarily of unrealized foreign
exchange gains and losses, along with minority interest. Expense in 2001 was
$0.6 million lower than 2000.

         Income Taxes. The Company's income taxes at the statutory rate differed
from its recorded income tax expense due to international rate differences.

     Extraordinary Item. The write off of unamortized debt financing costs
related to the refinancing of the Company's senior credit facility in November
2001 resulted in an extraordinary expense of $0.3 million, net of $0.1 million
tax benefit.

     Net Loss. Due to the factors discussed above, net loss increased $1.1
million, to a loss of $1.8 million for 2001.


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

         Net Sales. The Company's net sales for the total year 2000 increased
4.1%, or $5.7 million, from $140.1 million in 1999 to $145.9 million in 2000,
although net sales for the fourth quarter exhibited a 10.6% decrease from prior
year, as a result of the general economic slowdown. Net sales in North America
increased 4.3%, or $5.1 million, while international sales increased 2.8%, or
$0.6 million.

         Gross Profit. Gross profit for 2000 decreased to 36.7% of net sales
from 37.4% in 1999. This decline was a result of product mix changes and
one-time inventory adjustments.

         Marketing, Engineering, General and Administrative. Marketing,
engineering, general and administrative expenses increased $2.5 million in 2000,
ending the year at $34.4 million. This increase was primarily attributable to
expanded marketing programs, professional fees, and costs associated with the
implementation of a new enterprise-wide

Page 21

<PAGE>

computer system at the U.S. Valves and FRL divisions in the first quarter of
2000. Incremental ongoing costs related to the computer system were $1.3 million
while incremental one-time costs for implementation and enhancements to the
system were $0.7 million. The $1.3 million of incremental ongoing costs are
expected to continue.

         Single Business Tax. Single business tax for 2000 was $0.2 million
compared to $0.4 million in 1999.

         Operating Income. Operating income in 2000 was $19.0 million, or 13.0%
of sales, compared to $20.2 million, or 14.4% of sales, in 1999. This $1.2
million decrease was principally due to reduced gross profit and increased
marketing, engineering, general and administrative expenses, as explained above.

         Interest and Other Financing Expenses. Slightly higher debt levels,
combined with increased general interest rates, resulted in a $0.8 million
increase in interest expense in 2000 compared to 1999.

         Other Expense. Other expense consisted primarily of unrealized foreign
exchange gains and losses. Expense in 2000 was substantially equal to 1999.

         Income Taxes. The Company's income taxes at the statutory rate differed
from its recorded income tax expense due to international rate differences and
other various differences.

         Net Income (Loss). Due to the factors discussed above, net income
decreased $1.5 million, to a loss of $0.7 million for 2000.

Liquidity and Capital Resources
-------------------------------

         Working capital was $41.3 million at December 31, 2001, compared with
$44.3 million at December 31, 2000. Historically, the Company has utilized cash
from operations and borrowings under its credit facilities to satisfy its
operating and capital needs and to service its indebtedness.

         On November 28, 2001, the Company entered into credit agreements with
LaSalle Business Credit, Inc. and its Canadian affiliate providing for $30.0
million of three-year revolving credit facilities, subject to borrowing base
requirements, and into a note purchase agreement with American Capital
Strategies, Ltd. providing for $31.4 million of five-year term loans.

         The new credit facilities and loans are secured by liens on
substantially all of the assets of Numatics, Incorporated and its U.S.,
Canadian, and German subsidiaries. The new revolving credit loans bear interest
at variable rates based on prime or LIBOR, at the Company's election. $14.2
million of the new term loans bear interest at the greater of

Page 22

<PAGE>

prime plus 6.5% per annum or 12% per annum. The remaining $17.0 million of the
new term loans bear interest at 19% per annum, 2% per annum of which may be paid
in kind at the Company's option.

     The credit facilities include: (i) term loans of $28.7 million, $1.7
million and $1.0 million to Numatics and its German and Canadian subsidiaries,
respectively and (ii) revolving credit facilities, including letters of credit,
of $26.0 million and $4.0 million to Numatics and its Canadian subsidiary,
respectively. The revolving credit facilities permit each of Numatics and its
Canadian subsidiary to borrow up to the lesser of the total amount of its
respective revolving credit facility or a borrowing base computed as a
percentage of inventory and accounts receivable. Management estimates that the
borrowing base limitations would have limited the Company's total revolving
credit availability to approximately $19.4 million as of December 31, 2001. All
borrowings under the revolving credit facilities mature in November 2004. The
term loans are payable in quarterly installments, which totaled $2.7 million for
2001, and will total $1.4 million for 2002 and $1.4 million for 2003. The credit
facilities include certain financial and operating covenants, which among other
things restrict the ability of the Company to incur additional indebtedness,
make investments, and take other actions. The Company expects to be in
compliance with its covenants through 2002.

Significant Accounting Policies
-------------------------------

     The Company's significant accounting policies are more fully described in
Note 1 of the consolidated financial statements. Certain of the accounting
policies require the application of significant judgment by management in
selecting appropriate assumptions for calculating financial estimates. By their
nature, these judgments are subject to an inherent degree of uncertainty.

         Long-Lived Assets. The Company periodically evaluates the
recoverability of the carrying amount of its long-lived assets (including
property, plant and equipment, goodwill and other intangible assets) whenever
events or changes in circumstances indicate that the carrying amount of any
asset may not be recoverable. An impairment is assessed when the undiscounted
expected future cash flows derived from an asset are less than its carrying
amount. The dynamic economic environment in which our business operates and the
resulting assumptions used to estimate future cash flows impact the outcome of
all impairment tests.

     Pension and Other Postretirement Benefits. The Company maintains defined
benefit pension plans on substantially all United States hourly employees and
postretirement benefit plans for certain domestic employees. For financial
reporting purposes, net period pension and other postretirement benefit costs
are calculated based upon a number of actuarial assumptions including discount
rate, rate of return on assets and certain demographic data. Each of these
assumptions is based on Company judgment, considering all known trends and
uncertainties. Any future changes to the discount rate will impact future net
periodic pension expense. Actual asset returns for our pension plans
significantly below the assumed rate of return would result in higher net
periodic expense in future years. Actual

Page 23

<PAGE>

annual rates of increase in costs of covered postretirement healthcare above
assumed rates of increase would result in higher net periodic postretirement
benefit costs in future years.

     Income Taxes. The Company must provide an estimate of actual current tax
exposure together with an assessment of temporary differences resulting from
differing treatment of items for tax and accounting purposes. These differences
result in deferred tax assets and liabilities, which are included within the
consolidated balance sheet. Based on known and projected earnings information
and tax planning strategies, the Company must then assess the likelihood that
the deferred tax assets will be recovered. To the extent that the Company
believes recovery is not likely, it must establish a valuation allowance.
Significant management judgment is required in determining provision for income
taxes, deferred tax assets and liabilities and any valuation allowance recorded
against net deferred tax assets. For the period ended December 31, 2001 Numatics
had no valuation allowance recorded. In the event that actual results differ
from the estimates, or facts or circumstances change in future periods, the
effects of these adjustments could materially impact the financial position and
results of operations.

Other Matters
-------------

     As further discussed in item 11, under "Compensation Committee Interlocks
and Insider Participation," Numatics, Mr. Welker, and all of the Company's other
employee-shareholders are parties to an agreement under which the Company has
the option, but not the obligation, to redeem the shares of any such shareholder
upon the happening of certain events, including death, disability, or
termination of employment. This agreement covers over 93.0% of the Numatics'
shares currently outstanding. At December 31, 2001, the total redemption value
of these optioned shares was immaterial. The indenture governing the Series B
Notes and the agreements governing the credit facilities contain substantial
limitations on Numatics' ability to redeem shares but permit redemptions,
including limited cash redemptions, in certain cases. If one of the triggering
events were to occur, the Numatics Board of Directors would decide whether to
exercise the option based on the facts and circumstances existing at that time.
In making such a determination, the Board could be expected to consider the
following factors, among others: the limitations contained in the indenture and
the credit facilities, the Company's ability to pay or finance the redemption
price, the Company's other anticipated cash needs, and other then-existing
business and economic conditions.

     Each of the management shareholders of certain Numatics subsidiaries
(Numation, Numatech and the Company's subsidiary in Taiwan) is required to sell
his subsidiary shares to Numatics (or the subsidiary) upon such shareholder's
(i) death, (ii) permanent disability or (iii) termination of employment with the
Company. The price to be paid by the Company for such shares will be determined
by a formula based upon a multiple of earnings of the relevant subsidiary. The
obligations of the Company to purchase such shares are not subject to any
limitations. However, the payment of these amounts may be prohibited by the
terms of the Series B Note indenture. Currently, the amounts that would be
payable under these agreements are approximately $475,000.

Page 24

<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Information with respect to the levels of indebtedness subject to
interest rate fluctuation is contained in Note 2 to the consolidated financial
statements filed with this Form 10-K as exhibit 99.1. Information with respect
to the Company's level of business outside the United States that is subject to
foreign currency exchange rate market risk is contained in Note 7 to those
consolidated financial statements under the caption "Segment and Geographic
Information." Those notes hereby are incorporated in this item by reference.

Interest Rate Risk
------------------

         The Company is subject to market risk associated with adverse changes
in interest rates and foreign currency exchange rates, but does not hold any
market risk sensitive instruments for trading purposes. The Company had total
debt of $161.8 million at December 31, 2001, of which $28.2 million was variable
rate debt. The Company measures its interest rate risk by estimating the net
amount by which potential future net earnings would be impacted by hypothetical
changes in market interest rates related to all interest rate sensitive assets
and liabilities. Assuming a hypothetical 20% increase from the interest rates in
effect as of December 31, 2001 and consistent levels of debt and cash, the
estimated reduction in future earnings, net of tax, would be approximately $ 0.3
million.

Foreign Currency Risk
---------------------

         The Company mitigates its foreign currency exchange rate risk
principally by establishing local production and sales facilities in the markets
it serves and by invoicing customers in the same currency as the source of the
products. The Company also monitors its foreign currency exposure in each
country and implements strategies to respond to changing economic and political
environments.

     As of December 31, 2001, the Company's net current assets (defined as
current assets less current liabilities) subject to foreign currency translation
risk were $14.4 million. The potential decrease in net assets from a
hypothetical 10% adverse change in quoted foreign currency exchange rates would
be approximately $1.4 million.

         The sensitivity analysis presented assumes a parallel shift in all
foreign currency exchange rates. Exchange rates for different currencies do not
necessarily move in the same direction. Accordingly, this assumption may
overstate the impact of changing exchange rates on the Company's assets and
liabilities denominated in a foreign currency.

Page 25

<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The information required by this item is incorporated in this item by
reference to the Company's audited consolidated financial statements filed with
this Form 10-K as exhibit 99.1.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

         None.

Page 26

<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The table that follows sets forth the name, age at December 31, 2001,
and position with the Company of each person who currently is a Numatics
director or an executive officer of the Company. Information concerning the
business experience for at least the past five years of each of the persons
named is provided after the table. All Numatics directors are elected for terms
of one year and until their successors are elected and qualified.

                 Name              Age                   Position
         -----------------------------------------------------------------------
          John H. Welker           61      Chairman, President and Chief
                                           Executive Officer

          Robert P. Robeson        55      Vice President, Treasurer, Secretary
                                           and Chief Financial Officer

          David K. Dodds           53      Vice President--Sales & Marketing

          David M. Tenniswood      65      Director

          Albert A. Koch           59      Director

          John P. Musat            56      Director

          John J. Collins          50      Director

          Mark D. Schindel         38      Director




         John H. Welker has been with Numatics (and its predecessor) for a total
of 36 years. He has been Numatics' Chairman of the Board, President, and CEO
since 1990. He was President of Numatics' predecessor from 1983 until 1990 and
prior to 1983 held a variety of management positions within that predecessor
company.

         Robert P. Robeson joined Numatics' predecessor as Chief Financial
Officer in 1988 and in 1990 also was named Vice President, and its Treasurer and
Secretary. Prior to joining Numatics' predecessor, Mr. Robeson was CFO of Gelman
Sciences, a publicly traded company.

         David K. Dodds has been Vice President-Sales & Marketing since 1994.
Prior to

Page 27

<PAGE>

that, he was President of Numatics, Ltd., the Company's Canadian subsidiary, a
position he was appointed to in 1980.

         David M. Tenniswood has been a Numatics Director since 1990. He has
been the President and Chief Executive Officer of Aqua-Chem, Inc. (manufacturer
of boilers and water purification and treatment products) since October 20,
1999. Prior to that he was Vice President - European Operations of the Company
from 1996 through March 31, 1998 and prior to 1996, Mr. Tenniswood was President
of the Controls Group at MascoTech for ten years.

         Albert A. Koch has been a Numatics Director since 1990. He is the
Chairman of Jay Alix & Associates, where he has been since 1995. Prior to
joining Jay Alix & Associates, he was a Managing Director of Equity Partners of
America, Ltd. (investment banking and financial consulting).

         John P. Musat has been a Numatics Director since 1996. He is Vice
President, Manufacturing Technology at Metaldyne Precision Forming (cold steel
extruder) and has been with them since 1982.

         John J. Collins has been a Numatics Director since 2000. He has been
the Senior Vice President and General Counsel of Champion Enterprises, Inc.
since 1997. Prior to joining Champion Enterprises, Inc. he was a Senior
Principal and Managing Director of Miller, Canfield, Paddock and Stone, P.L.C.
(law firm).

         Mark D. Schindel has been a Numatics Director since 2001. He has been a
Principal of American Capital Strategies (publicly traded mezzanine fund) since
1998. Prior to joining American Capital Strategies he was a Managing Director at
PENMAN Partners (private equity fund).

Page 28

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Information
--------------------------------

         The table that follows provides information for the Company's last
three fiscal years concerning the compensation of John H. Welker, Numatics' CEO,
and the two other individuals who were the highest paid executive officers of
Numatics during 2001.

<TABLE>
<CAPTION>
                              Summary Compensation Table
                                                     Annual Compensation (1)
  ------------------------------------------------------------------------------------
      Name and Principal                                                All Other
           Position               Year       Salary         Bonus    Compensation (2)
<S>                               <C>       <C>           <C>           <C>
   John H. Welker,                2001      $239,422      $      0      $  6,900
   Chairman, President and        2000       351,020       125,250         6,500
   CEO                            1999       326,020       110,750         5,000

   Robert P. Robeson, Vice        2001       137,490        45,639         6,900
   President, Treasurer, and      2000       150,300        64,610         6,500
   CFO                            1999       143,100        56,180         5,000

   David K. Dodds,                2001       127,624        44,027         6,900
   Vice President--Sales and      2000       139,460        59,233         6,500
   Marketing                      1999       132,860        49,036         5,000
</TABLE>


(1)      Does not include perquisites and other personal benefits provided to
         named executives, the incremental cost of which to the Company in each
         case was less than 10% of the pertinent executive's salary and bonus
         for the year.

(2)      For each executive, includes a Company contribution of $3,500 in 2001
         and 2000 and $2,000 in 1999 to the Company's deferred contribution and
         employee savings plan and, in each year, a Company matching
         contribution to that plan based on the executive's contribution.

Page 29

<PAGE>

Welker Employment Agreement
---------------------------

         Numatics has an agreement with John Welker for his employment as CEO
through December 31, 2003. Under this agreement, he is entitled to salary at
specified rates ($380,000 for 2001, increasing annually thereafter to $440,000
for 2003), and to a cash performance bonus supplementing his salary determined
pursuant to a formula based on the Company's operating performance relative to
its operating budget. The agreement also contemplates that Numatics' Board of
Directors annually will consider whether he should be paid a discretionary
bonus, whether or not a performance bonus also is payable.

         During the term of the agreement, Numatics is entitled to terminate Mr.
Welker's employment at any time for any reason, upon 60 days' prior notice to
him, and also is entitled to terminate him for "cause" or in certain cases of
"permanent disability" (as defined in the agreement), upon less prior notice. If
the Company were to terminate him not for cause or permanent disability, or
terminated him for permanent disability without having maintained certain
disability insurance in effect for his benefit, he would be entitled to
continuation of his regular salary for a one-year period commencing on his
termination date. In addition, if Mr. Welker were to die while employed by the
Company, the equivalent of his regular salary for a 60-day period thereafter
would be payable to his estate.

         The agreement imposes non-competition obligations upon Mr. Welker
during his employment and for one year thereafter and also imposes
confidentiality obligations upon him, which continue for five years after his
employment termination date.

     For 2001, Mr. Welker voluntarily accepted less salary than he was entitled
to under the agreement.

Deferred Compensation Plan
--------------------------

         Numatics has a "top-hat" non-qualified deferred compensation plan,
under which a small group of management-level employees could become entitled to
receive cash distributions if certain conditions are satisfied. In general,
under the plan as currently in effect, if a plan participant's employment with
the Company continues until his death, retirement at or after age 65, or
disability (determined as specified in the plan), or if a participant remains in
active Company service through the later of (a) November 29, 2002 or (b) the
twelfth anniversary of the commencement of his employment; and his employment
thereafter terminates other than in an Involuntary Discharge for Cause (as
defined in the plan), which involuntary discharge would cause the forfeiture of
his right to any distribution, then Numatics would become obligated to pay his
distribution, without interest, in regular installments over a five-year period
commencing within 60 days of his employment termination date. Similar five-year
installment payment obligations also would arise under the plan with respect to
all participants if Numatics elected to terminate the plan or if a Company
Change in Control (as defined in the plan) should occur.

         However, the current terms of the plan also provide for a pro rata
reduction in the amounts of annual installment payments to distributees and for
lengthening the installment

Page 30

<PAGE>

payment period if Numatics becomes obligated to make payments to more than one
distributee at the same time, to the extent (if any) necessary to prevent total
annual payments to the distributees in excess of 3.0% of the Company's prior
year earnings before interest, taxes, depreciation, and amortization. In
addition, the plan provides that no distribution payments whatsoever may be made
prior to January 31, 2004.

       Six of the Company's employees participate in this plan, including all of
the named executives. The distribution amounts for the named executives are as
follows: Mr. Welker, $2,643,546; Mr. Robeson, $105,398; Mr. Dodds, $151,757.

Directors' Compensation
-----------------------

       Numatics pays a meeting fee of $1,600 to each director not also employed
by the Company for each meeting of the Numatics Board of Directors that he
attends. For 2001, these fees were voluntarily waived.

       During 2000, Numatics issued three of its non-employee directors options
to purchase shares of Numatics common stock for $17.50 per share. Messrs.
Tenniswood and Koch were each issued options to purchase 6,000 shares; Mr. Musat
was issued options to purchase 3,000 shares. Each option is currently
exercisable with respect to 40% of the covered shares and will become
exercisable as to an additional 20% each year for the next three years if the
holder continues to be a director. As a condition to exercising an option, the
director will be required to enter into a stock transfer agreement that will,
among other things, restrict the transfer of the purchased shares, give Mr.
Welker the right to vote them, give the Company the right to repurchase them in
certain events (including the death or resignation of the director), and give
the director the right to sell them to the Company (subject to certain
limitations and in any event only if the Board of directors determines that the
purchase would be in the Company's best interest). Repurchases under the stock
transfer agreement would be at a formula price based on the Company's operating
income for its most recently completed twelve-month period. None of the options
has been exercised.

         Employee directors are not paid any additional compensation for Board
service.

Compensation Committee Interlocks and Insider Participation
-----------------------------------------------------------

         All decisions concerning the 2001 compensation of the Company's
executive officers were made by the Numatics Board of Directors. Except as
described below, no current or former officer and no current employee of
Numatics or of any of its subsidiaries participated in deliberations of the
Board concerning executive compensation during 2001.

         Mr. Welker is the controlling shareholder of Numatics and its Chairman,
CEO, and President. Until March 24, 1998, Mr. Tenniswood also was an executive
officer of the Company. None of the other directors is or ever has been an
officer or employee of Numatics or of any of its subsidiaries.

         Numatics advanced $185,000 to Mr. Welker during 1996 to purchase the
stock of

Page 31

<PAGE>

a departing executive, all of which remains outstanding. In February 1998,
Numatics advanced an additional $400,000 to Mr. Welker, all of which also
remains outstanding. These loans are unsecured, bear interest at 6.5% per annum,
and are payable on demand.

         Numatics, Mr. Welker, each other current executive officer of the
Company, and all of its other employees who own Numatics' stock are party to a
shareholder agreement that gives Numatics the option, but not the obligation, to
purchase the shares of any shareholder party, including Mr. Welker, if the
shareholder ceases to be a Company employee due to his death, his Total and
Permanent Disability or Involuntary Discharge Without Cause (each as defined in
the agreement), his retirement at or after age 65, or his resignation (if after
the later of (i) November 29, 2002 or (ii) the twelfth anniversary of his date
of hire by Numatics or its predecessor) for a redemption price to be determined
by a formula intended to approximate the shares' fair market value at the time
of employment termination. This agreement covers 93.34% of the outstanding
shares of Numatics common stock, 82.23% of which are held by Mr. Welker.

         The Company employs Mr. Jeffrey Welker, son of John Welker, as
Application Engineer. His total 2001 compensation was $68,098.

Page 32

<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Over 5% Owners
--------------

         So far as is known to the Company, the only persons who are beneficial
owners (within the meaning of SEC Rule 13d-3) of over 5.0% of Numatics'
outstanding common shares are: (a) John H. Welker, whose ownership information
is set forth below under "Management and Directors" and who maintains an address
at the Company's principal executive office; and (b) Harvard Private Capital
Holdings, Inc. (the address of which is c/o Charlesbank Capital Partners LLC,
600 Atlantic Avenue, Boston, Massachusetts 02210), which holds 159,575 shares,
representing 6.66% of the outstanding shares.

Management and Directors
------------------------

         The table that follows sets forth the beneficial ownership (for
purposes of SEC Rule 13d-3) of shares of Numatics' common stock by each Numatics
director, each executive officer named in the Summary Compensation Table above,
and all directors and current executive officers as a group.

       Name of Beneficial Owner                Shares Owned    Percentage Owned
      --------------------------------------------------------------------------
       John H. Welker (1)                      2,237,660.00              93.34%
       Robert P. Robeson                          78,391.25               3.27%
       David K. Dodds                            112,881.25               4.71%
       David M. Tenniswood                                0                  --
       Albert A. Koch                                     0                  --
       John P. Musat                                      0                  --
       John J. Collins                                    0                  --
       Mark D. Schindel                                   0                  --
       All directors and executive officers    2,237,660.00              93.34%
       as a group (8 persons) (1)


(1)      Mr. Welker has sole voting and dispositive power over 1,971,196.25
         (82.23%) of the reported shares, which are his own, and sole voting
         power over all other outstanding shares, excluding those owned by
         Harvard Private Capital Holdings, pursuant to a voting agreement among
         Numatics, Mr. Welker and all of Numatics' other shareholders who are
         Company employees.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required in response to this item is included under item 12 and
incorporated herein by this reference.

Page 33

<PAGE>

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)      1. Financial Statements. (All contained in Exhibit 99.1 to this report.
            Page numbers shown below.)

                        Consolidated Financial Statements
                             Numatics, Incorporated
                  Years ended December 31, 2001, 2000, and 1999
                       with Report of Independent Auditors



                                                                      Page in
                                                                    Exhibit 99.1
               Report of Independent Auditors                             1
               Consolidated Balance Sheets                                2
               Consolidated Statements of Operations                      4
               Consolidated Statements of Stockholders' Deficiency        5
               Consolidated Statements of Cash Flows                      6
               Notes to Consolidated Financial Statements                 7

         2. Financial Statement Schedule.

                  Schedule II - Valuation and Qualifying Accounts (found at page
                  F-1 of this report)

         3. Exhibits. The following exhibits are filed with this Form 10-K or
                  incorporated herein by reference:


Exhibit No        Description
--------------------------------------------------------------------------------

(e) 3.1.1         Article of Incorporation of Numatics, as amended

(a) 3.1.2         Bylaws of Numatics

(a) 3.2.1         Articles of Incorporation of Numation, Inc., as amended

(a) 3.3.2         Bylaws of Numation, Inc., as amended

(a) 3.2.1         Articles of Incorporation of Numatech, Inc., as amended

Page 34

<PAGE>

(a) 3.3.2         Bylaws of Numatech, Inc., as amended

(a) 3.4.1         Articles of Incorporation of Micro-Filtration, Inc. as amended

(a) 3.4.2         Bylaws of Micro-Filtration, Inc., as amended

(a) 3.5.1         Articles of Incorporation of Ultra Air Products, Inc. as
                  amended

(a) 3.5.2         Bylaws of Ultra Air Products, Inc., as amended

(a) 3.6.1         Articles of Incorporation of Microsmith, Inc., as amended

(a) 3.6.2         Bylaws of Microsmith, Inc., as amended

(a) 3.7.1         Articles of Incorporation of I.A.E. Incorporated

(a) 3.7.2         Bylaws of I.A.E. Incorporated

(a) 4.1.1         Indenture, dated as March 23, 1998, among Numatics, the
                  Guarantors identified there, and First Trust National
                  Association, as trustee

(a) 4.1.2         Form of Series B Notes (including related Subsidiary
                  Guarantees by the Guarantors indentified in Indenture)

(c) 4.1.3         Supplemental Indenture, dated as of January 25, 1999, by which
                  Empire Air Systems, Inc. became a Guarantor

(f) 4.2.1         Loan and Security Agreement dated as of November 28, 2001
                  between LaSalle Business Credit, Inc., as the lender and
                  collateral agent, and Numatics, Incorporated,
                  Micro-Filtration, Inc., Numation, Inc., Numatech, Inc., Ultra
                  Air Products, Inc., Microsmith, Inc., and Empire Air Systems,
                  Inc., as the borrowers (exhibits and schedules omitted)

(f) 4.2.2         Joint and Several Revolving Note dated as of November 28, 2001
                  from each of the borrowers under the Loan and Security
                  Agreement to LaSalle Business Credit, Inc.

(f) 4.3.1         Credit Agreement dated as of November 28, 2001 between
                  Numatics Ltd. and LaSalle Business Credit, a division of ABN
                  AMRO Canada (exhibits and schedules omitted)

(f) 4.3.2         Revolving Promissory Note dated as of November 28, 2001 from
                  Numatics Ltd. to LaSalle Business Credit, a division of ABN
                  AMRO

Page 35

<PAGE>

                  Bank Canada

(f) 4.4.1         Note Purchase Agreement dated November 28, 2001 among
                  Numatics, Incorporated, Numatics GmbH, Numatics Ltd.,
                  Micro-Filtration, Inc., Numation, Inc., Numatech, Inc., Ultra
                  Air Products, Inc., Microsmith, Inc., and Empire Air Systems,
                  Inc., American Capital Strategies, Ltd., and American Capital
                  Financial Services, Inc., as agent (exhibits and schedules
                  omitted)

(f) 4.4.2         Senior Secured Term A Note Due November 27, 2006 from
                  Numatics, Incorporated to American Capital Strategies, Ltd.

(f) 4.4.3         Senior Secured Term B Note Due November 27, 2006 from
                  Numatics, Incorporated to American Capital Strategies, Ltd.

(f) 4.4.4         Senior Secured Term A Note Due November 27, 2006 from Numatics
                  Ltd. to American Capital Strategies, Ltd.

(f) 4.4.5         Senior Secured Term A Note Due November 27, 2006 from Numatics
                  GmbH to American Capital Strategies, Ltd.

    4.5.1         First Amendment to Loan and Security Agreement dated March 25,
                  2002 among Numatics, Incorporated, Micro-Filtration, Inc.,
                  Numation, Inc., Numatech, Inc., Ultra Air Products, Inc.,
                  Microsmith, Inc., Empire Air Systems, Inc., and LaSalle
                  Business Credit, Inc.

    4.5.2         First Amendment to Note Purchase Agreement dated March 29,
                  2002 among Numatics, Incorporated, Numatics, GmbH, Numatics
                  Ltd., and American Capital Financial Services, Inc.

(a) 10.1.1        Securities Purchase Agreement, dated as of January 3, 1996,
                  between Numatics and Harvard Private Capital Holdings

(a) 10.1.2        Numatics, Incorporated Tag-Along and Drag-Along Agreement,
                  dated January 3, 1996, among Numatics, Harvard Private Capital
                  Holdings, and shareholders of Numatics

(a) 10.1.3        Registration Agreement, dated as of January 3, 1996, between
                  Numatics and Harvard Private Capital Holdings

(a) 10.1.4        Form of Guaranty Agreement between Harvard Private Capital
                  Holdings and I.A.E. Incorporated, dated as of March 23, 1998
                  (Each of the other guarantors has executed an Amended and
                  Restated Guaranty Agreement in substantially the same form.)

(a) 10.1.5        Agreement, dated as of March 23, 1998, between Numatics and
                  Harvard Private Capital Holdings

(a) 10.2          Amended and Restated Stock Transfer Agreement, dated December
                  28, 1995, among Numatics, John H. Welker, individually and as
                  trustee of the John H. Welker Trust u/a dtd December 28, 1995,
                  David K. Dodds, Donald E. McGeachy, Henry Fleischer,
                  individually and as trustee of the Henry Fleischer Trust u/a
                  dtd March 10, 1993, Robert P. Robeson, John

Page 36

<PAGE>

                  A. Acuff, Bruce W. Hoppe, David King, and Philip Robinson

(b) 10.2.1        First Amendment, dated June 30, 1998, to Amended and Restated
                  Stock Transfer Agreement

(a) 10.3          Voting Agreement, dated as November 29, 1990, among Numatics
                  (under its former name, Numatics Acquisition Corporation) and
                  certain shareholders of Numatics

(a) 10.4          Employment Agreement, dated January 3, 1996, between Numatics
                  and John H. Welker**

(a) 10.5          Numatics, Incorporated Amended and Restated Deferred
                  Compensation Plan, adopted December 28, 1995, and related
                  acknowledgements by Eligible Employees (as therein defined)**

(d) 10.6.1        Numatics, Incorporated Incentive Plan adopted June 29, 2000**

(d) 10.6.2        Form of Stock Transfer Agreement referred to in Incentive
                  Plan**

 21.1             List of subsidiaries of Numatics

 99.1             Consolidated Financial Statements--Numatics,
                  Incorporated--Years ended December 31, 2001, 2000 and 1999
                  with Report of Independent Auditors


(a)      Incorporated by reference to exhibit to Registration Statement on Form
         S-4 filed on April 29, 1998 (File No. 333-51355)

(b)      Incorporated by reference to Amendment No. 1 to Registration Statement
         on Form S-4 filed on July 10, 1998 (File No. 333-51355)

(c)      Incorporated by reference to exhibit to Annual Report on Form 10-K for
         the year ended December 31, 1998 (File No. 333-51355)

(d)      Incorporated by reference to exhibit to Quarterly Report on Form 10-Q
         for the quarter ended September 30, 2000 (File No. 333-51355)

(e)      Incorporated by reference to exhibit to Annual Report on Form 10-K for
         the year ended December 31, 1999 (File No. 333-51355)

(f)      Incorporated by reference to exhibit to Form 8-K filed on December 3,
         2001 (File No. 333-51355)

Page 37

<PAGE>

**       Indicates contract or compensatory plan or arrangement with one or more
         Numatics executive officers and/or directors



     (b) Reports on Form 8-K.

                  On December 3, 2001 the Company filed with the Securities and
                  Exchange Commission a Form 8-K, dated November 28, 2001,
                  reporting the successful refinancing of the Company's credit
                  facility.

Page 38

<PAGE>

                 SCHEDULE II - Valuation and Qualifying Accounts
                                 (in thousands)

<TABLE>
<CAPTION>
                 Column A                        Column B         Column C         Column D         Column E
                 --------                        --------         --------         --------         --------
                                                                  Addition
                                                Balance at       Charged to                        Balance at
                                               Beginning of       Costs and      Deductions -        End of
                Description                       Period          Expenses         Describe          Period

--------------------------------------------------------------------------------------------------------------

<S>                                                     <C>             <C>           <C>               <C>
 Year ended December 31, 2001
   Accounts receivable allowance                        177             446           187 (1)             436
   Inventory reserve                                    498             583             0 (2)           1,081
   Deferred tax asset valuation allowance                 0               0             0 (3)               0

 Year ended December 31, 2000
   Accounts receivable allowance                        185              50            58 (1)             177
   Inventory reserve                                    576               0            78 (2)             498
   Deferred tax asset valuation allowance               118               0           118 (3)               0

 Year ended December 31, 1999
   Accounts receivable allowance                         58             161            34 (1)             185
   Inventory reserve                                    994               0           418 (2)             576
   Deferred tax asset valuation allowance               465               0           347 (3)             118
</TABLE>


(1)  Uncollectible accounts charged off net of recoveries
(2)  Reduction in inventory reserves for inventory disposed of during the year
     and allowance for valuation changes
(3)  Utilization of foreign net operating loss carry-forwards.


                                       F-1

Page 39

<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) 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.

         NUMATICS, INCORPORATED



         /s/ John H. Welker
         --------------------------------
         John H. Welker
         President and Chief Executive
         Officer

         Date: March 29, 2002


         Pursuant to the requirements of Section 13 or 15(d) 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.

Name                            Capacity                          Date

/s/ John H. Welker              President and Chief Executive     March 29, 2002
---------------------------     Officer and Director
    John H. Welker

/s/ Robert P. Robeson           Vice President, Treasurer and     March 29, 2002
---------------------------     Chief Financial Officer (also
    Robert P. Robeson           principal accounting officer)

/s/ David M. Tenniswood         Director                          March 29, 2002
---------------------------
    David M. Tenniswood

/s/ Albert A. Koch              Director                          March 29, 2002
---------------------------
    Albert A. Koch

/s/ John P. Musat               Director                          March 29, 2002
---------------------------
    John P. Musat

/s/ John J. Collins             Director                          March 29, 2002
---------------------------
    John J. Collins

                                Director                          March 29, 2002
---------------------------
    Mark D. Schindel

Page 40

<PAGE>

                  S-1


                                  Exhibit Index

Exhibit No        Description
--------------------------------------------------------------------------------

(e) 3.1.1         Article of Incorporation of Numatics, as amended

(a) 3.1.2         Bylaws of Numatics

(a) 3.2.1         Articles of Incorporation of Numation, Inc., as amended

(a) 3.3.2         Bylaws of Numation, Inc., as amended

(a) 3.2.1         Articles of Incorporation of Numatech, Inc., as amended

(a) 3.3.2         Bylaws of Numatech, Inc., as amended

(a) 3.4.1         Articles of Incorporation of Micro-Filtration, Inc. as amended

(a) 3.4.2         Bylaws of Micro-Filtration, Inc., as amended

(a) 3.5.1         Articles of Incorporation of Ultra Air Products, Inc. as
                  amended

(a) 3.5.2         Bylaws of Ultra Air Products, Inc., as amended

(a) 3.6.1         Articles of Incorporation of Microsmith, Inc., as amended

(a) 3.6.2         Bylaws of Microsmith, Inc., as amended

(a) 3.7.1         Articles of Incorporation of I.A.E. Incorporated

(a) 3.7.2         Bylaws of I.A.E. Incorporated

(a) 4.1.1         Indenture, dated as March 23, 1998, among Numatics, the
                  Guarantors identified there, and First Trust National
                  Association, as trustee

(a) 4.1.2         Form of Series B Notes (including related Subsidiary
                  Guarantees by the Guarantors indentified in Indenture)

(c) 4.1.3         Supplemental Indenture, dated as of January 25, 1999, by which
                  Empire Air Systems, Inc. became a Guarantor

Page 41

<PAGE>

(f) 4.2.1         Loan and Security Agreement dated as of November 28, 2001
                  between LaSalle Business Credit, Inc., as the lender and
                  collateral agent, and Numatics, Incorporated,
                  Micro-Filtration, Inc., Numation, Inc., Numatech, Inc., Ultra
                  Air Products, Inc., Microsmith, Inc., and Empire Air Systems,
                  Inc., as the borrowers (exhibits and schedules omitted)

(f) 4.2.2         Joint and Several Revolving Note dated as of November 28, 2001
                  from each of the borrowers under the Loan and Security
                  Agreement to LaSalle Business Credit, Inc.

(f) 4.3.1         Credit Agreement dated as of November 28, 2001 between
                  Numatics Ltd. and LaSalle Business Credit, a division of ABN
                  AMRO Canada (exhibits and schedules omitted)

(f) 4.3.2         Revolving Promissory Note dated as of November 28, 2001 from
                  Numatics Ltd. to LaSalle Business Credit, a division of ABN
                  AMRO Bank Canada

(f) 4.4.1         Note Purchase Agreement dated November 28, 2001 among
                  Numatics, Incorporated, Numatics GmbH, Numatics Ltd.,
                  Micro-Filtration, Inc., Numation, Inc., Numatech, Inc., Ultra
                  Air Products, Inc., Microsmith, Inc., and Empire Air Systems,
                  Inc., American Capital Strategies, Ltd., and American Capital
                  Financial Services, Inc., as agent (exhibits and schedules
                  omitted)

    4.5.1         First Amendment to Loan and Security Agreement dated March 25,
                  2002 among Numatics, Incorporated, Micro-Filtration, Inc.,
                  Numation, Inc., Numatech, Inc., Ultra Air Products, Inc.,
                  Microsmith, Inc., Empire Air Systems, Inc., and LaSalle
                  Business Credit, Inc.

    4.5.2         First Amendment to Note Purchase Agreement dated March 29,
                  2002 among Numatics, Incorporated, Numatics, GmbH, Numatics
                  Ltd., and American Capital Financial Services, Inc.

(f) 4.4.2         Senior Secured Term A Note Due November 27, 2006 from
                  Numatics, Incorporated to American Capital Strategies, Ltd.

(f) 4.4.3         Senior Secured Term B Note Due November 27, 2006 from
                  Numatics, Incorporated to American Capital Strategies, Ltd.

(f) 4.4.4         Senior Secured Term A Note Due November 27, 2006 from Numatics
                  Ltd. to American Capital Strategies, Ltd.

(f) 4.4.5         Senior Secured Term A Note Due November 27, 2006 from Numatics
                  GmbH to American Capital Strategies, Ltd.

(a) 10.1.1        Securities Purchase Agreement, dated as of January 3, 1996,
                  between Numatics and Harvard Private Capital Holdings

(a) 10.1.2        Numatics, Incorporated Tag-Along and Drag-Along Agreement,
                  dated January 3, 1996, among Numatics, Harvard Private Capital
                  Holdings, and shareholders of Numatics

Page 42

<PAGE>

(a) 10.1.3        Registration Agreement, dated as of January 3, 1996, between
                  Numatics and Harvard Private Capital Holdings

(a) 10.1.4        Form of Guaranty Agreement between Harvard Private Capital
                  Holdings and I.A.E. Incorporated, dated as of March 23, 1998
                  (Each of the other guarantors has executed an Amended and
                  Restated Guaranty Agreement in substantially the same form.)

(a) 10.1.5        Agreement, dated as of March 23, 1998, between Numatics and
                  Harvard Private Capital Holdings

(a) 10.2          Amended and Restated Stock Transfer Agreement, dated December
                  28, 1995, among Numatics, John H. Welker, individually and as
                  trustee of the John H. Welker Trust u/a dtd December 28, 1995,
                  David K. Dodds, Donald E. McGeachy, Henry Fleischer,
                  individually and as trustee of the Henry Fleischer Trust u/a
                  dtd March 10, 1993, Robert P. Robeson, John A. Acuff, Bruce W.
                  Hoppe, David King, and Philip Robinson

(b) 10.2.1        First Amendment, dated June 30, 1998, to Amended and Restated
                  Stock Transfer Agreement

(a) 10.3          Voting Agreement, dated as November 29, 1990, among Numatics
                  (under its former name, Numatics Acquisition Corporation) and
                  certain shareholders of Numatics

(a) 10.4          Employment Agreement, dated January 3, 1996, between Numatics
                  and John H. Welker**

(a) 10.5          Numatics, Incorporated Amended and Restated Deferred
                  Compensation Plan, adopted December 28, 1995, and related
                  acknowledgements by Eligible Employees (as therein defined)**

(d) 10.6.1        Numatics, Incorporated Incentive Plan adopted June 29, 2000**

(d) 10.6.2        Form of Stock Transfer Agreement referred to in Incentive
                  Plan**

 21.1             List of subsidiaries of Numatics

 99.1             Consolidated Financial Statements--Numatics,
                  Incorporated--Years ended December 31, 2001, 2000 and 1999
                  with Report of Independent Auditors

Page 43

<PAGE>

(a)      Incorporated by reference to exhibit to Registration Statement on Form
         S-4 filed on April 29, 1998 (File No. 333-51355)

(b)      Incorporated by reference to Amendment No. 1 to Registration Statement
         on Form S-4 filed on July 10, 1998 (File No. 333-51355)

(c)      Incorporated by reference to exhibit to Annual Report on Form 10-K for
         the year ended December 31, 1998 (File No. 333-51355)

(d)      Incorporated by reference to exhibit to Quarterly Report on Form 10-Q
         for the quarter ended September 30, 2000 (File No. 333-51355)

(g)      Incorporated by reference to exhibit to Annual Report on Form 10-K for
         the year ended December 31, 1999 (File No. 333-51355)

(h)      Incorporated by reference to exhibit to Form 8-K filed on December 3,
         2001 (File No. 333-51355)

**       Indicates contract or compensatory plan or arrangement with one or more
         Numatics executive officers and/or directors

Page 44