SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K

[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

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 For the transition period from _________________ to
     _________________

Commission file number 1-5356

                     PENN ENGINEERING & MANUFACTURING CORP.
                     --------------------------------------
             (Exact name of registrant as specified in its charter)

           Delaware                                      23-0951065
------------------------------------                -------------------
(State or other jurisdiction of                      (I.R.S. employer
incorporation or organization)                      identification no.)

P.O. Box 1000, Danboro, Pennsylvania                       18916
------------------------------------                    -----------
(Address of principal executive offices)                (Zip code)

Registrant's telephone number, including area code:  (215) 766-8853
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

    Title of each class                Name of each exchange on which registered
    -------------------                -----------------------------------------
Class A Common Stock, $.01 par value   New York Stock Exchange
Common Stock, $.01 par value           New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:  None.

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 the 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]

As of March 1, 2002, the aggregate market value based on the closing sales price
on that date of the voting and non-voting common equity held by non-affiliates
of the Registrant was approximately $211,048,000.

Indicate the number of shares outstanding of each of the Registrant's classes of
common stock as of the latest practicable date: 13,991,645 shares of Common
Stock and 3,350,164 shares of Class A Common Stock outstanding on March 1, 2002.

                      DOCUMENTS INCORPORATED BY REFERENCE:

1.   Portions of the Registrant's 2001 Annual Report to Stockholders filed as
     Exhibit (13) are incorporated by reference in Items 1, 3, 5, 6, 7, 8, and
     14.

2.   Portions of the Proxy Statement for the Registrant's 2002 Annual Meeting of
     Stockholders filed with the Commission on March 15, 2002 are incorporated
     by reference in Items 10, 11, 12, and 13.


<PAGE>


                     PENN ENGINEERING & MANUFACTURING CORP.

                                   -----------

                            INDEX TO FORM 10-K REPORT

                                   -----------

                                                                           PAGE
                                                                           ----
I.    PART I.

      Item 1.    Business....................................................  1
      Item 2.    Properties..................................................  5
      Item 3.    Legal Proceedings...........................................  6
      Item 4.    Submission of Matters to a Vote of Security Holders.........  6
                 Executive Officers of the Registrant........................  6

II.   PART II.

      Item 5.    Market for Registrant's Common Equity and Related
                 Stockholder Matters.........................................  7
      Item 6.    Selected Financial Data.....................................  7
      Item 7.    Management's Discussion and Analysis of Financial
                 Condition and Results of Operations.........................  7
      Item 7A.   Quantitative and Qualitative Disclosure About Market Risk...  7
      Item 8.    Financial Statements and Supplementary Data.................  8
      Item 9.    Changes in and Disagreements with Accountants on
                 Accounting and Financial Disclosure.........................  8

III.  PART III.

      Item 10.   Directors and Executive Officers of the Registrant..........  9
      Item 11.   Executive Compensation......................................  9
      Item 12.   Security Ownership of Certain Beneficial Owners and
                 Management..................................................  9
      Item 13.   Certain Relationships and Related Transactions.............. 10

IV.   PART IV.

      Item 14.   Exhibits, Financial Statements and Schedules and
                   Reports on Form 8-K....................................... 10


<PAGE>

                                     PART I

ITEM 1.   BUSINESS.

          (A)  GENERAL DEVELOPMENT OF BUSINESS.

          The Registrant, a Delaware corporation, was incorporated in 1942. The
primary businesses of the Registrant are:

               (i) The development, manufacture, and sale through Registrant's
PEM[registered] Fastening Systems division ("PEM Fastening Systems") of
PEM[registered] self-clinching and broaching fasteners, inserts for plastics,
and automatic insertion equipment for such fasteners sold under the name
PEMSERTER[registered];

               (ii) The development, manufacture, and sale through the
Registrant's Pittman division ("Pittman") of permanent magnet brush-commutated
dc motors under the Pittman[registered] trademark, and electronically commutated
brushless dc servomotors under the Elcom[registered] trademark; and

               (iii) The distribution of fasteners and other components utilized
by original equipment manufacturers ("OEMs") and the provision of comprehensive
logistical and inventory management services through Arconix Group, Inc.
("Arconix Group"), which the Registrant commenced reporting as a separate
business segment for the fiscal year ended December 31, 2001.

          On February 5, 2001, the Registrant acquired all of the issued and
outstanding capital stock of Precision Steel Holdings, Ltd. and its subsidiary,
Precision Steel Components Ltd., whose name was changed in February 2002 to PEM
Fastening Systems/Europe Ltd. PEM Fastening Systems/Europe Ltd., which is
located in Galway, Ireland, is a manufacturer of screw machine products, serving
customers throughout Europe. The purchase price of approximately $17.4 million
consisted of cash, the assumption of certain liabilities and acquisition-related
expenses. The cash portion of the purchase price was financed with borrowings
under the Registrant's existing line of credit facilities.

          (B) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS.

          The answer to this Item is incorporated by reference to Note 12 of the
Notes to Consolidated Financial Statements "Financial Reporting for Business
Segments of the Registrant" on pages 22, 23, and 24 of the Registrant's 2001
Annual Report to Stockholders (the "Annual Report"), which is included as
Exhibit (13) to this Form 10-K Annual Report.

          (C) NARRATIVE DESCRIPTION OF BUSINESS.

          PEM Fastening Systems is the world's leading manufacturer of
self-clinching fasteners, which are used by the computer, data communications,
telecommunications, general electronics, automotive, and avionics industries.
PEM[registered] self-clinching fasteners were first developed by the
Registrant's founder in 1942. Self-clinching fasteners become an integral part
of the material in which they are installed and provide a reliable means of
attaching components to sheet metal.

                                       1


<PAGE>

Typical applications for the Registrant's fastener products include personal
computers, computer cabinetry, power supplies, instrumentation,
telecommunications equipment, and certain automobile parts, such as air bags and
windshield wipers.

          The Registrant's fasteners are primarily used by sheet metal
fabricators, which utilize the Registrant's fasteners to produce sub-assemblies
for OEMs. Both OEMs and their subcontractors seek fastening solutions that
provide lower total installed cost and are highly reliable, thereby lowering
production and service costs. The Registrant's application engineers, its
distributors and its independent distributors continually work in close
collaboration with OEMs and their subcontractors early in the design process to
determine appropriate fastener applications and to engineer fastening solutions.
This collaboration often results in OEMs specifying the Registrant's fasteners
in their products. Self-clinching fasteners generally compete against loose
hardware, such as nuts and bolts. Even though the Registrant's fasteners
typically sell at a premium to loose hardware, its fasteners generally result in
lower overall manufacturing costs for the end user.

          PEM Fastening Systems also manufactures and sells manual and automated
presses for fastener installation under the PEMSERTER[registered] trademark. The
rapid and accurate installation provided by PEMSERTER[registered] presses,
together with the Registrant's broad range of fastener products, provides the
Registrant's customers with a complete fastening system.

          Pittman produces high-quality, high-performance, permanent magnet dc
motors and electronically commutated brushless dc servomotors used in
light-weight precision electronics, medical, and manufacturing applications such
as archival storage, printing, copying, robotics, and medical diagnostic
equipment and centrifuges. Pittman's broad range of products are typically
adapted to the specific requirements of individual customers.

          Arconix Group is a global distribution organization that offers a
single source of supply for fastening and electronic hardware products and other
components utilized by OEMs and their subcontractors and also provides a broad
range of logistical and on-site inventory management services.

          The following table sets forth information with respect to the
percentage of total sales attributable to each of the Registrant's principal
products which accounted for 10% or more of consolidated revenues in each of the
fiscal years ended December 31, 1999, 2000, and 2001:

                                          Percentage of Total Sales
                                          -------------------------
          Year Ended
          December 31,        Fasteners           Motors        Distribution
          ------------        ---------           ------        ------------

             1999                82%                18%               *
             2000                84                 16                *
             2001                63                 18               19%

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

*    Prior to 2001, the sales of the distribution segment were included with
     those of the fastener segment.

          The Registrant's fastener products are sold through a worldwide
network of approximately 40 authorized independent distributors located in 36
countries, including the

                                       2


<PAGE>

Registrant's own subsidiaries in California, Singapore, England, and Mexico.
Many of the independent distributors and engineering representative
organizations have been affiliated with the Registrant for more than 20 years.
The Registrant's independent distributors, which maintain their own inventories
of the Registrant's products, typically sell other complementary industrial
components. The Registrant's return allowances, which are made through the
exchange of inventory, have generally averaged less than 1% of sales. The
Registrant supplies its customers and distributors through warehouses in Oxnard,
California, Doncaster, England, Singapore and Guadalajara, Mexico in addition to
maintaining an inventory at its Danboro, Pennsylvania facility.

          Domestic and European sales of Pittman motors are made through
independent sales representatives.

          During the year ended December 31, 2001, conditions in the domestic
market for fasteners continued to be highly competitive. It is not possible to
determine with accuracy the relative competitive position of PEM Fastening
Systems in the market for self-clinching, broaching, and insert fasteners. The
Registrant believes that PEM Fastening Systems has maintained its market share
during 2001. Approximately ten other companies are known to be competing with
the Registrant in the manufacture and sale of such fasteners, some of which also
manufacture products other than self-clinching, broaching, and insert fasteners.

          The Registrant also believes that Pittman has maintained its
competitive position in the dc motor market in 2001 and that Arconix Group has
maintained its competitive position in the distribution and inventory management
services arena in 2001.

          Among PEM Fastening Systems' principal customers for fasteners and
PEMSERTER[registered] presses are manufacturers of business machines, personal
computers, computer peripherals, electronic and communications equipment,
electrical equipment, industrial controls instrumentation, vending machines,
automotive subcontractors, and other fabricated metal products. Pittman's
principal customers for the dc motors and servomotors are manufacturers of mass
data storage units, automated production equipment, instruments, computer
peripherals, business machines, and medical equipment. Arconix Group's customers
are generally the same as those of PEM Fastening Systems. In the opinion of the
Registrant, no material part of its business is dependent upon a single customer
or a few customers, the loss of any one or more of which would have a material
adverse effect on the business of the Registrant. However, sales of fasteners to
one of the Registrant's authorized distributors totaled approximately
$25,354,000 for the year ended December 31, 1999, $32,557,000 for the year ended
December 31, 2000, and $22,105,000 for the year ended December 31, 2001, or
approximately 13%, 12%, and 12%, respectively, of the Registrant's consolidated
net sales during such years.

          As of December 31, 2001, the Registrant had an order backlog of
$24,028,000 compared with $98,998,000 as of December 31, 2000. The Registrant
estimates that substantially all of its backlog as of December 31, 2001 will be
shipped during its fiscal year ending December 31, 2002.

          The raw materials used by the Registrant are generally available in
adequate supply.

          The Registrant holds a number of patents and trademarks, and has
patent applications pending in the United States and various foreign countries.
Management believes, however, that the

                                       3


<PAGE>

Registrant's business is not materially dependent on any patent or group of
patents. The principal trademarks of the Registrant are registered in the United
States and various foreign countries.

          Research and development is carried on by the operating personnel of
the Registrant on a continuing basis. The amounts expended for research and
development for the fiscal years ended December 31, 1999, 2000, and 2001 were
approximately $4,727,000, $5,635,000, and $5,111,000, respectively.

          The Registrant believes that compliance with federal, state, and local
laws and regulations that have been enacted or adopted regulating the discharge
of materials into the environment, or otherwise relating to the protection of
the environment, will not have a material adverse effect upon the earnings or
competitive position of the Registrant.

          As of December 31, 2001, 1,344 persons were employed by the
Registrant, 313 fewer than were employed as of December 31, 2000. The Registrant
believes that its labor rates are comparable to those of its competitors and
that the Registrant's relations with its employees are good. The Registrant does
not consider its business to be seasonal in any material respect, nor is any
material portion of the Registrant's business subject to the renegotiation of
profits or termination of contracts at the election of the Government.

          (D)  FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND
               EXPORT SALES.

          The answer to this Item is incorporated by reference to Note 12
"Financial Reporting for Business Segments of the Company" on pages 22, 23 and
24 of the Annual Report. All foreign sales, except for those of Arconix/UK Ltd.,
Arconix/Singapore Pte Ltd., and PEM Fastening Systems/Europe Ltd. (formerly
known as Precision Steel Components Ltd.), are sold F.O.B., the Registrant's
United States factory, payable in U.S. dollars. Sales in the United Kingdom and
Western Europe are made through the Registrant's wholly owned subsidiaries,
Arconix/UK Ltd. and PEM Fastening Systems/Europe Ltd., and are denominated in
pounds sterling, Irish pounds, U.S. dollars, and Euros. Sales in the Pacific Rim
are made through the Registrant's wholly owned subsidiary, Arconix/Singapore Pte
Ltd., and are denominated in Singapore dollars and U.S. dollars. In 2002, the
Registrant will commence selling in Mexico through its Arconix/Mexico affiliate,
which sales will be denominated in U.S. dollars and Mexican pesos. All foreign
sales are subject to special risks of exchange controls and restrictions on the
repatriation of funds and also may be affected by the imposition or increase of
taxes and/or tariffs and international instability.

          RISK FACTORS

          MANY OF THE COMPANY'S CUSTOMERS ARE IN CYCLICAL INDUSTRIES, AND THEIR
PURCHASES FROM THE COMPANY TEND TO DECLINE DURING PERIODS OF ECONOMIC SLOWDOWN.

          A majority of the Company's revenues are derived from customers and
OEMs that are in industries and businesses that are cyclical in nature and
subject to change in general economic conditions, such as business machines,
personal computers, computer peripherals, electronic and communications
equipment, and other electronic equipment. Demand for the Company's products is
affected by the business success of the Company's OEM and indirect customers who
purchase

                                       4


<PAGE>

products from those OEM customers. General economic or industry-specific
downturns could have a material adverse effect on the Company and its business,
results of operations, and financial condition.

          THE COMPANY'S FOREIGN OPERATIONS ARE SUBJECT TO NUMEROUS RISKS,
INCLUDING CURRENCY FLUCTUATIONS AND OTHER RISKS THAT MAY IMPACT THE COMPANY'S
RESULTS OF OPERATIONS.

          Foreign sales accounted for approximately 26% of the Company's 2001
consolidated sales. Because not all of the Company's sales and expenses are
incurred in U.S. dollars, the Company's operations have been and may continue to
be affected by fluctuations in currency exchange rates. Furthermore, currency
fluctuations may cause reported sales to fluctuate from period to period
regardless of the fluctuation in the volume of such sales in foreign currencies.
The Company purchases forward foreign currency exchange contracts to attempt to
insulate the Company from the impact of foreign currency exchange rate
fluctuations. See Item 7A "Quantitative and Qualitative Disclosure About Market
Risk" in this Form 10-K Annual Report.

          Foreign sales are subject to numerous other risks, including political
and economic instability in foreign markets, restrictive trade policies of
foreign governments, economic conditions in local markets, the imposition of
product tariffs, and the burdens of complying with a wide variety of
international and U.S. export laws.

ITEM 2.   PROPERTIES.

          The Registrant's principal plants and offices, all of which (other
than the Singapore and Mexico offices) were owned by the Registrant, were as
follows:

<TABLE>
<CAPTION>

     LOCATION                     SIZE OF FACILITY                USE OF FACILITY
     --------                     ----------------                ---------------

<S>                               <C>                             <C>
Danboro, Pennsylvania             230,000 sq. ft building         Executive offices and
                                  on 107 acres                    manufacture of fasteners

Winston-Salem,                    120,000 sq. ft. building        Manufacture of fasteners
North Carolina                    on 16.3 acres; and
                                  58,280 sq. ft. building
                                  on 6 acres

Kent, Ohio                        75,000 sq. ft. building         Manufacture of fasteners
                                  on 10 acres

Harleysville, Pennsylvania        58,000 sq. ft. building         Manufacture of dc motors
                                  on 6 acres

Galway, Ireland                   55,000 sq. ft. building         Manufacture of fasteners
                                  on 2 acres

Bedminster, Pennsylvania          51,000 sq. ft. building         Manufacture of installation
                                  on 10 acres                     presses and tooling

</TABLE>

                                       5

<PAGE>

<TABLE>
<CAPTION>


LOCATION                          SIZE OF FACILITY                USE OF FACILITY
--------                          ----------------                ---------------

<S>                               <C>                             <C>
Oxnard, California                30,600 sq. ft. building         Office and warehouse for
                                  on 2 acres                      the distribution of fasteners
                                                                  and related components

Doncaster, England                33,250 sq. ft. building         Office and warehouse for
                                  on 5 acres                      the distribution of fasteners
                                                                  and related components

</TABLE>

          The Registrant has also leased 9,758 sq. ft. of office and warehouse
space in Guadalajara, Mexico and 7,000 sq. ft. of office and warehouse space in
Singapore. The Registrant carries fire, casualty, business interruption, and
public liability insurance for all of its facilities in amounts which are deemed
adequate.

ITEM 3.   LEGAL PROCEEDINGS.

          The answer to this Item is incorporated by reference to Note 11 of
Notes to Consolidated Financial Statements "Commitments & Contingencies" on page
22 of the Annual Report.

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

          None.

          EXECUTIVE OFFICERS OF THE REGISTRANT

          Certain information about the executive officers of the Registrant is
as follows:

NAME                       AGE   POSITION HELD WITH THE REGISTRANT
----                       ---   ---------------------------------

Kenneth A. Swanstrom       62    Chairman of the Board and
                                 Chief Executive Officer

Martin Bidart              65    President and Chief Operating Officer

Mark W. Simon              63    Senior Vice President, Chief Financial Officer,
                                 and Corporate Secretary

Raymond L. Bievenour       58    Vice President - Corporate Business
                                 Development

Royce C. Sturdevant        41    Vice President - Corporate Quality

Francis P. Wilson          62    President - PEM Fastening Systems

Kent R. Fretz              64    President - Pittman

                                       6

<PAGE>


NAME                       AGE   POSITION HELD WITH THE REGISTRANT
----                       ---   ---------------------------------

Richard F. Davies          52    Treasurer and Assistant Secretary

William E. Sarnese         48    Corporate Controller and Assistant Secretary

          All of the executive officers of the Registrant have been principally
employed as officers or employees of the Registrant for more than the past five
years, except for Messrs. Sturdevant and Wilson. Mr. Sturdevant was hired on
August 2, 1999 and has an extensive background in quality control with several
major multinational companies. Mr. Wilson was hired on June 23, 1997. From 1993
until he joined the Registrant, Mr. Wilson was Director of Engineering for the
International Division of Emhart Fastening Technologies, a subsidiary of Black &
Decker.

          The executive officers of the Registrant are elected each year at the
Organization Meeting of the Board of Directors of the Registrant, which is held
following the Annual Meeting of Stockholders.


                                     PART II

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

          The Registrant's common stock (non-voting), par value $0.01, is traded
on the New York Stock Exchange under the symbol "PNN." The Registrant's Class A
common stock (voting), par value $0.01, is traded on the New York Stock Exchange
under the symbol "PNNA." As of March 1, 2002, there were 510 holders of record
of the Registrant's common stock and 355 holders of record of the Registrant's
Class A common stock. Additional information with respect to this Item 5 is
incorporated by reference to page 13 of the Annual Report.

ITEM 6.   SELECTED FINANCIAL DATA.

          The Five-Year Financial Data and other financial information for the
Registrant is incorporated by reference to page 9 of the Annual Report.

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

          The answer to this Item is incorporated by reference to pages 10
through 12 of the Annual Report.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

          The Registrant's earnings and cash flow are subject to fluctuations
due to changes in foreign currency exchange rates and interest rates. The
Registrant manages its exposures to changes in foreign currency exchange rates
on certain firm sales commitments and anticipated, but not yet committed sales,
by entering into foreign currency forward contracts and foreign currency option

                                       7

<PAGE>

contracts. The Registrant's risk management objective is to reduce its exposure
to the effect of changes in exchange rates on sales revenue over quarterly time
horizons. To a certain extent, foreign currency rate movements also affect the
Registrant's competitive position, as exchange rate changes may affect business
practices and/or pricing strategies of non-U.S. based competitors. The
Registrant's foreign currency risk policies entail entering into foreign
currency derivative instruments only to manage risk, and not for speculative
investments.

          Annually, Registrant's financial officers approve the outlook for
expected currency exchange rate movements, as well as the policy on desired
future foreign currency cash flow positions (i.e., long, short, balanced) for
those currencies where there is significant activity. These officers receive
reports on open foreign currency hedges on a regular basis. Expected future cash
flow positions and strategies are continuously monitored. Foreign exchange
practices, including the use of derivative financial instruments, are reviewed
with the Audit Committee of the Registrant's Board of Directors at least
annually.

          Considering both the anticipated cash flows from firm sales
commitments plus anticipated sales for the next quarter and the foreign currency
derivative instruments in place at year end, a hypothetical 10% weakening of the
U.S. dollar relative to all other currencies would not materially adversely
affect expected 2002 earnings or cash flows. This analysis is dependent on
actual export sales during the next quarter occurring within 90% of the budgeted
forecasts. The effect of the hypothetical change in exchange rates ignores the
effect that this movement may have on other variables including competitive
risk. If it were possible to quantify this competitive impact, the results could
well be different from the sensitivity effect mentioned above. In addition, it
is unlikely that all currencies would uniformly strengthen or weaken relative to
the U.S. dollar. In reality, some currencies may weaken while others strengthen.

          The Registrant does not believe that its earnings will be exposed to
changes in short-term interest rates because the Registrant has entered into
interest rate swap agreements in 2002 for substantially all of its short and
long-term debt at an average rate of approximately 3.7%. A small portion of
current debt as well as any additional debt incurred in 2002, for working
capital or acquisitions, may affect the Registrant's earnings due to potential
interest rate risk. The fair values of the Registrant's bank loans are not
significantly affected by changes in market interest rates. The change in fair
value of the Registrant's long-term debt resulting from a hypothetical 10%
change in interest rates is not material.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

          The answer to this Item is incorporated by reference to pages 13
through 24 of the Annual Report.

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

          None.

                                       8

<PAGE>

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

          The response to this Item with respect to the Registrant's directors
is incorporated by reference to pages 5 through 6 of the proxy statement
relating to the Registrant's 2002 annual meeting of stockholders to be held
April 25, 2002 (the "Proxy Statement"). Information with respect to executive
officers of the Registrant is included in Part I of this Form 10-K Annual
Report.

ITEM 11.  EXECUTIVE COMPENSATION.

          The response to this Item is incorporated by reference to pages 7
through 12 of the Proxy Statement, other than the "Report of the Compensation
Committee of the Board of Directors" and the "Performance Graph," which are not
incorporated by reference into this Form 10-K Annual Report.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

          The response to this Item is incorporated by reference to pages 2
through 4 of the Proxy Statement.

          The following table sets forth information regarding equity
compensation plans of the Registrant. Only shares of the Registrant's common
stock (non-voting) may be issued under the Registrant's equity compensation
plans. The Registrant does not have any equity compensation plans that have not
been approved by the stockholders of the Registrant.


<TABLE>
<CAPTION>

                      EQUITY COMPENSATION PLAN INFORMATION

                                                                                           Number of securities
                                                                                         remaining available for
                                    Number of securities                                  future issuance under
                                     to be issued upon           Weighted-average          equity compensation
                                        exercise of              exercise price of           plans (excluding
                                   outstanding options,         outstanding options,       securities reflected
     Plan category                 warrants and rights          warrants and rights           in column (a))
     -------------                 -------------------          -------------------           --------------
                                           (a)                        (b)                           (c )
<S>                                     <C>                         <C>                          <C>
Equity compensation
plans approved by                       1,947,286                   $14.33                       1,100,862
security holders

Equity compensation
plans not approved by                       --                         --                            --
security holders

         Total                          1,947,286                   $14.33                       1,100,862

</TABLE>

                                       9

<PAGE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

          Not applicable.


                                     PART IV

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

          (A)  FINANCIAL STATEMENTS, FINANCIAL SCHEDULES AND EXHIBITS FILED.

               1. CONSOLIDATED FINANCIAL STATEMENTS.

               The following Consolidated Financial Statements of the Registrant
and its subsidiaries are filed as part of this Form 10-K Report:

<TABLE>
<CAPTION>

                                                                                     PAGE
                                                                                     ----

                  <S>                                                              <C>
                  Consolidated Balance Sheets at December 31, 2001 and 2000           14*

                  Statements of Consolidated Income                                   15*
                  for the years ended December 31, 2001, 2000, and 1999.

                  Statements of Changes in Consolidated Stockholders' Equity          16*
                  for the years ended December 31, 2001, 2000, and 1999.

                  Statements of Consolidated Cash Flows for the years                 17*
                  ended December 31, 2001, 2000, and 1999.

                  Notes to Consolidated Financial Statements.                      18-24*

                  Independent Auditors' Report.                                       24*
</TABLE>

-------------------
*    Refers to the respective pages of the Annual Report. With the exception of
     the portions of such Annual Report specifically incorporated by reference
     in this Item, and in Items 1, 3, 5, 6, 7, and 8 hereof, such Annual Report
     shall not be deemed filed as a part of this Form 10-K Report or otherwise
     deemed subject to the liabilities of Section 18 of the Securities Exchange
     Act of 1934.

               2. FINANCIAL SCHEDULES.

               None.

               3. EXHIBITS.

               Reference is made to the Exhibit Index on page 13 of this Form
10-K.

          (B)  REPORTS ON FORM 8-K.

               Form 8-K Current Report filed with the Securities and Exchange
Commission on January 8, 2002 disclosing information under Item 5.

                                       10

<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.

                                  PENN ENGINEERING &
                                  MANUFACTURING CORP.


Date:  March 15, 2002             By:/s/ Kenneth A. Swanstrom
                                     -------------------------------------------
                                     Kenneth A. Swanstrom,
                                     Chairman and Chief Executive Officer

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

<TABLE>
<CAPTION>


    SIGNATURE                                         TITLE                                     DATE
    ----------                                        -----                                     ----

<S>                                            <C>                                        <C>
/s/ Kenneth A. Swanstrom                       Chairman of the Board,                     March 15, 2002
----------------------------------------       Chief Executive Officer,
Kenneth A. Swanstrom                           and Director (Principal
                                               Executive Officer)


/s/ Mark Bidart                                President, Chief Operating                 March 15, 2002
----------------------------------------       Officer, and Director (Principal
Martin Bidart                                  Operating Officer)


/s/ Mark W. Simon                              Senior Vice President, Chief               March 15, 2002
----------------------------------------       Financial Officer, Corporate
Mark W. Simon                                  Secretary, and Director
                                               (Principal Financial
                                               and Accounting Officer)


/s/ Willard S. Boothby, Jr.                    Director                                   March 15, 2002
----------------------------------------
Willard S. Boothby, Jr.

/s/ Lewis W. Hull                              Director                                   March 15, 2002
----------------------------------------
Lewis W. Hull

/s/ Thomas M. Hyndman, Jr.                     Director                                   March 15, 2002
----------------------------------------
Thomas M. Hyndman, Jr.

/s/ Maurice D. Oaks                            Director                                   March 15, 2002
----------------------------------------
Maurice D. Oaks

/s/ John J. Sickler                            Director                                   March 15, 2002
----------------------------------------
John J. Sickler

/s/ Charles R. Smith                           Director                                   March 15, 2002
----------------------------------------
Charles R. Smith

/s/ Daryl L. Swanstrom                         Director                                   March 15, 2002
----------------------------------------
Daryl L. Swanstrom

</TABLE>

                                       11

<PAGE>


                     PENN ENGINEERING & MANUFACTURING CORP.
                     --------------------------------------

                                  EXHIBIT INDEX
                                  -------------


 Item                      Description
 ----             -----------------------------

(3)(i)            Restated Certificate of Incorporation of the Registrant.
                  (Incorporated by reference to Exhibit 3.1 of the
                  Registrant's Form 10-Q Quarterly Report for the period ended
                  March 31, 2001.)

(3)(ii)           By-laws of the Registrant, as amended.

(10)(i)           Right of First Refusal dated as of September 5, 1986 between
                  the Registrant and Lawrence W. Swanstrom and Daryl L.
                  Swanstrom. (Incorporated by reference to Exhibit A to the
                  Registrant's Form 8-K Current Report dated September 5,
                  1986, the date of the earliest event reported.)

(10)(ii)          1996 Equity Incentive Plan. (Incorporated by reference to the
                  Registrant's Form S-8 Registration Statement No. 333-20101
                  filed with the Securities and Exchange Commission on January
                  21, 1997.)

(10)(iii)         1996 Employee Stock Purchase Plan. (Incorporated by reference
                  to the Registrant's Form S-8 Registration Statement No.
                  333-13073 filed with the Securities and Exchange Commission
                  on September 30, 1996.)

(10)(iv)          1998 Stock Option Plan for Non-Employee Directors.
                  (Incorporated by reference to the Registrant's Form S-8
                  Registration Statement No. 333- 92907 filed with the
                  Securities and Exchange Commission on December 16, 1999.)

(10)(v)           1999 Employee Stock Option Plan. (Incorporated by reference to
                  the Registrant's Form S-8 Registration Statement No.
                  333-92903 filed with the Securities and Exchange Commission
                  on December 16, 1999.)

(13)              2001 Annual Report to Stockholders. (Only those pages
                  expressly incorporated by reference in Items 1, 3, 5, 6, 7,
                  8, and 14 of this Form 10-K report.)

(21)              Subsidiaries of the Registrant.

(23)              Independent Auditor's Consent.


                                       12


<PAGE>