**UNITEDSTATES**

**SECURITIESAND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

----

**FORM 10-Q**

**QUARTERLYREPORT UNDERSECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934**

----

| **x**      |   | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**                                                                                    |
|------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                                                                                      |
|       |   | **For the quarterly period ended July 1, 2006**                                                                                                                                      |
|       |   |                                                                                                                                                                                      |
| **OR**     |
|       |   |                                                                                                                                                                                      |
| **o**      |   | **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: 333-110531**

**NORCROSSSAFETY PRODUCTS L.L.C.**

(Exact name of registrantas specified in its charter)

| **Delaware**                                                    |   | **61-1283304**                        |
|-----------------------------------------------------------------|--------|---------------------------------------|
| (State or other  jurisdiction of incorporation or organization) |   | (I.R.S. Employer  Identification No.) |
| ** **                                                      |   | ** **                            |
| **2001  Spring Road, Suite 425 Oak Brook, Illinois**       |   | **60523**                             |
| (Address of  Principal Executive Offices)                       |   | (Zip Code)                            |
| ** **                                                      |   | ** **                            |
| Registrant’s  telephone number, including area code:       |
| **(630)  572-5715**                                             |

Indicateby check mark whether the Registrant (1) has filed all reports required tobe filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90 days.  Yes x   No o

Indicateby check mark whether the Registrant is a large accelerated filer, anaccelerated filer, or a non-accelerated. See definition of “accelerated filerand large accelerated filer” in Rule 12b-2 of the Exchange Act.

Largeaccelerated filer  o  Accelerated filer  o  Non-accelerated filer  x

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2of the Exchange Act). Yes o  No x

On August 14, 2006 Norcross Safety Products L.L.C. had 100 unitsoutstanding, all of which were owned by a holding company.

 

----

**NORCROSS SAFETY PRODUCTS L.L.C.FORM 10-Q QUARTERLY REPORT**

**For the Quarterly Period Ended July1, 2006**

**TABLEOF CONTENTS**
| **PART I Financial Information**  |   |                                                                                                |
|-----------------------------------|--------|-----------------------------------------------------------------------------------------------------|
|                              |   |                                                                                                |   |   |
|                              |   | Item 1. Financial Statements  (Unaudited)                                                           |   | 1 |
|                              |   |                                                                                                |   |   |
|                              |   | Consolidated  Balance Sheets                                                                        |   | 1 |
|                              |   |                                                                                                |   |   |
|                              |   | Consolidated  Statements of Operations                                                              |   | 2 |
|                              |   |                                                                                                |   |   |
|                              |   | Consolidated  Statements of Cash Flows                                                              |   | 3 |
|                              |   |                                                                                                |   |   |
|                              |   | Item 2. Management’s  Discussion and Analysis of Financial Condition and Results of Operations |   | 18 |
|                              |   |                                                                                                |   |   |
|                              |   | Item 3. Quantitative and  Qualitative Disclosures About Market Risk                                 |   | 27 |
|                              |   |                                                                                                |   |   |
|                              |   | Item 4. Controls and Procedures                                                                     |   | 28 |
|                              |   |                                                                                                |   |   |
| **PART II Other Information**     |   | 29                                                                                                  |
|                              |   |                                                                                                |   |   |
|                              |   | Item 1. Legal Proceedings                                                                           |   | 29 |
|                              |   |                                                                                                |   |   |
|                              |   | Item 1A. Risk Factors                                                                               |   | 31 |
|                              |   |                                                                                                |   |   |
|                              |   | Item 6. Exhibits                                                                                    |   | 34 |
|                              |   |                                                                                                |   |   |
| **Signatures**                    |   | 35                                                                                                  |
|                              |   |                                                                                                |   |   |
| **Form 10-Q Listing of Exhibits** |   | 36                                                                                                  |

 

i

----

**PART IFINANCIAL INFORMATION**

**Item 1. Financial Statements(Unaudited)**

**NORCROSS SAFETY PRODUCTS L.L.C.**

**CONSOLIDATED BALANCE SHEETS**

**(Amounts in Thousands) (Unaudited)**
| ** **                                                                                | ** ** | **Successor**         | ** ** |
|-------------------------------------------------------------------------------------------|------------|-----------------------|------------|
| ** **                                                                                | ** ** | **December 31,** | ** ** | **July 1,** | ** ** |
| ** **                                                                                | ** ** | **2005 (1)**     | ** ** | **2006** | ** ** |
| **Assets**                                                                                | ** ** | ** **            | ** ** | ** ** | ** ** |
| Current assets:                                                                           |       |                  |       |   |   |
| Cash and cash  equivalents                                                                |       | $                     | 20,683     |   | $ | 9,111 |   |
| Accounts  receivable, less allowance of $2,317 and $2,428 in 2005 and 2006,  respectively |       | 68,286                |       | 81,424 |   |
| Inventories                                                                               |       | 93,462                |       | 112,721 |   |
| Deferred income  taxes                                                                    |       | 3,230                 |       | 3,230 |   |
| Prepaid expenses  and other current assets                                                |       | 3,135                 |       | 3,626 |   |
| Total current assets                                                                      |       | 188,796               |       | 210,112 |   |
| Property, plant and  equipment, net                                                       |       | 67,315                |       | 71,090 |   |
| Deferred financing  costs, net                                                            |       | 7,513                 |       | 7,057 |   |
| Goodwill, net                                                                             |       | 136,487               |       | 160,141 |   |
| Other intangible  assets, net                                                             |       | 276,842               |       | 274,083 |   |
| Other noncurrent assets                                                                   |       | 5,109                 |       | 5,222 |   |
| Total assets                                                                              |       | $                     | 682,062    |   | $ | 727,705 |   |
|                                                                                      |       |                  |       |   |   |
| **Liabilities and member’s equity**                                                  | ** ** | ** **            | ** ** | ** ** | ** ** |
| Current liabilities:                                                                      |       |                  |       |   |   |
| Accounts payable                                                                          |       | $                     | 21,229     |   | $ | 27,007 |   |
| Accrued expenses                                                                          |       | 34,683                |       | 38,309 |   |
| Current  maturities of long-term obligations                                              |       | 2,735                 |       | 3,163 |   |
| Total current  liabilities                                                                |       | 58,647                |       | 68,479 |   |
| Pension,  post-retirement and deferred compensation                                       |       | 32,340                |       | 31,637 |   |
| Long-term obligations                                                                     |       | 309,664               |       | 323,780 |   |
| Other noncurrent  liabilities                                                             |       | 5,376                 |       | 7,353 |   |
| Deferred income taxes                                                                     |       | 52,496                |       | 51,858 |   |
| Minority interest                                                                         |       | 176                   |       | 191 |   |
|                                                                                      |       | 400,052               |       | 414,819 |   |
| Member’s equity:                                                                     |       |                  |       |   |   |
| Contributed  capital                                                                      |       | 221,068               |       | 222,298 |   |
| Retained  earnings                                                                        |       | 308                   |       | 13,182 |   |
| Accumulated  other comprehensive income                                                   |       | 1,987                 |       | 8,927 |   |
| Total member’s equity                                                                |       | 223,363               |       | 244,407 |   |
| Total liabilities and member’s equity                                                |       | $                     | 682,062    |   | $ | 727,705 |   |

 

----

(1)          December 31, 2005balances were obtained from audited financial statements.

*See notes to unaudited consolidated financialstatements.*

1

----

**NORCROSSSAFETY PRODUCTS L.L.C.**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(Amountsin Thousands) (Unaudited)**
| ** **                                                                                                                                                                                         | ** ** | **Predecessor**                  | ** ** | **Successor**                  | ** ** | **Predecessor**        | ** ** | **Successor**          | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------|------------|--------------------------------|------------|------------------------|------------|------------------------|------------|
| ** **                                                                                                                                                                                         | ** ** | **Three months ended** | ** ** | **Six months ended** | ** ** |
| ** **                                                                                                                                                                                         | ** ** | **July 2,  2005**           | ** ** | **July 1,  2006**         | ** ** | **July 2,  2005** | ** ** | **July 1,  2006** | ** ** |
| Net sales                                                                                                                                                                                          |       | $                                | 118,126    |                           | $          | 136,246                |       | $                      | 238,070    |   | $ | 278,122 |   |
| Cost of goods  sold                                                                                                                                                                                |       | 73,457                           |       | 83,334                         |       | 149,059                |       | 171,479                |       |
| Gross profit                                                                                                                                                                                       |       | 44,669                           |       | 52,912                         |       | 89,011                 |       | 106,643                |       |
| Operating  expenses:                                                                                                                                                                               |       |                             |       |                           |       |                   |       |                   |       |
| Selling                                                                                                                                                                                            |       | 10,978                           |       | 13,239                         |       | 22,356                 |       | 26,114                 |       |
| Distribution                                                                                                                                                                                       |       | 6,346                            |       | 8,061                          |       | 12,620                 |       | 15,987                 |       |
| General and administrative, excludes amortization of  intangibles and includes $280 and $1,080 of management incentive compensation  for the three and six months ended July 1, 2006, respectively |       | 11,250                           |       | 12,711                         |       | 22,193                 |       | 26,628                 |       |
| Amortization of intangibles                                                                                                                                                                        |       | 141                              |       | 2,741                          |       | 283                    |       | 5,467                  |       |
| Total operating  expenses                                                                                                                                                                          |       | 28,715                           |       | 36,752                         |       | 57,452                 |       | 74,196                 |       |
| Income from  operations                                                                                                                                                                            |       | 15,954                           |       | 16,160                         |       | 31,559                 |       | 32,447                 |       |
| Other expense  (income):                                                                                                                                                                           |       |                             |       |                           |       |                   |       |                   |       |
| Interest expense                                                                                                                                                                                   |       | 5,682                            |       | 6,616                          |       | 11,281                 |       | 13,078                 |       |
| Interest income                                                                                                                                                                                    |       | (165                             | )          | (167                           | )          | (415                   | )          | (330                   | )          |
| Other, net                                                                                                                                                                                         |       | 436                              |       | (169                           | )          | 822                    |       | (540                   | )          |
| Income before  income taxes and minority interest                                                                                                                                                  |       | 10,001                           |       | 9,880                          |       | 19,871                 |       | 20,239                 |       |
| Income tax  expense                                                                                                                                                                                |       | 2,093                            |       | 3,413                          |       | 3,667                  |       | 6,967                  |       |
| Minority  interest                                                                                                                                                                                 |       | 7                                |       | 4                              |       | 11                     |       | 15                     |       |
| Net income                                                                                                                                                                                         |       | $                                | 7,901      |                           | $          | 6,463                  |       | $                      | 16,193     |   | $ | 13,257 |   |

 

*Seenotes to unaudited consolidated financial statements.*

2

----

**NORCROSS SAFETY PRODUCTS L.L.C.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Amounts in Thousands) (Unaudited)**
| ** **                                                                         | ** ** | **Predecessor**                | ** ** | **Successor**          | ** ** |
|------------------------------------------------------------------------------------|------------|--------------------------------|------------|------------------------|------------|
| ** **                                                                         | ** ** | **Six months ended** | ** ** |
| ** **                                                                         | ** ** | **July 2,  2005**         | ** ** | **July 1,  2006** | ** ** |
| **Operating  activities**                                                          |       |                           |       |                   |       |
| Net income                                                                         |       | $                              | 16,193     |                   | $          | 13,257 |   |
| Adjustments to  reconcile net income to net cash provided by operating activities: |       |                           |       |                   |       |
| Depreciation                                                                       |       | 5,311                          |       | 6,496                  |       |
| Amortization of intangibles                                                        |       | 283                            |       | 5,467                  |       |
| Amortization of deferred financing costs                                           |       | 922                            |       | 657                    |       |
| Amortization of original issue discount (premium)                                  |       | 50                             |       | (508                   | )          |
| Deferred income taxes                                                              |       | (153                           | )          | 140                    |       |
| Minority interest                                                                  |       | 11                             |       | 15                     |       |
| Management incentive compensation                                                  |       | —                         |       | 1,080                  |       |
| Gain on sale of property, plant and equipment                                      |       | —                         |       | (67                    | )          |
| Changes in operating assets and liabilities:                                       |       |                           |       |                   |       |
| Accounts receivable                                                                |       | (6,587                         | )          | (10,607                | )          |
| Inventories                                                                        |       | (1,731                         | )          | (15,739                | )          |
| Prepaid expenses and other current assets                                          |       | 222                            |       | (166                   | )          |
| Other noncurrent assets                                                            |       | (219                           | )          | 11                     |       |
| Accounts payable                                                                   |       | 1,165                          |       | 4,405                  |       |
| Accrued expenses                                                                   |       | (138                           | )          | 1,880                  |       |
| Pension, postretirement and deferred compensation                                  |       | (101                           | )          | (729                   | )          |
| Other noncurrent liabilities                                                       |       | (28                            | )          | (22                    | )          |
| Other                                                                              |       | 12                             |       | (6                     | )          |
| Net cash  provided by operating activities                                         |       | 15,212                         |       | 5,564                  |       |
|                                                                               |       |                           |       |                   |       |
| **Investing  activities**                                                          |       |                           |       |                   |       |
| Purchase of  businesses, net of cash acquired                                      |       | (605                           | )          | (26,998                | )          |
| Purchases of  property, plant and equipment                                        |       | (3,478                         | )          | (4,787                 | )          |
| Proceeds from  sale of property, plant and equipment                               |       | —                         |       | 113                    |       |
| Net cash used in  investing activities                                             |       | (4,083                         | )          | (31,672                | )          |
|                                                                               |       |                           |       |                   |       |
| **Financing  activities**                                                          |       |                           |       |                   |       |
| Payments for  deferred financing costs                                             |       | —                         |       | (201                   | )          |
| Proceeds from  borrowings                                                          |       | —                         |       | 15,000                 |       |
| Payments of debt                                                                   |       | (13,637                        | )          | (948                   | )          |
| Capital  contribution                                                              |       | —                         |       | 150                    |       |
| Due from NSP  Holdings L.L.C.                                                      |       | (422                           | )          | —                 |       |
| Dividends to NSP  Holdings L.L.C.                                                  |       | (9                             | )          | —                 |       |
| Dividends to  Safety Product Holdings, Inc.                                        |       | —                         |       | (383                   | )          |
| Net cash (used  in) provided by financing activities                               |       | (14,068                        | )          | 13,618                 |       |
| Effect of  exchange rate changes on cash                                           |       | (3,448                         | )          | 918                    |       |
| Net decrease in  cash and cash equivalents                                         |       | (6,387                         | )          | (11,572                | )          |
| Cash and cash  equivalents at beginning of period                                  |       | 35,731                         |       | 20,683                 |       |
| Cash and cash  equivalents at end of period                                        |       | $                              | 29,344     |                   | $          | 9,111 |   |

 

*Seenotes to unaudited consolidated financial statements*

3

----

**NORCROSSSAFETY PRODUCTS L.L.C.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Amounts in Thousands) (Unaudited)**

**1.**                 Transactions

On July 19, 2005, Norcross Safety Products L.L.C. (the “Company” or “Norcross”)announced the closing of the transaction under which it was acquired by SafetyProducts Holdings, Inc. (“Safety Products”), a new holding company formed byOdyssey Investment Partners, LLC (“Odyssey”) for the purpose of completing theacquisition. Pursuant to the terms of the purchase agreement, Safety Productspurchased all of the outstanding membership units of the Company and all of theoutstanding common stock of NSP Holdings Capital Corp. (“NSP Capital”), awholly-owned subsidiary of NSP Holdings L.L.C. (“NSP Holdings”), and pursuantto which Safety Products assumed all of the outstanding indebtedness of theCompany and NSP Holdings, in exchange for a base purchase price to NSP Holdingsof $472,000, plus the cash in the Company as of April 2, 2005 in the amount ofapproximately $16,900, less (1) the indebtedness of the Company and itssubsidiaries as of April 2, 2005 and (2) certain transaction fees and expenses.The cash purchase price was $204,488 including direct costs of acquisition of$2,346, and excluding assumed debt of $260,523.

On November 1, 2005, the Company completed the acquisition of all ofthe issued and outstanding capital stock of The Fibre-Metal Products Company (“Fibre-Metal”).The purchase price was $68,723, including acquisition costs of $723. TheCompany financed the acquisition through additional term borrowings under thesenior credit facility and cash on the balance sheet. The results of operationsof Fibre-Metal are included in the Company’s consolidated statement ofoperations from the date of acquisition.

OnFebruary 2, 2006, the Company completed the acquisition of all of the issuedand outstanding capital stock of American Firewear, Inc. (“American Firewear”).The purchase price consisted of $4,453 in cash (including acquisition costs of$203 and net of cash acquired of $183) and a $1,000 subordinated seller note.In addition, the purchase price may be increased by $750 over the next fouryears based on American Firewear achieving certain financial and operatingobjectives. The Company financed the acquisition through cash on the balancesheet and the issuance of the $1,000 subordinated seller note. The results ofoperations of American Firewear are included in the Company’s consolidatedstatement of operations from the date of acquisition. The Company has notfinalized the allocation of purchase price as of July 1, 2006.

OnJune 9, 2006, the Company completed the acquisition of all of the issued andoutstanding capital stock of The White Rubber Corporation (“White Rubber”). Thepurchase price was $22,182 (including acquisition costs of $636 and gross ofoutstanding checks of $773). The Company financed the acquisition throughadditional term borrowings under the senior credit facility and cash on thebalance sheet.  The results of operationsof White Rubber are included in the Company’s consolidated statement ofoperations from the date of acquisition. The Company has not finalized theallocation of purchase price as of July 1, 2006.

The acquisition of Norcross is referred to as the “Norcross Transaction”,the acquisition of Fibre-Metal is referred to as the “Fibre-Metal Transaction”,the acquisition of American Firewear is referred to as the “American FirewearTransaction”, and the acquisition of White Rubber is referred to as the “WhiteRubber Transaction.” Collectively, the Norcross Transaction, the Fibre-MetalTransaction, the American Firewear Transaction and the White Rubber Transactionare referred to as the “Transactions.”

**2.**                 Basis ofPresentation

The accompanyingunaudited consolidated financial statements of the Company have been preparedin accordance with accounting principles generally accepted in the UnitedStates for interim financial information. Accordingly, they do not include allof the information and notes required by accounting principles generallyaccepted in the United States for complete financial statements.

In the opinion of management, all adjustments(consisting only of adjustments of a normal and recurring nature) considerednecessary for a fair presentation of the financial position and results ofoperations have been included. Interim results are not necessarily indicativeof the results that might be expected for any other interim period or for thefiscal year ending December 31, 2006. The financial statements presented shouldbe read in conjunction with the consolidated financial statements and footnotesthereto included in our 2005 consolidated financial statements, included in theCompany’s annual report on Form 10-K.

Predecessor — The consolidated financial statements of the Predecessorrepresent the consolidated results of operations of Norcross Safety ProductsL.L.C. prior to the Norcross Transaction.

Successor — The consolidated financial statements of the Successorrepresent the consolidated results of operations of Norcross Safety ProductsL.L.C. subsequent to the Norcross Transaction.

4

----

The consolidated financial statements of the Successor reflect theTransactions under the purchase method of accounting, in accordance with theFinancial Accounting Standards Board (FASB) Statement of Accounting Standards(SFAS) No. 141, *Business Combinations*.

5

----

The following table presents the pro forma net sales, income fromoperations, and net income of the Company assuming the Transactions hadoccurred on January 1, 2005:

|                         | ** ** | **Predecessor**                                | ** ** | **Successor**                                  | ** ** |
|-------------------------|------------|------------------------------------------------|------------|------------------------------------------------|------------|
| ** **              | ** ** | **Six months  ended  July 2,  2005** | ** ** | **Six months  ended  July 1,  2006** | ** ** |
| Net sales               |       | $                                              | 267,721    |                                           | $          | 286,769 |   |
| Income from  operations |       | 27,531                                         |       | 33,464                                         |       |
| Net income              |       | 9,675                                          |       | 13,166                                         |       |
|                         |            |                                                |            |                                                |            |  |  |

 

**3.**                 Reclassifications

Certain account balances have been reclassified from the prior year toconform with current year presentation. Specifically, discounts and rebateexpenses were reclassified from selling expenses to net sales. The impact ofthis reclassification resulted in a reduction of selling expenses and net salesof  $719 and $1,198 for the three monthsended July 2, 2005 and the six months ended July 2, 2005, respectively.

**4.      Recent Accounting Pronouncements**

In July 2006, the Financial Accounting Standards Board (“FASB”) issuedFASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN48”), which clarifies the accounting for uncertainty in tax positions.  This Interpretation requires that the Companyrecognize in the financial statements, the impact of a tax position, if thatposition is more likely than not of being sustained on audit, based on thetechnical merits of the position.  Inaddition, FIN 48 provides guidance on the derecognition, classification,accounting in interim periods and disclosure requirements for uncertain taxpositions.

The accounting provision of FIN 48 will be effective as of thebeginning of the 2007 fiscal year, with the cumulative effect of the change inaccounting principle recorded as an adjustment to the beginning retainedearnings.  The Company is currentlyevaluating the impact of adopting FIN 48 on the financial statements.

**5.**                 ManagementIncentive Compensation

Safety Products’ Option Plan (the “Plan”) was adoptedand approved by the Board of Directors in December 2005, and provides for theissuance of up to 1,286,631 shares of common stock of Safety Products inconnection with the granting of non-qualified or incentive stock options. Theprincipal purposes of the Plan are: 1) to further the growth, development andfinancial success of Safety Products and its subsidiaries, by providingadditional incentives to employees, consultants and independent directors (asdefined) of Safety Products and its subsidiaries and 2) to enable SafetyProducts and its subsidiaries to obtain and retain the services of the type ofprofessional, technical and managerial employees, consultants and independentdirectors considered essential to the long-range success of Safety Products.

Prior to December 31,2005, the Company accounted for stock-based compensation programs according tothe provisions of Accounting Principles Board Opinion (“ABP”) No. 25, *Accounting for Stock Issued to**Employees*(“APB No. 25”), as permitted by Statement ofFinancial Accounting Standards (“SFAS”) No. 123, *Accounting for Stock-Based**Compensation*.Effective January 1, 2006, the Company adopted the fair value recognitionprovisions of SFAS 123 (R), *Share-BasedPayments*(“SFAS No. 123(R)”).As a result of adopting SFAS No. 123(R) on January 1, 2006, income beforeincome taxes and net income for the six months ended July 1, 2006, are $1,080and $660 lower, respectively, than if the Company had continued to account forshare-based compensation under APB No. 25. The application of the fair valueprovisions of SFAS No. 123(R) would not have had an impact on the Company’sresults for the six months ended July 2, 2005. The $280 and $1,080 ofmanagement incentive compensation is recorded in general and administrativeexpenses for the three and six months ended July 1, 2006, respectively.

In January 2006, Safety Products granted of a total of1,213,559 non-qualified options in connection with the Plan. Outstandingnon-qualified stock options have an expiration date ten years from the date ofgrant. All non-qualified stock options were granted with an exercise priceequal to the fair market value on the date of grant. During the six monthsended July 1, 2006, no options were forfeited or exercised.

The non-qualified stock options are scheduled to vestover an approximate eight year period. In addition, a portion of thenon-qualified stock options are subject to accelerated vesting provisions whencertain performance targets are met. The first performance target was met, andtherefore the first installment was vested as of July 1, 2006. If certainadditional performance targets are met, the remaining four installments willvest on, or within 120 days following, December 31 of each calendar year 2006through 2009. The non-qualified stock options are subject to furtheracceleration clauses based on change in control provisions. As of July 1, 2006,272,980 shares of non-qualified stock options were vested. As of July 1, 2006,there was approximately $3,719 of unrecognized management incentivecompensation related to nonvested non-qualified stock options. The Companyexpects to recognize this management incentive compensation over a weightedaverage period of 4.0 years.

6

----

The Company used the Black-Scholes option-pricingmodel to estimate the fair value of each option grant as of the date of grant.Expected volatilities are based on historical volatility of the common stock ofcomparable public companies. The Company estimated the expected life of theoptions based on the likelihood of the achievement of performance targets,change in control provisions, and historic employee termination data. Therisk-free interest rate is based on U.S. Treasury yields in effect at the timeof grant. The estimated weighted-average fair values of and related assumptionsfor options granted were as follows:
| Weighted-average fair value  of options granted: |   |   |   |
|--------------------------------------------------|--------|--------|--------|
|                                             |   |   |   |
| At fair value                                    |   | $      | 3.95   |   |
|                                             |   |   |   |
| Assumptions:                                     |   |   |   |
| Dividend yield                                   |   | 0.0    | %      |
| Expected volatility                              |   | 40.0   | %      |
| Risk-free interest rate                          |   | 5.0    | %      |
| Expected life of  option (years)                 |   | 5.0    |   |
|                                                  |        |        |        |  |

 

**6.**                 Inventories

Inventories consist of the following:
|                         | ** ** | **Successor**               | ** ** |
|-------------------------|------------|-----------------------------|------------|
| ** **              | ** ** | **December 31,  2005** | ** ** | **July 1,  2006** | ** ** |
| At FIFO cost:           |       |                        |       |   |   |
| Raw materials           |       | $                           | 23,755     |   | $ | 29,627 |   |
| Work in process         |       | 12,745                      |       | 13,976 |   |
| Finished goods          |       | 57,126                      |       | 69,282 |   |
|                    |       | 93,626                      |       | 112,885 |   |
| Adjustment to LIFO cost |       | (164                        | )          | (164 | ) |
|                    |       | $                           | 93,462     |   | $ | 112,721 |   |

 

# **7.****              Long-Term Obligations**

The Company’s long-term obligations consist of thefollowing:
|                                                    | ** ** | **Successor**               | ** ** |
|----------------------------------------------------|------------|-----------------------------|------------|
| ** **                                         | ** ** | **December 31,  2005** | ** ** | **July 1,  2006** | ** ** |
| Revolving credit  facilities                       |       | $                           | —     |   | $ | — |   |
| Term loan                                          |       | 152,390                     |       | 166,574 |   |
| Senior  subordinated notes                         |       | 152,500                     |       | 152,500 |   |
| European term  loans                               |       | 248                         |       | 186 |   |
| Subordinated  seller note                          |       | —                      |       | 1,000 |   |
| Capital lease  obligations                         |       | 75                          |       | 5 |   |
| Unamortized  premium on senior subordinated notes  |       | 7,186                       |       | 6,678 |   |
|                                               |       | 312,399                     |       | 326,943 |   |
| Less: Current  maturities of long-term obligations |       | 2,735                       |       | 3,163 |   |
|                                               |       | $                           | 309,664    |   | $ | 323,780 |   |

 

Aggregate maturities of long-term obligations as ofJuly 1, 2006, are as follows:
| 2007       |   | $       | 3,163   |   |
|------------|--------|---------|---------|--------|
| 2008       |   | 3,217   |    |
| 2009       |   | 3,320   |    |
| 2010       |   | 3,099   |    |
| 2011       |   | 155,721 |    |
| Thereafter |   | 158,423 |    |
|       |   | $       | 326,943 |   |

 

7

----

**8.      Income Taxes**

The income taxexpense (benefit) for the Predecessor differs from the amount of income taxexpense (benefit) computed by applying the U.S. federal income tax rate toincome (loss) before income taxes and minority interest primarily due to:1) the tax structure of certain U.S. subsidiaries which requires incometaxes to be distributed to and paid by the unitholders, 2) net operatingloss carryforwards in the United States and 3) the settlement of incometax audits in the Company’s foreign subsidiaries.

The income taxexpense (benefit) for the Successor differs from the amount of income taxexpense (benefit) computed by applying the U.S. federal income tax rate toincome (loss) before income taxes and minority interest primarily due to netoperating loss carryforwards in the United States, the impact of purchaseaccounting adjustments related to the Transactions and the impact of foreignstatutory rate changes on the Company’s deferred taxes.

**9.**                 Employee BenefitPlans

The following table sets forth the components of netperiodic benefit cost:
|                                     | ** ** | **Predecessor**                                            | ** ** | **Successor**                                              | ** ** |
|-------------------------------------|------------|------------------------------------------------------------|------------|------------------------------------------------------------|------------|
| ** **                          | ** ** | **Six months ended July 2, 2005** | ** ** | **Six months ended July 1, 2006** | ** ** |
| ** **                          | ** ** | **Pension  Benefits**                                      | ** ** | **Post-retirement  Benefits**                              | ** ** | **Pension  Benefits** | ** ** | **Post-retirement  Benefits** | ** ** |
|                                |       |                                                       |       |                                                       |       |   |   |   |   |
| Service cost                        |       | $                                                          | 834        |                                                       | $          | 12 |   | $ | 982 |   | $ | 12 |   |
| Interest cost                       |       | 1,810                                                      |       | 40                                                         |       | 1,888 |   | 36 |   |
| Expected return  on plan assets     |       | (1,554                                                     | )          | —                                                     |       | (1,812 | ) | — |   |
| Amortization of  prior service cost |       | 2                                                          |       | 8                                                          |       | — |   | — |   |
| Amortization of  actuarial loss     |       | 568                                                        |       | 44                                                         |       | — |   | — |   |
|                                |       | $                                                          | 1,660      |                                                       | $          | 104 |   | $ | 1,058 |   | $ | 48 |   |

 

**10.**          Restructuring andMerger-Related Charges

In conjunctionwith the Fibre-Metal Transaction, the Company initiated a restructuring plan toclose the Fibre-Metal manufacturing facility located in Concordville,Pennsylvania and move production to its Cranston, Rhode Island and Mexicali,Mexico facilities. In addition, the Company plans to close certain Fibre-Metaldistribution centers and integrate Fibre-Metal distribution into its existingdistribution facilities. The Company initiated this plan in order to increaseprofitability through utilizing excess capacity at its existing plants and tomove manufacturing to locations with favorable labor costs. As of the date ofthe Fibre-Metal Transaction, the Company recorded an accrual for costsassociated with the plan of $1,716, comprised of $1,383 in severance costs and$333 in facility closure and other exit costs. Since the Fibre-MetalTransaction there have been $72 of payments recorded against the liability.

In conjunctionwith the White Rubber Transaction, the Company initiated a restructuring planto move certain production and distribution functions located in Ohio andWashington to its Charleston, South Carolina, Skokie, Illinois and Chicago,Illinois facilities.  The Companyinitiated this plan in order to increase profitability through utilizing excesscapacity and consolidating distribution functions.  As of the date of the White RubberTransaction, the Company recorded an accrual for costs associated with the planof $1,018, comprised of severance costs.  Since the White Rubber Transaction there have been no payments oradjustments to the liability.

8

----

**11.**          Legal Proceedings

The Company is subject to various claims arising in the ordinary courseof business. Most of these lawsuits and claims are product liability mattersthat arise out of the use of respiratory product lines manufactured by theCompany’s North Safety Products subsidiary. As of July 1, 2006, the Company’sNorth Safety Products subsidiary, along with its predecessors and/or the formerowners of such business were named as defendants in approximately 985 lawsuitsinvolving respirators allegedly manufactured and sold by it or itspredecessors. The Company is also monitoring an additional 12 lawsuits in whichit feels that North Safety Products, its predecessors and/or the former ownersof such businesses may be named as defendants. Collectively, these 997 lawsuitsrepresent a total of approximately 9,468 plaintiffs. Approximately 87% of theselawsuits involve plaintiffs alleging injury resulting from exposure to silicadust, with the remainder alleging injury resulting from exposure to other dustparticles, including asbestos. These lawsuits typically allege that thepurposed injuries resulted in part from respirators that were negligentlydesigned or manufactured. Invensys plc (“Invensys”), formerly Siebe plc, iscontractually obligated to indemnify the Company for any losses, includingcosts of defending claims, resulting from respiratory products manufactured orsold prior to the acquisition of North Safety Products in October 1998.

In addition, the Company’s North Safety Products subsidiary iscontractually entitled to indemnification from Norton Company, an affiliate ofSaint-Gobain, which owned the North Safety Products business prior to Invensys.Pursuant to a December 14, 1982 asset purchase agreement, Siebe Norton, Inc., anewly formed wholly-owned subsidiary of Norton Company, acquired the assets ofNorton’s Safety Products Division and the stock of this company was in turnacquired by Siebe Gorman Holdings PLC. Under the terms of the agreement, SiebeNorton, Inc. did not assume any liability for claims relating to productsshipped by Norton Company prior to the closing date. Moreover, Norton Companycovenanted in the agreement to indemnify Siebe Norton, Inc. and its successorsand assigns against any liability resulting from or arising out of any state offacts, omissions or events existing or occurring on or before the closing date,including, without limitation, any claims arising from products shipped byNorton Company or any of its affiliates prior to the closing date. SiebeNorton, Inc., whose name was subsequently changed to Siebe North Inc., wassubsequently acquired by the Company as part of the 1998 acquisition of theNorth Safety Products business from Invensys.

Despite these indemnification arrangements, the Company couldpotentially be liable for losses or claims relating to products manufacturedprior to the October 1998 acquisition date if Invensys fails to meet itsobligations to indemnify the Company and the Company could potentially beliable for losses and claims relating to products sold prior to January 10,1983 if both Invensys and Norton fail to meet their obligations to indemnifythe Company. The Company could also be liable if the alleged exposure involvedthe use of a product manufactured by the Company after the October 1998acquisition of the North Safety Products business.  The Company believes that Invensys has theability to pay these claims based on its current financial position, aspublicly disclosed by Invensys.

Effective July 1, 2006, the Company plans to enter into a joint defenseagreement through December 31, 2008 with the former owners of the North SafetyProducts business (the “Joint Defense Agreement”).  Under the terms of the Joint DefenseAgreement, the Company agreed to pay a weighted average percentage of defensecosts associated with defending the Company and the prior owners of the NorthSafety Products business subject to a cap of $525, $960 and $1,000 for theperiod from July 1, 2006 through December 31, 2006, the year ended December 31,2007 and the year ended December 31, 2008, respectively.  The cap excludes settlement costs and othercosts incurred exclusively by the Company, including trial costs and specialrequests of counsel.  Separately, theCompany agreed to pay Invensys $200 related to settled cases through June 30,2006 in which Invensys claims that the period of alleged exposure includedperiods after October 1998.

Based upon information provided to the Company by Invensys, the Companybelieves activity related to these lawsuits was as follows for the six monthsended July 1, 2006:
|                       | ** ** | **Plaintiffs** | ** ** | **Cases** | ** ** |
|-----------------------|------------|----------------|------------|-----------|------------|
| Beginning  lawsuits   |       | 18,459         |       | 1,148     |       |
| New lawsuits          |       | 601            |       | 452       |       |
| Settlements           |       | (5             | )          | (5        | )          |
| Dismissals and  other |       | (9,587         | )          | (598      | )          |
| Ending lawsuits       |       | 9,468          |       | 997       |       |

 

9

----

Plaintiffs have asserted specific dollar claims in approximately aquarter of the approximately 985 cases pending as of July 1, 2006 in whichNorth Safety Products, its predecessors and/or the former owners of suchbusinesses have been named as defendants. A majority of jurisdictions prohibitspecifying damages in tort cases such as these, and most of the remainingjurisdictions do not require such specification. In those cases in whichplaintiffs choose to assert specific dollar amounts in their complaints,brought in states that permit such pleading, the amounts claimed are typicallynot meaningful as an indicator of a company’s potential liability. This isbecause (1) the amounts claimed typically bear no relation to the level of theplaintiff’s injury, (2) the complaints typically assert claims against numerousdefendants, and (3) many cases are brought on behalf of plaintiffs who have notsuffered any medical injury, and ultimately are resolved without any payment orpayment of a small fraction of the damages initially claimed. Of the 985complaints maintained in the Company’s records, 747 do not specify the amountof damages sought, 26 generally allege damages in excess of $50, three allegecompensatory damages in excess of $50 and an unspecified amount of punitivedamages, 92 allege compensatory damages and punitive damages, each in excess of$25, two generally allege damages in excess of $100, 11 allege compensatorydamages and punitive damages, each in excess of $50, 20 generally allegedamages in excess of $15,000, one generally alleges damages not to exceed$290,000, one generally alleges damages of $23,000, one alleges compensatorydamages and punitive damages, each in excess of $10, four allege generaldamages of $18,000 and punitive damages of $10,000, two allege general damagesof $13,000 and punitive damages of $10,000, one alleges compensatory andpunitive damages, each in excess of $15, four allege punitive damages in excessof $25, one alleges punitive damages in excess of $50, 57 generally allegedamages in excess of $15, five generally allege damages in excess of $25, onealleges compensatory damages of $18,000 and punitive damages of $10,000, onealleges punitive damages of $13,500 and compensatory damages of $10,000, onealleges punitive damages of $13,000 and compensatory damages of $10,000, onealleges compensatory damages of $13,000 and punitive damages of $10,000, onealleges compensatory and punitive damages, each of $15, and two allegecompensatory and punitive damages, each in excess of $15,000. The Companycurrently does not have access to the complaints with respect to the previouslymentioned additional 12 monitored cases, and therefore it does not know whetherthese cases allege specific damages, or if so, the amount of such damages, butis in the process of seeking to obtain such information. Due to the reasonsnoted above and to the indemnification arrangements benefiting the Company, itdoes not believe that the damage amounts specified in these complaints are ameaningful factor in any assessment of the Company’s potential liability.

The Predecessor recorded a $1,250 reserve for respiratory claims. TheCompany increased this reserve to $7,000 and recorded the increase as part ofthe purchase price allocation process associated with the Norcross Transaction.The increase represents a decision by new ownership to enter into the JointDefense Agreement with the prior owners of North Safety Products. This reserverepresents a reasonable estimate of the Company’s probable and estimable liabilitiesfor claims alleging injury resulting from exposure to silica dust and otherdust particles, including asbestos as determined by the Company in consultationwith an independent consultant. The Company has determined that a five-yearprojection of claims and related defense costs is the most reasonable approach.However, it is possible that the Company may incur liabilities in excess of theamounts currently reserved. This reserve will be re-evaluated periodically andadditional charges or credits will be recorded to operating expenses asadditional information becomes available.

It is possible that the Company may incur liabilities in an amount inexcess of amounts currently reserved. However, taking into account currentlyavailable information, historical experience, and the Company’s indemnificationfrom Invensys, but recognizing the inherent uncertainties in the projection ofany future events, the Company believes that these suits or claims should notresult in final judgments or settlements in excess of its reserve.

In connection with an ongoing dispute, one of the Company’s competitorshas filed a complaint against it alleging that the Company has made a series ofmisrepresentations concerning this competitor and its products. The complaintseeks a retraction of all statements alleged to have been made by the Companyand unspecified damages, including legal fees. A bench trial on the issue ofliability was held in February 2006 and the matter is now awaiting ruling bythe court. The Company intends to vigorously defend against these claims.

The Company is not otherwise involved in any material lawsuits. TheCompany historically has not been required to pay any material liabilityclaims. The Company maintains insurance against product liability claims (withthe exception of asbestosis and silicosis cases, for which coverage is notcommercially available), but it is possible that its insurance coverage willnot continue to be available on terms acceptable to the Company or that suchcoverage will not be adequate for liabilities actually incurred.

10

----

**12.**          Segment Data

The following table presents information about theCompany by segment:
| ** **                           | ** ** | **General  Safety &  Preparedness** | ** ** | **Fire  Service** | ** ** | **Electrical  Safety** | ** ** | **Corporate** | ** ** | **Eliminations** | ** ** | **Total** | ** ** |
|--------------------------------------|------------|----------------------------------------------|------------|-------------------|------------|------------------------|------------|---------------|------------|------------------|------------|-----------|------------|
| **Predecessor**                      |       |                                         |       |              |       |                   |       |          |       |             |       |      |       |
| **Three  Months Ended July 2, 2005** |       |                                         |       |              |       |                   |       |          |       |             |       |      |       |
| Net sales—third  parties        |       | $                                            | 81,140     |              | $          | 22,086                 |       | $             | 14,900     |             | $          | —    |       | $ | — |   | $ | 118,126 |   |
| Net  sales—intersegment         |       | 2,297                                        |       | —            |       | —                 |       | —        |       | (2,297           | )          | —    |       |
| Income (loss)  from operations       |       | 9,291                                        |       | 3,763             |       | 4,142                  |       | (1,242        | )          | —           |       | 15,954    |       |
|                                 |       |                                         |       |              |       |                   |       |          |       |             |       |      |       |
| **Successor**                        |       |                                         |       |              |       |                   |       |          |       |             |       |      |       |
| **Three  Months Ended July 1, 2006** |       |                                         |       |              |       |                   |       |          |       |             |       |      |       |
| Net sales—third  parties        |       | 95,212                                       |       | 22,184            |       | 18,850                 |       | —        |       | —           |       | 136,246   |       |
| Net  sales—intersegment         |       | 2,238                                        |       | —            |       | —                 |       | —        |       | (2,238           | )          | —    |       |
| Income (loss)  from operations       |       | 11,483                                       |       | 2,026             |       | 4,271                  |       | (1,620        | )          | —           |       | 16,160    |       |
|                                 |       |                                         |       |              |       |                   |       |          |       |             |       |      |       |
| **Predecessor**                      |       |                                         |       |              |       |                   |       |          |       |             |       |      |       |
| **Six  Months Ended July 2, 2005**   |       |                                         |       |              |       |                   |       |          |       |             |       |      |       |
| Net sales—third  parties        |       | 163,881                                      |       | 45,086            |       | 29,103                 |       | —        |       | —           |       | 238,070   |       |
| Net  sales—intersegment         |       | 4,855                                        |       | —            |       | —                 |       | —        |       | (4,855           | )          | —    |       |
| Income (loss)  from operations       |       | 18,103                                       |       | 8,144             |       | 7,827                  |       | (2,515        | )          | —           |       | 31,559    |       |
|                                 |       |                                         |       |              |       |                   |       |          |       |             |       |      |       |
| **Successor**                        |       |                                         |       |              |       |                   |       |          |       |             |       |      |       |
| **Six  Months Ended July 1, 2006**   |       |                                         |       |              |       |                   |       |          |       |             |       |      |       |
| Net sales—third  parties        |       | 194,395                                      |       | 46,256            |       | 37,471                 |       | —        |       | —           |       | 278,122   |       |
| Net  sales—intersegment         |       | 4,903                                        |       | —            |       | —                 |       | —        |       | (4,903           | )          | —    |       |
| Income (loss) from  operations       |       | 22,759                                       |       | 4,688             |       | 9,148                  |       | (4,148        | )          | —           |       | 32,447    |       |
|                                      |            |                                              |            |                   |            |                        |            |               |            |                  |            |           |            |  |  |  |  |  |  |

 

11

----

**13.**          Subsidiary Guarantors

All of the Company’s direct or indirect 100% ownedactive domestic subsidiaries, fully, unconditionally, jointly and severallyguarantee the senior subordinated notes. Separate financial statements of theguarantor subsidiaries are not separately presented because, in the opinion ofmanagement, such financial statements are not material to investors. Thenon-guarantor subsidiaries include wholly owned subsidiaries of the Companyorganized under the laws of foreign jurisdictions and inactive subsidiaries,all of which are included in the consolidated financial statements. Thefollowing is summarized combining financial information for Norcross SafetyProducts L.L.C. on a stand-alone basis (NSP), Norcross Capital Corp. (NCC), theguarantor subsidiaries of the Company and the non-guarantor subsidiaries of theCompany:
| ** **                                          | ** ** | **NSP**    | ** ** | **NCC**    | ** ** | **Guarantor  Subsidiaries** | ** ** | **Non-Guarantor  Subsidiaries** | ** ** | **Eliminations** | ** ** | **Total**  | ** ** |
|-----------------------------------------------------|------------|------------|------------|------------|------------|-----------------------------|------------|---------------------------------|------------|------------------|------------|------------|------------|
| **Successor**                                       |       |       |       |       |       |                        |       |                            |       |             |       |       |       |
| **July 1,  2006**                                   | ** ** | ** ** | ** ** | ** ** | ** ** | ** **                  | ** ** | ** **                      | ** ** | ** **       | ** ** | ** ** | ** ** |
| Current assets:                                     |       |       |       |       |       |                        |       |                            |       |             |       |       |       |
| Cash and cash equivalents                           |       | $          | 8,635      |       | $          | —                      |       | $                               | (1,475     | )                | $          | 1,951      |       | $ | — |   | $ | 9,111 |   |
| Accounts receivable, net                            |       | 6,352      |       | —     |       | 40,451                      |       | 34,621                          |       | —           |       | 81,424     |       |
| Inventories                                         |       | 16,591     |       | —     |       | 52,466                      |       | 43,664                          |       | —           |       | 112,721    |       |
| Deferred income taxes                               |       | 434        |       | —     |       | 2,796                       |       | —                          |       | —           |       | 3,230      |       |
| Prepaid expenses and other current assets           |       | 838        |       | —     |       | 2,103                       |       | 685                             |       | —           |       | 3,626      |       |
| Total current  assets                               |       | 32,850     |       | —     |       | 96,341                      |       | 80,921                          |       | —           |       | 210,112    |       |
| Property, plant  and equipment, net                 |       | 7,049      |       | —     |       | 42,101                      |       | 21,940                          |       | —           |       | 71,090     |       |
| Deferred  financing costs, net                      |       | 7,057      |       | —     |       | —                      |       | —                          |       | —           |       | 7,057      |       |
| Goodwill, net                                       |       | 19,266     |       | —     |       | 95,282                      |       | 45,593                          |       | —           |       | 160,141    |       |
| Other intangible  assets, net                       |       | 24,701     |       | —     |       | 211,617                     |       | 37,765                          |       | —           |       | 274,083    |       |
| Investment in  subsidiaries                         |       | 439,301    |       | —     |       | 98,634                      |       | —                          |       | (537,935         | )          | —     |       |
| Other noncurrent  assets                            |       | —     |       | —     |       | 3,761                       |       | 1,461                           |       | —           |       | 5,222      |       |
| Total assets                                        |       | $          | 530,224    |       | $          | —                      |       | $                               | 547,736    |             | $          | 187,680    |       | $ | (537,935 | ) | $ | 727,705 |   |
| Current  liabilities:                               |       |       |       |       |       |                        |       |                            |       |             |       |       |       |
| Accounts payable                                    |       | $          | 3,255      |       | $          | —                      |       | $                               | 14,644     |             | $          | 9,108      |       | $ | — |   | $ | 27,007 |   |
| Accrued expenses                                    |       | 10,643     |       | —     |       | 18,687                      |       | 8,979                           |       | —           |       | 38,309     |       |
| Current maturities of long-term obligations         |       | 2,791      |       | —     |       | 334                         |       | 38                              |       | —           |       | 3,163      |       |
| Total current  liabilities                          |       | 16,689     |       | —     |       | 33,665                      |       | 18,125                          |       | —           |       | 68,479     |       |
| Pension,  post-retirement and deferred compensation |       | 52         |       | —     |       | 31,308                      |       | 277                             |       | —           |       | 31,637     |       |
| Long-term  obligations                              |       | 322,961    |       | —     |       | 666                         |       | 153                             |       | —           |       | 323,780    |       |
| Intercompany  balances                              |       | (55,194    | )          | —     |       | 8,085                       |       | 47,109                          |       | —           |       | —     |       |
| Other noncurrent  liabilities                       |       | —     |       | —     |       | 7,323                       |       | 30                              |       | —           |       | 7,353      |       |
| Deferred income  taxes                              |       | 1,309      |       | —     |       | 33,397                      |       | 17,152                          |       | —           |       | 51,858     |       |
| Minority interest                                   |       | —     |       | —     |       | —                      |       | 191                             |       | —           |       | 191        |       |
|                                                |       | 269,128    |       | —     |       | 80,779                      |       | 64,912                          |       | —           |       | 414,819    |       |
| Member’s equity:                               |       |       |       |       |       |                        |       |                            |       |             |       |       |       |
| Contributed capital                                 |       | 222,298    |       | —     |       | 399,359                     |       | 92,118                          |       | (491,477         | )          | 222,298    |       |
| Accumulated deficit                                 |       | 13,182     |       | —     |       | 33,933                      |       | 12,525                          |       | (46,458          | )          | 13,182     |       |
| Accumulated other comprehensive income              |       | 8,927      |       | —     |       | —                      |       | —                          |       | —           |       | 8,927      |       |
| Total member’s  equity                         |       | 244,407    |       | —     |       | 433,292                     |       | 104,643                         |       | (537,935         | )          | 244,407    |       |
| Total liabilities and  member’s equity         |       | $          | 530,224    |       | $          | —                      |       | $                               | 547,736    |             | $          | 187,680    |       | $ | (537,935 | ) | $ | 727,705 |   |

 

12

----

 
| ** **                                          | ** ** | **NSP**    | ** ** | **NCC**    | ** ** | **Guarantor  Subsidiaries** | ** ** | **Non-  Guarantor  Subsidiaries** | ** ** | **Eliminations** | ** ** | **Total**  | ** ** |
|-----------------------------------------------------|------------|------------|------------|------------|------------|-----------------------------|------------|-----------------------------------|------------|------------------|------------|------------|------------|
| **Successor**                                       | ** ** | ** ** | ** ** | ** ** | ** ** | ** **                  | ** ** | ** **                        | ** ** | ** **       | ** ** | ** ** | ** ** |
| **December  31, 2005**                              | ** ** | ** ** | ** ** | ** ** | ** ** | ** **                  | ** ** | ** **                        | ** ** | ** **       | ** ** | ** ** | ** ** |
| Current assets:                                     |       |       |       |       |       |                        |       |                              |       |             |       |       |       |
| Cash and cash equivalents                           |       | $          | 17,885     |       | $          | —                      |       | $                                 | (265       | )                | $          | 3,063      |       | $ | — |   | $ | 20,683 |   |
| Accounts receivable, net                            |       | 10,812     |       | —     |       | 31,134                      |       | 26,340                            |       | —           |       | 68,286     |       |
| Inventories                                         |       | 10,228     |       | —     |       | 41,720                      |       | 41,514                            |       | —           |       | 93,462     |       |
| Deferred income taxes                               |       | 434        |       | —     |       | 2,791                       |       | 5                                 |       | —           |       | 3,230      |       |
| Prepaid expenses and other current assets           |       | 809        |       | —     |       | 1,432                       |       | 894                               |       | —           |       | 3,135      |       |
| Total current  assets                               |       | 40,168     |       | —     |       | 76,812                      |       | 71,816                            |       | —           |       | 188,796    |       |
| Property, plant  and equipment, net                 |       | 6,606      |       | —     |       | 38,776                      |       | 21,933                            |       | —           |       | 67,315     |       |
| Deferred  financing costs, net                      |       | 7,513      |       | —     |       | —                      |       | —                            |       | —           |       | 7,513      |       |
| Goodwill, net                                       |       | 19,266     |       | —     |       | 74,099                      |       | 43,122                            |       | —           |       | 136,487    |       |
| Other intangible  assets, net                       |       | 25,007     |       | —     |       | 215,630                     |       | 36,205                            |       | —           |       | 276,842    |       |
| Investment in  subsidiaries                         |       | 387,606    |       | —     |       | 86,614                      |       | —                            |       | (474,220         | )          | —     |       |
| Other noncurrent  assets                            |       | —     |       | —     |       | 3,555                       |       | 1,554                             |       | —           |       | 5,109      |       |
| Total assets                                        |       | $          | 486,166    |       | $          | —                      |       | $                                 | 495,486    |             | $          | 174,630    |       | $ | (474,220 | ) | $ | 682,062 |   |
| Current  liabilities:                               |       |       |       |       |       |                        |       |                              |       |             |       |       |       |
| Accounts payable                                    |       | $          | 3,492      |       | $          | —                      |       | $                                 | 9,266      |             | $          | 8,471      |       | $ | — |   | $ | 21,229 |   |
| Accrued expenses                                    |       | 13,568     |       | —     |       | 14,180                      |       | 6,935                             |       | —           |       | 34,683     |       |
| Current maturities of long-term obligations         |       | 2,598      |       | —     |       | 68                          |       | 69                                |       | —           |       | 2,735      |       |
| Total current  liabilities                          |       | 19,658     |       | —     |       | 23,514                      |       | 15,475                            |       | —           |       | 58,647     |       |
| Pension,  post-retirement and deferred compensation |       | 70         |       | —     |       | 32,000                      |       | 270                               |       | —           |       | 32,340     |       |
| Long-term  obligations                              |       | 309,478    |       | —     |       | —                      |       | 186                               |       | —           |       | 309,664    |       |
| Intercompany  balances                              |       | (67,712    | )          | —     |       | 20,135                      |       | 47,577                            |       | —           |       | —     |       |
| Other noncurrent  liabilities                       |       | —     |       | —     |       | 5,318                       |       | 58                                |       | —           |       | 5,376      |       |
| Deferred income  taxes                              |       | 1,309      |       | —     |       | 33,579                      |       | 17,608                            |       | —           |       | 52,496     |       |
| Minority  interest                                  |       | —     |       | —     |       | —                      |       | 176                               |       | —           |       | 176        |       |
|                                                |       | 243,145    |       | —     |       | 91,032                      |       | 65,875                            |       | —           |       | 400,052    |       |
| Member’s equity:                               |       |       |       |       |       |                        |       |                              |       |             |       |       |       |
| Contributed capital                                 |       | 221,068    |       | —     |       | 373,312                     |       | 92,117                            |       | (465,429         | )          | 221,068    |       |
| Retaining earnings                                  |       | 308        |       | —     |       | 7,628                       |       | 1,163                             |       | (8,791           | )          | 308        |       |
| Accumulated other comprehensive income              |       | 1,987      |       | —     |       | —                      |       | —                            |       | —           |       | 1,987      |       |
| Total member’s  equity                         |       | 223,363    |       | —     |       | 380,940                     |       | 93,280                            |       | (474,220         | )          | 223,363    |       |
| Total liabilities and  member’s equity         |       | $          | 486,166    |       | $          | —                      |       | $                                 | 495,486    |             | $          | 174,630    |       | $ | (474,220 | ) | $ | 682,062 |   |

 

13

----

 
| ** **                                        | ** ** | **NSP**    | ** ** | **NCC**    | ** ** | **Guarantor  Subsidiaries** | ** ** | **Non-Guarantor  Subsidiaries** | ** ** | **Eliminations** | ** ** | **Total**  | ** ** |
|---------------------------------------------------|------------|------------|------------|------------|------------|-----------------------------|------------|---------------------------------|------------|------------------|------------|------------|------------|
| **Successor**                                     | ** ** | ** ** | ** ** | ** ** | ** ** | ** **                  | ** ** | ** **                      | ** ** | ** **       | ** ** | ** ** | ** ** |
| **Six  months ended July 1, 2006**                | ** ** | ** ** | ** ** | ** ** | ** ** | ** **                  | ** ** | ** **                      | ** ** | ** **       | ** ** | ** ** | ** ** |
| Third party                                       |       | $          | 30,864     |       | $          | —                      |       | $                               | 145,691    |             | $          | 101,567    |       | $ | — |   | $ | 278,122 |   |
| Intercompany                                      |       | 4,036      |       | —     |       | 6,040                       |       | 7,745                           |       | (17,821          | )          | —     |       |
| Net sales                                         |       | 34,900     |       | —     |       | 151,731                     |       | 109,312                         |       | (17,821          | )          | 278,122    |       |
| Cost of goods  sold                               |       | 22,965     |       | —     |       | 96,354                      |       | 69,981                          |       | (17,821          | )          | 171,479    |       |
| Gross profit                                      |       | 11,935     |       | —     |       | 55,377                      |       | 39,331                          |       | —           |       | 106,643    |       |
| Operating expenses:                               |       |       |       |       |       |                        |       |                            |       |             |       |       |       |
| Selling                                           |       | 1,741      |       | —     |       | 13,462                      |       | 10,911                          |       | —           |       | 26,114     |       |
| Distribution                                      |       | 2,110      |       | —     |       | 7,086                       |       | 6,791                           |       | —           |       | 15,987     |       |
| General and administrative                        |       | 5,826      |       | —     |       | 13,776                      |       | 7,026                           |       | —           |       | 26,628     |       |
| Amortization of intangibles                       |       | 535        |       | —     |       | 4,014                       |       | 918                             |       | —           |       | 5,467      |       |
| Total operating  expenses                         |       | 10,212     |       | —     |       | 38,338                      |       | 25,646                          |       | —           |       | 74,196     |       |
| Income from  operations                           |       | 1,723      |       | —     |       | 17,039                      |       | 13,685                          |       | —           |       | 32,447     |       |
| Other expense  (income):                          |       |       |       |       |       |                        |       |                            |       |             |       |       |       |
| Interest expense                                  |       | 13,018     |       | —     |       | 37                          |       | 23                              |       | —           |       | 13,078     |       |
| Interest income                                   |       | (276       | )          | —     |       | —                      |       | (54                             | )          | —           |       | (330       | )          |
| Intercompany charges                              |       | (21,389    | )          | —     |       | (9,140                      | )          | 5,684                           |       | 24,845           |       | —     |       |
| Other, net                                        |       | 6          |       | —     |       | (252                        | )          | (294                            | )          | —           |       | (540       | )          |
| Income before  income taxes and minority interest |       | 10,364     |       | —     |       | 26,394                      |       | 8,326                           |       | (24,845          | )          | 20,239     |       |
| Income tax  (benefit) expense                     |       | (2,893     | )          | —     |       | 7,780                       |       | 2,080                           |       | —           |       | 6,967      |       |
| Minority  interest                                |       | —     |       | —     |       | —                      |       | 15                              |       | —           |       | 15         |       |
| Net income                                        |       | $          | 13,257     |       | $          | —                      |       | $                               | 18,614     |             | $          | 6,231      |       | $ | (24,845 | ) | $ | 13,257 |   |

 

14

----

 
| ** **                                        | ** ** | **NSP** | ** ** | **NCC** | ** ** | **Guarantor  Subsidiaries** | ** ** | **Non-Guarantor  Subsidiaries** | ** ** | **Eliminations** | ** ** | **Total** | ** ** |
|---------------------------------------------------|------------|---------|------------|---------|------------|-----------------------------|------------|---------------------------------|------------|------------------|------------|-----------|------------|
| **Predecessor**                                   |       |    |       |    |       |                        |       |                            |       |             |       |      |       |
| **Six months ended July 2, 2005**                 |       |    |       |    |       |                        |       |                            |       |             |       |      |       |
| Third party                                       |       | $       | 32,309     |    | $          | —                      |       | $                               | 120,484    |             | $          | 85,277    |       | $ | — |   | $ | 238,070 |   |
| Intercompany                                      |       | 4,064   |       | —  |       | 4,775                       |       | 5,024                           |       | (13,863          | )          | —    |       |
| Net sales                                         |       | 36,373  |       | —  |       | 125,259                     |       | 90,301                          |       | (13,863          | )          | 238,070   |       |
| Cost of goods sold                                |       | 24,474  |       | —  |       | 79,939                      |       | 58,509                          |       | (13,863          | )          | 149,059   |       |
| Gross profit                                      |       | 11,899  |       | —  |       | 45,320                      |       | 31,792                          |       | —           |       | 89,011    |       |
| Operating expenses:                               |       |    |       |    |       |                        |       |                            |       |             |       |      |       |
| Selling                                           |       | 1,726   |       | —  |       | 10,842                      |       | 9,788                           |       | —           |       | 22,356    |       |
| Distribution                                      |       | 2,125   |       | —  |       | 4,935                       |       | 5,560                           |       | —           |       | 12,620    |       |
| General and  administrative                       |       | 3,956   |       | —  |       | 12,187                      |       | 6,050                           |       | —           |       | 22,193    |       |
| Amortization of  intangibles                      |       | 160     |       | —  |       | —                      |       | 123                             |       | —           |       | 283       |       |
| Total operating  expenses                         |       | 7,967   |       | —  |       | 27,964                      |       | 21,521                          |       | —           |       | 57,452    |       |
| Income from operations                            |       | 3,932   |       | —  |       | 17,356                      |       | 10,271                          |       | —           |       | 31,559    |       |
| Other expense (income):                           |       |    |       |    |       |                        |       |                            |       |             |       |      |       |
| Interest expense                                  |       | 11,191  |       | —  |       | 14                          |       | 76                              |       | —           |       | 11,281    |       |
| Interest income                                   |       | (376    | )          | —  |       | —                      |       | (39                             | )          | —           |       | (415      | )          |
| Intercompany  charges                             |       | (23,079 | )          | —  |       | (2,737                      | )          | 3,436                           |       | 22,380           |       | —    |       |
| Other, net                                        |       | (10     | )          | —  |       | (4                          | )          | 836                             |       | —           |       | 822       |       |
| Income before income  taxes and minority interest |       | 16,206  |       | —  |       | 20,083                      |       | 5,962                           |       | (22,380          | )          | 19,871    |       |
| Income tax expense                                |       | 13      |       | —  |       | 537                         |       | 3,117                           |       | —           |       | 3,667     |       |
| Minority interest                                 |       | —  |       | —  |       | —                      |       | 11                              |       | —           |       | 11        |       |
| Net income                                        |       | $       | 16,193     |    | $          | —                      |       | $                               | 19,546     |             | $          | 2,834     |       | $ | (22,380 | ) | $ | 16,193 |   |

 

15

----

 
| ** **                                           | ** ** | **NSP** | ** ** | **NCC** | ** ** | **Guarantor  Subsidiaries** | ** ** | **Non-Guarantor  Subsidiaries** | ** ** | **Eliminations** | ** ** | **Total** | ** ** |
|------------------------------------------------------|------------|---------|------------|---------|------------|-----------------------------|------------|---------------------------------|------------|------------------|------------|-----------|------------|
| **Successor**                                        |       |    |       |    |       |                        |       |                            |       |             |       |      |       |
| **Six months ended July 1, 2006**                    |       |    |       |    |       |                        |       |                            |       |             |       |      |       |
| **Operating activities**                             |       |    |       |    |       |                        |       |                            |       |             |       |      |       |
| Net cash (used in)  provided by operating activities |       | $       | (8,090     | )       | $          | —                      |       | $                               | 12,323     |             | $          | 1,331     |       | $ | — |   | $ | 5,564 |   |
| **Investing activities**                             |       |    |       |    |       |                        |       |                            |       |             |       |      |       |
| Purchase of businesses,  net of cash acquired        |       | (229    | )          | —  |       | (26,635                     | )          | (134                            | )          | —           |       | (26,998   | )          |
| Purchase of property,  plant and equipment           |       | (1,153  | )          | —  |       | (2,643                      | )          | (991                            | )          | —           |       | (4,787    | )          |
| Proceeds from sale of  property, plant and equipment |       | —  |       | —  |       | —                      |       | 113                             |       | —           |       | 113       |       |
| Net cash used in  investing activities               |       | (1,382  | )          | —  |       | (29,278                     | )          | (1,012                          | )          | —           |       | (31,672   | )          |
| **Financing activities**                             |       |    |       |    |       |                        |       |                            |       |             |       |      |       |
| Payments for deferred  financing costs               |       | (201    | )          | —  |       | —                      |       | —                          |       | —           |       | (201      | )          |
| Proceeds from  borrowings                            |       | 15,000  |       | —  |       | —                      |       | —                          |       | —           |       | 15,000    |       |
| Payments of debt                                     |       | (816    | )          | —  |       | (68                         | )          | (64                             | )          | —           |       | (948      | )          |
| Intercompany                                         |       | (13,528 | )          | —  |       | 13,992                      |       | (464                            | )          | —           |       | —    |       |
| Capital contribution                                 |       | 150     |       | —  |       | —                      |       | —                          |       | —           |       | 150       |       |
| Dividends to Safety Products  Holdings, Inc.         |       | (383    | )          | —  |       | —                      |       | —                          |       | —           |       | (383      | )          |
| Net cash provided by  (used in) financing activities |       | 222     |       | —  |       | 13,924                      |       | (528                            | )          | —           |       | 13,618    |       |
| Effect of exchange rate  changes on cash             |       | —  |       | —  |       | 1,821                       |       | (903                            | )          | —           |       | 918       |       |
| Net decrease in cash  and cash equivalents           |       | (9,250  | )          | —  |       | (1,210                      | )          | (1,112                          | )          | —           |       | (11,572   | )          |
| Cash and cash  equivalents at beginning of period    |       | 17,885  |       | —  |       | (265                        | )          | 3,063                           |       | —           |       | 20,683    |       |
| Cash and cash equivalents at end of period           |       | $       | 8,635      |    | $          | —                      |       | $                               | (1,475     | )                | $          | 1,951     |       | $ |   |   | $ | 9,111 |   |

 

16

----

 
| ** **                                          | ** ** | **NSP**    | ** ** | **NCC**    | ** ** | **Guarantor  Subsidiaries** | ** ** | **Non-Guarantor  Subsidiaries** | ** ** | **Eliminations** | ** ** | **Total**  | ** ** |
|-----------------------------------------------------|------------|------------|------------|------------|------------|-----------------------------|------------|---------------------------------|------------|------------------|------------|------------|------------|
| **Predecessor**                                     | ** ** | ** ** | ** ** | ** ** | ** ** | ** **                  | ** ** | ** **                      | ** ** | ** **       | ** ** | ** ** | ** ** |
| **Six  months ended July 2, 2005**                  |       |       |       |       |       |                        |       |                            |       |             |       |       |       |
| **Operating  activities**                           |       |       |       |       |       |                        |       |                            |       |             |       |       |       |
| Net cash (used  in) provided by operating activites |       | $          | (1,593     | )          | $          | —                      |       | $                               | 13,501     |             | $          | 3,304      |       | $ | — |   | $ | 15,212 |   |
| **Investing  activities**                           |       |       |       |       |       |                        |       |                            |       |             |       |       |       |
| Purchase of  businesses, net of cash acquired       |       | (256       | )          | —     |       | (275                        | )          | (74                             | )          | —           |       | (605       | )          |
| Purchase of  property, plant and equipment          |       | (788       | )          | —     |       | (1,899                      | )          | (791                            | )          | —           |       | (3,478     | )          |
| Net cash used in  investing activities              |       | (1,044     | )          | —     |       | (2,174                      | )          | (865                            | )          | —           |       | (4,083     | )          |
| **Financing  activities**                           |       |       |       |       |       |                        |       |                            |       |             |       |       |       |
| Payments of debt                                    |       | (12,850    | )          | —     |       | (501                        | )          | (286                            | )          | —           |       | (13,637    | )          |
| Intercompany                                        |       | 12,310     |       | —     |       | (8,734                      | )          | (3,576                          | )          | —           |       | —     |       |
| Due from NSP  Holdings L.L.C.                       |       | (422       | )          | —     |       | —                      |       | —                          |       | —           |       | (422       | )          |
| Dividends to NSP  Holdings L.L.C.                   |       | (9         | )          | —     |       | —                      |       | —                          |       | —           |       | (9         | )          |
| Net cash used in  financing activities              |       | (971       | )          | —     |       | (9,235                      | )          | (3,862                          | )          | —           |       | (14,068    | )          |
| Effect of  exchange rate changes on cash            |       | —     |       | —     |       | (2,449                      | )          | (999                            | )          | —           |       | (3,448     | )          |
| Net decrease in  cash and cash equivalents          |       | (3,608     | )          | —     |       | (357                        | )          | (2,422                          | )          | —           |       | (6,387     | )          |
| Cash and cash  equivalents at beginning of period   |       | 32,859     |       | —     |       | (2,780                      | )          | 5,652                           |       | —           |       | 35,731     |       |
| Cash and cash  equivalents at end of period         |       | $          | 29,251     |       | $          | —                      |       | $                               | (3,137     | )                | $          | 3,230      |       | — |   | $ | 29,344 |   |
|                                                     |            |            |            |            |            |                             |            |                                 |            |                  |            |            |            |  |  |  |  |  |  |

 

**14.****                               ComprehensiveIncome**

Totalcomprehensive income (which includes the impact of foreign currencytranslation) for the three months ended July 2, 2005 and July 1, 2006 amountedto $3,357 and $11,699, respectively. Total comprehensive income for the six months ended July 2, 2005 andJuly 1, 2006 amounted to $9,129 and $20,197, respectively.

17

----

**Item 2.Management’s Discussion and Analysis of Financial Condition and Results ofOperations**

**Overview**

We are a leading designer, manufacturer and marketerof branded products in the fragmented personal protection equipment industry.We manufacture and market a full line of personal protection equipment forworkers in the general safety and preparedness, fire service and electricalsafety industries. We sell our products under trusted, long-standing andwell-recognized brand names, including *North*, *KCL**, Fibre-Metal, *MorningPride**, *Ranger*, *Servus*,*Pro-Warrington, AmericanFirewear*and*Salisbury*. Our broad product offering includes, among other things,respiratory protection, protective footwear, hand protection, bunker gear and linemenequipment.

We classify our diverse product offerings into threeoperating segments:

*General Safety andPreparedness*. We offer a diverse portfolio of leadingproducts for a wide variety of industries, including manufacturing,agriculture, automotive, construction, food processing and pharmaceuticalindustries and the military, under the *North*, *KCL, Fibre-Metal, Ranger and Servus* brand names. Our productoffering is one of the broadest in the personal protection equipment industryand includes respiratory protection, protective footwear, hand protection, eye,head and face protection, first aid, hearing protection and fall protection. Wesell our general safety and preparedness products primarily through industrialdistributors.

*Fire Service*.We manufacture and market one of the broadest lines of personal protectionequipment for the fire service market, offering firefighters head-to-toeprotection. Our products include bunker gear, fireboots, helmets, gloves andother accessories. We market our products under our Total Fire Group umbrella,using the brand names of *MorningPride*, *Ranger*, *Servus*,*Pro-Warrington and American Firewear*. Weare the vendor of choice for many of the largest fire departments in NorthAmerica. We sell our fire service products primarily through specialized fireservice distributors.

*Electrical Safety*.We manufacture and market a broad line of personal protection equipment for theutility market under the *Salisbury* and *Servus* brands. Our products, including linemen equipment,gloves, sleeves and footwear, are designed to protect workers from up to 36,000volts of electricity. All of our products either meet or exceed the applicablestandards of the American National Standards Institute (“ANSI”) and theAmerican Society for Testing of Materials (“ASTM”). We distribute ourelectrical safety products through specialized distributors, test labs,utilities and electrical contractors.

18

----

**Predecessorand Successor**

In May 2005, Safety Products entered into a purchaseand sale agreement with NSP Holdings and Norcross to purchase from NSP Holdingsall of the outstanding equity interests of Norcross and NSP Capital for anaggregate purchase price of approximately $481.0 million, which included theassumption or repayment of indebtedness but excluded payment of fees andexpenses. The acquisition closed on July 19, 2005 and was funded with proceedsto Safety Products from the issuance and sale of senior pay in kind notes aswell as an equity investment from affiliates of Odyssey and General Electric PensionTrust (“GEPT”) and certain members of management of Norcross. Concurrently withthe acquisition, Norcross entered into a new senior credit facility, consistingof a revolving credit facility that provides for up to $50.0 million ofborrowings and an $88.0 million term loan. As a result of the acquisition,Safety Products became the sole unit holder of Norcross. Norcross, followingthe Norcross Transaction, is referred to as the “Successor.” Norcross, prior tothe Norcross Transaction, is referred to as the “Predecessor.”

In accordance with GAAP, our historical financialresults for the Predecessor and the Successor are presented separately. Theseparate presentation is required under GAAP in situations when there is achange in accounting basis, which occurred when purchase accounting was appliedto the Norcross Transaction. Purchase accounting requires that the historicalcarrying value of assets acquired and liabilities assumed be adjusted to fairvalue, which may yield results that are not comparable on a period-to-periodbasis due to the different, and sometimes higher, cost basis associated withthe allocation of the purchase price. There have been no material changes tothe operations or customer relationships of our business as a result of the NorcrossTransaction.

**Acquisitions**

InNovember 2005, we completed the acquisition of all of the issued andoutstanding capital stock of Fibre-Metal. The purchase price of $68.7 million(including $0.7 million of acquisition costs) was financed through $65.0 millionof additional term borrowings under the senior credit facility and cash on thebalance sheet.

InFebruary 2006, we completed the acquisition of all of the issued andoutstanding capital stock of American Firewear. The purchase price consisted of $4.5 million in cash (includingacquisition costs of $0.2 million and net of cash acquired of $0.2 million) anda $1.0 million subordinated seller note. In addition, the purchase price may be increased by $0.8 million overthe next four years based on American Firewear achieving certain financial andoperating objectives.  We financed theacquisition through cash on the balance sheet and the issuance of the $1.0million subordinated seller note.

InJune 2006, we completed the acquisition of all of the issued and outstandingcapital stock of White Rubber. The purchase price of $22.2 million (including$0.6 million of acquisition costs and gross of outstanding checks of $0.8million) was financed through $15.0 million of additional term borrowings underthe senior credit facility and cash on the balance sheet.

19

----

**Results ofOperations**

The following tables set forth our results ofoperations in dollars and as a percentage of net sales for the three and sixmonths ended July 2, 2005 and July 1, 2006. The data for the three and sixmonths ended July 2, 2005 and July 1, 2006 have been derived from ourhistorical unaudited financial statements.
| ** **                                        | ** ** | **Predecessor**                      | ** ** | **Successor**                  | ** ** | **Predecessor**        | ** ** | **Successor**          | ** ** |
|---------------------------------------------------|------------|--------------------------------------|------------|--------------------------------|------------|------------------------|------------|------------------------|------------|
| ** **                                        | ** ** | **Three Months Ended**     | ** ** | **Six Months Ended** | ** ** |
| ** **                                        | ** ** | **July 2,  2005**               | ** ** | **July 1,  2006**         | ** ** | **July 2,  2005** | ** ** | **July 1,  2006** | ** ** |
| ** **                                        | ** ** | **(dollars in thousands)** | ** ** |
| Net sales:                                        |       |                                 |       |                           |       |                   |       |                   |       |
| General Safety & Preparedness                 |       | $                                    | 81,140     |                           | $          | 95,212                 |       | $                      | 163,881    |   | $ | 194,395 |   |
| Fire Service                                      |       | 22,086                               |       | 22,184                         |       | 45,086                 |       | 46,256                 |       |
| Electrical Safety                                 |       | 14,900                               |       | 18,850                         |       | 29,103                 |       | 37,471                 |       |
| Total net sales                                   |       | 118,126                              |       | 136,246                        |       | 238,070                |       | 278,122                |       |
| Cost of goods  sold                               |       | 73,457                               |       | 83,334                         |       | 149,059                |       | 171,479                |       |
| Gross profit                                      |       | 44,669                               |       | 52,912                         |       | 89,011                 |       | 106,643                |       |
| Operating  expenses                               |       | 28,715                               |       | 36,752                         |       | 57,452                 |       | 74,196                 |       |
| Income from  operations:                          |       |                                 |       |                           |       |                   |       |                   |       |
| General Safety & Preparedness                 |       | 9,291                                |       | 11,483                         |       | 18,103                 |       | 22,759                 |       |
| Fire Service                                      |       | 3,763                                |       | 2,026                          |       | 8,144                  |       | 4,688                  |       |
| Electrical Safety                                 |       | 4,142                                |       | 4,271                          |       | 7,827                  |       | 9,148                  |       |
| Corporate                                         |       | (1,242                               | )          | (1,620                         | )          | (2,515                 | )          | (4,148                 | )          |
| Total income from operations                      |       | 15,954                               |       | 16,160                         |       | 31,559                 |       | 32,447                 |       |
| Other expense  (income):                          |       |                                 |       |                           |       |                   |       |                   |       |
| Interest expense                                  |       | 5,682                                |       | 6,616                          |       | 11,281                 |       | 13,078                 |       |
| Interest income                                   |       | (165                                 | )          | (167                           | )          | (415                   | )          | (330                   | )          |
| Other, net                                        |       | 436                                  |       | (169                           | )          | 822                    |       | (540                   | )          |
| Income before  income taxes and minority interest |       | 10,001                               |       | 9,880                          |       | 19,871                 |       | 20,239                 |       |
| Income tax  expense                               |       | 2,093                                |       | 3,413                          |       | 3,667                  |       | 6,967                  |       |
| Minority  interest                                |       | 7                                    |       | 4                              |       | 11                     |       | 15                     |       |
| Net income                                        |       | $                                    | 7,901      |                           | $          | 6,463                  |       | $                      | 16,193     |   | $ | 13,257 |   |

 

20

----

 
| ** **                                        | ** ** | **Predecessor**                                             | ** ** | **Successor**                  | ** ** | **Predecessor**        | ** ** | **Successor**          | ** ** |
|---------------------------------------------------|------------|-------------------------------------------------------------|------------|--------------------------------|------------|------------------------|------------|------------------------|------------|
| ** **                                        | ** ** | **Three Months Ended**                            | ** ** | **Six Months Ended** | ** ** |
| ** **                                        | ** ** | **July 2,  2005**                                      | ** ** | **July 1,  2006**         | ** ** | **July 2,  2005** | ** ** | **July 1,  2006** | ** ** |
| ** **                                        | ** ** | **(as a percentage of net sales)** | ** ** |
| Net sales:                                        |       |                                                        |       |                           |       |                   |       |                   |       |
| General Safety & Preparedness                 |       | 68.7                                                        | %          | 69.9                           | %          | 68.9                   | %          | 69.9                   | %          |
| Fire Service                                      |       | 18.7                                                        | %          | 16.3                           | %          | 18.9                   | %          | 16.6                   | %          |
| Electrical Safety                                 |       | 12.6                                                        | %          | 13.8                           | %          | 12.2                   | %          | 13.5                   | %          |
| Total net sales                                   |       | 100.0                                                       | %          | 100.0                          | %          | 100.0                  | %          | 100.0                  | %          |
| Cost of goods  sold                               |       | 62.2                                                        | %          | 61.2                           | %          | 62.6                   | %          | 61.7                   | %          |
| Gross profit                                      |       | 37.8                                                        | %          | 38.8                           | %          | 37.4                   | %          | 38.3                   | %          |
| Operating  expenses                               |       | 24.3                                                        | %          | 27.0                           | %          | 24.1                   | %          | 26.7                   | %          |
| Income from  operations:                          |       |                                                        |       |                           |       |                   |       |                   |       |
| General Safety & Preparedness                 |       | 7.9                                                         | %          | 8.4                            | %          | 7.7                    | %          | 8.2                    | %          |
| Fire Service                                      |       | 3.2                                                         | %          | 1.5                            | %          | 3.4                    | %          | 1.7                    | %          |
| Electrical Safety                                 |       | 3.5                                                         | %          | 3.1                            | %          | 3.3                    | %          | 3.3                    | %          |
| Corporate                                         |       | (1.1                                                        | )%         | (1.2                           | )%         | (1.1                   | )%         | (1.6                   | )%         |
| Total income from operations                      |       | 13.5                                                        | %          | 11.8                           | %          | 13.3                   | %          | 11.6                   | %          |
| Other expense  (income):                          |       |                                                        |       |                           |       |                   |       |                   |       |
| Interest expense                                  |       | 4.8                                                         | %          | 4.8                            | %          | 4.8                    | %          | 4.7                    | %          |
| Interest income                                   |       | (0.1                                                        | )%         | (0.1                           | )%         | (0.2                   | )%         | (0.1                   | )%         |
| Other, net                                        |       | 0.4                                                         | %          | (0.1                           | )%         | 0.4                    | %          | (0.2                   | )%         |
| Income before  income taxes and minority interest |       | 8.4                                                         | %          | 7.2                            | %          | 8.3                    | %          | 7.2                    | %          |
| Income tax  expense                               |       | 1.8                                                         | %          | 2.5                            | %          | 1.5                    | %          | 2.4                    | %          |
| Minority  interest                                |       | 0.0                                                         | %          | 0.0                            | %          | 0.0                    | %          | 0.0                    | %          |
| Net income                                        |       | 6.6                                                         | %          | 4.7                            | %          | 6.8                    | %          | 4.8                    | %          |

 

***Three Months Ended July 1, 2006 as Compared to Three MonthsEnded July 2, 2005***

*Net sales.*Net sales increased by $18.1 million, or15.3%, from $118.1 million for the three months ended July 2, 2005 to $136.2million for the three months ended July 1, 2006. In our general safety andpreparedness segment, net sales increased by $14.0 million, or 17.3%, from$81.2 million for the three months ended July 2, 2005 to $95.2 million for thethree months ended July 1, 2006. The increase reflects a combination of thefollowing: incremental Fibre-Metal net sales of $10.6 million, combined organicgrowth in our European and South African operations of $2.6 million, favorableexchange rates, which had an impact of $2.0 million, overall organic growth inour North American non-government business of $1.3 million and a decrease ingovernment contract shipments of $2.5 million. In our fire service segment, netsales increased by $0.1 million, or 0.4%, from $22.1 million for the threemonths ended July 2, 2005 to $22.2 million for the three months ended July 1,2006 as incremental American Firewear net sales of $1.8 million were offset bypostponed customer orders due to the combined impact of government grantholdups and a delay in the issuance of the new NFPA standard.  In our electrical safety segment, net salesincreased by $4.0 million, or 26.5%, from $14.9 million for the three monthsended July 2, 2005 to $18.9 million for the three months ended  July 1, 2006 primarily driven by strong marketdemand, new product penetration, and incremental White Rubber net sales of $1.6million.

*Gross profit.*Gross profit increased by $8.2 million,or 18.5%, from $44.7 million for the three months ended July 2, 2005 to $52.9million for the three months ended July 1, 2006, primarily due to the $18.1million, or 15.3%, increase in net sales. Our gross profit margin of 38.8% for the three months ended July 1, 2006was favorable to the 37.8% gross profit margin for the three months ended July2, 2005. In our general safety and preparedness segment, gross profit increasedby $7.1 million, or 22.8%, from $31.4 million for the three months ended July2, 2005 to $38.5 million for the three months ended July 1, 2006. This increasewas primarily due to the overall net sales increase of $14.0 million, or 17.3%and improved margin realization in our North American operations (in part dueto the favorable contribution of Fibre-Metal).

21

----

In our fire service segment, gross profit decreased by $0.2 million, or2.4%, from $6.9 million for the three months ended July 2, 2005 to $6.7 millionfor the three months ended July 1, 2006 primarily as a result of lower marginrealization (in part due to the inherent lower margin of American Firewearproducts and product line integration costs). In our electrical safety segment,gross profit increased by $1.3 million, or 19.5%, from $6.5 million for thethree months ended July 2, 2005 to $7.8 million for the three months ended July2, 2006, primarily due to the $4.0 million, or 26.5% increase in net sales.

*Operating expenses. *Operating expenses increased by $8.1 million, or28.0%, from $28.7 million for the three months ended July 2, 2005 to $36.8million for the three months ended July 1, 2006. In our general safety andpreparedness segment, operating expenses increased by $5.0 million, or 22.4%,from $22.0 million for the three months ended July 2, 2005 to $27.0 million forthe three months ended July 1, 2006, primarily due to higher amortizationexpense of $1.2 million associated with intangible assets recorded as part ofpurchase accounting, incremental Fibre-Metal operating expenses of $2.1 million,unfavorable exchange rates, which had an impact of $0.5 million and increasedvariable selling and distribution expenses associated with the $14.0 million,or 17.3% increase in net sales.  In ourfire service segment, operating expenses increased $1.5 million, or 51.3%, from$3.1 million for the three months ended July 2, 2005 to $4.6 million for thethree months ended July 1, 2006, primarily due to higher amortization expenseof  $1.0 million associated withintangible assets recorded as part of purchase accounting, incremental AmericanFirewear operating expenses of $0.2 million, and additional general andadministrative expenses, including legal costs related to litigation with acompetitor. In our electrical safety segment, operating expenses increased by$1.2 million, or 48.2%, from $2.3 million for the three months ended July 2,2005 to $3.5 million for the three months ended July 1, 2006, primarily due tohigher amortization expense of $0.4 million associated with intangible assetsrecorded as part of purchase accounting, incremental White Rubber operatingexpenses of $0.3 million and increased variable selling and distributionexpenses related to the $4.0 million, or 26.5%, increase in net sales. Ourcorporate expenses increased $0.4 million, primarily due to non-cash managementincentive compensation charges of $0.3 million related to our equity optionplan and higher payroll costs during the three months ended July 1, 2006.

*Income from operations.*Income from operations increased by $0.2million, or 1.3%, from $16.0 million for the three months ended July 2, 2005 to$16.2 million for the three months ended July 1, 2006. Included in income fromoperations for the three months ended July 1, 2006 were: (1) incrementalamortization expense of $2.6 million related to purchase accounting and (2)non-cash management incentive compensation charges of $0.3 million. Excludingthese charges, income from operations increased by $3.1 million, or 19.3%.Excluding these same charges, as a percentage of net sales, income fromoperations increased from 13.5% for the three months ended July 2, 2005 to14.0% for the three months ended July 1, 2006. In our general safety andpreparedness segment (after adjusting for incremental charges related topurchase accounting of $1.2 million), income from operations increased by $3.4 million,or 36.8%, from $9.3 million for the three months ended July 2, 2005 to $12.7million for the three months ended July 1, 2006, primarily due to higher netsales of $14.0 million, or 17.3% and favorable margin realization. In our fireservice segment (after adjusting for incremental charges related to purchaseaccounting of $1.0 million), income from operations decreased by $0.7 million,or 19.5%, from $3.7 million for the three months ended July 2, 2005 to $3.0million for the three months ended July 1, 2006, primarily as a result of lowermargin realization and higher general and administrative expenses, includinglegal costs related to litigation with a competitor. In our electrical safetysegment (after adjusting for incremental charges related to purchase accountingof $0.4 million), income from operations increased by $0.5 million, or 12.1%,from $4.1 million for the three months ended July 2, 2005 to $4.6 million forthe three months ended July 1, 2006, primarily due to higher net sales of $4.0 million,or 26.5%. Our corporate expenses increased $0.4 million, primarily due tomanagement incentive compensation charges of $0.3 million related to our equityoption plan and higher payroll costs during the three months ended July 1,2006.

Included in income from operations for the threemonths ended July 1, 2006 and July 2, 2005 were depreciation and amortizationexpenses of $6.1 million and $2.7 million, respectively. Of these amounts, $4.1million, $1.1 million, and $0.9 million were attributable to the general safetyand preparedness, fire service, and electrical safety segments, respectively,for the three months ended July 1, 2006 and $2.3 million, $0.1 million, and$0.3 million were attributable to these segments for the three months endedJuly 2, 2005.

*Interest expense.*Interestexpense increased by $0.9 million, or 16.4%, from $5.7 million for the threemonths ended July 2, 2005 to $6.6 million for the three months ended July 1,2006 primarily due to higher outstanding debt balances related to theFibre-Metal and White Rubber Transactions. Interest expense incurred byNorcross and the subsidiary guarantors totaled $6.6 million for the three monthsended July 1, 2006 and $5.6 million for the three months ended July 2, 2005.

22

----

*Other, net.*Other,net decreased by $0.6 million from $0.4 million for the three months ended July2, 2005 to $(0.2) million for the three months ended July 1, 2006, primarilydue to unrealized foreign exchange rate gains.

*Income tax expense.*Income tax expense increased by $1.3million, from $2.1 million for the three months ended July 2, 2005 to $3.4million for the three months ended July 1, 2006, primarily as a result ofhigher domestic income tax expense.

*Net income.*Net income decreased by $1.4 million, or18.2%, from $7.9 million for the three months ended July 2, 2005 to $6.5million for the three months ended July 1, 2006. This was the result of thereasons discussed above.

***Six Months Ended July 1, 2006 as Compared to Six MonthsEnded July 2, 2005***

*Net sales.*Net sales increased by $40.1 million, or16.8%, from $238.0 million for the six months ended July 2, 2005 to $278.1million for the six months ended July 1, 2006. In our general safety andpreparedness segment, net sales increased by $30.5 million, or 18.6%, from$163.9 million for the six months ended July 2, 2005 to $194.4 million for thesix months ended July 1, 2006. The increase reflects a combination of thefollowing: incremental Fibre-Metal net sales of $21.1 million, combined organicgrowth in our European and South African operations of $7.0 million, favorableexchange rates, which had an impact of $1.0 million, overall organic growth inour North American non-government business of $4.4 million and a decrease ingovernment contract shipments of $3.0 million. In our fire service segment, net sales increased by $1.2 million, or2.6%, from $45.1 million for the six months ended July 2, 2005 to $46.3 millionfor the six months ended July 1, 2006 as incremental American Firewear netsales of $3.0 million were partially offset by postponed customer orders due tothe combined impact of government grant holdups and a delay in the issuance ofthe new NFPA standard.  In our electricalsafety segment, net sales increased by $8.4 million, or 28.8%, from $29.1million for the six months ended July 2, 2005 to $37.5 million for the sixmonths ended July 1, 2006 primarily driven by strong market demand, new productpenetration, and incremental White Rubber net sales of $1.6 million.

*Gross profit.*Gross profit increased by $17.6 million,or 19.8%, from $89.0 million for the six months ended July 2, 2005 to $106.6million for the six months ended July 1, 2006, primarily due to the $40.1million, or 16.8%, increase in net sales. Excluding the impact of inventorypurchase accounting adjustments in our general safety and preparedness segmentof $0.7 million, gross profit increased by $18.3 million, or 20.6%. Afteradjusting for the inventory purchase accounting adjustments, our gross profitmargin of 38.6% for the six months ended July 1, 2006 was favorable to the37.4% gross profit margin for the six months ended July 2, 2005. In our generalsafety and preparedness segment (after adjusting for charges related topurchase accounting of $0.7 million), gross profit increased by $14.9 million,or 24.1%, from $62.4 million for six months ended July 2, 2005 to $77.3 millionfor the six months ended July 1, 2006. This increase was primarily due to theoverall net sales increase of $30.5 million, or 18.6% and improved marginrealization in our North American operations (in part due to the favorablecontribution of Fibre-Metal).  In ourfire service segment, gross profit was consistent at $14.2 million for thesix months ended July 2, 2005 and the six months ended July 1, 2006, as the increasein net sales of $1.2 million, or 2.6%, were offset by lower marginrealization (in part due to the inherent lower margin of American Firewearproducts and product line integration costs). In our electrical safety segment,gross profit increased by $3.4 million, or 27.0%, from $12.4 millionfor the six months ended July 2, 2005 to $15.8 million for the six monthsended July 1, 2006, primarily due to the $8.4 million, or 28.8% increase in netsales.

*Operating expenses.*Operating expenses increased by $16.7 million,or 29.1%, from $57.5 million for the six months ended July 2, 2005 to$74.2 million for the six months ended July 1, 2006. In our general safetyand preparedness segment, operating expenses increased by $9.6 million, or21.7%, from $44.2 million for the six months ended July 2, 2005 to$53.8 million for the six months ended July 1, 2006, primarily due tohigher amortization expense of $2.4 million associated with the intangibleassets recorded as part of purchase accounting, incremental Fibre-Metaloperating expenses of $4.4 million and increased variable distribution andselling expenses associated with the $30.5 million, or 18.6% increase in netsales. In our fire service segment, operating expenses increased$3.4 million, or 56.7%, from $6.1 million for the six months ended July 2,2005 to $9.5 million for the six months ended July 1, 2006, primarily dueto higher amortization expense of $2.0 million associated with intangibleassets recorded as part of purchase accounting, incremental American Firewearoperating expenses of $0.3 million, and additional general and administrativeexpenses, including legal costs related to litigation with a competitor. In ourelectrical safety segment, operating expenses increased by $2.1 million,or 44.2%, from $4.6 million for the six months ended July 2, 2005 to$6.7 million for the six months ended July 1, 2006, primarily due tohigher amortization expense of $0.7 million associated with intangible assetsrecorded as part of purchase accounting, incremental White Rubber operatingexpenses of $0.3 million and increased variable selling and distributionexpenses related to the $8.4 million, or 28.8% increase in net sales. Ourcorporate expenses increased by $1.6 million, primarily due to non-cashmanagement incentive compensation charges of $1.1 million related to our equityoption plan and higher payroll costs during the six months ended July 1, 2006.

*Income from operations.*Income from operations increased by$0.9 million, or 2.8%, from $31.6 million for the six months endedJuly 2, 2005 to $32.5 million for the six months ended July 1, 2006.  Included in income from operations for thesix months ended July 1, 2006 were: (1) inventory purchase accounting chargesof $0.7 million, (2) incremental amortization expense of $5.2

23

----

million related to purchase accounting and (3) non-cash managementincentive compensation charges of $1.1 million. Excluding these charges, incomefrom operations increased by $7.9 million, or 25.0%. Excluding these samecharges, as a percentage of net sales, income from operations increased from13.3% for the six months ended July 2, 2005 to 14.2% for the six months endedJuly 1, 2006. In our general safety and preparedness segment (after adjustingfor incremental charges related to purchase accounting of $3.2 million), incomefrom operations increased by $7.8 million, or 43.3%, from $18.1 million for thesix months ended July 2, 2005 to $25.9 million for the six months ended July 1,2006, primarily due to higher net sales of $30.5 million, or 18.6% andfavorable margin realization. In our fire service segment (after adjusting forincremental charges related to purchase accounting of $2.0 million), incomefrom operations decreased by $1.4 million, or 17.8%, from $8.1 million for thesix months ended July 2, 2005 to $6.7 million for the six months ended July 1,2006, as higher net sales of $1.2 million, or 2.6%, were offset by lower marginrealization and higher general and administrative expenses, including legalcosts related to litigation with a competitor. In our electrical safety segment(after adjusting for incremental charges related to purchase accounting of $0.7million), income from operations increased by $2.0 million, or 26.4%, from $7.9million for the six months ended July 2, 2005 to $9.9 million for the sixmonths ended July 1, 2006, primarily due to higher net sales of $8.4 million,or 28.8%. Our corporate expenses increased $1.6 million, primarily due tomanagement incentive compensation charges of $1.1 million related to our equityoption plan and higher payroll costs during the six months ended July 1, 2006.

Included in income from operations for the six monthsended July 1, 2006 and July 2, 2005 were depreciation and amortization expensesof $12.0 million and $5.6 million, respectively. Of these amounts, $8.0million, $2.2 million, and $1.8 million were attributable to the general safetyand preparedness, fire service, and electrical safety segments, respectively,for the six months ended July 1, 2006 and $4.6 million, $0.2 million, and $0.8million were attributable to these segments for the six months ended July 2,2005.

*Interest expense.*Interest expense increased by $1.8million, or 15.9%, from $11.3 million for the six months ended July 2, 2005 to$13.1 million for the six months ended July 1, 2006 due to higher outstandingdebt balances related to the Fibre-Metal and White Rubber Transactions.Interest expense incurred by Norcross and the subsidiary guarantors totaled$13.1 million for the six months ended July 1, 2006 and $11.2 million forthe six months ended July 2, 2005.

*Other, net.*Other, net decreased by $1.3 million from$0.8 million for the six months ended July 2, 2005 to $(0.5) million for thesix months ended July 1, 2006, primarily due to unrealized foreign exchangerate gains.

*Income tax expense.*Income tax expense increased by$3.3 million, from $3.7 million for the six months ended July 2, 2005to $7.0 million for the six months ended July 1, 2006, primarily as aresult of higher domestic income tax expense.

*Net income.*Net income decreased by$2.9 million, or 18.1%, from $16.2 million for the six months endedJuly 2, 2005 to $13.3 million for the six months ended July 1, 2006. Thiswas the result of the reasons discussed above.

**Liquidityand Capital Resources**

We have historically used internal cash flow fromoperations, commercial borrowings on our lines of credit, seller notes,investments from our equityholders and capital markets transactions to fund ouroperations, acquisitions, capital expenditures and working capitalrequirements. For the six months ended July 1, 2006 and July 2, 2005, net cashprovided by operating activities was $5.6 million and $15.2 million,respectively. The $9.6 million decrease was primarily attributable to higherincome from operations of $7.9 million (after adjusting for expenses related topurchase accounting and management incentive compensation), which was offset byincreased inventory and accounts receivable balances due in part to the $40.1million, or 16.8%, increase in net sales.

Historically, our principal uses of cash have beencapital expenditures, acquisitions and working capital. Our capitalexpenditures were $4.8 million for the six months ended July 1, 2006 and $3.5million for the six months ended July 2, 2005. Investing activities for the sixmonths ended July 1, 2006 included $22.2 million for the acquisition of WhiteRubber, $4.5 million for the acquisition of American Firewear and $0.3 millionof royalty payments made to the sellers of Muck Boot and Arbin. During the sixmonths ended July 1, 2006, we received cash proceeds of $0.1 million related tothe sale of property, plant, and equipment. For the six months ended July 2,2005, investing activities included $0.6 million in acquisition and royaltypayments.

As of July 1, 2006, we had working capital of $141.6million and cash of $9.1 million. We maintain inventory levels sufficient tosatisfy customer orders on demand, with generally a three month supply on hand.Bunker gear is an exception and is generally made to order. Our accountsreceivable terms are generally 30 days, net.

For the six months ended July 1, 2006, net cashprovided by financing activities was $13.6 million, consisting of thefollowing: proceeds from additional term borrowings of $15.0 million under thesenior credit facility related to the White Rubber transaction, $0.9 million ofpayments on long-term obligations, $0.4 million of dividends to Safety ProductsHoldings Inc., $0.2

24

----

millionof capital contributions, and $0.2 million of payments for deferred financingcosts. For the six months ended July 2, 2005, net cash used in financingactivities was $14.1 million, representing $13.6 million of payments onlong-term obligations, including an excess cash flow sweep payment under theterms of the then existing senior credit facility of $12.2 million and cashfunded to NSP Holdings L.L.C. of $0.4 million.

As of July 1, 2006, borrowings under the senior creditfacility bore interest at a weighted average rate of 6.8%. As of July 1, 2006,there was approximately $166.6 million of outstanding indebtedness under thesenior credit facility and approximately $46.6 million of available borrowingsunder the revolving credit facility.

We believe that our internal cash flows and borrowingsunder the revolving portions of our senior credit facility will provide us withsufficient liquidity and capital resources to meet our current and futurefinancial obligations for the foreseeable future, including funding ouroperations, debt service and capital expenditures. Our future operatingperformance will be subject to future economic conditions and to financial,business and other factors, many of which are beyond our control. If our futurecash flow from operations and other capital resources are insufficient to payour obligations as they mature or to fund our liquidity needs, we may be forcedto reduce or delay our business activities and capital expenditures, sellassets, obtain additional debt or equity capital or restructure or refinanceall or a portion of our debt, including the notes, on or before maturity. Wecannot assure you that we would be able to accomplish any of these alternativeson a timely basis or on satisfactory terms, if at all. In addition, the termsof our existing and future indebtedness, including our senior subordinatednotes and our senior credit facility, may limit our ability to pursue any ofthese alternatives.

25

----

**Forward-Looking Statements**

This Management’s Discussion and Analysis of FinancialCondition and Results of Operations contains forward-looking information. Thesestatements reflect management’s expectations, estimates, and assumptions basedon information available at the time of the statement. Forward-lookingstatements include, but are not limited to, statements regarding future events,plans, goals, objectives, and expectations. The words ‘‘anticipate,’’ ‘‘believe,’’‘‘estimate,’’ ‘‘expect,’’ ‘‘plan,’’ ‘‘intent,’’ ‘‘likely,’’ ‘‘will,’’ ‘‘should,’’and similar expressions are intended to identify forward-looking statements.Forward-looking statements are not guarantees of future performance and involverisks, uncertainties, and other factors, including those set forth below, whichmay cause our actual results, performance, or achievements to be materiallydifferent from any future results, performance, or achievements expressed orimplied by those statements. Important factors that could cause our actualresults, performance, or achievements to be materially different from anyfuture results, performance, or achievements expressed or implied by thosestatements include, but are not limited to: (i) our high degree of leverage andsignificant debt service obligations; (ii) the impact of current and futurelaws and governmental regulations affecting us or our product offerings; (iii)the impact of governmental spending; (iv) our ability to retain existingcustomers, maintain key supplier status with those customers with which we haveachieved such status, and obtain new customers; (v) the highly competitivenature of the personal protection equipment industry; (vi) any future changesin management; (vii) acceptance by consumers of new products we develop oracquire; (viii) the importance and costs of product innovation; (ix) unforeseenproblems associated with international sales, including gains and losses fromforeign currency exchange and restrictions on the efficient repatriation ofearnings; (x) the unpredictability of patent protection and other intellectualproperty issues; (xi) cancellation of current orders; (xii) the outcome ofpending product liability claims and the availability of indemnification forthose claims; (xiii) general risks associated with the personal protectionequipment industry; and (xiv) the successful integration of acquired companieson economically acceptable terms. We undertake no obligation to publicly updateor revise any forward-looking statements to reflect changed assumptions, theoccurrence of anticipated or unanticipated events, or changes to future resultsover time.

26

----

**Item 3. Quantitative andQualitative Disclosures About Market Risk**

There have been nomaterial changes to our exposure to market risk since December 31, 2005.

27

----

**Item 4. Controls and Procedures**

Based on their evaluation as of the end of the periodcovered by this quarterly report on Form 10-Q, our Chief ExecutiveOfficer and Chief Financial Officer have concluded that our disclosure controlsand procedures (as defined in Rules 13a-15(e) and 15d-15(e) underthe Securities Exchange Act of 1934, as amended (the “Exchange Act”)) areeffective. There was no change in our internal control over financial reporting(as defined in Rules 13a-15(f) and 15d-15(f) under the ExchangeAct) identified in connection with the evaluation required by Rule 13a-15(d)of the Exchange Act that occurred during the period covered by this quarterlyreport on Form 10-Q that has materially affected, or is reasonably likelyto materially affect, our internal control over financial reporting.

28

----

**PART IIOTHER INFORMATION**

**Item1. Legal Proceedings**

As of July 1, 2006, our North Safety Productssubsidiary, along with its predecessors and/or the former owners of suchbusiness were named as defendants in approximately 985 lawsuits involvingrespirators allegedly manufactured and sold by it or its predecessors. We arealso monitoring an additional 12 lawsuits in which we feel that North SafetyProducts, its predecessors and /or the former owners of such businessesmay be named as defendants. Collectively, these 997 lawsuits representapproximately 9,468 (excluding spousal claims) plaintiffs. Approximately 87% ofthese lawsuits involve plaintiffs alleging injury resulting from exposure tosilica dust, with the remainder alleging injury from exposure to otherparticles, including asbestos. These lawsuits typically allege that thepurported injuries resulted in part from respirators that were negligentlydesigned and/or manufactured. The defendants in these lawsuits are oftennumerous, and include, in addition to respirator manufacturers, employers ofthe plaintiffs and manufacturers of sand (used in sand blasting) and asbestos.We acquired our North Safety Products subsidiary on October 2, 1998 fromSiebe plc. In connection with the acquisition, Siebe, which was subsequentlymerged with BTR plc (now known as “Invensys plc”), contractually agreed toindemnify us for any losses, including costs of defending claims, resultingfrom respiratory products manufactured or sold prior to our acquisition ofNorth Safety Products in October 1998.

In addition, our North Safety Products subsidiary iscontractually entitled to indemnification from Norton Company, an affiliate ofSaint-Gobain, which owned the North Safety Products business prior to Invensys.Pursuant to a December 14, 1982 asset purchase agreement, SiebeNorton, Inc., a newly formed wholly-owned subsidiary of Norton Company,acquired the assets of Norton’s Safety Products Division and the stock of thiscompany was in turn acquired by Siebe Gorman Holdings PLC. Under the terms ofthe agreement, Siebe Norton, Inc. did not assume any liability for claimsrelating to products shipped by Norton Company prior to the closing date.Moreover, Norton Company covenanted in the agreement to indemnify Siebe Norton,Inc. and its successors and assigns against any liability resulting from orarising out of any state of facts, omissions or events existing or occurring onor before the closing date, including, without limitation, any claims arisingfrom products shipped by Norton Company or any of its affiliates prior to theclosing date.  Siebe Norton, Inc., whosename was subsequently changed to Siebe North Inc., was subsequently acquired byus as part of the 1998 acquisition of the North Safety Products businessfrom Invensys.

Despite these indemnification arrangements, we couldpotentially be liable for losses or claims relating to products manufacturedprior to the October 1998 acquisition date if Invensys fails to meet itsobligations to indemnify us and we could potentially be liable for losses andclaims relating to products sold prior to January 10, 1983 if bothInvensys and Norton fail to meet their obligations to indemnify us. We couldalso be liable if the alleged exposure involved the use of a productmanufactured by us after our October 1998 acquisition of the North SafetyProducts business.

Effective July 1, 2006, we plan to enter into a joint defense agreementthrough December 31, 2008 with the former owners of the North Safety Productsbusiness (the “Joint Defense Agreement”). Under the terms of the Joint Defense Agreement, we agreed to pay aweighted average percentage of defense costs associated with defendingourselves and the prior owners of the North Safety Products business subject toa cap of $525,000, $960,000 and $1.0 million for the period from July 1, 2006through December 31, 2006, the year ended December 31, 2007 and the year endedDecember 31, 2008, respectively.  The capexcludes settlement costs and other costs incurred exclusively by us, includingtrial costs and special requests of counsel. Separately, we agreed to pay Invensys $200,000 related to settled casesthrough June 30, 2006 in which Invensys claims that the period of allegedexposure included periods after October 1998.

Based upon informationprovided to us by Invensys, we believe activity related to these lawsuits wasas follows for the six months ended July 1, 2006:
|                       | ** ** | **Plaintiffs** | ** ** | **Cases** | ** ** |
|-----------------------|------------|----------------|------------|-----------|------------|
| Beginning  lawsuits   |       | 18,459         |       | 1,148     |       |
| New lawsuits          |       | 601            |       | 452       |       |
| Settlements           |       | (5             | )          | (5        | )          |
| Dismissals and  other |       | (9,587         | )          | (598      | )          |
| Ending lawsuits       |       | 9,468          |       | 997       |       |

 

29

----

Plaintiffs haveasserted specific dollar claims in approximately a quarter of the approximately985 cases pending as of July 1, 2006, in which North Safety Products, itspredecessors and/or the former owners of such businesses have been named asdefendants. A majority of jurisdictions prohibit specifying damages in tortcases such as these, and most of the remaining jurisdictions do not requiresuch specification. In those cases in which plaintiffs choose to assertspecific dollar amounts in their complaints, brought in states that permit suchpleading, the amounts claimed are typically not meaningful as an indicator of acompany’s potential liability. This is because (1) the amounts claimedtypically bear no relation to the level of the plaintiff’s injury, (2) thecomplaints typically assert claims against numerous defendants, and(3) many cases are brought on behalf of plaintiffs who have not sufferedany medical injury, and, ultimately, are resolved without any payment orpayment of a small fraction of the damages initially claimed. Of the 985complaints maintained in our records, 747 do not specify the amount of damagessought, 26 generally allege damages in excess of $50,000, three allegecompensatory damages in excess of $50,000 and an unspecified amount of punitivedamages, 92 allege compensatory damages and punitive damages, each in excess of$25,000, two generally allege damages in excess of $100,000, 11 allegecompensatory damages and punitive damages, each in excess of $50,000, 20generally allege damages of $15.0 million, one generally alleges damages not toexceed $290.0 million, one generally alleges damages of $23.0 million, onealleges compensatory damages and punitive damages, each in excess of $10,000,four allege general damages of $18.0 million and punitive damages of $10.0million, two allege general damages of $13.0 million and punitive damages $10.0million, one alleges compensatory and punitive damages, each in excess of$15,000, four allege punitive damages in excess of $25,000, one allegespunitive damages in excess of $50,000, 57 generally allege damages in excess of$15,000, five generally allege damages in excess of $25,000, one allegescompensatory damages of $18.0 million and punitive damages of $10.0 million,one alleges punitive damages of $13.5 million and compensatory damages of $10.0million, one alleges punitive damages of $13.0 million and compensatory damagesof $10.0 million, one alleges compensatory damages of $13.0 million andpunitive damages of $10.0 million, one alleges compensatory and punitivedamages, each of $15,000, and two allege compensatory and punitive damages,each in excess of $15.0 million. We currently do not have access to the complaintswith respect to the previously mentioned additional 12 monitored cases, andtherefore do not know whether these cases allege specific damages, and if so,the amount of such damages, but are in the process of seeking to obtain suchinformation. Due to the reasons noted above and to the indemnificationarrangements benefiting us, we do not believe that the damage amounts specifiedin these complaints are a meaningful factor in any assessment of our potentialliability.

Bankruptcy filings of companies with asbestos andsilica-related litigation could increase our cost over time. If we were foundliable in these cases and either Invensys or Norton Company failed to meet itsindemnification obligations to us or the suit involved products manufactured byus after our October 1998 acquisition of North Safety Products, it wouldhave a material adverse effect on our business.

The Predecessor recorded a $1.25 million reserve forrespiratory claims. We increased this reserve to $7.0 million and recorded theincrease as part of our purchase price allocation process associated withthe Norcross Transaction. The increase represents a decision by new ownershipto enter into the Joint Defense Agreement with the prior owners of North SafetyProducts. We believe that this reserve represents a reasonable estimate of ourprobable and estimable liabilities for product claims alleging injury resultingfrom exposure to silica dust and other particles, including asbestos, asdetermined by us in consultation with an independent consultant. We believethat a five-year projection of claims and related defense costs is the mostreasonable approach. However, it is possible that we may incur liabilitiesin excess of the amounts currently reserved. This reserve will be re-evaluatedperiodically and additional charges or credits will be recorded to operatingexpenses as additional information becomes available.

It is possible that we may incur liabilities inan amount in excess of amounts currently reserved. However, taking into accountcurrently available information, historical experience, and our indemnificationfrom Invensys, but recognizing the inherent uncertainties in the projection ofany future events, we believe that these suits or claims should not result infinal judgments or settlements in excess of our reserve.

In connection with an ongoing dispute, one of ourcompetitors has filed a complaint against us alleging that we have made aseries of misrepresentations concerning this competitor and its products.The complaint seeks a retraction of all statements alleged to have been made byus and unspecified damages, including legal fees. A bench trial on the issue ofliability was held in February 2006 and the matter is now awaiting rulingby the court. We intend to vigorously defend against these claims.

We are not otherwise involved in any materiallawsuits. We historically have not been required to pay any material liabilityclaims. We maintain insurance against product liability claims (with theexception of asbestosis and silicosis cases, for which coverage is notcommercially available), but it is possible that insurance coverage will notcontinue to be available on terms acceptable to us or that such coverage willnot be adequate for liabilities actually incurred.

We are subject to legal proceedings and claims thatarise in the ordinary course of our business. In our opinion, the outcome ofthese actions will not have a material adverse effect on our financial positionor results of operations.

30

----

**Item 1A. Risk Factors**

In addition to thefactors discussed elsewhere in this Form 10-Q, the following are importantfactors which could cause actual results or events to differ materially fromthose contained in any forward-looking statements made by or on behalf of theCompany.

***If we are unableto retain senior executives and other qualified professionals our growth may behindered.***

Our successdepends in part on our ability to attract, hire, train and retain qualifiedmanagerial, sales and marketing personnel. Competition for these types ofpersonnel is intense. We may be unsuccessful in attracting and retaining thepersonnel we require to conduct and expand our operations successfully. Ourresults of operations could be materially and adversely affected if we areunable to attract, hire, train and retain qualified personnel. Our success alsodepends to a significant extent on the continued service of our managementteam. The loss of any member of the management team could have a materialadverse effect on our business, results of operations and financial condition.

***The markets inwhich we compete are highly competitive, and some of our competitors havegreater financial and other resources than we do. The competitive pressuresfaced by us could materially and adversely affect our business, results ofoperations and financial condition.***

The personalprotection equipment market is highly competitive, with participants ranging insize from small companies which focus on single types of safety products, tolarge multinational corporations which manufacture and supply many types ofsafety products. Our main competitors vary by region and product. We believethat participants in this industry compete primarily on the basis of productcharacteristics (such as functional performance, design and style), price,brand name recognition and service. Some of our competitors have greaterfinancial and other resources than we do and our cash flows from operationscould be adversely affected by competitors’ new product innovations and pricingchanges made by us in response to competition from existing or new competitors.Individual competitors have advantages and strengths in different segments ofthe industry, in different products and in different areas, includingmanufacturing and distribution systems, geographic market presence, customerservice and support, breadth of product, delivery time, costs of labor andprice. We may not be able to compete successfully against current and futurecompetitors and the competitive pressures faced by us could materially andadversely affect our business, results of operations and financial condition.

***Many of ourproducts are subject to existing regulations and standards, changes in whichcould materially and adversely affect our results of operations.***

Our net sales maybe materially and adversely affected by changes in safety regulations andstandards covering industrial workers, firefighters and utility workers in theU.S. and Canada, including safety regulations of OSHA and standards of theNFPA, ANSI and ASTM. Our net sales could also be adversely affected by areduction in the level of enforcement of such regulations. Changes inregulations could reduce the demand for our products or require us toreengineer our products, thereby creating opportunities for our competitors.

***A reduction in thespending patterns of government agencies could materially and adversely affectour net sales.***

We sell asignificant portion of our products in the U.S. and Canada to variousgovernmental agencies. In addition, a portion of our products are sold togovernment agencies through fixed price contracts awarded by competitive bidssubmitted to state and local agencies. Many of these governmental agencycontracts are awarded on an annual basis. Accordingly, notwithstanding ourlong-standing relationship with various governmental agencies, we may lose ourcontracts with such agencies to lower bidders in the competitive bid process.Moreover, the terms and conditions of such sales and the government contractprocess are subject to extensive regulation by various federal, state and localauthorities in the U.S. and Canada.

***In most markets inwhich we compete, there are frequent introductions of new products and productline extensions. If we fail to introduce successful new products, we may losemarket position and our financial performance may be negatively impacted.***

If we are unableto identify emerging consumer and technological trends, maintain and improvethe competitiveness of our products and introduce these products on a globalbasis, we may lose market position, which could have a material adverse effecton our business, financial condition and results of operations. Continuedproduct development and marketing efforts have all the risks inherent in thedevelopment of new products and line extensions, including development delays,the failure of new products and line extensions to achieve anticipated levelsof market acceptance and the cost of failed product introductions.

***Our internationaloperations are subject to various uncertainties and a significant reduction ininternational sales of our products could have a material adverse effect on ourresults of operations.***

Our internationaloperations are subject to various political, economic and other uncertaintieswhich could adversely effect

31

----

ourbusiness. A significant reduction of our international business due to any ofthese risks would adversely affect our revenues. In 2005, approximately 35.0%of our net sales were outside the U.S. These risks include:

·                  unexpected changes in regulatory requirements;

·                  currency exchange rate fluctuations;

·                  changes in trade policy or tariff regulations;

·                  customs matters;

·                  longer payment cycles;

·                  higher tax rates and potentially adverse taxconsequences, including restrictions on repatriating earnings and the threat of“double taxation”;

·                  additional tax withholding requirements;

·                  intellectual property protection difficulties;

·                  difficulty in collecting accounts receivable;

·                  complications in complying with a variety of foreignlaws and regulations, many of which conflict with U.S. laws;

·                  costs and difficulties in integrating, staffing andmanaging international operations; and

·                  strains on financial and other systems to properlyadminister VAT and other taxes.

In addition,foreign operations involve uncertainties arising from local business practices,cultural considerations and international political and trade tensions. Forexample, in 2002, we recorded a non-cash impairment charge with regard to ourformer Zimbabwe subsidiary due to adverse economic and political conditions. Inaddition, a portion of our manufacturing and outsourcing relationships involveChina. If we are unable to successfully manage the risks associated withexpanding our global business or to adequately manage operational fluctuationsinternationally, it could have a material adverse effect on our business,financial condition or results of operations.

***We may incurrestructuring or impairment charges that would reduce our earnings.***

We have in thepast and may in the future restructure some of our operations, including ourrecently acquired subsidiaries. In such circumstances, we may take actions thatwould result in a charge related to discontinued operations, thereby reducingour earnings. These restructurings have or may be undertaken to realign oursubsidiaries, eliminate duplicative functions, rationalize our operatingfacilities and products, and reduce our staff. For example, in conjunction withthe Fibre-Metal Transaction, we recorded an accrual of $1.7 million, comprisedof $1.4 million in severance costs and $0.3 million in facility closure andother exit costs. On January 1, 2002 we adopted Statement of FinancialAccounting Standards (SFAS) No. 142, “Goodwill and Other IntangibleAssets,” which requires that goodwill and intangible assets that have anindefinite useful life be tested at least annually for impairment. We carry avery significant amount of goodwill and intangible assets and SFAS No. 142requires us to perform an annual assessment for possible impairment. As of July1, 2006, we had goodwill and other intangible assets of approximately $433.5million.

***We may be unableto successfully execute or effectively integrate acquisitions, which mayadversely affect our results of operations.***

One of our keyoperating strategies is to selectively pursue acquisitions. Acquisitionsinvolve a number of risks including:

·                  failure of the acquired businesses toachieve the results we expect;

·                  diversion of our management’s attention fromoperational matters;

·                  our inability to retain key personnel of the acquiredbusinesses;

·                  risks associated with unanticipated events orliabilities;

·                  the potential disruption of our existing business; and

32

----

·                  customer dissatisfaction or performance problems atthe acquired businesses.

If we are unableto integrate or successfully manage any business that we may acquire in thefuture, we may not realize anticipated cost savings, improved manufacturingefficiencies and revenue growth, which may result in reduced profitability oroperating losses. In addition, we expect to face competition for acquisitioncandidates, which may limit the number of our acquisition opportunities and maylead to higher acquisition prices. Moreover, acquisitions of businesses mayrequire additional debt financing, resulting in additional leverage. Thecovenants in the senior credit facility, the indenture governing our senior payin kind notes and the indenture governing the Norcross senior subordinatednotes may further limit our ability to complete acquisitions. The realizationof all or any of the risks described above could materially and adverselyaffect our reputation and our results of operations.

***Our continuedsuccess depends on our ability to protect our intellectual property. If we areunable to protect our intellectual property, our sales could be materially andaversely affected.***

Our successdepends, in part, on our ability to obtain and enforce patents, maintain tradesecret protection and operate without infringing on the proprietary rights ofthird parties. We have been issued patents and have registered trademarks withrespect to many of our products, but our competitors could independentlydevelop similar or superior products or technologies, duplicate any of ourdesigns, trademarks, processes or other intellectual property or design aroundany processes or designs on which we have or may obtain patents or trademarkprotection. In addition, it is possible that third parties may have or acquirelicenses for other technology or designs that we may use or desire to use, sothat we may need to acquire licenses to, or to contest the validity of, suchpatents or trademarks of third parties. Such licenses may not be made availableto us on acceptable terms, if at all, and we may not prevail in contesting thevalidity of third-party rights.

In addition topatent and trademark protection, we also protect trade secrets, know-how andother confidential information against unauthorized use by others or disclosureby persons who have access to them, such as our employees, through contractualarrangements. These agreements may not provide meaningful protection for ourtrade secrets, know-how or other proprietary information in the event of anyunauthorized use, misappropriation or disclosure of such trade secrets,know-how or other proprietary information. If we are unable to maintain theproprietary nature of our technologies, our sales could be materially adverselyaffected.

***We do not havelong-term contracts with many of our customers and they may terminate theirrelationship with us at any time, which could have a material adverse effect onour operating results.***

A significantportion of our contracts are not long-term contacts and are terminable at willby either party. If a significant number of our customers choose to terminatetheir contracts or to not renew their contracts with us upon expiration, itwould have a material adverse effect on our business, financial condition andresults of operations.

***We face aninherent business risk of exposure to product liability claims which could havea material adverse effect on our operating results.***

We face aninherent business risk of exposure to product liability claims arising from theclaimed failure of our products to prevent the types of personal injury ordeath against which they are designed to protect. We have not experienced anymaterial uninsured losses due to product liability claims, but it is possiblethat we could experience material losses in the future.  For more information, see “Item 1. LegalProceedings.”

***We are subject to various environmental lawsand any violation of these laws could adversely affect our results ofoperations.***

We are subject tofederal, state and local laws, regulations and ordinances relating to theprotection of the environment, including those governing discharges to air andwater, handling and disposal practices for solid and hazardous wastes,hazardous substance contamination and the maintenance of a safe workplace.These laws impose penalties for noncompliance and liability for response costs andcertain damages resulting from past and current spills, disposals or otherreleases of hazardous materials. We could incur substantial costs as a resultof noncompliance with or liability pursuant to these environmental laws and toattain and maintain compliance with evolving regulatory requirements underenvironmental laws. Environmental laws continue to evolve and we may be subjectto more stringent environmental laws in the future. If more stringentenvironmental laws are enacted, these future laws could have a material adverseeffect on our results of operations.

33

----

**Item 6. Exhibits**
| Exhibit No. | ** ** | **Description**                                                                                                                                            |
|-------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |       |                                                                                                                                                       |
| 10.1        |       | Managing Director Employment Agreement, dated May  29, 2006 and effective July 1, 2005, by and between Kächele-Cama Latex GmbH  and Volker H. Laitsch |
|        |       |                                                                                                                                                       |
| 31.1        |       | Certification of Chief Executive Officer Pursuant to  Section 302 of the Sarbanes-Oxley Act of 2002                                                   |
|        |       |                                                                                                                                                       |
| 31.2        |       | Certification of Chief Financial Officer Pursuant to  Section 302 of the Sarbanes-Oxley Act of 2002                                                        |
|        |       |                                                                                                                                                       |
| 32.1        |       | Certification of Chief Executive Officer Pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002                                                        |
|        |       |                                                                                                                                                       |
| 32.2        |       | Certification of Chief Financial Officer Pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002                                                        |

 

34

----

**SIGNATURES**

Pursuant to the requirements of the SecuritiesExchange Act of 1934, Norcross Safety Products L.L.C. has duly caused thisreport to be signed on its behalf by the undersigned thereunto duly authorized.
|            | NORCROSS SAFETY  PRODUCTS L.L.C. |
|-----------------|----------------------------------|
|            |                             |
|            |                             |
| August 14, 2006 | By:                              | /s/ ROBERT A. PETERSON |   |
|            |                             | Robert A. Peterson |
|            |                             | President, Chief  Executive Officer and Manager |
|            |                             | (Principal Executive  Officer) |
|            |                             |   |
|            |                             |   |
| August 14, 2006 | By:                              | /s/ DAVID F. MYERS, JR. |   |
|            |                             | David F. Myers, Jr. |
|            |                             | Executive Vice President, Chief Financial Officer, |
|            |                             | Secretary and Manager |
|            |                             | (Principal Financial  and Accounting Officer) |

 

35

----

**NORCROSSSAFETY PRODUCTS L.L.C.**

**FORM 10-Q LISTINGOF EXHIBITS**
| Exhibit No. | ** ** | **Description**                                                                                                                                            |
|-------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |       |                                                                                                                                                       |
| 10.1        |       | Managing Director Employment Agreement, dated May  29, 2006 and effective July 1, 2005, by and between Kächele-Cama Latex GmbH  and Volker H. Laitsch |
|        |       |                                                                                                                                                       |
| 31.1        |       | Certification of Chief Executive Officer Pursuant to  Section 302 of the Sarbanes-Oxley Act of 2002                                                   |
|        |       |                                                                                                                                                       |
| 31.2        |       | Certification of Chief Financial Officer Pursuant to  Section 302 of the Sarbanes-Oxley Act of 2002                                                        |
|        |       |                                                                                                                                                       |
| 32.1        |       | Certification of Chief Executive Officer Pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002                                                        |
|        |       |                                                                                                                                                       |
| 32.2        |       | Certification of Chief Financial Officer Pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002                                                        |

 

36

----