----

----

| x      | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                                                                                                                                                                                                                                                                               |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | For the quarterly period ended  September 25, 2010                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                  |
| OR     |
|   |                                                                                                                                                                                                                                                                                                                                                                  |
| o      | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                                                                                                                                                                                                                                                                              |
|   | For the transition period from                              to                          |

|                                                   |
|--------------------------------------------------------|
| THE L. S. STARRETT COMPANY                             |
| (Exact name of registrant as specified in its charter) |

| MASSACHUSETTS                                                  |   | 04-1866480                           |
|----------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification No.) |

|                                      |
|-------------------------------------------|
| 121 CRESCENT STREET, ATHOL, MASSACHUSETTS | 01331-1915 |
| (Address of principal executive offices)  | (Zip Code) |

| 978-249-3551                                       |
|----------------------------------------------------|
| Registrant's telephone number, including area code |

|                                                               |
|--------------------------------------------------------------------|
| Former name, address and fiscal year, if changed since last report |

| Common Shares outstanding as of October 29, 2010 |   | 6,691,830 |   |
|--------------------------------------------------|--------|-----------|--------|
|                                             |   |      |
| Class A Common Shares                            |   | 5,880,655 |   |
|                                             |   |      |
| Class B Common Shares                            |   | 811,175   |   |

----

|                                                                                                                        |   | Page No. |
|-----------------------------------------------------------------------------------------------------------------------------|--------|----------|
|                                                                                                                        |   |     |
| Part I. Condensed Consolidated Unaudited Financial Statements:                                                              |   |     |
|                                                                                                                        |   |     |
| Item 1. Financial Statements                                                                                                |   |     |
|                                                                                                                        |   |     |
| Consolidated Balance Sheets-September 25, 2010 (unaudited) and June 26, 2010                                                |   | 3        |
|                                                                                                                        |   |     |
| Consolidated Statements of Operations-Thirteen weeks ended September 25, 2010 and September 26, 2009 (unaudited)            |   | 4        |
|                                                                                                                        |   |     |
| Consolidated Statements of Cash Flows-Thirteen weeks ended September 25, 2010 and September 26, 2009 (unaudited)            |   | 5        |
|                                                                                                                        |   |     |
| Consolidated Statements of Stockholders' Equity -Thirteen weeks ended September 25, 2010 and September 26, 2009 (unaudited) |   | 6        |
|                                                                                                                        |   |     |
| Notes to Unaudited Consolidated Financial Statements                                                                        |   | 7-12     |
|                                                                                                                        |   |     |
| Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations                               |   | 12-14    |
|                                                                                                                        |   |     |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk                                                          |   | 14       |
|                                                                                                                        |   |     |
| Item 4. Controls and Procedures                                                                                             |   | 14       |
|                                                                                                                        |   |     |
| Part II. Other information:                                                                                                 |   | 15-18    |
|                                                                                                                        |   |     |
| Item 1A. Risk Factors                                                                                                       |   | 14-15    |
|                                                                                                                        |   |     |
| Item 5. Other Information                                                                                                   |   | 15-18    |
|                                                                                                                        |   |     |
| Item 6. Exhibits                                                                                                            |   | 18       |
|                                                                                                                        |   |     |
| SIGNATURES                                                                                                                  |   | 18       |

----

|                                                                                                                     |   | Sept. 25,2010(unaudited) |     |   | June 26,2010 |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|----------|--------|--------------|--------|
| ASSETS                                                                                                                   |   |                     |     |   |         |   |
| Current assets:                                                                                                          |   |                     |     |   |         |   |
| Cash                                                                                                                     |   | $                        | 22,963   |   |         | $      | 20,478 |   |
| Investments                                                                                                              |   |                     | -        |   |         |   | 1,250 |   |
|     Accounts receivable (less allowance for doubtful accounts of $717and $607, respectively)              |   |                     | 40,305   |   |         |   | 33,707 |   |
| Inventory                                                                                                                |   |                     | 47,935   |   |         |   | 46,156 |   |
|    Current deferred income tax asset                                                                      |   |                     | 3,366    |   |         |   | 3,300 |   |
|    Prepaid expenses, taxes and other current assets                                                       |   |                     | 5,458    |   |         |   | 5,510 |   |
| Total current assets                                                                                                     |   |                     | 120,027  |   |         |   | 110,401 |   |
|                                                                                                                     |   |                     |     |   |         |   |   |   |
| Property, plant and equipment, at cost (less accumulated depreciation of $125,286 and $120,943, respectively)            |   |                     | 56,208   |   |         |   | 56,529 |   |
| Property held for sale                                                                                                   |   |                     | 2,699    |   |         |   | 2,699 |   |
| Intangible assets (less accumulated amortization of $5,285 and $4,973, respectively)                                     |   |                     | 991      |   |         |   | 1,303 |   |
| Other assets                                                                                                             |   |                     | 626      |   |         |   | 280 |   |
| Long-term taxes receivable                                                                                               |   |                     | 2,807    |   |         |   | 2,807 |   |
| Long-term deferred income tax asset                                                                                      |   |                     | 26,068   |   |         |   | 26,115 |   |
| Total assets                                                                                                             |   | $                        | 209, 426 |   |         | $      | 200,134 |   |
|                                                                                                                     |   |                     |     |   |         |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                               |   |                     |     |   |         |   |   |   |
| Current liabilities:                                                                                                     |   |                     |     |   |         |   |   |   |
| Notes payable and current maturities                                                                                     |   | $                        | 3,525    |   |         | $      | 2,696 |   |
| Accounts payable and accrued expenses                                                                                    |   |                     | 20,111   |   |         |   | 17,740 |   |
| Accrued salaries and wages                                                                                               |   |                     | 5,121    |   |         |   | 5,037 |   |
| Total current liabilities                                                                                                |   |                     | 28,757   |   |         |   | 25,473 |   |
|                                                                                                                     |   |                     |     |   |         |   |   |   |
| Long-term taxes payable                                                                                                  |   |                     | 9,249    |   |         |   | 9,132 |   |
| Deferred income taxes                                                                                                    |   |                     | 2,366    |   |         |   | 2,436 |   |
| Long-term debt                                                                                                           |   |                     | 642      |   |         |   | 706 |   |
| Postretirement benefit liability                                                                                         |   |                     | 31,285   |   |         |   | 30,005 |   |
| Total liabilities                                                                                                        |   |                     | 72,299   |   |         |   | 67,752 |   |
|                                                                                                                     |   |                     |     |   |         |   |   |   |
| Stockholders' equity:                                                                                                    |   |                     |     |   |         |   |   |   |
| Class A Common $1 par (20,000,000 shares authorized;5,876,514 outstanding on 9/25/10 and5,769,894 outstanding on 6/26/10 |   |                     | 5,877    |   |         |   | 5,859 |   |
| Class B Common $1 par (10,000,000 shares authorized;811,175 outstanding on 9/25/10 and821,204 outstanding on 6/26/10)    |   |                     | 811      |   |         |   | 821 |   |
| Additional paid-in capital                                                                                               |   |                     | 50,456   |   |         |   | 50,373 |   |
| Retained earnings reinvested and employed in the business                                                                |   |                     | 123,146  |   |         |   | 122,724 |   |
| Accumulated other comprehensive loss                                                                                     |   |                     | (43,163  | )      |         |   | (47,395 | ) |
| Total stockholders' equity                                                                                               |   |                     | 137,127  |   |         |   | 132,382 |   |
| Total liabilities and stockholders’ equity                                                                         |   | $                        | 209,426  |   |         | $      | 200,134 |   |

----

|                                                                      |   | 13 Weeks Ended |   |
|---------------------------------------------------------------------------|--------|----------------|--------|
|                                                                      |   | 9/25/2010      |   |   | 9/26/2009 |   |
|                                                                      |   |           |   |   |   |   |
| Net sales                                                                 |   | $              | 57,539 |   |   | $ | 40,573 |   |
|                                                                      |   |           |   |   |   |   |   |   |
| Cost of goods sold                                                        |   |           | 38,867 |   |   |   | 30,541 |   |
|                                                                      |   |           |   |   |   |   |   |   |
| Gross margin                                                              |   |           | 18,672 |   |   |   | 10,032 |   |
|       % of net sales                        |   |           | 32.5   | % |   |   | 24.7 | % |
|                                                                      |   |           |   |   |   |   |   |   |
| Selling and general expense                                               |   |           | 17,387 |   |   |   | 14,353 |   |
|                                                                      |   |           |   |   |   |   |   |   |
| Operating income (loss)                                                   |   |           | 1,285  |   |   |   | (4,321 | ) |
|                                                                      |   |           |   |   |   |   |   |   |
| Other income (expense)                                                    |   |           | 183    |   |   |   | (388 | ) |
|                                                                      |   |           |   |   |   |   |   |   |
| Earnings (loss) before income taxes                                       |   |           | 1,468  |   |   |   | (4,709 | ) |
|                                                                      |   |           |   |   |   |   |   |   |
| Income tax expense (benefit)                                              |   |           | 645    |   |   |   | (1,578 | ) |
|                                                                      |   |           |   |   |   |   |   |   |
| Net earnings(loss)                                                        |   | $              | 823    |   |   | $ | (3,131 | ) |
|                                                                      |   |           |   |   |   |   |   |   |
|                                                                      |   |           |   |   |   |   |   |   |
|                                                                      |   |           |   |   |   |   |   |   |
| Basic and diluted earnings (loss) per share                               |   | $              | 0.12   |   |   | $ | (0.47 | ) |
|                                                                      |   |           |   |   |   |   |   |   |
| Average outstanding shares used in per share calculations (in thousands): |   |           |   |   |   |   |   |   |
| Basic                                                                     |   |           | 6,684  |   |   |   | 6,651 |   |
| Diluted                                                                   |   |           | 6,699  |   |   |   | 6,651 |   |
|                                                                      |   |           |   |   |   |   |   |   |
|                                                                      |   |           |   |   |   |   |   |   |
|                                                                      |   |           |   |   |   |   |   |   |
| Dividends per share                                                       |   | $              | 0.06   |   |   | $ | 0.12 |   |

----

|                                                |   | 13 Weeks Ended |   |
|-----------------------------------------------------|--------|----------------|--------|
|                                                |   | 9/25/2010      |   |   | 9/26/2009 |   |
|                                                |   |           |   |   |   |   |
| Cash flows from operating activities:               |   |           |   |   |   |   |
| Net earnings (loss)                                 |   | $              | 823    |   |   | $ | (3,131 | ) |
| Non-cash items included:                            |   |           |   |   |   |   |   |   |
| Depreciation                                        |   |           | 2,429  |   |   |   | 2,253 |   |
| Amortization                                        |   |           | 312    |   |   |   | 313 |   |
| Net long-term tax payable                           |   |           | 60     |   |   |   | 2 |   |
| Deferred taxes                                      |   |           | 146    |   |   |   | 59 |   |
| Unrealized transaction (gains)                      |   |           | (88    | ) |   |   | (79 | ) |
| Retirement benefits                                 |   |           | 432    |   |   |   | 971 |   |
| Working capital changes                             |   |           |   |   |   |   |   |   |
| Receivables                                         |   |           | (4,700 | ) |   |   | (39 | ) |
| Inventories                                         |   |           | (288   | ) |   |   | 5,355 |   |
| Other current assets                                |   |           | 194    |   |   |   | 186 |   |
| Other current liabilities                           |   |           | 1,667  |   |   |   | (1,343 | ) |
| Prepaid pension cost and other                      |   |           | (104   | ) |   |   | (138 | ) |
|                                                |   |           |   |   |   |   |   |   |
| Net cash provided by operating activities           |   |           | 883    |   |   |   | 4,409 |   |
|                                                |   |           |   |   |   |   |   |   |
| Cash flows from investing activities:               |   |           |   |   |   |   |   |   |
| Additions to plant and equipment                    |   |           | (1,035 | ) |   |   | (2,783 | ) |
| Proceeds from investments                           |   |           | 1,250  |   |   |   | 615 |   |
| Net cash provided (used in) by investing activities |   |           | 215    |   |   |   | (2,168 | ) |
|                                                |   |           |   |   |   |   |   |   |
| Cash flows from financing activities:               |   |           |   |   |   |   |   |   |
| Proceeds from short-term borrowings                 |   |           | 1,484  |   |   |   | 11,887 |   |
| Short-term debt repayments                          |   |           | (678   | ) |   |   | (14,887 | ) |
| Proceeds from long-term borrowings                  |   |           | -      |   |   |   | 129 |   |
| Long-term debt repayments                           |   |           | (67    | ) |   |   | (171 | ) |
| Proceeds from common stock issued                   |   |           | 73     |   |   |   | 162 |   |
| Dividends paid                                      |   |           | (401   | ) |   |   | (799 | ) |
| Net cash (used in) provided by financing activities |   |           | 411    |   |   |   | (3,679 | ) |
|                                                |   |           |   |   |   |   |   |   |
| Effect of exchange rate changes on cash             |   |           | 976    |   |   |   | 121 |   |
|                                                |   |           |   |   |   |   |   |   |
| Net increase in cash                                |   |           | 2,485  |   |   |   | (1,317 | ) |
| Cash, beginning of period                           |   |           | 20,478 |   |   |   | 10,248 |   |
| Cash, end of period                                 |   | $              | 22,963 |   |   | $ | 8,931 |   |

----

|                                                                                        |   | Common Stock Outstanding($1 Par) |   |   | Addi-tionalPaid-inCapital |   |   | RetainedEarnings |   |   | AccumulatedOther Com-prehensiveLoss |   |   | Total  |    |
|---------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|--------|---------------------------|--------|--------|------------------|--------|--------|-------------------------------------|--------|--------|--------|---------|
|                                                                                        |   | Class A                               |   |   | Class B                   |   |   |             |   |   |                                |   |   |   |    |   |   |   |
| Balance June 27,2009                                                                        |   | $                                     | 5,770  |   |                      | $      | 869    |             |   | $      | 49,984                              |   |   | $      | 127,707 |   |   | $ | (41,452 | ) |   | $ | 142,878 |   |
| Comprehensive income (loss):                                                                |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   |   |   |   |   |   |   |
|      Net loss                                                           |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   | (3,131  | ) |   |   |   |   |   |   | (3,131 | ) |
|      Unrealized net gain on investments                                 |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   | 9 |   |   |   | 9 |   |
|      Translation gain, net                                              |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   | 2,491 |   |   |   | 2,491 |   |
| Total comprehensive loss                                                                    |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   |   |   |   |   | (631 | ) |
| Dividends ($0.12 per share)                                                                 |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   | (799    | ) |   |   |   |   |   |   | (799 | ) |
| Treasury shares:                                                                            |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   |   |   |   |   |   |   |
|      Purchased                                                          |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   |   |   |   |   |   |   |
|      Issued                                                             |   |                                  | 20     |   |                      |   |   |             |   |   | 142                                 |   |   |   |    |   |   |   |   |   |   |   | 162 |   |
| Issuance of stock under ESPP                                                                |   |                                  |   |   |                      |   |   |             |   |   | 15                                  |   |   |   |    |   |   |   |   |   |   |   | 15 |   |
| Conversion                                                                                  |   |                                  | 7      |   |                      |   | (7     | )                |   |   |                                |   |   |   |    |   |   |   |   |   |   |   | – |   |
|                                                                                        |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance September 26, 2009                                                                  |   | $                                     | 5,797  |   |                      | $      | 862    |             |   | $      | 50,141                              |   |   | $      | 123,777 |   |   | $ | (38,352 | ) |   | $ | 141,625 |   |
|                                                                                        |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance June 26, 2010                                                                       |   | $                                     | 5,859  |   |                      | $      | 821    |             |   | $      | 50,373                              |   |   | $      | 122,724 |   |   | $ | (47,395 | ) |   | $ | 132,382 |   |
| Comprehensive income (loss):                                                                |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   |   |   |   |   |   |   |
|      Net  earnings                                            |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   | 823     |   |   |   |   |   |   |   | 823 |   |
|      Unrealized net gain on investments                                 |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Minimum pension liability                                                                   |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   | 39 |   |   |   | 39 |   |
|      Translation gain, net                                              |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   | 4,193 |   |   |   | 4,193 |   |
| Total comprehensive income                                                                  |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   |   |   |   |   | 5,055 |   |
| Dividends ($0.06 per share)                                                                 |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   | (401    | ) |   |   |   |   |   |   | (401 | ) |
| Treasury shares:                                                                            |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   |   |   |   |   |   |   |
|      Issued                                                             |   |                                  | 8      |   |                      |   |   |             |   |   | 65                                  |   |   |   |    |   |   |   |   |   |   |   | 73 |   |
| Issuance of stock under ESPP                                                                |   |                                  |   |   |                      |   |   |             |   |   | 18                                  |   |   |   |    |   |   |   |   |   |   |   | 18 |   |
| Conversion                                                                                  |   |                                  | 10     |   |                      |   | (10    | )                |   |   |                                |   |   |   |    |   |   |   |   |   |   |   | - |   |
|                                                                                        |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance September 25, 2010                                                                  |   | $                                     | 5,877  |   |                      | $      | 811    |             |   | $      | 50,456                              |   |   | $      | 123,146 |   |   | $ | (43,163 | ) |   | $ | 137,127 |   |
|                                                                                        |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Cumulative Balance:                                                                         |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   |   |   |   |   |   |   |
|      Translation loss                                                   |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   | (7,379 | ) |   |   |   |   |
|      Unrealized gain on investments                                     |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   |   |   |   |   |   |   |
|      Amounts not recognized as a component of net periodic benefit cost |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   |   | (35,784 | ) |   |   |   |   |
|                                                                                        |   |                                  |   |   |                      |   |   |             |   |   |                                |   |   |   |    |   |   | $ | (43,163 | ) |   |   |   |   |

----

| o   | Level 1 – Financial assets whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market which the company has the ability to access at the measurement date (examples include active exchange-traded equity securities and most U.S. Government and agency securities). |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | Level 2 – Financial assets whose value are based on quoted market prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets. |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | Level 3 – Financial assets whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own view about the assumptions a market participant would use in pricing the asset. |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                |   | Level 1   |   |
|-----------------------------------------------------|--------|-----------|--------|
|                                                |   | 9/25/2010 |   |   | 6/26/2010 |   |
| International Bonds (Puerto Rican debt obligations) |   |      | -      |   |   | $ | 1,250 |   |
|                                                |   |      | -      |   |   | $ | 1,250 |   |

----

|                                |   |           |    |   |          |   |
|-------------------------------------|--------|----------------|---------|--------|---------------|--------|
|                                |   | Sept. 25, 2010 |    |   | June 26, 2010 |   |
| Raw Material & Supplies         |   | $              | 28,832  |   |          | $      | 27,251 |   |
| Goods in Process and Finished Parts |   |           | 20,142  |   |          |   | 19,136 |   |
| Finished Goods                      |   |           | 23,868  |   |          |   | 24,960 |   |
|                                |   |           | 72,842  |   |          |   | 71,347 |   |
| LIFO Reserve                        |   |           | (24,907 | )      |          |   | (25,191 | ) |
| Net Inventory                       |   | $              | 47,935  |   |          | $      | 46,156 |   |

----

|                               |   | Thirteen WeeksEnded September |   |
|------------------------------------|--------|-------------------------------|--------|
|                               |   | 2010                          |   |   | 2009 |   |
|                               |   |                          |   |   |   |   |
| Service cost                       |   | $                             | 573    |   |   | $ | 487 |   |
| Interest cost                      |   |                          | 1,611  |   |   |   | 1,580 |   |
| Expected return on plan assets     |   |                          | (1,861 | ) |   |   | (1,789 | ) |
| Amortization of prior service cost |   |                          | 157    |   |   |   | 96 |   |
| Amortization of unrecognized loss  |   |                          | 680    |   |   |   | 702 |   |
|                               |   | $                             | 1,160  |   |   | $ | 1,076 |   |

|                                  |   | Thirteen WeeksEnded September |   |
|---------------------------------------|--------|-------------------------------|--------|
|                                  |   | 2010                          |   |   | 2009 |   |
|                                  |   |                          |   |   |   |   |
| Service cost                          |   | $                             | 92     |   |   | $ | 85 |   |
| Interest cost                         |   |                          | 151    |   |   |   | 169 |   |
| Amortization of prior service benefit |   |                          | (226   | ) |   |   | (226 | ) |
| Amortization of unrecognized loss     |   |                          | 7      |   |   |   | - |   |
|                                  |   | $                             | 24     |   |   | $ | 28 |   |

|                               |   | Sept. 25,2010 |   |   | June 26,2010 |   |
|------------------------------------|--------|---------------|--------|--------|--------------|--------|
|                               |   |          |   |   |         |   |
| Loan and Security Agreement        |   | $             | 3,100  |   |         | $      | 1,700 |   |
| Short-term foreign credit facility |   |          | 170    |   |         |   | 730 |   |
| Other                              |   |          | 255    |   |         |   | 266 |   |
|                               |   | $             | 3,525  |   |         | $      | 2,696 |   |

----

| o   | Cash and short term investments |
|---------------|---------------------------------|

|   | The carrying amount approximates fair value because of the short maturity of those investments |
|--------|------------------------------------------------------------------------------------------------|

| o   | Long term investments |
|---------------|-----------------------|

|   | The fair value of some investments are estimated on quoted market prices for those or similar investments. |
|--------|------------------------------------------------------------------------------------------------------------|

| o   | Short and long term debt |
|---------------|--------------------------|

|   | The fair value of the Company’s long term debt is estimated on quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|            |   | September 25, 2010 |   |   | June 26, 2010 |   |
|-----------------|--------|--------------------|--------|--------|---------------|--------|
| Short-term Debt |   | CarryingAmount     |   |   | FairValue     |   |   | CarryingAmount |   |   | FairValue |   |
|            |   |               |   |   |          |   |   |   |   |   |   |   |
| Cash            |   | $                  | 22,963 |   |          | $      | 22,963 |   |   | $ | 20,478 |   |   | $ | 20,478 |   |
| Short term debt |   |               | 3,525  |   |          |   | 3,525 |   |   |   | 2,696 |   |   |   | 2,696 |   |
| Investments     |   |               | -      |   |          |   | - |   |   |   | 1,250 |   |   |   | 1,250 |   |
| Long term debt  |   |               | 642    |   |          |   | 642 |   |   |   | 706 |   |   |   | 706 |   |

----

----

| Cash flows (in thousands)                         |   | Thirteen Weeks |   |
|---------------------------------------------------|--------|----------------|--------|
|                                              |   | 9/25/2010      |   |   | 9/26/2009 |   |
|                                              |   |           |   |   |   |   |
| Cash provided by operations                       |   | $              | 883    |   |   | $ | 4,409 |   |
| Cash (used in) provided from investing activities |   |           | 215    |   |   |   | (2,168 | ) |
| Cash (used in) provided from financing activities |   |           | 411    |   |   |   | (3,679 | ) |
| Effect of exchange rate changes on cash           |   |           | 976    |   |   |   | 121 |   |
|                                              |   |           |   |   |   |   |   |   |
| Net increase (decrease) in cash                   |   | $              | 2,485  |   |   | $ | (1,317 | ) |

----

----

| Nominee            | For       | Against | Withhold  | Abstentations | Broker Non Votes |
|--------------------|-----------|---------|-----------|---------------|------------------|
| Richard B. Kennedy | 2,991,587 |    | 1,565,456 |          |             |

| Nominee        | For       | Against | Withhold  | Abstentations | Broker Non Votes |
|----------------|-----------|---------|-----------|---------------|------------------|
| Terry A. Piper | 9,495,390 |    | 1,066,703 |          |             |

----

----

----

| 4 | Rights Agreement dated as of November 2, 2010 between the Company and Mellon Investor Services LLC, as Rights Agent (together with exhibits, including the Form of Rights Certificate, and the Summary of Rights to Purchase Shares of Class A Common Stock). |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31a | Certification of Chief Executive Officer Pursuant to Rules 13a-15(e)/15(d)-15(e) and 13a-15(f)/15(d)-15(f), filed herewith. |
|-----|-----------------------------------------------------------------------------------------------------------------------------|

| 31b | Certification of Principal Accounting Officer Pursuant to Rules 13a-15(e)/15(d)-15(e) and 13a-15(f)/15(d)-15(f), filed herewith. |
|-----|----------------------------------------------------------------------------------------------------------------------------------|

| 32 | Certification of Chief Executive Officer and Principal Accounting Officer Pursuant to Rule 13a-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), filed herewith. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |             |   | THE L. S. STARRETT COMPANY(Registrant)       |
|--------|------------------|--------|----------------------------------------------|
|   |             |   |                                         |
|   |             |   |                                         |
| Date   | November 4, 2010 |   | S/R. Douglas A. Starrett                     |
|   |             |   | Douglas A. Starrett - President and CEO      |
|   |             |   |                                         |
| Date   | November 4, 2010 |   | S/R. Francis J. O’Brien                |
|   |             |   | Francis J. O’Brien - Treasurer and CFO |