----

----

| Pennsylvania                                            |   | 23-1683282                         |
|---------------------------------------------------------|--------|------------------------------------|
| (State                or other jurisdiction of          |   | (I.R.S.                Employer    |
| incorporation                or organization)           |   | Identification                No.) |
|                                                    |   |                               |
| 160                Cassell Road, P.O. Box 144           |   |                               |
|   Harleysville,                Pennsylvania   |   | 19438                              |
| (Address                of principal executive offices) |   | (Zip                Code)          |

| Large                accelerated filer                o |   | Accelerated                filer x |   | Non-accelerated                filer o |
|---------------------------------------------------------|--------|------------------------------------|--------|----------------------------------------|

----

----

----

|   | · | Part                I – Item 1 – Financial Statements |
|--------|--------|-------------------------------------------------------------------|

|   | · | Part                I – Item 2 – Management’s Discussion and Analysis of Financial Condition                and Results of Operations |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Part                I – Item 4 – Controls and Procedures |
|--------|--------|----------------------------------------------------------------------|

|   | · | Part                II – Item 6 – Exhibits |
|--------|--------|--------------------------------------------------------|

----

IND

| Item                1.                           |   | Financial                Statements                                                                                                                      |   |
|--------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                             |   |                                                                                                                                                     |   |
|                                             |   | Consolidated                Balance Sheet (Restated) as of October 31, 2006 and January 31,                2006                                          | 3      |
|                                             |   | Consolidated                Statement of Operations (Restated) for the nine-month and three-month                periods ended October 31, 2006 and 2005 | 4      |
|                                             |   | Consolidated                Statement of Shareholders’ Equity (Restated) for the nine-month periods                ended October 31, 2006 and 2005 | 5      |
|                                             |   | Consolidated                Statement of Cash Flows (Restated) for the nine-month periods ended                October 31, 2006 and 2005                 | 6      |
|                                             |   | Notes                to Consolidated Financial Statements                                                                                                | 7      |
|                                             |   | Report                of Independent Registered Public Accounting Firm                                                                                   | 19     |
|                                             |   |                                                                                                                                                     |   |
| Item                2.                           |   | Management’s                Discussion and Analysis of Financial Condition and Results of Operations                (Restated)                     | 20     |
|                                             |   |                                                                                                                                                     |   |
| Item                3.                           |   | Qualitative                and Quantitative Disclosures about Market Risk                                                                                | 28     |
|                                             |   |                                                                                                                                                     |   |
| Item                4.                           |   | Controls                and Procedures (Restated)                                                                                                        | 28     |
|                                             |   |                                                                                                                                                     |   |
| PART                II – OTHER INFORMATION |   |
|                                             |   |                                                                                                                                                     |   |
| Item                1.                           |   | Legal                Proceedings                                                                                                                         | 29     |
|                                             |   |                                                                                                                                                     |   |
| Item                1A.                          |   | Risk                Factors                                                                                                                              | 30     |
|                                             |   |                                                                                                                                                     |   |
| Item                2.                           |   | Unregistered                Sales of Equity Securities and Use of Proceeds                                                                               | 30     |
|                                             |   |                                                                                                                                                     |   |
| Item                3.                           |   | Defaults                Upon Senior Securities                                                                                                           | 30     |
|                                             |   |                                                                                                                                                     |   |
| Item                4.                           |   | Submission                of Matters to a Vote of Security Holders                                                                                       | 30     |
|                                             |   |                                                                                                                                                     |   |
| Item                5.                           |   | Other                Information                                                                                                                         | 30     |
|                                             |   |                                                                                                                                                     |   |
| Item                6.                           |   | Exhibits                                                                                                                                                 | 31     |
|                                             |   |                                                                                                                                                     |   |
|                                             |   |                                                                                                                                                     |   |
| SIGNATURES                                       | 32     |

----

Index

ME
ON

| PART                I – FINANCIAL INFORMATION                                                                                                                                                                                                                                                                                               |   |                       |        |   |                       |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|-------------|--------|----------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                              |   |                       |        |   |                       |   |
| Item                1.  Financial                Statements                                                                                                                                                                                                                                                                             |   |                       |        |   |                       |   |
|                                                                                                                                                                                                                                                                                                                                              |   |                       |        |   |                       |   |
|                                                                                                                                                                                                                                                                                                                                              |   | October                31, |        |   | January                31, |   |
| ASSETS                                                                                                                                                                                                                                                                                                                                            |   | 2006                       |        |   | 2006                       |   |
| Current                assets                                                                                                                                                                                                                                                                                                                     |   | (Restated)                 |        |   |                       |   |
| Cash                and cash                equivalents                                                                                                                                                                                                                                                                                           |   | $                          | 18,537,674  |   |                       | $      | 17,683,305 |   |
| Marketable                securities                                                                                                                                                                                                                                                                                                              |   |                       | 20,294      |   |                       |   | - |   |
| Accounts                receivable, net of                allowance for doubtful accounts of                                                                                                                                                                                                                                                      |   |                       | 19,611,594  |   |                       |   | 17,909,727 |   |
| approximately$180,000and$247,000,                respectively                                                                                                                                                                                                                                                                                     |   |                       |        |   |                       |   |   |   |
| Inventories                                                                                                                                                                                                                                                                                                                                       |   |                       | 19,096,835  |   |                       |   | 16,438,481 |   |
| Prepaid                expenses, deposits and                other current assets                                                                                                                                                                                                                                                                 |   |                       | 1,363,890   |   |                       |   | 1,381,900 |   |
| Deferred                income                taxes                                                                                                                                                                                                                                                                                               |   |                       | 620,667     |   |                       |   | 591,534 |   |
| Total                current                assets                                                                                                                                                                                                                                                                                                |   |                       | 59,250,954  |   |                       |   | 54,004,947 |   |
|                                                                                                                                                                                                                                                                                                                                              |   |                       |        |   |                       |   |   |   |
| Property,                plant and equipment,                net                                                                                                                                                                                                                                                                                  |   |                       | 16,977,419  |   |                       |   | 13,838,221 |   |
| Costs                in excess of net assets of                businesses acquired, net                                                                                                                                                                                                                                                           |   |                       | 20,798,913  |   |                       |   | 20,798,913 |   |
| Other                assets                                                                                                                                                                                                                                                                                                                       |   |                       | 1,001,642   |   |                       |   | 1,020,844 |   |
| Total                assets                                                                                                                                                                                                                                                                                                                       |   | $                          | 98,028,928  |   |                       | $      | 89,662,925 |   |
|                                                                                                                                                                                                                                                                                                                                              |   |                       |        |   |                       |   |   |   |
| LIABILITIES                AND SHAREHOLDERS'                EQUITY                                                                                                                                                                                                                                                                                |   |                       |        |   |                       |   |   |   |
| Current                liabilities                                                                                                                                                                                                                                                                                                                |   |                       |        |   |                       |   |   |   |
| Current                portion of long-term                debt                                                                                                                                                                                                                                                                                   |   | $                          | 1,943,898   |   |                       | $      | 1,689,413 |   |
| Accounts                payable                                                                                                                                                                                                                                                                                                                   |   |                       | 6,783,453   |   |                       |   | 5,900,281 |   |
| Accrued                salaries, wages and                expenses                                                                                                                                                                                                                                                                                |   |                       | 8,410,240   |   |                       |   | 7,150,142 |   |
| Dividend                payable                                                                                                                                                                                                                                                                                                                   |   |                       | 757,029     |   |                       |   | 699,819 |   |
| Customers'                advances                                                                                                                                                                                                                                                                                                                |   |                       | 1,081,913   |   |                       |   | 1,703,092 |   |
| Total                current                liabilities                                                                                                                                                                                                                                                                                           |   |                       | 18,976,533  |   |                       |   | 17,142,747 |   |
|                                                                                                                                                                                                                                                                                                                                              |   |                       |        |   |                       |   |   |   |
| Long-term                debt                                                                                                                                                                                                                                                                                                                     |   |                       | 5,745,214   |   |                       |   | 2,723,586 |   |
| Other                non-current                liabilities                                                                                                                                                                                                                                                                                       |   |                       | 44,859      |   |                       |   | 43,211 |   |
| Deferred                income                taxes                                                                                                                                                                                                                                                                                               |   |                       | 2,208,638   |   |                       |   | 2,215,143 |   |
| Total                liabilities                                                                                                                                                                                                                                                                                                                  |   |                       | 26,975,244  |   |                       |   | 22,124,687 |   |
|                                                                                                                                                                                                                                                                                                                                              |   |                       |        |   |                       |   |   |   |
| Shareholders'                equity                                                                                                                                                                                                                                                                                                               |   |                       |        |   |                       |   |   |   |
| Common                shares, $.10 par value;                18,000,000                shares authorized,                12,846,608                shares issued,                of                which 1,631,364                and 1,649,498                shares were reacquired and held                in treasury at the respective dates |   |                       | 1,284,661   |   |                       |   | 1,284,661 |   |
| Additional                paid-in                capital                                                                                                                                                                                                                                                                                          |   |                       | 7,828,910   |   |                       |   | 7,564,180 |   |
| Retained                earnings                                                                                                                                                                                                                                                                                                                  |   |                       | 73,570,713  |   |                       |   | 70,645,717 |   |
| Accumulated                other comprehensive                loss                                                                                                                                                                                                                                                                                |   |                       | (123,946    | )      |                       |   | (321,821 | ) |
| Treasury                shares, at                cost                                                                                                                                                                                                                                                                                            |   |                       | (11,506,654 | )      |                       |   | (11,634,499 | ) |
| Total                shareholders'                equity                                                                                                                                                                                                                                                                                          |   |                       | 71,053,684  |   |                       |   | 67,538,238 |   |
| Total                liabilities and                shareholders' equity                                                                                                                                                                                                                                                                          |   | $                          | 98,028,928  |   |                       | $      | 89,662,925 |   |
| See                accompanying notes to                consolidated financial statements.                                                                                                                                                                                                                                                        |   |                       |        |   |                       |

----

Index

ME

|                                                                       |   | Nine                Months                Ended |       |   | Three                Months                Ended |   |
|----------------------------------------------------------------------------|--------|-------------------------------------------------|------------|--------|--------------------------------------------------|--------|
|                                                                       |   | October                31,                      |       |   | October                31,                       |   |
|                                                                       |   | 2006                                            |       |   | 2005                                             |   |   | 2006 |   |   |  2005 |   |
|                                                                       |   | (Restated)                                      |       |   |                                             |   |   | (Restated) |   |   |   |   |
| Net                sales                                                   |   | $                                               | 68,566,778 |   |                                             | $      | 62,492,924 |   |   | $ | 25,008,855 |   |   | $ | 21,918,792 |   |
| Cost                of goods                sold                           |   |                                            | 47,817,655 |   |                                             |   | 42,762,662 |   |   |   | 16,849,581 |   |   |   | 15,205,528 |   |
| Gross                profit                                                |   |                                            | 20,749,123 |   |                                             |   | 19,730,262 |   |   |   | 8,159,274 |   |   |   | 6,713,264 |   |
|                                                                       |   |                                            |       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
| Operating                expenses                                          |   |                                            |       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
| Selling                                                                    |   |                                            | 6,269,844  |   |                                             |   | 5,899,709 |   |   |   | 2,297,478 |   |   |   | 1,972,308 |   |
| General                and                administrative                   |   |                                            | 7,162,325  |   |                                             |   | 6,617,271 |   |   |   | 2,622,394 |   |   |   | 2,256,715 |   |
| Loss                on curtailment of pension                benefits      |   |                                            | 234,180    |   |                                             |   | - |   |   |   | 234,180 |   |   |   | - |   |
|                                                                       |   |                                            | 13,666,349 |   |                                             |   | 12,516,980 |   |   |   | 5,154,052 |   |   |   | 4,229,023 |   |
| Income                from                operations                       |   |                                            | 7,082,774  |   |                                             |   | 7,213,282 |   |   |   | 3,005,222 |   |   |   | 2,484,241 |   |
|                                                                       |   |                                            |       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
| Interest                expense                                            |   |                                            | (256,519   | )      |                                             |   | (196,868 | ) |   |   | (109,205 | ) |   |   | (60,954 | ) |
| Other                income,                net                            |   |                                            | 759,712    |   |                                             |   | 457,195 |   |   |   | 254,461 |   |   |   | 162,610 |   |
| Income                before                taxes                          |   |                                            | 7,585,967  |   |                                             |   | 7,473,609 |   |   |   | 3,150,478 |   |   |   | 2,585,897 |   |
|                                                                       |   |                                            |       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
| Provision                for                taxes                          |   |                                            | 2,503,368  |   |                                             |   | 2,316,820 |   |   |   | 1,084,012 |   |   |   | 703,875 |   |
| Net                income                                                  |   | $                                               | 5,082,599  |   |                                             | $      | 5,156,789 |   |   | $ | 2,066,466 |   |   | $ | 1,882,022 |   |
|                                                                       |   |                                            |       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                per share, basic                (1)                |   | $                                               | .45        |   |                                             | $      | .46 |   |   | $ | .18 |   |   | $ | .17 |   |
|                                                                       |   |                                            |       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                per share, diluted                (2)              |   | $                                               | .45        |   |                                             | $      | .46 |   |   | $ | .18 |   |   | $ | .17 |   |
|                                                                       |   |                                            |       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
| Cash                dividend per share – declared                (3) |   | $                                               | .1925      |   |                                             | $      | .1788 |   |   | $ | .0675 |   |   | $ | .0625 |   |
|                                                                       |   |                                            |       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
| Cash                dividend per share – paid                (3)     |   | $                                               | .1875      |   |                                             | $      | .1744 |   |   | $ | .0625 |   |   | $ | .0581 |   |

|   | (1) | Basic                earnings per share are based upon the weighted average number of                shares                outstanding of 11,204,760                and 11,185,838                for                the nine-month periods ended October 31, 2006 and 2005, respectively,                and                11,203,551                and                11,184,295                for                the three-month periods ended October 31, 2006 and 2005,                respectively. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Diluted                earnings per share are based upon the weighted average number of                shares                outstanding of 11,384,801                and                11,320,875                for                the nine-month periods ended October 31, 2006 and 2005, respectively,                and                11,382,247                and                11,317,027                for                the three-month periods ended October 31, 2006 and 2005,                respectively. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | The                Board of Directors declared quarterly dividends of $.0625 per share                payable on March 9, 2006, June 7, 2006, and September                6, 2006 to                shareholders of record as of February 24, 2006, May 26, 2006, and                August                24, 2006,                respectively, and a quarterly dividend of $.0675 per share payable                on                December 14, 2006 to shareholders of record as of November 30,                2006.  Quarterly dividends of $.0581 per share were paid on                March                8, 2005,                June                8, 2005,                and September                8, 2005 to                shareholders of record as of February                25, 2005,                May                27, 2005,                and August                28, 2005,                respectively, and a quarterly dividend of $.0625 per share payable                on                December                8, 2005 to                shareholders of record as of November                25, 2005. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

ME

|                                                                         |   |   |      |   |       |   |      |     |   |   | Accumulated   |   |   |     |     |   |   |   |
|------------------------------------------------------------------------------|--------|--------|-----------|--------|------------|--------|-----------|----------|--------|--------|---------------|--------|--------|----------|----------|--------|--------|--------|
|                                                                         |   |   |      |   | Additional |   |      |     |   |   | Other         |   |   |     |     |   |   |   |
|                                                                         |   | Common |      |   | Paid-in    |   |      | Retained |   |   | Comprehensive |   |   | Treasury |     |   |   |   |
|                                                                         |   | Shares |      |   | Capital    |   |      | Earnings |   |   | Income/(Loss) |   |   | Shares   |     |   | Total  |   |
| Balances,January                31,                2006                      |   | $      | 1,284,661 |   |       | $      | 7,564,180 |     |   | $      | 70,645,717    |   |   | $        | (321,821 | )      |   | $      | (11,634,499 | ) |   | $ | 67,538,238 |   |
|                                                                         |   |   |      |   |       |   |      |     |   |   |          |   |   |     |     |   |   |   |   |   |   |   |   |   |
| Comprehensive                income:                                         |   |   |      |   |       |   |      |     |   |   |          |   |   |     |     |   |   |   |   |   |   |   |   |   |
| Net                income                (Restated)                          |   |   | -         |   |       |   | -         |     |   |   | 5,082,599     |   |   |     | -        |   |   |   | - |   |   |   |   |   |
| Cumulative                translation                adjustment              |   |   | -         |   |       |   | -         |     |   |   | -             |   |   |     | 209,890  |   |   |   | - |   |   |   |   |   |
| Interest                rate                swap,                            |   |   | -         |   |       |   | -         |     |   |   | -             |   |   |     | (10,993  | )      |   |   | - |   |   |   |   |   |
| net                of tax of ($4,846)                                        |   |   |      |   |       |   |      |     |   |   |          |   |   |     |     |   |   |   |   |   |   |   |   |   |
| Securities                available for                sale,                 |   |   | -         |   |       |   | -         |     |   |   | -             |   |   |     | (1,022   | )      |   |   | - |   |   |   |   |   |
| net                of tax of                ($504)                           |   |   |      |   |       |   |      |     |   |   |          |   |   |     |     |   |   |   |   |   |   |   |   |   |
| Total                comprehensive                income                     |   |   |      |   |       |   |      |     |   |   |          |   |   |     |     |   |   |   |   |   |   |   | 5,280,474 |   |
|                                                                         |   |   |      |   |       |   |      |     |   |   |          |   |   |     |     |   |   |   |   |   |   |   |   |   |
| Dividends                paid, $.125                per                share |   |   | -         |   |       |   | -         |     |   |   | (1,400,574    | )      |   |     | -        |   |   |   | - |   |   |   | (1,400,574 | ) |
| Dividends                declared, $.0675 per                share           |   |   | -         |   |       |   | -         |     |   |   | (757,029      | )      |   |     | -        |   |   |   | - |   |   |   | (757,029 | ) |
| Stock-based                compensation                                      |   |   | -         |   |       |   | 245,402   |     |   |   | -             |   |   |     | -        |   |   |   | - |   |   |   | 245,402 |   |
| Stock                option                transactions                      |   |   | -         |   |       |   | 19,328    |     |   |   | -             |   |   |     | -        |   |   |   | 127,845 |   |   |   | 147,173 |   |
| Balances,                October 31, 2006                (Restated)          |   | $      | 1,284,661 |   |       | $      | 7,828,910 |     |   | $      | 73,570,713    |   |   | $        | (123,946 | )      |   | $      | (11,506,654 | ) |   | $ | 71,053,684 |   |

|                                                                                                      |   |   |    |   |       |   |      |     |   |   | Accumulated   |   |   |     |     |   |   |   |
|-----------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|------------|--------|-----------|----------|--------|--------|---------------|--------|--------|----------|----------|--------|--------|--------|
|                                                                                                      |   |   |    |   | Additional |   |      |     |   |   | Other         |   |   |     |     |   |   |   |
|                                                                                                      |   | Common |    |   | Paid-in    |   |      | Retained |   |   | Comprehensive |   |   | Treasury |     |   |   |   |
|                                                                                                      |   | Shares |    |   | Capital    |   |      | Earnings |   |   | Income/(Loss) |   |   | Shares   |     |   | Total  |   |
| Balances,January                31,                2005                                                   |   | $      | 963,496 |   |       | $      | 7,930,646 |     |   | $      | 66,032,446    |   |   | $        | 100,635  |   |   | $      | (11,862,032 | ) |   | $ | 63,165,191 |   |
|                                                                                                      |   |   |    |   |       |   |      |     |   |   |          |   |   |     |     |   |   |   |   |   |   |   |   |   |
| Comprehensive                income:                                                                      |   |   |    |   |       |   |      |     |   |   |          |   |   |     |     |   |   |   |   |   |   |   |   |   |
| Net                income                                                                                 |   |   | -       |   |       |   | -         |     |   |   | 5,156,789     |   |   |     | -        |   |   |   | - |   |   |   |   |   |
| Cumulative                translation                adjustment                                           |   |   | -       |   |       |   | -         |     |   |   | -             |   |   |     | (264,444 | )      |   |   | - |   |   |   |   |   |
| Interest                rate                swap,                                                         |   |   | -       |   |       |   | -         |     |   |   | -             |   |   |     | 71,186   |   |   |   | - |   |   |   |   |   |
| net                of tax of                ($38,028)                                                     |   |   |    |   |       |   |      |     |   |   |          |   |   |     |     |   |   |   |   |   |   |   |   |   |
| Total                comprehensive                income                                                  |   |   |    |   |       |   |      |     |   |   |          |   |   |     |     |   |   |   |   |   |   |   | 4,963,531 |   |
|                                                                                                      |   |   |    |   |       |   |      |     |   |   |          |   |   |     |     |   |   |   |   |   |   |   |   |   |
| Dividends                paid, $.1163 per                share                                            |   |   | -       |   |       |   | -         |     |   |   | (1,300,374    | )      |   |     | -        |   |   |   | - |   |   |   | (1,300,374 | ) |
| Dividends                declared, $.0625per                share                                         |   |   | -       |   |       |   | -         |     |   |   | (699,539      | )      |   |     | -        |   |   |   | - |   |   |   | (699,539 | ) |
| Stock                option                transactions                                                   |   |   | -       |   |       |   | (43,387   | )        |   |   | -             |   |   |     | -        |   |   |   | 367,668 |   |   |   | 324,281 |   |
| Purchase                of 12,548 treasury                shares                                          |   |   | -       |   |       |   | -         |     |   |   | -             |   |   |     | -        |   |   |   | (140,135 | ) |   |   | (140,135 | ) |
| Balances,October                31,                2005                                                   |   | $      | 963,496 |   |       | $      | 7,887,259 |     |   | $      | 69,189,322    |   |   | $        | (92,623  | )      |   | $      | (11,634,499 | ) |   | $ | 66,312,955 |   |
| See                accompanying notes to                consolidated financial                statements. |

----

Index

ME

|                                                                                                                           |   | Nine                Months                Ended |                     |
|--------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------------------------|
|                                                                                                                           |   | October                31,                      |                     |
|                                                                                                                           |   | 2006                                            |                     |   | 2005 |   |
|                                                                                                                           |   | (Restated)                                      |                     |   |   |   |
| INCREASE                (DECREASE) IN CASH AND                CASH EQUIVALENTS                                                 |   |
|                                                                                                                           |   |                                            |                     |   |   |   |
| Cash                flows from operating                activities                                                             |   |                                            |                     |   |   |   |
| Net                income                                                                                                      |   | $                                               | 5,082,599                |   |   | $ | 5,156,789 |   |
| Adjustments                to reconcile net                income to net cash provided by operating                activities: |   |                                            |                     |   |   |   |   |   |
| Depreciation                and                amortization                                                                    |   |                                            | 1,183,326                |   |   |   | 1,109,925 |   |
| Deferred                income                taxes                                                                            |   |                                            | (              1,659     | ) |   |   | (1,659 | ) |
| Losson                sale of property and equipment,                net                                                       |   |                                            | 11,754                   |   |   |   | 8,348 |   |
| Stock-based                compensation                                                                                        |   |                                            | 245,402                  |   |   |   | - |   |
| Allowance                for doubtful                accounts                                                                  |   |                                            | (              67, 424   | ) |   |   | 96,682 |   |
| (Increase)                decrease in operating                assets:                                                         |   |                                            |                     |   |   |   |   |   |
| Accounts                receivable                                                                                             |   |                                            | (1,              517,623 | ) |   |   | (2,172,567 | ) |
| Inventories                                                                                                                    |   |                                            | (              2,570,442 | ) |   |   | (2,638,644 | ) |
| Prepaid                expenses, deposits and                other current assets                                              |   |                                            | 202                      |   |   |   | 18,158 |   |
| Other                assets                                                                                                    |   |                                            | 25,421                   |   |   |   | (6,744 | ) |
| Increase                (decrease) in operating                liabilities:                                                    |   |                                            |                     |   |   |   |   |   |
| Accounts                payable and accrued                expenses                                                            |   |                                            | 2,003,045                |   |   |   | 1,560,944 |   |
| Customers’                advances                                                                                       |   |                                            | (              621,249   | ) |   |   | 380,037 |   |
| Other                non-current                liabilities                                                                    |   |                                            | 1,648                    |   |   |   | 1,648 |   |
| Net                cash provided by operating                activities                                                        |   |                                            | 3,775,000                |   |   |   | 3,512,917 |   |
|                                                                                                                           |   |                                            |                     |   |   |   |   |   |
| Cash                flows from investing                activities                                                             |   |                                            |                     |   |   |   |   |   |
| Proceeds                from sale of property and                equipment                                                     |   |                                            | 14,310                   |   |   |   | 31,696 |   |
| Acquisitions                of property and                equipment                                                           |   |                                            | (              4,192,649 | ) |   |   | (2,093,201 | ) |
| Securities                available for                sale                                                                    |   |                                            | (21,820                  | ) |   |   | - |   |
| Net                cash (used in) investing                activities                                                          |   |                                            | (              4,200,159 | ) |   |   | (2,061,505 | ) |
|                                                                                                                           |   |                                            |                     |   |   |   |   |   |
| Cash                flows from financing                activities                                                             |   |                                            |                     |   |   |   |   |   |
| Proceeds                from new                borrowings                                                                     |   |                                            | 4,306,406                |   |   |   | - |   |
| Reduction                of                debt                                                                                |   |                                            | (              1,103,380 | ) |   |   | (1,500,910 | ) |
| Exercise                of stock                options                                                                        |   |                                            | 147,173                  |   |   |   | 324,281 |   |
| Payment                of                dividends                                                                             |   |                                            | (              2,100,393 | ) |   |   | (1,948,755 | ) |
| Purchase                of treasury                shares                                                                      |   |                                            | -                        |   |   |   | (140,135 | ) |
| Net                cash provided by (used in)                financing activities                                              |   |                                            | 1,249,806                |   |   |   | (3,265,519 | ) |
| Effect                of exchange rate changes on                cash                                                          |   |                                            | 29,722                   |   |   |   | (59,026 | ) |
|                                                                                                                           |   |                                            |                     |   |   |   |   |   |
| Net                increase (decrease) in cash                and cash equivalents                                             |   |                                            | 854,369                  |   |   |   | (1,873,133 | ) |
|                                                                                                                           |   |                                            |                     |   |   |   |   |   |
| Cash                and cash equivalents at                February 1                                                          |   |                                            | 17,683,305               |   |   |   | 20,889,476 |   |
| Cash                and cash equivalents at                October 31                                                          |   | $                                               | 18,537,674               |   |   | $ | 19,016,343 |   |
| See                accompanying notes to                consolidated financial                statements.                      |

----

Index

ME

|                                                 |   | Nine                Months EndedOctober                31, 2006 |       |   | Three                Months EndedOctober                31, 2006 |   |
|------------------------------------------------------|--------|-----------------------------------------------------------------|------------|--------|------------------------------------------------------------------|--------|
|                                                 |   | As                Restated                                      |       |   | As                Previously Reported                            |   |   | As                Restated |   |   | As                Previously Reported |   |
| Consolidated                Statement of Operations: |   |                                                            |       |   |                                                             |   |   |   |   |   |   |   |
| Net                sales                             |   | $                                                               | 68,566,778 |   |                                                             | $      | 68,881,850 |   |   | $ | 25,008,855 |   |   | $ | 25,323,927 |   |
| Net                income                            |   |                                                            | 5,082,599  |   |                                                             |   | 5,188,951 |   |   |   | 2,066,466 |   |   |   | 2,172,818 |   |
| Earnings                per share, basic             |   | $                                                               | .45        |   |                                                             | $      | .46 |   |   | $ | .18 |   |   | $ | .19 |   |
| Earnings                per share, diluted           |   | $                                                               | .45        |   |                                                             | $      | .46 |   |   | $ | .18 |   |   | $ | .19 |   |

|                                                |   | As                ofOctober                31, 2006 |       |
|-----------------------------------------------------|--------|-----------------------------------------------------|------------|
|                                                |   | As                Restated                          |       |   | As                Previously Reported |   |
| Consolidated                Balance Sheet:          |   |                                                |       |   |   |   |
| Accounts                receivable                  |   | $                                                   | 19,611,594 |   |   | $ | 19,936,228 |   |
| Inventory                                           |   |                                                | 19,096,835 |   |   |   | 18,940,498 |   |
| Accounts                payable                     |   |                                                | 6,783,453  |   |   |   | 6,793,015 |   |
| Accrued                salaries, wages and expenses |   |                                                | 8,410,240  |   |   |   | 8,462,623 |   |
| Retained                earnings                    |   |                                                | 73,570,713 |   |   |   | 73,677,065 |   |

----

Index

----

Index

----

Index

----

Index

|                                   | Nine                Months Ended |
|----------------------------------------|----------------------------------|
|                                   | October                31,       |
|                                   | 2006                             |   | 2005 |
|                                   |                             |   |   |
| Expected                term (years)   | 5.0                              |   | 5.0 |
| Risk-free                interest rate | 3.63%                - 4.58%     |   | 3.11%                - 4.58% |
| Expected                volatility     | 30%                - 32%         |   | 30%                - 32% |
| Dividend                yield          | 2.26%                - 3.39%     |   | 2.26%                - 3.73% |

|                                           |   | Shares |    |   | WeightedAverageExercise                Price |   |   | WeightedAverageRemainingLife                (years) |   |   | AggregateIntrinsic                Value |   |
|------------------------------------------------|--------|--------|---------|--------|----------------------------------------------|--------|--------|-----------------------------------------------------|--------|--------|-----------------------------------------|--------|
| Options:                                       |   |   |    |   |                                         |   |   |                                                |   |   |                                    |   |
| Outstanding                at February 1, 2006 |   |   | 810,742 |   |                                         | $      | 9.8071 |                                                |   |   | 7.68                                    |   |   |   |   |
| Granted                                        |   |   | -       |   |                                         |   | -      |                                                |   |   |                                    |   |   |   |   |
| Forfeited                                      |   |   | 6,667   |   |                                         |   | 11.18  |                                                |   |   |                                    |   |   |   |   |
| Expired                                        |   |   | -       |   |                                         |   | -      |                                                |   |   |                                    |   |   |   |   |
| Exercised                                      |   |   | 18,134  |   |                                         |   | 8.12   |                                                |   |   |                                    |   |   |   |   |
| Outstanding                at October 31, 2006 |   |   | 785,941 |   |                                         | $      | 9.8344 |                                                |   |   | 7.18                                    |   |   | $ | 2,896,664 |   |
|                                           |   |   |    |   |                                         |   |   |                                                |   |   |                                    |   |   |   |   |   |
| Exercisable                at October 31, 2006 |   |   | 619,487 |   |                                         | $      | 9.4274 |                                                |   |   | 7.18                                    |   |   | $ | 2,535,312 |   |

|                                |   | Options                Outstanding |    |   | Options                Exercisable                                  |   |
|-------------------------------------|--------|------------------------------------|---------|--------|---------------------------------------------------------------------|--------|
|                                |   | Shares                             |    |   | Weighted                AverageRemaining                Life(years) |   |   | Weighted                AverageExercise                Price |   |   | Shares |   |   | Weighted                AverageExercise                Price |   |
| Range                of prices:     |   |                               |    |   |                                                                |   |   |   |   |   |   |   |   |   |   |
| $5.48                – 5.99   |   |                               | 32,980  |   |                                                                |   | 3.21 |   |   | $ | 5.5533 |   |   |   | 32,980 |   |   | $ | 5.5533 |   |
| $6.00                – 6.99   |   |                               | 64,716  |   |                                                                |   | 4.39 |   |   |   | 6.8063 |   |   |   | 64,716 |   |   |   | 6.8063 |   |
| $7.00                – 8.99   |   |                               | 205,231 |   |                                                                |   | 5.23 |   |   |   | 7.3740 |   |   |   | 205,231 |   |   |   | 7.3740 |   |
| $9.00                – 11.99  |   |                               | 161,340 |   |                                                                |   | 7.96 |   |   |   | 9.8813 |   |   |   | 107,558 |   |   |   | 9.8813 |   |
| $12.00                – 12.99 |   |                               | 321,674 |   |                                                                |   | 8.44 |   |   |   | 12.4288 |   |   |   | 209,002 |   |   |   | 12.6331 |   |
|                                |   |                               | 785,941 |   |                                                                |   | 7.18 |   |   | $ | 9.8344 |   |   |   | 619,487 |   |   | $ | 9.4274 |   |

----

Index

|                                                                                                                                    |   | Nine                Months EndedOctober                31, 2005 |      |   | Three                Months EndedOctober                31, 2005 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------|-----------|--------|------------------------------------------------------------------|--------|
| Net                income, as reported                                                                                                  |   | $                                                               | 5,156,789 |   |                                                             | $      | 1,882,022 |   |
| Add:                Stock-based employee compensation expense included in reported net                income,                net of tax |   |                                                            | -         |   |                                                             |   | - |   |
| Less:                Pro forma expense related to stock options granted, net of tax                effects                              |   |                                                            | (125,070  | )      |                                                             |   | (41,690 | ) |
| Pro                forma                                                                                                                |   | $                                                               | 5,031,719 |   |                                                             | $      | 1,840,332 |   |
| Earnings                per share, basic:                                                                                               |   |                                                            |      |   |                                                             |   |   |   |
| As                reported                                                                                                              |   | $                                                               | .46       |   |                                                             | $      | .17 |   |
| Pro                forma                                                                                                                |   |                                                            | .45       |   |                                                             |   | .16 |   |
| Earnings                per share, diluted:                                                                                             |   |                                                            |      |   |                                                             |   |   |   |
| As                reported                                                                                                              |   | $                                                               | .46       |   |                                                             | $      | .17 |   |
| Pro                forma                                                                                                                |   |                                                            | .44       |   |                                                             |   | .16 |   |

|                            |   | October                31, |       |   | January                31, |   |
|---------------------------------|--------|----------------------------|------------|--------|----------------------------|--------|
|                            |   | 2006                       |       |   | 2006                       |   |
| Raw                materials    |   | $                          | 14,139,255 |   |                       | $      | 9,116,168 |   |
| Work                in progress |   |                       | 2,932,796  |   |                       |   | 2,334,589 |   |
| Finished                goods   |   |                       | 2,024,784  |   |                       |   | 4,987,724 |   |
|                            |   | $                          | 19,096,835 |   |                       | $      | 16,438,481 |   |

----

Index

|                                            |   | Nine                Months Ended |      |
|-------------------------------------------------|--------|----------------------------------|-----------|
|                                            |   | October                31,       |      |
|                                            |   | 2006                             |      |   | 2005 |   |
| Cash                paid during the period for: |   |                             |      |   |   |   |
| Interest                                        |   | $                                | 247,049   |   |   | $ | 210,071 |   |
| Income                taxes                     |   |                             | 2,834,775 |   |   |   | 1,290,171 |   |

----

Index

|                                                                                                                                                                                                                                                                                                    |   | October                31, |      |   | January                31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|-----------|--------|----------------------------|--------|
|                                                                                                                                                                                                                                                                                                    |   | 2006                       |      |   | 2006                       |   |
|                                                                                                                                                                                                                                                                                                    |   |                       |      |   |                       |   |
| Note                payable, bank, payable in quarterly installments of $300,000, plus                interest at a rate of 75 basis points over the ninety day LIBOR rate                (effective interest rate of 6.42% at October 31, 2006), maturing                October,                2008. |   | $                          | 2,700,000 |   |                       | $      | 3,600,000 |   |
|                                                                                                                                                                                                                                                                                                    |   |                       |      |   |                       |   |   |   |
| Note                payable, bank, payable in quarterly installments of $31,908 (25,000                Euro),                plus interest at a fixed rate of 3.82%, maturing January,                2016.                                                                                             |   |                       | 1,180,624 |   |                       |   | 379,387 |   |
|                                                                                                                                                                                                                                                                                                    |   |                       |      |   |                       |   |   |   |
| Line                of credit, $382,890 (300,000 Euro), payable upon demand,                plus interest at a rate of 70 basis points over the thirty day                EURIBOR rate (effective interest rate of 4.05% at October 31,                2006).                                      |   |                       | 382,890   |   |                       |   | 364,559 |   |
|                                                                                                                                                                                                                                                                                                    |   |                       |      |   |                       |   |   |   |
| Bond                payable, bank, payable in quarterly installments of $58,333, plus                interest                at a rate of 16 basis points below the ninety day LIBOR rate (effective                interest rate of 5.51% at October 31, 2006), maturing April,                2021.   |   |                       | 3,390,706 |   |                       |   | 50,000 |   |
|                                                                                                                                                                                                                                                                                                    |   |                       |      |   |                       |   |   |   |
|                                                                                                                                                                                                                                                                                                    |   |                       | 7,654,220 |   |                       |   | 4,393,946 |   |
| Less                current portion                                                                                                                                                                                                                                                                     |   |                       | 1,943,898 |   |                       |   | 1,689,413 |   |
|                                                                                                                                                                                                                                                                                                    |   |                       | 5,710,322 |   |                       |   | 2,704,533 |   |
| Fair                market value of interest rate swap liability                                                                                                                                                                                                                                        |   |                       | 34,892    |   |                       |   | 19,053 |   |
| Long-term                portion                                                                                                                                                                                                                                                                        |   | $                          | 5,745,214 |   |                       | $      | 2,723,586 |   |

----

Index

| Year                Ending |   |   |      |
|----------------------------|--------|--------|-----------|
| January                31, |   |   |      |
| 2007                       |   | $      | 1,943,898 |   |
| 2008                       |   |   | 1,561,472 |   |
| 2009                       |   |   | 1,561,472 |   |
| 2010                       |   |   | 361,472   |   |
| 2011                       |   |   | 361,472   |   |
| Thereafter                 |   |   | 1,864,434 |   |
|                       |   | $      | 7,654,220 |   |

|                                                                        |   | October                31, |     |   | January                31, |   |
|-----------------------------------------------------------------------------|--------|----------------------------|----------|--------|----------------------------|--------|
|                                                                        |   | 2006                       |     |   | 2006                       |   |
| Interest                rate swap, net of tax                               |   | $                          | (23,378  | )      |                       | $      | (12,385 | ) |
| Unrealized                loss on securities available-for sale, net of tax |   |                       | (1,022   | )      |                       |   | - |   |
| Cumulative                translation of adjustment                         |   |                       | 610,321  |   |                       |   | 400,431 |   |
| Minimum                pension liability adjustment, net of tax             |   |                       | (709,867 | )      |                       |   | (709,867 | ) |
|                                                                        |   | $                          | (123,946 | )      |                       | $      | (321,821 | ) |

|                                                |   | Nine                Months Ended |    |   | Three                Months Ended |   |
|-----------------------------------------------------|--------|----------------------------------|---------|--------|-----------------------------------|--------|
|                                                |   | October                31,       |    |   | October                31,        |   |
|                                                |   | 2006                             |    |   | 2005                              |   |   | 2006 |   |   | 2005 |   |
| Interest                income                      |   | $                                | 736,050 |   |                              | $      | 426,009 |   |   | $ | 242,066 |   |   | $ | 168,268 |   |
| Other                miscellaneous income/(expense) |   |                             | 23,662  |   |                              |   | 31,186 |   |   |   | 12,395 |   |   |   | (5,658 | ) |
|                                                |   | $                                | 759,712 |   |                              | $      | 457,195 |   |   | $ | 254,461 |   |   | $ | 162,610 |   |

----

Index

|                                              |   | Net                Periodic Pension Cost |     |
|---------------------------------------------------|--------|------------------------------------------|----------|
|                                              |   | Nine                Months Ended         |     |   | Three                Months Ended |   |
|                                              |   | October                31,               |     |   | October                31, |   |
|                                              |   | 2006                                     |     |   | 2005 |   |   | 2006 |   |   | 2005 |   |
| Service                cost                       |   | $                                        | 523,584  |   |   | $ | 465,048 |   |   | $ | 169,460 |   |   | $ | 155,016 |   |
| Interest                cost                      |   |                                     | 764,040  |   |   |   | 772,488 |   |   |   | 228,226 |   |   |   | 257,496 |   |
| Expected                return on plan assets     |   |                                     | (877,394 | ) |   |   | (770,700 | ) |   |   | (292,464 | ) |   |   | (256,900 | ) |
| Amortization                of transition asset   |   |                                     | (24,986  | ) |   |   | (7,887 | ) |   |   | (16,928 | ) |   |   | (2,629 | ) |
| Amortization                of prior service cost |   |                                     | 62,416   |   |   |   | 75,888 |   |   |   | 13,010 |   |   |   | 25,296 |   |
| Recognized                net actuarial loss      |   |                                     | 63,726   |   |   |   | 20,727 |   |   |   | 12,048 |   |   |   | 6,909 |   |
| Curtailment                loss                   |   |                                     | 234,180  |   |   |   | - |   |   |   | 234,180 |   |   |   | - |   |
| Net                periodic pension cost          |   | $                                        | 745,566  |   |   | $ | 555,564 |   |   | $ | 347,532 |   |   | $ | 185,188 |   |

----

Index

----

Index

|                                                        |   | Nine                Months Ended |       |   | Three                Months Ended |   |
|-------------------------------------------------------------|--------|----------------------------------|------------|--------|-----------------------------------|--------|
|                                                        |   | October                31,       |       |   | October                31,        |   |
|                                                        |   | 2006                             |       |   | 2005                              |   |   | 2006 |   |   | 2005 |   |
| Net                sales                                    |   | (Restated)                       |       |   |                              |   |   | (Restated) |   |   |   |   |
| Product                recovery/pollution control equipment |   | $                                | 34,768,126 |   |                              | $      | 30,483,973 |   |   | $ | 12,676,874 |   |   | $ | 11,319,446 |   |
| Fluid                handling equipment                     |   |                             | 19,440,477 |   |                              |   | 17,279,997 |   |   |   | 7,416,844 |   |   |   | 5,733,900 |   |
| Filtration                and purification                  |   |                             | 14,358,175 |   |                              |   | 14,728,954 |   |   |   | 4,915,137 |   |   |   | 4,865,446 |   |
|                                                        |   | $                                | 68,566,778 |   |                              | $      | 62,492,924 |   |   | $ | 25,008,855 |   |   | $ | 21,918,792 |   |
|                                                        |   |                             |       |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Income                from operations                       |   |                             |       |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Product                recovery/pollution control equipment |   | $                                | 2,981,498  |   |                              | $      | 2,651,828 |   |   | $ | 1,575,426 |   |   | $ | 1,008,424 |   |
| Fluid                handling equipment                     |   |                             | 3,054,544  |   |                              |   | 2,751,401 |   |   |   | 1,320,796 |   |   |   | 897,015 |   |
| Filtration                and purification                  |   |                             | 1,046,732  |   |                              |   | 1,810,053 |   |   |   | 109,000 |   |   |   | 578,802 |   |
|                                                        |   | $                                | 7,082,774  |   |                              | $      | 7,213,282 |   |   | $ | 3,005,222 |   |   | $ | 2,484,241 |   |

|                                                        |   | October                31, |       |   | January                31, |   |
|-------------------------------------------------------------|--------|----------------------------|------------|--------|----------------------------|--------|
|                                                        |   | 2006                       |       |   | 2006                       |   |
| Identifiable                assets                          |   | (Restated)                 |       |   |                       |   |
| Product                recovery/pollution control equipment |   | $                          | 34,977,614 |   |                       | $      | 34,173,031 |   |
| Fluid                handling equipment                     |   |                       | 22,189,737 |   |                       |   | 17,008,765 |   |
| Filtration                and purification                  |   |                       | 20,218,663 |   |                       |   | 17,653,316 |   |
|                                                        |   |                       | 77,386,014 |   |                       |   | 68,835,112 |   |
| Corporate                                                   |   |                       | 20,642,914 |   |                       |   | 20,827,813 |   |
|                                                        |   | $                          | 98,028,928 |   |                       | $      | 89,662,925 |   |

----

Index

MET

|   | /s/                Margolis &                Company P.C. |
|--------|---------------------------------------------------------------|
|   | Certified                Public Accountants                   |

----

Index

ME

|                                                 |   | Nine                Months EndedOctober                31, 2006 |       |   | Three                Months EndedOctober                31, 2006 |   |
|------------------------------------------------------|--------|-----------------------------------------------------------------|------------|--------|------------------------------------------------------------------|--------|
|                                                 |   | As                Restated                                      |       |   | As                Previously Reported                            |   |   | As                Restated |   |   | As                Previously Reported |   |
| Consolidated                Statement of Operations: |   |                                                            |       |   |                                                             |   |   |   |   |   |   |   |
| Net                sales                             |   | $                                                               | 68,566,778 |   |                                                             | $      | 68,881,850 |   |   | $ | 25,008,855 |   |   | $ | 25,323,927 |   |
| Net                income                            |   |                                                            | 5,082,599  |   |                                                             |   | 5,188,951 |   |   |   | 2,066,466 |   |   |   | 2,172,818 |   |
| Earnings                per share, basic             |   | $                                                               | .45        |   |                                                             | $      | .46 |   |   | $ | .18 |   |   | $ | .19 |   |
| Earnings                per share, diluted           |   | $                                                               | .45        |   |                                                             | $      | .46 |   |   | $ | .18 |   |   | $ | .19 |   |

|                                                |   | As                ofOctober                31, 2006 |       |
|-----------------------------------------------------|--------|-----------------------------------------------------|------------|
|                                                |   | As                Restated                          |       |   | As                Previously Reported |   |
| Consolidated                Balance Sheet:          |   |                                                |       |   |   |   |
| Accounts                receivable                  |   | $                                                   | 19,611,594 |   |   | $ | 19,936,228 |   |
| Inventory                                           |   |                                                | 19,096,835 |   |   |   | 18,940,498 |   |
| Accounts                payable                     |   |                                                | 6,783,453  |   |   |   | 6,793,015 |   |
| Accrued                salaries, wages and expenses |   |                                                | 8,410,240  |   |   |   | 8,462,623 |   |
| Retained                earnings                    |   |                                                | 73,570,713 |   |   |   | 73,677,065 |   |

----

Index

|                                                                      |   | Nine                Months                Ended |   |             | Three                Months                Ended |             |
|---------------------------------------------------------------------------|--------|-------------------------------------------------|--------|------------------|--------------------------------------------------|------------------|
|                                                                      |   | October                31,                      |   |             | October 31,                                 |             |
|                                                                      |   | 2006                                            |   |             | 2005                                             |             |   | 2006 |   |   | 2005 |   |
|                                                                      |   | (Restated)                            |   |             |                                             | (Restated)  |   |   |
| Net                Sales                                                  |   |                                            | 100.0  | %                |                                             |             | 100.0 | % |   |   | 100.0 | % |   |   | 100.0 | % |
| Cost                of goods                sold                          |   |                                            | 69.7   | %                |                                             |             | 68.4 | % |   |   | 67.4 | % |   |   | 69.4 | % |
| Gross                profit                                               |   |                                            | 30.3   | %                |                                             |             | 31.6 | % |   |   | 32.6 | % |   |   | 30.6 | % |
|                                                                      |   |                                            |   |             |                                             |             |   |   |   |   |   |   |   |   |   |   |
| Selling                expenses                                           |   |                                            | 9.2    | %                |                                             |             | 9.4 | % |   |   | 9.2 | % |   |   | 9.0 | % |
| General                and administrative                expenses         |   |                                            | 10.5   | %                |                                             |             | 10.6 | % |   |   | 10.5 | % |   |   | 10.3 | % |
| Loss                on the curtailment of pension                benefits |   |                                            | .3     | %                |                                             |             | - |   |   |   | .9 | % |   |   | - |   |
| Income                from                operations                      |   |                                            | 10.3   | %                |                                             |             | 11.6 | % |   |   | 12.0 | % |   |   | 11.3 | % |
|                                                                      |   |                                            |   |             |                                             |             |   |   |   |   |   |   |   |   |   |   |
| Interest                expense                                           |   |                                            | (.4    | %              ) |                                             |             | (.3 | %) |   |   | (.4 | %) |   |   | (.3 | %) |
| Other                income,                net                           |   |                                            | 1.1    | %                |                                             |             | .7 | % |   |   | 1.0 | % |   |   | .7 | % |
| Income                before                taxes                         |   |                                            | 11.0   | %                |                                             |             | 12.0 | % |   |   | 12.6 | % |   |   | 11.7 | % |
|                                                                      |   |                                            |   |             |                                             |             |   |   |   |   |   |   |   |   |   |   |
| Provision                for                taxes                         |   |                                            | 3.6    | %                |                                             |             | 3.7 | % |   |   | 4.3 | % |   |   | 3.2 | % |
| Net                income                                                 |   |                                            | 7.4    | %                |                                             |             | 8.3 | % |   |   | 8.3 | % |   |   | 8.5 | % |

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| · | the                write-down of costs in excess of net assets of businesses acquired                (goodwill), as a result of the determination that the acquired business                is                impaired. Our Flex-Kleen business unit, which initially performed                well                after being acquired by Met-Pro, thereafter had several years of                declining                performance which we attributed primarily to a general weakness in                its                served markets, followed by improved performance in the fiscal years                ended                January 31, 2006 and 2005. During the fiscal year ended January 31,                2006,                we performed an impairment analysis of the $11.1 million of goodwill                that                the Company carries for Flex-Kleen and concluded that no impairment                had                occurred. For the nine-month period ended October 31, 2006, the actual                net                sales and operating profits for our Flex-Kleen business unit have                exceeded                the projections used in our annual impairment model, and in addition                the                backlog as of October 31, 2006 for the Flex-Kleen business unit totaled                $6.4 million or an increase of 218% over the same period of last                year.                Flex-Kleen’s performance needs to continue to improve in order for us not                to be required to write-off some or all of its goodwill (Restated); |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | materially                adverse changes in economic conditions in the markets served by us                or in                significant customers of ours; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | material                changes in available technology; |
|--------|----------------------------------------------------------|

| · | adverse                developments in the asbestos cases that have been filed against the                Company, including without limitation the exhaustion of insurance                coverage, the insolvency of our insurance carriers, the imposition                of                punitive damages or other adverse developments in the availability                of                insurance coverage; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | changes                in accounting rules promulgated by regulatory agencies, including                the SEC,                which could result in an impact on earnings; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | the                cost of compliance with Sarbanes-Oxley and other applicable legal                and                listing requirements, and the unanticipated possibility that Met-Pro                may                not meet these requirements; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | unexpected                results in our product development activities; |
|--------|--------------------------------------------------------------------------|

| · | loss                of key customers; |
|--------|---------------------------------------|

| · | changes                in product mix and the cost of materials, with effect on margins; |
|--------|------------------------------------------------------------------------------------------|

| · | changes                in our existing management; |
|--------|----------------------------------------------------|

| · | exchange                rate fluctuations; |
|--------|--------------------------------------------|

| · | changes                in federal laws, state laws and regulations; |
|--------|---------------------------------------------------------------------|

| · | lower                than anticipated return on investments in the Company’s defined benefit                plans, which could affect the amount of the Company’s pension liabilities; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | the                assertion of litigation claims that the Company’s products, including                products produced by companies acquired by the Company, infringe                third                party patents or have caused injury, loss or damage; |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | the                effect of acquisitions and other strategic ventures; |
|--------|-------------------------------------------------------------------------|

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| · | failure                to properly quote and/or execute customer orders, including                misspecifications, design, engineering or production errors; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | the                cancellation or delay of purchase orders or shipments; |
|--------|---------------------------------------------------------------------------|

| · | losses                related to international sales; and/or |
|--------|--------------------------------------------------------------|

| · | failure                in execution of acquisition strategy. |
|--------|--------------------------------------------------------------|

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| (a) | During                the third quarter ended October 31, 2006, we did not sell any of                our                equity securities that were not registered under the Securities Act                of                1933. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Not                  applicable |
|-----|---------------------------------|

| (c)  | The                following table summarizes Met-Pro’s purchases of its Common Shares for                the quarter ended October 31, 2006: |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|                                |   |                     |   |   |                      |   |   | Total                     |   |   | Maximum                  |                            |
|-------------------------------------|--------|--------------------------|--------|--------|---------------------------|--------|--------|---------------------------|--------|--------|--------------------------|---------------------------------|
|                                |   |                     |   |   |                      |   |   | Number                of  |   |   | Number                of |                            |
|                                |   |                     |   |   |                      |   |   | Shares                    |   |   | Shares                   |                            |
|                                |   |                     |   |   |                      |   |   | Purchased                 |   |   | That                May  |                            |
|                                |   |                     |   |   |                      |   |   | As                Part of |   |   | Yet                be    |                            |
|                                |   | Total                    |   |   |                      |   |   | Publicly                  |   |   | Purchased                |                            |
|                                |   | Number                of |   |   | Average                   |   |   | Announced                 |   |   | Under                the |                            |
|                                |   | Shares                   |   |   | Price                Paid |   |   | Plans                or   |   |   | Plan                or   |                            |
| Period                              |   | Purchased                |   |   | Per                Share  |   |   | Programs                  |   |   | Programs                 |                  (1)  |
|                                |   |                     |   |   |                      |   |   |                      |   |   |                     |                            |
| August                1-31, 2006    |   |                     | 0      |   |                      | $      | -      |                      |   |   | 0                        |                            |   |   | 270,918 |   |
| September                1-30, 2006 |   |                     | 0      |   |                      |   | -      |                      |   |   | 0                        |                            |   |   | 270,918 |   |
| October                1-31, 2006   |   |                     | 0      |   |                      |   | -      |                      |   |   | 0                        |                            |   |   | 270,918 |   |
| Total                               |   |                     | 0      |   |                      | $      | -      |                      |   |   | 0                        |                            |   |   | 270,918 |   |

|  | (1) | On                  December 15, 2000, our Board of Directors authorized a Common Share                  repurchase program that was publicly announced on December 19,                  2000, for                  up to 533,333 (adjusted for stock split) shares. The program has                  no fixed                  expiration date. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Ite

| (a)    |   | Exhibits                Required by Item 601 of Regulation S-K |
|--------|--------|----------------------------------------------------------------|
|   |   |                                                           |   |   |
|   |   | Exhibit                No.                                     |   | Description |
|   |   |                                                           |   |   |
|   |   | 31.1                                                           |   | Certification                of Chief Executive Officer, under Section                302 of the Sarbanes-Oxley Act of 2002.* |
|   |   |                                                           |   |   |
|   |   | 31.2                                                           |   | Certification                of Chief Financial Officer, under Section                302 of the Sarbanes-Oxley Act of 2002.* |
|   |   |                                                           |   |   |
|   |   | 32.1                                                           |   | Certification                of Chief Executive Officer, Pursuant 18                U.S.C. Section 1350.* |
|   |   |                                                           |   |   |
|   |   | 32.2                                                           |   | Certification                of Chief Financial Officer, Pursuant 18                U.S.C. Section 1350.* |

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ME

|                             |   | Met-Pro                Corporation                                                                                                                                     |
|----------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                             |   | (Registrant)                                                                                                                                                           |
|                             |   |                                                                                                                                                                   |
|                             |   |                                                                                                                                                                   |
| February                12, 2008 |   | /s/                Raymond J. De Hont                                                                                                                                  |
|                             |   | Raymond                J. De Hont                                                                                                                                      |
|                             |   | Chairman,                President and Chief Executive Officer                                                                                                         |
|                             |   |                                                                                                                                                                   |
|                             |   |                                                                                                                                                                   |
| February                12, 2008 |   | /s/                Gary J. Morgan                                                                                                                                      |
|                             |   | Gary                J. Morgan                                                                                                                                          |
|                             |   | Senior                Vice President of Finance, Secretary and Treasurer, Chief Financial                Officer, Chief Accounting Officer and                Director |

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