----

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

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|   | · | 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 |
|--------|--------|--------------------------------------------------------|

----

MET

| PART                I – FINANCIAL INFORMATION |                                                                                                                                                          |
|-----------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                |                                                                                                                                                          |   |   |
| Item                1.                              |                                                                                                                                                          | Financial                Statements |   |
|                                                |                                                                                                                                                          |   |   |
|                                                | Consolidated              Balance Sheet (Restated) as of July 31, 2007 and              January 31, 2007                                                      | 3 |
|                                                | Consolidated              Statement of Operations (Restated) for the              six-month and three-month periods ended July 31, 2007 and              2006 | 4 |
|                                                | Consolidated              Statement of Shareholders’ Equity (Restated) for              the six-month periods ended July 31, 2007 and 2006              | 5 |
|                                                | Consolidated              Statement of Cash Flows (Restated) for the              six-month periods ended July 31, 2007 and 2006                              | 6 |
|                                                | Notes              to Consolidated Financial Statements                                                                                                       | 7 |
|                                                | Report              of Independent Registered Public Accounting              Firm                                                                             | 17 |
|                                                |                                                                                                                                                          |   |   |
| Item                2.                              | Management’s              Discussion and Analysis of Financial              Condition and Results of Operations (Restated)                              | 18 |
|                                                |                                                                                                                                                          |   |   |
| Item                3.                              |                                                                                                                                                          | Qualitative                and Quantitative Disclosures about Market                Risk | 25 |
|                                                |                                                                                                                                                          |   |   |
| Item                4.                              |                                                                                                                                                          | Controls                and                Procedures (Restated) | 25 |
|                                                |                                                                                                                                                          |   |   |
|                                                |                                                                                                                                                          |   |   |
| PART                II – OTHER INFORMATION    |                                                                                                                                                          |
|                                                |                                                                                                                                                          |   |   |
| Item                1.                              |                                                                                                                                                          | Legal                Proceedings | 26 |
|                                                |                                                                                                                                                          |   |   |
| Item                1A.                             |                                                                                                                                                          | Risk                Factors | 27 |
|                                                |                                                                                                                                                          |   |   |
| Item                2.                              |                                                                                                                                                          | Unregistered                Sales of Equity Securities and Use of                Proceeds | 27 |
|                                                |                                                                                                                                                          |   |   |
| Item                3.                              |                                                                                                                                                          | Defaults                Upon Senior Securities | 27 |
|                                                |                                                                                                                                                          |   |   |
| Item                4.                              |                                                                                                                                                          | Submission                of Matters to a Vote of Security                Holders | 28 |
|                                                |                                                                                                                                                          |   |   |
| Item                5.                              |                                                                                                                                                          | Other                Information | 28 |
|                                                |                                                                                                                                                          |   |   |
| Item                6.                              |                                                                                                                                                          | Exhibits | 28 |
|                                                |                                                                                                                                                          |   |   |
|                                                |                                                                                                                                                          |   |   |
| SIGNATURES                                          | 29                                                                                                                                                            |

----

Index

CONSOLIDATED

| PART                  I – FINANCIAL INFORMATION                                                                                                                                                                                                                            |   |                      |        |   |                         |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|-------------|--------|------------------------------|--------|
|                                                                                                                                                                                                                                                                             |   |                      |        |   |                         |   |
| Item                  1.  Financial                  Statements                                                                                                                                                                                                        |   |                      |        |   |                         |   |
|                                                                                                                                                                                                                                                                             |   |                      |        |   |                         |   |
|                                                                                                                                                                                                                                                                             |   | July                  31, |        |   | January                  31, |   |
| ASSETS                                                                                                                                                                                                                                                                           |   | 2007                      |        |   | 2007                         |   |
| Current                  assets                                                                                                                                                                                                                                                  |   | (Restated)                |        |   | (Restated)                   |   |
| Cash                  and cash                  equivalents                                                                                                                                                                                                                      |   | $                         | 24,426,816  |   |                         | $      | 17,322,194 |   |
| Marketable                  securities                                                                                                                                                                                                                                           |   |                      | 24,043      |   |                         |   | 24,090 |   |
| Accounts                  receivable, net of                  allowance for doubtful accounts of approximately                  $150,000                  and $133,000,                  respectively                                                                            |   |                      | 16,703,558  |   |                         |   | 19,988,097 |   |
| Inventories                                                                                                                                                                                                                                                                      |   |                      | 24,414,471  |   |                         |   | 19,720,842 |   |
| Prepaid                  expenses, deposits and                  other current assets                                                                                                                                                                                            |   |                      | 2,254,041   |   |                         |   | 1,748,130 |   |
| Total                  current                  assets                                                                                                                                                                                                                           |   |                      | 67,822,929  |   |                         |   | 58,803,353 |   |
|                                                                                                                                                                                                                                                                             |   |                      |        |   |                         |   |   |   |
| Property,                  plant and equipment,                  net                                                                                                                                                                                                             |   |                      | 16,217,855  |   |                         |   | 16,832,988 |   |
| Costs                  in excess of net assets of                  businesses acquired, net                                                                                                                                                                                      |   |                      | 20,798,913  |   |                         |   | 20,798,913 |   |
| Other                  assets                                                                                                                                                                                                                                                    |   |                      | 294,610     |   |                         |   | 306,403 |   |
| Total                  assets                                                                                                                                                                                                                                                    |   | $                         | 105,134,307 |   |                         | $      | 96,741,657 |   |
|                                                                                                                                                                                                                                                                             |   |                      |        |   |                         |   |   |   |
| LIABILITIESANDSHAREHOLDERS'                  EQUITY                                                                                                                                                                                                                              |   |                      |        |   |                         |   |   |   |
| Current                  liabilities                                                                                                                                                                                                                                             |   |                      |        |   |                         |   |   |   |
| Current                  portion of long-term                  debt                                                                                                                                                                                                              |   | $                         | 1,981,082   |   |                         | $      | 1,955,202 |   |
| Accounts                  payable                                                                                                                                                                                                                                                |   |                      | 8,554,790   |   |                         |   | 6,419,951 |   |
| Accrued                  salaries, wages and                  expenses                                                                                                                                                                                                           |   |                      | 3,753,556   |   |                         |   | 4,005,300 |   |
| Dividend                  payable                                                                                                                                                                                                                                                |   |                      | 757,389     |   |                         |   | 757,029 |   |
| Customers'                  advances                                                                                                                                                                                                                                             |   |                      | 2,333,909   |   |                         |   | 981,680 |   |
| Deferred                  income                  taxes                                                                                                                                                                                                                          |   |                      | 242,457     |   |                         |   | 245,231 |   |
| Total                  current                  liabilities                                                                                                                                                                                                                      |   |                      | 17,623,183  |   |                         |   | 14,364,393 |   |
|                                                                                                                                                                                                                                                                             |   |                      |        |   |                         |   |   |   |
| Long-term                  debt                                                                                                                                                                                                                                                  |   |                      | 4,517,363   |   |                         |   | 5,417,990 |   |
| Other                  non-current                  liabilities                                                                                                                                                                                                                  |   |                      | 3,305,321   |   |                         |   | 3,276,551 |   |
| Deferred                  income                  taxes                                                                                                                                                                                                                          |   |                      | 2,335,529   |   |                         |   | 1,369,591 |   |
| Total                  liabilities                                                                                                                                                                                                                                               |   |                      | 27,781,396  |   |                         |   | 24,428,525 |   |
|                                                                                                                                                                                                                                                                             |   |                      |        |   |                         |   |   |   |
| Shareholders'                  equity                                                                                                                                                                                                                                            |   |                      |        |   |                         |   |   |   |
| Common                  shares, $.10 par value;                  18,000,000 shares authorized, 12,846,608 shares issued, of which 1,588,563                  and 1,631,364 shares were                  reacquired and held in treasury at the respective                  dates |   |                      | 1,284,661   |   |                         |   | 1,284,661 |   |
| Additional                  paid-in                  capital                                                                                                                                                                                                                     |   |                      | 8,254,499   |   |                         |   | 7,910,708 |   |
| Retained                  earnings                                                                                                                                                                                                                                               |   |                      | 78,666,767  |   |                         |   | 74,657,888 |   |
| Accumulated                  other comprehensive                  income (loss)                                                                                                                                                                                                  |   |                      | 351,891     |   |                         |   | (                33,471 | ) |
| Treasury                  shares, at                  cost                                                                                                                                                                                                                       |   |                      | (11,204,907 | )      |                         |   | (11,506,654 | ) |
| Total                  shareholders'                  equity                                                                                                                                                                                                                     |   |                      | 77,352,911  |   |                         |   | 72,313,132 |   |
| Total                  liabilities and                  shareholders' equity                                                                                                                                                                                                     |   | $                         | 105,134,307 |   |                         | $      | 96,741,657 |   |
| See                  accompanying notes to                  consolidated financial statements.                                                                                                                                                                                   |   |                      |        |   |                         |

----

Index

CONSOLIDATED

|                                                                       |   | Six                Months                Ended July 31, |       |   | Three                Months                Ended July 31, |   |
|----------------------------------------------------------------------------|--------|-------------------------------------------------------------------|------------|--------|---------------------------------------------------------------------|--------|
|                                                                       |   | 2007                                                              |       |   | 2006                                                                |   |   | 2007 |   |   | 2006 |   |
|                                                                       |   | (Restated)                                                        |       |   |                                                                |   |   | (Restated) |   |   |   |   |
| Net                sales                                                   |   | $                                                                 | 45,964,544 |   |                                                                | $      | 43,557,923 |   |   | $ | 25,148,431 |   |   | $ | 23,778,882 |   |
| Cost                of goods                sold                           |   |                                                              | 31,147,427 |   |                                                                |   | 30,968,074 |   |   |   | 17,015,515 |   |   |   | 17,044,392 |   |
| Gross                profit                                                |   |                                                              | 14,817,117 |   |                                                                |   | 12,589,849 |   |   |   | 8,132,916 |   |   |   | 6,734,490 |   |
|                                                                       |   |                                                              |       |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Operating                expenses                (income)                  |   |                                                              |       |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Selling                                                                    |   |                                                              | 4,589,778  |   |                                                                |   | 3,972,366 |   |   |   | 2,519,901 |   |   |   | 2,076,187 |   |
| General                and                administrative                   |   |                                                              | 5,407,261  |   |                                                                |   | 4,539,931 |   |   |   | 2,923,408 |   |   |   | 2,181,418 |   |
| Gain                on sale of                building                     |   |                                                              | (3,513,940 | )      |                                                                |   | - |   |   |   | - |   |   |   | - |   |
|                                                                       |   |                                                              | 6,483,099  |   |                                                                |   | 8,512,297 |   |   |   | 5,443,309 |   |   |   | 4,257,605 |   |
| Income                from                operations                       |   |                                                              | 8,334,018  |   |                                                                |   | 4,077,552 |   |   |   | 2,689,607 |   |   |   | 2,476,885 |   |
|                                                                       |   |                                                              |       |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Interest                expense                                            |   |                                                              | (170,698   | )      |                                                                |   | (147,314 | ) |   |   | (90,546 | ) |   |   | (87,509 | ) |
| Other                income,                net                            |   |                                                              | 516,393    |   |                                                                |   | 505,251 |   |   |   | 299,087 |   |   |   | 270,453 |   |
| Income                before                taxes                          |   |                                                              | 8,679,713  |   |                                                                |   | 4,435,489 |   |   |   | 2,898,148 |   |   |   | 2,659,829 |   |
|                                                                       |   |                                                              |       |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Provision                for                taxes                          |   |                                                              | 3,030,694  |   |                                                                |   | 1,419,356 |   |   |   | 970,880 |   |   |   | 851,144 |   |
| Net                income                                                  |   | $                                                                 | 5,649,019  |   |                                                                | $      | 3,016,133 |   |   | $ | 1,927,268 |   |   | $ | 1,808,685 |   |
|                                                                       |   |                                                              |       |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                per share, basic                (1)                |   | $                                                                 | .50        |   |                                                                | $      | .27 |   |   | $ | .17 |   |   | $ | .16 |   |
|                                                                       |   |                                                              |       |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                per share, diluted                (2)              |   | $                                                                 | .49        |   |                                                                | $      | .27 |   |   | $ | .17 |   |   | $ | .16 |   |
|                                                                       |   |                                                              |       |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Cash                dividend per share – declared                (3) |   | $                                                                 | .1350      |   |                                                                | $      | .1250 |   |   | $ | .0675 |   |   | $ | .0625 |   |
|                                                                       |   |                                                              |       |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Cash                dividend per share – paid                (3)     |   | $                                                                 | .1350      |   |                                                                | $      | .1250 |   |   | $ | .0675 |   |   | $ | .0625 |   |

|   | (1) | Basic                earnings per share are based                upon the weighted average number of shares outstanding of 11,226,822                and                11,202,088 for the six-month periods ended July 31, 2007and                2006, respectively, and                11,222,658 and 11,201,507 for the three-month periods ended July 31, 2007and                2006,                respectively. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Diluted                earnings per share are                based upon the weighted average number of shares outstanding of 11,473,431                and 11,379,867 for the six-month periods ended July 31, 2007and                2006, respectively, and                11,470,742 and 11,383,659 for the three-month periods ended July 31, 2007and                2006,                respectively. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | The                Board of Directors declared                quarterly dividends of $.0675 per                share payable on                March 14,                2007, June                12, 2007, and September                10, 2007 to shareholders                of record as of                February 28,                2007, May                29, 2007, and August                27, 2007,                respectively.  Quarterly dividends of $.0625 per share were paid                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. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

CONSOLIDATED

|                                                                                                |   |   |      |   |       |   |      |     |   |          |       |   |     |   |   |    |   |
|-----------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|------------|--------|-----------|----------|--------|---------------|------------|--------|----------|--------|--------|---------|--------|
|                                                                                                |   |   |      |   |       |   |      |     |   | Accumulated   |       |   |     |   |   |    |   |
|                                                                                                |   |   |      |   | Additional |   |      |     |   | Other         |       |   |     |   |   |    |   |
|                                                                                                |   | Common |      |   | Paid-in    |   |      | Retained |   | Comprehensive |       |   | Treasury |   |   |    |   |
|                                                                                                |   | Shares |      |   | Capital    |   |      | Earnings |   | Income/(Loss) |       |   | Shares   |   |   | Total   |   |
| Balances,                                                                                           |   |   |      |   |       |   |      |     |   |          |       |   |     |   |   |    |   |   |   |
| January                  31, 2007(Restated)                                                         |   | $      | 1,284,661 |   |       | $      | 7,910,708 |     |   | $             | 74,657,888 |   |     |   | $      | (33,471 | )      |   | $ | (11,506,654 | ) |   | $ | 72,313,132 |   |
|                                                                                                |   |   |      |   |       |   |      |     |   |          |       |   |     |   |   |    |   |   |   |   |   |   |   |   |   |
| Comprehensive                  income:                                                              |   |   |      |   |       |   |      |     |   |          |       |   |     |   |   |    |   |   |   |   |   |   |   |   |   |
| Net                  income                  (Restated)                                             |   |   | -         |   |       |   | -         |     |   |          | 5,649,019  |   |     |   |   | -       |   |   |   | - |   |   |   |   |   |
| Adoption                  of FIN No.                  48                                            |   |   | -         |   |       |   | -         |     |   |          | (125,000   | )      |     |   |   | -       |   |   |   | - |   |   |   |   |   |
| Foreign                  currency translation                  adjustment                           |   |   |      |   |       |   |      |     |   |          |       |   |     |   |   | 280,143 |   |   |   |   |   |   |   |   |   |
| Interest                  rate swap,                  net                  of tax of ($61,813) |   |   | -         |   |       |   | -         |     |   |          | -          |   |     |   |   | 105,249 |   |   |   | - |   |   |   |   |   |
| Securities                  available for sale, net                  of tax of $17                  |   |   | -         |   |       |   | -         |     |   |          | -          |   |     |   |   | (30     | )      |   |   | - |   |   |   |   |   |
| Total                  comprehensive                  income                                        |   |   |      |   |       |   |      |     |   |          |       |   |     |   |   |    |   |   |   |   |   |   |   | 5,909,381 |   |
|                                                                                                |   |   |      |   |       |   |      |     |   |          |       |   |     |   |   |    |   |   |   |   |   |   |   |   |   |
| Dividends                  paid, $.0675 per                  share                                  |   |   | -         |   |       |   | -         |     |   |          | (757,751   | )      |     |   |   | -       |   |   |   | - |   |   |   | (757,751 | ) |
| Dividends                  declared, $.0675 per                  share                              |   |   | -         |   |       |   | -         |     |   |          | (757,389   | )      |     |   |   | -       |   |   |   | - |   |   |   | (757,389 | ) |
| Stock-based                  compensation                                                           |   |   | -         |   |       |   | 255,054   |     |   |          | -          |   |     |   |   | -       |   |   |   | - |   |   |   | 255,054 |   |
| Stock                  option                  transactions                                         |   |   | -         |   |       |   | 88,737    |     |   |          | -          |   |     |   |   | -       |   |   |   | 301,747 |   |   |   | 390,484 |   |
| Balances,                                                                                           |   |   |      |   |       |   |      |     |   |          |       |   |     |   |   |    |   |   |   |   |   |   |   |   |   |
| July                  31, 2007(Restated)                                                            |   | $      | 1,284,661 |   |       | $      | 8,254,499 |     |   | $             | 78,666,767 |   |     |   | $      | 351,891 |   |   | $ | (11,204,907 | ) |   | $ | 77,352,911 |   |

|                                                                                           |   |   |      |   |       |   |      |     |   |   | 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                                                                    |   |   | -         |   |       |   | -         |     |   |   | 3,016,133     |   |   |     | -        |   |   |   | - |   |   |   |   |   |
| Foreign                  currency translation                  adjustment                      |   |   | -         |   |       |   | -         |     |   |   | -             |   |   |     | 201,298  |   |   |   | - |   |   |   |   |   |
| Interest                  rate swap, net of tax of                  $43,599                    |   |   | -         |   |       |   | -         |     |   |   | -             |   |   |     | 90,864   |   |   |   | - |   |   |   |   |   |
| Total                  comprehensive                  income                                   |   |   |      |   |       |   |      |     |   |   |          |   |   |     |     |   |   |   |   |   |   |   | 3,308,295 |   |
|                                                                                           |   |   |      |   |       |   |      |     |   |   |          |   |   |     |     |   |   |   |   |   |   |   |   |   |
| Dividends                  paid, $.0625 per                  share                             |   |   | -         |   |       |   | -         |     |   |   | (700,287      | )      |   |     | -        |   |   |   | - |   |   |   | (700,287 | ) |
| Dividends                  declared, $.0625 per                  share                         |   |   | -         |   |       |   | -         |     |   |   | (700,286      | )      |   |     | -        |   |   |   | - |   |   |   | (700,286 | ) |
| Stock-based                  compensation                                                      |   |   | -         |   |       |   | 163,601   |     |   |   | -             |   |   |     | -        |   |   |   | - |   |   |   | 163,601 |   |
| Stock                  option                  transactions                                    |   |   | -         |   |       |   | 2,589     |     |   |   | -             |   |   |     | -        |   |   |   | 52,642 |   |   |   | 55,231 |   |
| Balances,July                  31,                  2006                                       |   | $      | 1,284,661 |   |       | $      | 7,730,370 |     |   | $      | 72,261,277    |   |   | $        | (29,659  | )      |   | $      | (11,581,857 | ) |   | $ | 69,664,792 |   |
| See                  accompanying notes to                  consolidated financial statements. |   |   |      |   |       |   |      |     |   |   |          |   |   |

----

Index

CONSOLIDATED

|                                                                                                                                 |   | Six                  Months                  Ended |       |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|------------|
|                                                                                                                                 |   | July 31,                                      |       |
|                                                                                                                                 |   | 2007                                               |       |   | 2006 |   |
|                                                                                                                                 |   | (Restated)                                         |       |   |   |   |
| INCREASE                  (DECREASE) IN                  CASH AND CASHEQUIVALENTS                                          |
|                                                                                                                                 |
| Cash                  flows from operating                  activities                                                               |   |                                               |       |   |   |   |
| Net                  income                                                                                                          |   | $                                                  | 5,649,019  |   |   | $ | 3,016,133 |   |
| Adjustments                  to reconcile net                  income to net cash provided by operating                  activities: |   |                                               |       |   |   |   |   |   |
| Depreciation                  and                  amortization                                                                      |   |                                               | 843,274    |   |   |   | 768,427 |   |
| Deferred                  income                  taxes                                                                              |   |                                               | 899,167    |   |   |   | (1,106 | ) |
| (Gain)                  on sale of property and                  equipment, net                                                      |   |                                               | (3,516,683 | ) |   |   | (11,589 | ) |
| Stock-based                  compensation                                                                                            |   |                                               | 255,054    |   |   |   | 163,601 |   |
| Allowance                  for doubtful                  accounts                                                                    |   |                                               | 17,211     |   |   |   | (79,629 | ) |
| (Increase)                  decrease in operating                  assets:                                                           |   |                                               |       |   |   |   |   |   |
| Accounts                  receivable                                                                                                 |   |                                               | 3,409,747  |   |   |   | 1,607,822 |   |
| Inventories                                                                                                                          |   |                                               | (4,562,546 | ) |   |   | (1,405,805 | ) |
| Prepaid                  expenses, deposits and                  other current assets                                                |   |                                               | (481,406   | ) |   |   | 247,600 |   |
| Other                  assets                                                                                                        |   |                                               | (4,841     | ) |   |   | (4,644 | ) |
| Increase                  (decrease) in operating                  liabilities:                                                      |   |                                               |       |   |   |   |   |   |
| Accounts                  payable and accrued                  expenses                                                              |   |                                               | 1,651,487  |   |   |   | (276,556 | ) |
| Customers’                  advances                                                                                           |   |                                               | 1,351,575  |   |   |   | (532,636 | ) |
| Other                  non-current                  liabilities                                                                      |   |                                               | 28,770     |   |   |   | 1,098 |   |
| Net                  cash provided by operating                  activities                                                          |   |                                               | 5,539,828  |   |   |   | 3,492,716 |   |
|                                                                                                                                 |   |                                               |       |   |   |   |   |   |
| Cash                  flows from investing                  activities                                                               |   |                                               |       |   |   |   |   |   |
| Proceeds                  from sale of property and                  equipment                                                       |   |                                               | 4,345,282  |   |   |   | 12,810 |   |
| Acquisitions                  of property and                  equipment                                                             |   |                                               | (864,953   | ) |   |   | (3,275,209 | ) |
| Net                  cash provided by (used in)                  investing activities                                                |   |                                               | 3,480,329  |   |   |   | (3,262,399 | ) |
|                                                                                                                                 |   |                                               |       |   |   |   |   |   |
| Cash                  flows from financing                  activities                                                               |   |                                               |       |   |   |   |   |   |
| Proceeds                  from new                  borrowings                                                                       |   |                                               | -          |   |   |   | 4,140,315 |   |
| Reduction                  of                  debt                                                                                  |   |                                               | (758,148   | ) |   |   | (713,113 | ) |
| Exercise                  of stock                  options                                                                          |   |                                               | 390,484    |   |   |   | 55,232 |   |
| Payment                  of                  dividends                                                                               |   |                                               | (1,514,780 | ) |   |   | (1,400,107 | ) |
| Net                  cash provided by (used in)                  financing activities                                                |   |                                               | (1,882,444 | ) |   |   | 2,082,327 |   |
| Effect                  of exchange rate changes on                  cash                                                            |   |                                               | (33,091    | ) |   |   | 23,357 |   |
|                                                                                                                                 |   |                                               |       |   |   |   |   |   |
| Net                  increase in cash and cash                  equivalents                                                          |   |                                               | 7,104,622  |   |   |   | 2,336,001 |   |
|                                                                                                                                 |   |                                               |       |   |   |   |   |   |
| Cash                  and cash equivalents at                  February 1                                                            |   |                                               | 17,322,194 |   |   |   | 17,683,305 |   |
| Cash                  and cash equivalents at July                  31                                                               |   | $                                                  | 24,426,816 |   |   | $ | 20,019,306 |   |
| See                  accompanying notes to                  consolidated financial statements.                                       |   |                                               |       |   |   |   |   |   |

----

Index

NOTES

|                                                 |   | Six Months                EndedJuly                31, 2007 |       |   | Three                Months EndedJuly                31, 2007 |   |
|------------------------------------------------------|--------|------------------------------------------------------------------|------------|--------|---------------------------------------------------------------|--------|
|                                                 |   | As                Restated                                       |       |   | As                PreviouslyReported                          |   |   | As                Restated |   |   | As                PreviouslyReported |   |
| Consolidated                Statement of Operations: |   |                                                             |       |   |                                                          |   |   |   |   |   |   |   |
| Net                sales                             |   | $                                                                | 45,964,544 |   |                                                          | $      | 49,512,698 |   |   | $ | 25,148,431 |   |   | $ | 27,596,089 |   |
| Net                income                            |   |                                                             | 5,649,019  |   |                                                          |   | 6,405,944 |   |   |   | 1,927,268 |   |   |   | 2,527,701 |   |
| Earnings                per share, basic             |   | $                                                                | .50        |   |                                                          | $      | .57 |   |   | $ | .17 |   |   | $ | .23 |   |
| Earnings                per share, diluted           |   | $                                                                | .49        |   |                                                          | $      | .56 |   |   | $ | .17 |   |   | $ | .22 |   |

|                                                               |   | Period                EndedJuly                31, 2007 |       |
|--------------------------------------------------------------------|--------|---------------------------------------------------------|------------|
|                                                               |   | As                Restated                              |       |   | As                Previously Reported |   |
| Consolidated                Balance Sheet:                         |   |                                                    |       |   |   |   |
| Accounts                receivable                                 |   | $                                                       | 16,703,558 |   |   | $ | 21,573,525 |   |
| Inventory                                                          |   |                                                    | 24,414,471 |   |   |   | 22,082,136 |   |
| Prepaid                expenses, deposits and other current assets |   |                                                    | 2,254,041  |   |   |   | 1,751,891 |   |
| Accounts                payable                                    |   |                                                    | 8,554,790  |   |   |   | 9,057,973 |   |
| Accrued                salaries, wages and expenses                |   |                                                    | 3,753,556  |   |   |   | 4,264,905 |   |
| Retained                earnings                                   |   |                                                    | 78,666,767 |   |   |   | 79,687,717 |   |

----

Index

----

Index

|                                   |   | Six                Months Ended |                      |
|----------------------------------------|--------|---------------------------------|---------------------------|
|                                   |   | July                31,         |                      |
|                                   |   | 2007                            |                      |   | 2006 |   |
| Expected                term (years)   |   |                            | 5.0                       |   |   |   | 5.0 |   |
| Risk-free                interest rate |   |                            | 4.50%              - 4.58 | % |   |   | 3.63%              - 4.58 | % |
| Expected                volatility     |   |                            | 29%              - 30     | % |   |   | 30%              - 32 | % |
| Dividend                yield          |   |                            | 1.86%              - 3.39 | % |   |   | 2.26%              - 3.39 | % |

----

Index

|                                           |   |   |    |   |                          |   |    | Weighted                    |   |   |                           |   |
|------------------------------------------------|--------|--------|---------|--------|-------------------------------|--------|---------|-----------------------------|--------|--------|--------------------------------|--------|
|                                           |   |   |    |   | Weighted                      |   |    | Average                     |   |   |                           |   |
|                                           |   |   |    |   | Average                       |   |    | Remaining                   |   |   | Aggregate                      |   |
|                                           |   | Shares |    |   | Exercise                Price |   |    | Life                (years) |   |   | Intrinsic                Value |   |
| Options:                                       |   |   |    |   |                          |   |    |                        |   |   |                           |   |
| Outstanding                at February 1, 2007 |   |   | 956,941 |   |                          | $      | 10.6892 |                        |   |   | 7.49                           |   |   |   |   |
| Granted                                        |   |   | -       |   |                          |   | -       |                        |   |   |                           |   |   |   |   |
| Forfeited                                      |   |   | 12,667  |   |                          |   | -       |                        |   |   |                           |   |   |   |   |
| Expired                                        |   |   | -       |   |                          |   | -       |                        |   |   |                           |   |   |   |   |
| Exercised                                      |   |   | 42,801  |   |                          |   | 9.1232  |                        |   |   |                           |   |   |   |   |
| Outstanding                at July 31, 2007    |   |   | 901,473 |   |                          | $      | 10.7169 |                        |   |   | 6.99                           |   |   | $ | 4,447,056 |   |
|                                           |   |   |    |   |                          |   |    |                        |   |   |                           |   |   |   |   |   |
| Exercisable                at July 31, 2007    |   |   | 678,801 |   |                          | $      | 9.6621  |                        |   |   | 6.99                           |   |   | $ | 4,064,593 |   |

|                            |                             |   | Options                Outstanding |   |    | Options                Exercisable |   |
|---------------------------------|----------------------------------|--------|------------------------------------|--------|---------|------------------------------------|--------|
|                            |                             |   |                               |   |    | Weighted                Average    |   |   |   |   |   |   |   |   |   |   |
|                            |                             |   |                               |   |    | Remaining                          |   |   | Weighted                Average |   |   |   |   |   | Weighted                Average |   |
|                            |                             |   | Shares                             |   |    | Life                (years)        |   |   | Exercise                Price |   |   | Shares |   |   | Exercise                Price |   |
| Range                of prices: |                             |   |                               |   |    |                               |   |   |   |   |   |   |   |   |   |   |
| $                               | 5.48              – 5.99   |   |                               |   | 32,980  |                               |   |   | 2.45 |   |   | $ | 5.5533 |   |   |   | 32,980 |   |   | $ | 5.5533 |   |
| $                               | 6.00              – 6.99   |   |                               |   | 59,382  |                               |   |   | 3.63 |   |   |   | 6.8063 |   |   |   | 59,382 |   |   |   | 6.8063 |   |
| $                               | 7.00              – 8.99   |   |                               |   | 187,097 |                               |   |   | 5.27 |   |   |   | 7.3740 |   |   |   | 187,097 |   |   |   | 7.3740 |   |
| $                               | 9.00              – 11.99  |   |                               |   | 153,340 |                               |   |   | 7.68 |   |   |   | 9.8813 |   |   |   | 153,340 |   |   |   | 9.8813 |   |
| $                               | 12.00              – 12.99 |   |                               |   | 299,674 |                               |   |   | 7.69 |   |   |   | 12.4243 |   |   |   | 246,002 |   |   |   | 12.5059 |   |
| $                               | 13.00              – 14.99 |   |                               |   | 169,000 |                               |   |   | 9.51 |   |   |   | 14.5300 |   |   |   | - |   |   |   | - |   |
|                            |                             |   |                               |   | 901,473 |                               |   |   | 6.99 |   |   | $ | 10.7169 |   |   |   | 678,801 |   |   | $ | 9.6621 |   |

----

Index

|                            |   | July                31, 2007 |       |   | January                31, 2007 |   |
|---------------------------------|--------|-----------------------------------|------------|--------|--------------------------------------|--------|
| Raw                materials    |   | $                                 | 15,049,792 |   |                                 | $      | 13,596,386 |   |
| Work                in progress |   |                              | 6,561,219  |   |                                 |   | 2,790,052 |   |
| Finished                goods   |   |                              | 2,803,460  |   |                                 |   | 3,334,404 |   |
|                            |   | $                                 | 24,414,471 |   |                                 | $      | 19,720,842 |   |

|                                            |   | Six                Months Ended July                31, |      |
|-------------------------------------------------|--------|--------------------------------------------------------------|-----------|
|                                            |   | 2007                                                         |      |   | 2006 |   |
| Cash                paid during the period for: |   |                                                         |      |   |   |   |
| Interest                                        |   | $                                                            | 173,826   |   |   | $ | 155,138 |   |
| Income                taxes                     |   |                                                         | 2,722,978 |   |   |   | 1,964,283 |   |

----

Index

|                                                                                                                                                                                                                                                                                                                                                    |   | July 31,2007 |          |    | January 31,2007 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------------|---------|----------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                    |   |              |          |    |                 |   |
| Bond                  payable, bank, payable in quarterly installments of $58,460, plus                  interest                  at a rate of 16 basis points below the ninety day LIBOR rate (effective                  interest rate of 5.19% at July 31, 2007), maturing April, 2021,                  collateralized by the Telford, PA building |   | $                 | 3,215,325     |    |                 | $      | 3,332,246 |   |
|                                                                                                                                                                                                                                                                                                                                                    |   |              |          |    |                 |   |   |   |
| 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 6.10% at July 31, 2007), maturing October,                  2008                                           |   |              | 1,800,000     |    |                 |   | 2,400,000 |   |
|                                                                                                                                                                                                                                                                                                                                                    |   |              |          |    |                 |   |   |   |
| Note                  payable, bank, payable in quarterly installments of $34,202 (25,000                  Euro),                  plus interest at a fixed rate of 3.82%, maturing January,                  2016                                                                                                                                      |   |              | 1,162,886     |    |                 |   | 1,173,061 |   |
|                                                                                                                                                                                                                                                                                                                                                    |   |              |          |    |                 |   |   |   |
| Line                  of credit, $410,430 (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 4.81% at July 31, 2007)                                                                                       |   |              | 410,430       |    |                 |   | 391,020 |   |
|                                                                                                                                                                                                                                                                                                                                                    |   |              |          |    |                 |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                    |   |              | 6,588,641     |    |                 |   | 7,296,327 |   |
| Less                  current portion                                                                                                                                                                                                                                                                                                                   |   |              | 1,981,082     |    |                 |   | 1,955,202 |   |
|                                                                                                                                                                                                                                                                                                                                                    |   |              | 4,607,559     |    |                 |   | 5,341,125 |   |
| Fair                market value of interest rateswap                liability                                                                                                                                                                                                                                                                          |   |              |  (90,196 |  ) |                 |   |  76,865 |   |
| Long-term                  portion                                                                                                                                                                                                                                                                                                                      |   | $                 | 4,517,363     |    |                 | $      | 5,417,990 |   |

----

Index

| Year                Ending |   |   |      |
|----------------------------|--------|--------|-----------|
| January                31, |   |   |      |
| 2008                       |   | $      | 1,981,082 |   |
| 2009                       |   |   | 1,570,648 |   |
| 2010                       |   |   | 370,648   |   |
| 2011                       |   |   | 370,648   |   |
| 2012                       |   |   | 370,648   |   |
| Thereafter                 |   |   | 1,924,967 |   |
|                       |   | $      | 6,588,641 |   |

|                                                                        |   | July                31, |     |   | January                31, |   |
|-----------------------------------------------------------------------------|--------|-------------------------|----------|--------|----------------------------|--------|
|                                                                        |   | 2007                    |     |   | 2007                       |   |
| Interest                rate swap, net of tax                               |   | $                       | 56,824   |   |                       | $      | (48,425 | ) |
| Unrealized                gain on securities available-for sale, net of tax |   |                    | 1,400    |   |                       |   | 1,430 |   |
| Foreign                currency translation adjustment                      |   |                    | 971,873  |   |                       |   | 691,730 |   |
| Minimum                pension liability adjustment, net of tax             |   |                    | (678,206 | )      |                       |   | (678,206 | ) |
|                                                                        |   | $                       | 351,891  |   |                       | $      | (33,471 | ) |

----

Index

|                                      |   | Six                Months Ended |    |   | Three                Months Ended |   |
|-------------------------------------------|--------|---------------------------------|---------|--------|-----------------------------------|--------|
|                                      |   | July                31,         |    |   |  July                31,     |   |
|                                      |   | 2007                            |    |   | 2006                              |   |   | 2007 |   |   | 2006 |   |
| Interest                income            |   | $                               | 529,028 |   |                              | $      | 493,984 |   |   | $ | 306,669 |   |   | $ | 248,893 |   |
| Other                miscellaneous income |   |                            | (12,635 | )      |                              |   | 11,267 |   |   |   | (7,582 | ) |   |   | 21,560 |   |
|                                      |   | $                               | 516,393 |   |                              | $      | 505,251 |   |   | $ | 299,087 |   |   | $ | 270,453 |   |

|                                              |   | Pension                Benefits                        |                   |
|---------------------------------------------------|--------|--------------------------------------------------------|------------------------|
|                                              |   | Six                Months EndedJuly                31, |                   |   | Three                Months EndedJuly                31, |   |
|                                              |   |                                                   | 2007    |   |   | 2006      |   |   | 2007     |   |   | 2006      |   |
| Service                cost                       |   | $                                                      | 74,128                 |   |   | $ | 354,124 |   |   | $ | 37,064 |   |   | $ | 177,062 |   |
| Interest                cost                      |   |                                                   | 520,082                |   |   |   | 535,814 |   |   |   | 260,041 |   |   |   | 267,907 |   |
| Expected                return on plan assets     |   |                                                   | (629,750               | ) |   |   | (584,930 | ) |   |   | (314,875 | ) |   |   | (292,465 | ) |
| Amortization                of transition asset   |   |                                                   | (742                   | ) |   |   | (8,058 | ) |   |   | (371 | ) |   |   | (4,029 | ) |
| Amortization                of prior service cost |   |                                                   | 17,390                 |   |   |   | 49,406 |   |   |   | 8,695 |   |   |   | 24,703 |   |
| Recognized                net actuarial loss      |   |                                                   | 20,368                 |   |   |   | 51,678 |   |   |   | 10,184 |   |   |   | 25,839 |   |
| Net                periodic benefit cost          |   | $                                                      | 1,476                  |   |   | $ | 398,034 |   |   | $ | 738 |   |   | $ | 199,017 |   |

----

Index

----

Index

|                                                           |   | Six                Months Ended July 31, |       |   | Three                Months Ended July 31, |   |
|----------------------------------------------------------------|--------|------------------------------------------|------------|--------|--------------------------------------------|--------|
|                                                           |   | 2007                                     |       |   | 2006                                       |   |   | 2007 |   |   | 2006 |   |
| Net                sales                                       |   | (Restated)                               |       |   |                                       |   |   | (Restated) |   |   |   |   |
| Product                recovery/pollution control technologies |   | $                                        | 21,551,576 |   |                                       | $      | 22,091,252 |   |   | $ | 12,105,186 |   |   | $ | 12,792,903 |   |
| Fluid                handling technologies                     |   |                                     | 13,411,570 |   |                                       |   | 12,023,633 |   |   |   | 7,357,498 |   |   |   | 6,106,139 |   |
| Filtration/purification                technologies            |   |                                     | 11,001,398 |   |                                       |   | 9,443,038 |   |   |   | 5,685,747 |   |   |   | 4,879,840 |   |
|                                                           |   | $                                        | 45,964,544 |   |                                       | $      | 43,557,923 |   |   | $ | 25,148,431 |   |   | $ | 23,778,882 |   |
|                                                           |   |                                     |       |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
| Income                from operations                          |   |                                     |       |   |                                       |   |   |   |   |   |   |   |   |   |   |   |
| Product                recovery/pollution control technologies |   | $                                        | 1,456,152  |   |                                       | $      | 1,406,072 |   |   | $ | 778,418 |   |   | $ | 839,358 |   |
| Fluid                handling technologies                     |   |                                     | 2,732,614  |   |                                       |   | 1,733,748 |   |   |   | 1,569,300 |   |   |   | 1,038,204 |   |
| Filtration/purification                technologies            |   |                                     | 631,312    |   |                                       |   | 937,732 |   |   |   | 341,889 |   |   |   | 599,323 |   |
|                                                           |   |                                     | 4,820,078  |   |                                       |   | 4,077,552 |   |   |   | 2,689,607 |   |   |   | 2,476,885 |   |
| Gain                on sale of building                        |   |                                     | 3,513,940  |   |                                       |   | - |   |   |   | - |   |   |   | - |   |
|                                                           |   | $                                        | 8,334,018  |   |                                       | $      | 4,077,552 |   |   | $ | 2,689,607 |   |   | $ | 2,476,885 |   |

|                                                           |   | July                31, |        |   | January                31, |   |
|----------------------------------------------------------------|--------|-------------------------|-------------|--------|----------------------------|--------|
|                                                           |   | 2007                    |        |   | 2007                       |   |
| Identifiable                assets                             |   | (Restated)              |        |   | (Restated)                 |   |
| Product                recovery/pollution control technologies |   | $                       | 33,990,621  |   |                       | $      | 34,907,323 |   |
| Fluid                handling technologies                     |   |                    | 21,421,043  |   |                       |   | 21,667,719 |   |
| Filtration/purification                technologies            |   |                    | 20,343,643  |   |                       |   | 20,514,339 |   |
|                                                           |   |                    | 75,755,307  |   |                       |   | 77,089,381 |   |
| Corporate                                                      |   |                    | 29,379,000  |   |                       |   | 19,652,276 |   |
|                                                           |   | $                       | 105,134,307 |   |                       | $      | 96,741,657 |   |

----

Index

REPORT

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

| Bala                Cynwyd, Pennsylvania                                                                                            |
|-------------------------------------------------------------------------------------------------------------------------------------|
| August                17, 2007, except for Notes 1, 6 and 13 as to which the date is February                4,                2008 |

----

Index

Management’s

|                                                 |   | Six Months                EndedJuly                31, 2007 |       |   | Three                Months EndedJuly                31, 2007 |   |
|------------------------------------------------------|--------|------------------------------------------------------------------|------------|--------|---------------------------------------------------------------|--------|
|                                                 |   | As                Restated                                       |       |   | As                Previously Reported                    |   |   | As                Restated |   |   | As                Previously Reported |   |
| Consolidated                Statement of Operations: |   |                                                             |       |   |                                                          |   |   |   |   |   |   |   |
| Net                sales                             |   | $                                                                | 45,964,544 |   |                                                          | $      | 49,512,698 |   |   | $ | 25,148,431 |   |   | $ | 27,596,089 |   |
| Net                income                            |   |                                                             | 5,649,019  |   |                                                          |   | 6,405,944 |   |   |   | 1,927,268 |   |   |   | 2,527,701 |   |
| Earnings                per share, basic             |   | $                                                                | .50        |   |                                                          | $      | .57 |   |   | $ | .17 |   |   | $ | .23 |   |
| Earnings                per share, diluted           |   | $                                                                | .49        |   |                                                          | $      | .56 |   |   | $ | .17 |   |   | $ | .22 |   |

|                                                               |   | Period                EndedJuly                31, 2007 |       |
|--------------------------------------------------------------------|--------|---------------------------------------------------------|------------|
|                                                               |   | As                Restated                              |       |   | As                Previously Reported |   |
| Consolidated                Balance Sheet:                         |   |                                                    |       |   |   |   |
| Accounts                receivable                                 |   | $                                                       | 16,703,558 |   |   | $ | 21,573,525 |   |
| Inventory                                                          |   |                                                    | 24,414,471 |   |   |   | 22,082,136 |   |
| Prepaid                expenses, deposits and other current assets |   |                                                    | 2,254,041  |   |   |   | 1,751,891 |   |
| Accounts                payable                                    |   |                                                    | 8,554,790  |   |   |   | 9,057,973 |   |
| Accrued                salaries, wages and expenses                |   |                                                    | 3,753,556  |   |   |   | 4,264,905 |   |
| Retained                earnings                                   |   |                                                    | 78,666,767 |   |   |   | 79,687,717 |   |

----

Index

|                                                              |   |    Six                Months                Ended  July                31, |   |             |                      Three Months Ended   July                31, |   |
|-------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|--------|------------------|-----------------------------------------------------------------------------------------------------------|--------|
|                                                              |   | 2007                                                                                                |   |             | 2006                                                                                                      |   |   | 2007 |   |   | 2006 |   |
|                                                              |   | (Restated)                                                                                          |   |             |                                                                                                      |   | (Restated) |   |   |   |
| Net                sales                                          |   |                                                                                                | 100.0  | %                |                                                                                                      |   | 100.0 | % |   |   | 100.0 | % |   |   | 100.0 | % |
| Cost                of goods                sold                  |   |                                                                                                | 67.8   | %                |                                                                                                      |   | 71.1 | % |   |   | 67.7 | % |   |   | 71.7 | % |
| Gross                profit                                       |   |                                                                                                | 32.2   | %                |                                                                                                      |   | 28.9 | % |   |   | 32.3 | % |   |   | 28.3 | % |
|                                                              |   |                                                                                                |   |             |                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Selling                expenses                                   |   |                                                                                                | 10.0   | %                |                                                                                                      |   | 9.1 | % |   |   | 10.0 | % |   |   | 8.7 | % |
| General                and administrative                expenses |   |                                                                                                | 11.7   | %                |                                                                                                      |   | 10.4 | % |   |   | 11.6 | % |   |   | 9.2 | % |
| Gain                on sale of                building            |   |                                                                                                | (7.6   | %              ) |                                                                                                      |   | - |   |   |   | - |   |   |   | - |   |
| Income                from                operations              |   |                                                                                                | 18.1   | %                |                                                                                                      |   | 9.4 | % |   |   | 10.7 | % |   |   | 10.4 | % |
|                                                              |   |                                                                                                |   |             |                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Interest                expense                                   |   |                                                                                                | (.3    | %              ) |                                                                                                      |   | (.3 | %              ) |   |   | (.4 | %              ) |   |   | (.4 | %              ) |
| Other                income,                net                   |   |                                                                                                | 1.1    | %                |                                                                                                      |   | 1.1 | % |   |   | 1.2 | % |   |   | 1.2 | % |
| Income                before                taxes                 |   |                                                                                                | 18.9   | %                |                                                                                                      |   | 10.2 | % |   |   | 11.5 | % |   |   | 11.2 | % |
|                                                              |   |                                                                                                |   |             |                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Provision                for                taxes                 |   |                                                                                                | 6.6    | %                |                                                                                                      |   | 3.3 | % |   |   | 3.8 | % |   |   | 3.6 | % |
| Net                income                                         |   |                                                                                                | 12.3   | %                |                                                                                                      |   | 6.9 | % |   |   | 7.7 | % |   |   | 7.6 | % |

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Index

| · | 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, 2007, 2006 and 2005. During the fiscal year ended January                31,                2007, 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 six-month period ended July 31, 2007, the annualized                projection for net sales and operating profit for our Flex-Kleen                business                unit currently exceeds the projections used in our annual impairment                model                for the fiscal year ended January 31, 2008; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | 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; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Index

Management’s

| · | 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; |
|--------|-------------------------------------------------------------------------|

| · | 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. |
|--------|--------------------------------------------------------------|

Qualitative

Controls

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Index

Legal

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Index

Item      1A.

Unregistered

| (a) | During                the second quarter ended July 31, 2007, 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 July 31, 2007: |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------|

| Period                         |   | TotalNumber                of SharesPurchased |   |   | AveragePrice                PaidPer                Share |   |   | TotalNumber                ofSharesPurchasedAs                Part ofPubliclyAnnouncedPlans                orPrograms |   |   | MaximumNumber                ofSharesThat                MayYet                bePurchasedUnder                thePlan                orPrograms |  (1 | )      |
|--------------------------------|--------|-----------------------------------------------|--------|--------|----------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|----------|--------|
|                           |   |                                          |   |   |                                                     |   |   |                                                                                                                  |   |   |                                                                                                                                             |     |   |
| May                1-31, 2007  |   |                                          | 0      |   |                                                     | $      | -      |                                                                                                                  |   |   | 0                                                                                                                                                |     |   |   | 270,918 |   |   |
| June                1-30, 2007 |   |                                          | 0      |   |                                                     |   | -      |                                                                                                                  |   |   | 0                                                                                                                                                |     |   |   | 270,918 |   |   |
| July                1-31, 2007 |   |                                          | 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. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Defaults

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Index

Submission

|                        |                                                                                                                |   | Number                of Votes |      |
|-----------------------------|---------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|-----------|
| Proposals                   |                                                                                                                |   | For                            |      |   | Against |   |   | Abstain/BrokerNon                Vote |   |
| Proposal                1 - | Election                of Directors                                                                                |   |                           |      |   |   |   |   |   |   |
|                        | Raymond                J. De Hont                                                                                   |   |                           | 9,774,929 |   |   |   | 331,545 |   |   |   | - |   |
|                        | Nicholas                DeBenedictis                                                                                |   |                           | 8,691,161 |   |   |   | 1,415,313 |   |   |   | - |   |
| Proposal                2 - | Selection                of Margolis & Company P.C. as Independent Registered Public                Accountants |   |                           | 9,946,454 |   |   |   | 117,863 |   |   |   | 42,157 |   |

Other

Exhibits

| (a)                                         |   | Exhibits                Required by Item 601 of Regulation S-K |
|---------------------------------------------|--------|----------------------------------------------------------------|
|                                        |   |                                                           |
|                                        |   | Exhibit                No.                                     |   | Description |
|                                        |   |                                                           |   |   |
|                                        |   | (31.1)                                                         |   | Certification                of the Chief Executive                Officer |
|                                        |   |                                                           |   | Pursuant                to Section 302 of the |
|                                        |   |                                                           |   | Sarbanes-Oxley                Act of 2002.* |
|                                        |   |                                                           |   |   |
|                                        |   | (31.2)                                                         |   | Certification                of the Chief Financial                Officer |
|                                        |   |                                                           |   | Pursuant                to Section 302 of the |
|                                        |   |                                                           |   | Sarbanes-Oxley                Act of 2002.* |
|                                        |   |                                                           |   |   |
|                                        |   | (32.1)                                                         |   | Certification                of the Chief Executive                Officer |
|                                        |   |                                                           |   | Pursuant                to 18 U.S.C. Section 1350, as                adopted |
|                                        |   |                                                           |   | Pursuant                to Section 906 of Sarbanes-Oxley Act of                2002.* |
|                                        |   |                                                           |   |   |
|                                        |   | (32.2)                                                         |   | Certification                of the Chief Financial                Officer |
|                                        |   |                                                           |   | Pursuant                to 18 U.S.C. Section 1350, as                adopted |
|                                        |   |                                                           |   | Pursuant                to Section 906 of Sarbanes-Oxley Act of                2002.* |
|                                        |   |                                                           |   |   |
| *  Filed                herewith. |   |                                                           |

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Index

SIGNATURES

|   | Pursuant                to the requirements of the Securities Exchange Act of 1934, the registrant                has duly caused this report to be signed on its behalf by the undersigned                thereunto duly authorized. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                             | 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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