<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-Q/A
                               (Amendment No. 1)


          Mark One
          [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                     For the quarter ended February 28, 2002

                                       OR

          [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                           Commission File No. 1-15851

                                    APW Ltd.
             (Exact name of registrant as specified in its charter)

                 Bermuda                                04-2576375
                 -------                                ----------
       (State or other jurisdiction of           (I.R.S. Employer Id. No.)
        incorporation or organization)

                                Clarendon House
                                2 Church Street
                            Hamilton HM DX, Bermuda

                        N22 W23685 Ridgeview Parkway West
                         Waukesha, Wisconsin 53188-1013
                    (Address of principal executive offices)    (Zip code)

                                 (262) 523-7600
                                 --------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                              Yes   X    No ____
                                  -----

The number of shares outstanding of the registrant's Common Stock (including
related Preferred Stock purchase rights) as of April 11, 2002 was 40,810,170.

<PAGE>

                                    APW Ltd.
                                      INDEX


This amendment on Form 10-Q/A #1 amends Items 1 and 2 of the Quarterly Report of
APW Ltd. (the "Company") on Form 10-Q previously filed for the three months and
six months ended February 28, 2002 and 2001. This Quarterly Report on Form
10-Q/A #1 is filed in connection with the Company's restatement of its financial
statements as of August 31, 2001 and 2000 and for the years ended August 31,
2001, 2000 and 1999 and for the quarters ended February 28, 2002, November 30,
2001, February 28, 2001 and November 30, 2000. Financial statement information
and related disclosures included in this amended filing reflect, where
appropriate, changes as a result of the restatements as described in Notes 1 and
13. All other information contained in this Quarterly Report on Form 10-Q/A #1
is as of the date referenced for such information in the original filing or, if
no date is referenced for information in the original filing, as of the date of
such filing.


<TABLE>
<CAPTION>
                                                                                        Page No.
                                                                                        --------
<S>                                                                                     <C>
PART I - FINANCIAL INFORMATION
------------------------------

Item 1 - Financial Statements

                 Condensed Consolidated Statements of Operations -
                    Three and Six Months Ended February 28, 2002 and 2001 .............     3

                 Condensed Consolidated Balance Sheets -
                    February 28, 2002 and August 31, 2001 .............................     4

                 Condensed Consolidated Statements of Cash Flows -
                    Six Months Ended February 28, 2002 and 2001 .......................     5

                 Notes to Condensed Consolidated Financial Statements .................     6

Item 2 - Management's Discussion and Analysis of Financial Condition
                 and Results of Operations ............................................    20

Item 3 - Quantitative and Qualitative Disclosures About Market Risk ...................    32


PART II - OTHER INFORMATION
---------------------------

Item 1 - Legal Proceedings ............................................................    33

Item 2 - Changes in Securities and Use of Proceeds ....................................    33

Item 4 - Submissions of Matters to a Vote of Security Holders .........................    33

Item 5 - Other Information ............................................................    33

Item 6 - Exhibits and Reports on Form 8-K .............................................    34

SIGNATURE .............................................................................    34
---------
</TABLE>


                                        2

<PAGE>

PART I  - FINANCIAL INFORMATION

Item 1 - Financial Statements
-----------------------------

                                    APW Ltd.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                   Three Months Ended                Six Months Ended
                                                                      February 28,                     February 28,
                                                             -------------------------------- --------------------------------
                                                                      As Restated                      As Restated
                                                                  2002            2001             2002            2001
                                                             --------------- ---------------- --------------- ----------------
<S>                                                          <C>             <C>              <C>             <C>
Net sales                                                    $     200,855    $     317,563    $    420,684     $    677,286
Cost of products sold                                              186,221          255,879         385,164          526,510
                                                             --------------- ---------------- --------------- ----------------
       Gross profit                                                 14,634           61,684          35,520          150,776

Engineering, selling and administrative expenses                    50,918           57,248          91,054          113,253
Amortization and impairment of intangible assets                   397,372            6,416         403,674           12,441
Restructuring charges                                                7,465                -          17,476                -
(Gain) loss on sale of subsidiary                                   (8,210)               -          (8,210)           2,667
                                                             --------------- ---------------- --------------- ----------------

       Operating earnings (loss)                                  (432,911)           (1,980)      (468,474)          22,415

Financing costs                                                     16,439            7,309          30,939           13,773
Other expense (income), net                                           (132)             741            (494)           1,058
                                                             --------------- ---------------- --------------- ----------------

Earnings (loss) before income tax expense (benefit)               (449,218)         (10,030)       (498,919)           7,584

Income tax expense (benefit)                                        44,256           (3,067)         31,792            2,868
                                                             --------------- ---------------- --------------- ----------------

Net earnings (loss)                                          $    (493,474)   $      (6,963)   $   (530,711)    $      4,716
                                                             =============== ================ =============== ================
Basic earnings (loss) per share:

   Earnings (loss) per share                                 $      (12.32)   $       (0.18)   $     (13.25)    $       0.12
                                                             =============== ================ =============== ================

   Weighted average common shares outstanding                       40,055           39,444          40,050           39,343
                                                             =============== ================ =============== ================

Diluted earnings (loss) per share:

   Diluted earnings (loss) per share                         $      (12.32)   $       (0.18)   $     (13.25)    $       0.11
                                                             =============== ================ =============== ================

   Weighted average common and potential dilutive
     common shares outstanding                                      40,055           39,444          40,050           41,219
                                                             =============== ================ =============== ================
</TABLE>

      See accompanying Notes to Condensed Consolidated Financial Statements

                                        3

<PAGE>

                                    APW Ltd.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                 (In thousands, except share and per share data)

<TABLE>
<CAPTION>
                                                                                                As Restated
                                                                                   ------------------------------------
                                                                                     February 28,         August 31,
                                                                                         2002                2001
                                                                                   ----------------     ---------------
                                                                                     (Unaudited)
<S>                                                                                <C>                  <C>
                                             ASSETS
                                             ------

Current assets
        Cash and cash equivalents                                                  $          6,866     $         6,190
        Accounts receivable, net                                                             94,395             112,948
        Inventories                                                                          97,902             130,937
        Prepaid expenses                                                                     16,538              14,213
        Deferred income taxes                                                                     -              16,650
                                                                                   ----------------     ---------------
                  Total current assets                                                      215,701             280,938

Property, plant and equipment                                                               431,652             477,915
        Less: Accumulated depreciation                                                     (212,172)           (222,886)
                                                                                   ----------------     ---------------
                 Net property, plant and equipment                                          219,480             255,029

Goodwill, net                                                                               301,611             679,225
Other intangible assets, net                                                                  4,192              27,616
Other assets                                                                                 47,606              58,524
                                                                                   ----------------     ---------------

                 Total assets                                                      $        788,590     $     1,301,332
                                                                                   ================     ===============

                        LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
                        ----------------------------------------------

Current liabilities
         Short-term borrowings                                                     $        644,015     $       603,353
         Trade accounts payable                                                              81,545             119,904
         Accrued compensation and benefits                                                   28,838              30,126
         Income taxes payable                                                                43,946              33,859
         Other current liabilities                                                           65,686              40,701
                                                                                   ----------------     ---------------
                 Total current liabilities                                                  864,030             827,943

Long-term debt                                                                                    -              18,096
Other long-term liabilities                                                                  38,274              45,375

Shareholders' equity (deficit)
         Common Stock--$0.01 par value per share; authorized 250,000,000
           shares; issued and outstanding, less contingent shares, 40,055,453
           and 40,042,207 shares, respectively                                                  400                 400
         Share premium                                                                      679,429             669,772
         Accumulated deficit                                                               (764,518)           (233,765)
         Accumulated other comprehensive loss                                               (29,025)            (26,489)
                                                                                   ----------------     ---------------
                  Total shareholders' equity (deficit)                                     (113,714)            409,918
                                                                                   ----------------     ---------------

                  Total liabilities and shareholders' equity (deficit)             $        788,590     $     1,301,332
                                                                                   ================     ===============
</TABLE>

      See accompanying Notes to Condensed Consolidated Financial Statements

                                        4

<PAGE>

                                    APW Ltd.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                             Six Months Ended
                                                                                               February 28,
                                                                                   ------------------------------------
                                                                                               As Restated
                                                                                   ------------------------------------
                                                                                        2002                  2001
                                                                                   --------------       ---------------
<S>                                                                                <C>                    <C>
Operating activities
--------------------
Net earnings (loss)                                                                $     (530,711)      $         4,716
Adjustments to reconcile net earnings (loss) to net cash
      used in operating activities:
           Depreciation and amortization                                                  440,917                31,515
           Amortization of financing fees                                                   4,683                     -
           Gain from sale of assets                                                          (252)                    -
           (Gain) loss on sale of subsidiary                                               (8,210)                2,667
           Deferred income taxes                                                           27,565                   326
           Restructuring charges                                                           17,476                     -
           Changes in operating assets and liabilities:
                    Accounts receivable                                                    31,762                 4,709
                    Inventories                                                            28,487               (27,819)
                    Prepaid expenses and other assets                                      (4,506)               (4,755)
                    Trade accounts payable                                                (35,782)                1,521
                    Income taxes                                                           10,843               (33,412)
                    Other liabilities                                                       5,370               (12,076)
                                                                                   --------------       ---------------
     Net cash used in operating activities                                                (12,358)              (32,608)


Investing activities
--------------------
Proceeds on the sale of property, plant and equipment                                       4,112                   295
Additions to property, plant and equipment                                                (11,874)              (57,848)
Net proceeds on sale of subsidiary, net of cash sold                                       19,241                 1,782
Business acquisitions, net of cash acquired                                                     -              (241,546)
Other investing activities                                                                   (398)                 (727)
                                                                                   --------------       ---------------
     Net cash provided by (used in) investing activities                                   11,081              (298,044)


Financing activities
--------------------
Net short term borrowings (repayments)                                                     (5,548)                  (86)
Principal repayments on long-term debt                                                   (132,687)              (79,448)
Principal borrowings on long-term debt                                                    161,378               364,587
Net commercial paper borrowings                                                                 -                50,124
Net receivables financed                                                                  (18,859)                  (50)
Debt financing costs                                                                       (2,100)                    -
Stock option exercises                                                                          -                 1,405
Other financing activities                                                                    (42)                 (823)
                                                                                   --------------       ---------------
     Net cash provided by financing activities                                              2,142               335,709

Effect of exchange rate changes on cash                                                      (189)               (2,580)
                                                                                   --------------       ---------------

Net increase in cash and cash equivalents                                                     676                 2,477

Cash and cash equivalents - beginning of period                                             6,190                   712
                                                                                   --------------       ---------------

Cash and cash equivalents - end of period                                          $        6,866       $         3,189
                                                                                   ==============       ===============

</TABLE>

      See accompanying Notes to Condensed Consolidated Financial Statements

                                        5

<PAGE>

                                    APW Ltd.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note 1 - Restatements
---------------------



     APW Ltd. (hereinafter referred to as "APW Ltd.", "APW" or "the Company")
has determined that accounting improprieties occurred in fiscal 2002, 2001, 2000
and 1999 at one U.S. subsidiary and in fiscal 2001 at one U.K. subsidiary. These
accounting improprieties resulted in the overstatement of assets (primarily cash
and inventory) and income and the understatement of liabilities (primarily trade
accounts payable and accrued compensation and benefits) and expense. As a
result, the consolidated financial statements as of August 31, 2001 and 2000 and
for the years ended August 31, 2001, 2000 and 1999 as well as the interim
results for these periods and the results for the interim periods ended
November 30, 2001 and February 28, 2002 have been restated. The restated
consolidated financial statements as of August 31, 2001 and 2000 and for the
years ended August 31, 2001, 2000 and 1999 have been included in a Form 10-K/A.
Restated condensed financial statement information for the interim periods in
the years ended August 31, 2001 and 2000 have been included in Item 8 of the
Form 10-K/A. Restated condensed financial statement information for the interim
periods ended February 28, 2002 and 2001 are included herein.

A summary of the effects of the restatements are set forth in Note 13.

As a result of the restatement for the year ended August 31, 2001, the Company
believes that it would have been in default of certain debt covenants as of
August 31, 2001, unless the Company had obtained waivers or the Company's
lenders had amended the debt covenants. Accordingly, the Company has classified
borrowings under the Revolving Multi-Currency Credit Agreement and the U.K.
Facility Agreement as a current liability as of August 31, 2001 in the
restated consolidated financial statements.

Note 2 - Holding Company Structure
----------------------------------

      APW Ltd. operates as a holding company that has no significant assets
other than investments in the stock of its wholly owned subsidiaries. APW Ltd.
has significant indebtedness, incurred through its Multi-Currency Credit
facilities, which is collateralized by substantially all of the assets,
including the stock of its subsidiaries. APW Ltd. relies on dividends and
distributions from its subsidiaries as its primary source of cash, primarily to
service its indebtedness.

Note 3 - Summary of Significant Accounting Policies
---------------------------------------------------


     Description of Business: APW Ltd. is a leading global provider of
     -----------------------
Technically Enabled Manufacturing Services ("TEMS"), focused on designing and
integrating large electronic products. APW has the capabilities to design and
manufacture various subsystems for electronic products, including enclosures,
thermal management systems, backplanes, power supplies, printed circuit board
assemblies, and cabling, either as integrated custom systems or as individual
subsystems. In addition, APW provides a wide range of integration services to
its customers, including product design, supply chain management, manufacturing,
assembly, testing and drop-ship services. APW's focus is on large infrastructure
solutions, such as wireless base stations and switches, enterprise hardware and
Internet server enclosures. APW is not targeting high volume markets, such as
personal computers or cell phone handsets. These offerings provide APW's
customers with accelerated time-to-market and decreased time-to-volume
production, while reducing their production costs and allowing them to focus on
the design and marketing of their products. APW believes the Company's emphasis
on technical innovation and vertically integrated engineering and manufacturing
expertise, coupled with its total solution approach, which can be delivered on a
worldwide basis, differentiates the Company in the marketplace.


      Basis of Presentation: The accompanying unaudited condensed consolidated
      ---------------------
financial statements of APW Ltd. and its subsidiaries have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial reporting and with the instructions of Form 10-Q
and Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States of America for complete financial statements. In the
opinion of management, the financial statements include all adjustments which
are normal and recurring in nature necessary to present fairly the financial
position of the Company at February 28, 2002, the results of operations for the
three and six months ended February 28, 2002 and 2001 and cash flows for the six
months ended February 28, 2002 and 2001. These financial statements should be
read in conjunction with the audited consolidated financial statements and notes
thereto in the Company's fiscal 2001 Annual Report on Form 10-K.

      Earnings (Loss) Per Share: Basic earnings per share is calculated by
      -------------------------
dividing net earnings (loss) by the weighted average common shares outstanding
during the period. Diluted earnings per share is calculated by using the
weighted average common shares outstanding adjusted to include the potentially
dilutive effect of outstanding stock options and warrants.

                                        6

<PAGE>

      Earnings (loss) per share for the three and six months ended February 28,
2002 and 2001 is based on the following (in thousands, except earnings per share
amounts):

<TABLE>
<CAPTION>
                                                                 Three Months Ended         Six Months Ended
                                                                    February 28,              February 28,
                                                              -----------------------   -----------------------
                                                                    As Restated               As Restated
                                                              -----------------------   -----------------------
                                                                 2002         2001         2002         2001
                                                              ----------   ----------   ---------    ----------
<S>                                                           <C>          <C>          <C>          <C>
Numerator:
        Net earnings (loss) for basic and diluted earnings
          per share                                           $ (493,474)  $   (6,963)  $ (530,711)  $    4,716
                                                              ==========   ==========   ==========   ==========

Denominator:
    Weighted average common shares outstanding for
      basic earnings (loss) per share                             40,055       39,444       40,050       39,343

    Net effect of dilutive stock options based on the
      treasury stock method                                            -            -            -        1,876
                                                              ----------   ----------   ----------   ----------

        Weighted average common and potential common shares
          outstanding for diluted earnings (loss) per share       40,055       39,444       40,050       41,219
                                                              ==========   ==========   ==========   ==========

Basic earnings (loss) per share                               $   (12.32)  $    (0.18)  $   (13.25)  $     0.12
                                                              ==========   ==========   ==========   ==========

Diluted earnings (loss) per share                             $   (12.32)  $    (0.18)  $   (13.25)  $     0.11
                                                              ==========   ==========   ==========   ==========
</TABLE>

      When the Company reports positive net earnings, the diluted earnings per
share calculation will include the impact of dilutive securities issued under
the existing stock option plans and issued warrants. Fiscal 2002 diluted
earnings per share exclude the effect of options to purchase approximately 6.9
million shares of common stock because they would be anti-dilutive due to the
net loss during the three and six months ended February 28, 2002. Warrants to
purchase approximately 6.2 million shares of common stock were outstanding as of
February 28, 2002, but were not included in the computation of diluted earnings
(loss) per share because they would be anti-dilutive due to the net loss for the
three and six months ended February 28, 2002.

     New Accounting Pronouncements: In June 2001, Statement of Financial
     -----------------------------
Accounting Standards ("SFAS") No. 141, "Business Combinations" and SFAS No. 142,
"Goodwill and Other Intangible Assets" were issued. The statements eliminate the
pooling-of-interests method of accounting for business combinations and require
that goodwill and certain intangible assets not be amortized. Instead, these
assets will be reviewed for impairment annually with any related losses
recognized in earnings when incurred. SFAS No. 141 was effective for APW Ltd. as
of July 31, 2001. SFAS No. 142 will be effective for the Company on September 1,
2002 for existing goodwill and intangible assets. The Company is currently
evaluating the impact of SFAS No. 142.

     In June 2001, SFAS No. 143, "Accounting for Asset Retirement Obligations"
was issued. SFAS No. 143 sets forth the financial accounting and reporting to be
followed for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. SFAS No. 143 requires entities
to record the fair value of a liability for an asset retirement obligation in
the period in which it is incurred if a reasonable estimate of fair value can be
made. The associated asset retirement costs are to be capitalized as part of the
carrying amount of the long-lived asset. Subsequently, the recorded liability
will be accreted to its present value and the capitalized costs will be
depreciated. The Company is required to adopt SFAS No. 143 on September 1, 2002.
The Company is currently evaluating the impact of SFAS No. 143.

     In August 2001, SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" was issued. SFAS No. 144 modifies and expands the financial
accounting and reporting for the impairment or disposal of long-lived assets
other than goodwill, which is specifically addressed by SFAS No. 142. SFAS No.
144 maintains the requirement that an impairment loss be recognized for a
long-lived asset to be held and used if its carrying value is not recoverable
from its undiscounted cash flows, with the recognized impairment being the
difference between the carrying amount and fair value of the asset. With respect
to long-lived assets to be disposed of other than by sale, SFAS No. 144 requires
that the asset be considered held and used until it is actually disposed of but
requires that its depreciable life be revised in accordance with APB Opinion No.
20, "Accounting Changes." SFAS No. 144 also requires that an impairment loss be
recognized at the date a long-lived asset is exchanged for a similar productive

                                       7

<PAGE>

asset. The Company will be required to adopt SFAS No. 144 on September 1, 2002.
The Company is currently evaluating the impact of SFAS No. 144.

     Reclassifications: Certain prior period amounts have been reclassified to
     ------------------
conform with the fiscal 2002 presentation. Such reclassifications had no impact
on previously reported net earnings (loss).

Note 4 - Intangible Asset Impairment, Restructuring and Other Charges
---------------------------------------------------------------------

   Goodwill and other intangible asset impairment charge

     During the second quarter of fiscal 2002, the Company performed an
impairment assessment of long-lived assets, which include property, plant and
equipment, goodwill and other intangible assets. The assessment was performed
primarily due to the reduced financial performance of the Company's operating
results during the second quarter of fiscal 2002 as compared with previously
developed estimates (see Note 10). As a result of the most recent assessment,
the Company recorded a $391.6 million impairment charge to further reduce the
carrying value of goodwill and other intangible assets. The impairment charge is
recorded as a component of amortization and impairment of intangible assets in
the Condensed Consolidated Statement of Operations. In determining whether an
impairment of long-lived assets has occurred, the Company compares estimated
undiscounted cash flows to the related asset book value. The charge was measured
in accordance with the provisions of SFAS No. 121, based upon the Company's
estimated future discounted cash flows using a discount rate determined by
management to be commensurate with the risk inherent in the Company's current
business model. The remaining long-lived assets are supported by management's
current best estimates of future undiscounted cash flows and will continue to be
depreciated and amortized over their remaining useful lives, which management
considers appropriate. However, there can be no assurances that the Company's
revised forecast will be achieved and accordingly future impairment charges may
be necessary. Additionally, the carrying value of remaining long-lived assets is
supported by estimates of future undiscounted cash flows as of February 28,
2002, and such amounts could be stated at amounts in excess of their fair
values.

   Restructuring

     Beginning in fiscal 2001 and continuing in fiscal 2002, management
developed formal plans to exit certain facilities and involuntarily terminate
employees. Management's plans to exit certain facilities included the
identification of manufacturing and sales facilities for closure and the
transfer of the related operations to other facilities. Management currently
anticipates that the facility closures and all related activities will be
substantially complete within one year of the commitment dates of the respective
exit plans.

     During the three and six months ended February 28, 2002, the Company
recognized pre-tax restructuring and other charges of $16.9 million and $36.5
million, respectively. The components of the charges recorded are as follows (in
millions):

                                              Three Months   Six Months
                                                 Ended         Ended
                                              February 28,  February 28,
                                                  2002          2002
                                              --------------------------
      Facility closure costs:
           Severance                             $   1.1      $   7.5
           Lease exit costs                          6.4         10.0
           Equipment impairment                      7.6         15.5
           Other costs                               1.8          3.5
                                              --------------------------
                Total facility closure costs     $  16.9      $  36.5
                                              ==========================

     Facility closure costs relate to the rationalization of seven facilities in
the first quarter of fiscal 2002 and three facilities in the second quarter of
fiscal 2002. The severance charges impact both salaried and hourly employees.
The costs are recorded in the Condensed Consolidated Statement of Operations for
the three and six months ended February 28, 2002, respectively, as follows: (i)
severance and lease exit costs totaling $7.5 million and $17.5 million are
recorded as restructuring charges; and (ii) equipment impairment charges,
resulting from facility closures, of $7.6 million ($5.5 million recorded as cost
of products sold and $2.1 million recorded as engineering, selling and
administrative expenses) and $15.5 million ($13.4 million recorded as cost of
products sold and $2.1 million recorded as engineering, selling and
administrative expenses) and other facility closure costs totaling $1.8 million

                                        8

<PAGE>

and $3.5 million are recorded as cost of products sold.

     The following table summarizes the activity with respect to fiscal 2002
restructuring charges (in millions, except employee data):

<TABLE>
<CAPTION>
                                                          Number
                                                            of         Severance    Facilities
                                                        Employees       Reserve      Reserve       Total Reserve
                                                      -------------  ------------  -------------  ---------------
   <S>                                                <C>            <C>           <C>            <C>
   Total reserve balance at August 31, 2001                287           $ 2.1       $   5.2         $   7.3
   Add: Fiscal 2002 six month charges                      612             7.5          10.0            17.5
   Less: Fiscal 2002 six month utilization                (677)           (5.6)         (3.9)           (9.5)
                                                      -------------  ------------  -------------  ---------------
   Total reserve balance at February 28, 2002              222           $ 4.0       $  11.3         $  15.3
                                                      =============  ============  =============  ===============
</TABLE>

     Additionally, the Company has recorded a charge of $2.0 million (recorded
as a component of engineering, selling and administrative expenses in the
Condensed Consolidated Statement of Operations) during the second quarter
related to its decision to discontinue use of its two leased aircraft. This
charge reflects management's current estimates relating to future required lease
payments and the ultimate disposition timing and proceeds of the two aircraft.
See further discussion in Note 10.

Note 5 - Comprehensive Income (Loss)
------------------------------------

     The components of comprehensive income (loss) are as follows (in
thousands):


<TABLE>
<CAPTION>
                                                           Three Months Ended           Six Months Ended
                                                              February 28,                February 28,
                                                       ---------------------------  -------------------------
                                                             As Restated                    As Restated
                                                       ---------------------------  -------------------------
                                                           2002           2001         2002          2001
                                                       -------------  ------------  -----------  ------------
   <S>                                                 <C>            <C>           <C>          <C>
   Net earnings (loss)                                  $ (493,474)    $  (6,963)   $(530,711)    $   4,716

   Cumulative effect of change in accounting
    principle for derivatives and hedging
    activities, net of tax                                       -             -            -           168

   Derivative instrument  fair market value adjustment        (724)       (1,030)      (1,379)       (1,072)

   Reclassification of derivative losses to earnings           343            39          539            81

   Foreign currency translation adjustments                   (593)        1,934       (1,696)         (161)
                                                       -------------  ------------  -----------  ------------

   Comprehensive (loss) income                          $ (494,448)    $  (6,020)   $(533,247)    $   3,732
                                                       =============  ============  ===========  ============
</TABLE>

Note 6 - Inventories
--------------------

     Inventories consisted of (in thousands):


<TABLE>
<CAPTION>
                                                                          As Restated
                                                             -------------------------------------
                                                               February 28,          August 31,
                                                                   2002                 2001
                                                             ----------------     ----------------
               <S>                                           <C>                  <C>
               Raw material                                  $        57,138      $        73,427
               Work-in-progress                                       25,536               31,945
               Finished goods                                         28,203               39,591
                                                             ----------------     ----------------
               Total inventories, gross                              110,877              144,963
               Less: inventory reserves                              (12,975)             (14,026)
                                                             ----------------     ----------------
                            Total inventories                $        97,902      $       130,937
                                                             ================     ================
</TABLE>

Note 7 - Divestitures
---------------------

     On February 13, 2002, APW Ltd. completed the sale of its Zero Cases
division. Total consideration from the transaction was a net $19.2 million,
which resulted in a net book gain of $8.2 million.

                                        9

<PAGE>

Note 8 - Accounts Receivable Facility
-------------------------------------

     At February 28, 2002 and August 31, 2001, accounts receivable were reduced
by $39.1 million and $58.0 million, respectively, representing receivable
interests sold under the Accounts Receivable Facility. The maximum that can be
sold under this facility is $80.0 million, but at any date is limited to the
amount of the Company's eligible receivables. The balance at February 28, 2002
reflects that limit. Eligible receivables are based on geographic origination,
aging status and customer concentration limits.

Note 9 - Contingencies and Litigation
-------------------------------------

     APW Ltd. is a party to various legal proceedings which have arisen in the
normal course of its business. These legal proceedings typically include product
liability, environmental, labor, patent and contract claims, and commission
disputes.

     APW Ltd. has recorded reserves for loss contingencies based on the specific
circumstances of each case. Such reserves are recorded when it is probable that
a loss has been incurred as of the balance sheet date and such loss can be
reasonably estimated. In the opinion of management, the resolution of these
contingencies will not have a material adverse effect on APW Ltd.'s financial
condition, results of operations or cash flows.

     APW Ltd. has facilities at numerous geographic locations, which are subject
to a range of environmental laws and regulations. Compliance with these laws has
and will require expenditures on a continuing basis. Predecessors to APW Ltd.
have been identified by the United States Environmental Protection Agency
("EPA") as "Potentially Responsible Parties" regarding various multi-party
Superfund sites. Potentially Responsible Parties are jointly and severally
liable with respect to Superfund remediation liabilities. Any liability in
connection with these sites has been assumed by APW Ltd. Based on the Company's
investigations, management believes that the Company is a de minimis participant
in certain of these sites. As to one other site, the Company is a minor
participant, and the Company's share of estimated cleanup costs is not likely to
exceed $1.1 million. As to another EPA site where the Company is not a de
minimis participant, the state has required additional ground water testing at a
former APW Ltd. manufacturing facility, and the Company cannot reasonably
estimate the amount of the Company's liability, if any. In addition, the Company
is also involved in other state cleanup actions for which management believes
the aggregate costs of remediation are adequately reserved for.

     APW Ltd. anticipates that environmental costs will be expensed or
capitalized depending on their future economic benefits. Expenditures that have
no future economic value are expensed. Liabilities will be recorded when
environmental remediation is probable and the costs can be reasonably estimated.
Although the level of future expenditures for environmental remediation is
impossible to determine with any degree of certainty, management does not
believe these costs are likely to have a material adverse effect on APW Ltd.'s
financial position, results of operations or cash flows.

     The Company, as well as one current, and one former executive have been
sued in three actions which are pending in the United States District Court for
the Eastern District of Wisconsin in connection with alleged violations of
Federal securities laws which preceded a drop in the price of its common stock
ending on March 20, 2001. The first of these suits which is captioned Stewart
Norman Hicks v. APW Ltd., et al., was filed on December 10, 2001. The
subsequently filed suits are captioned Robert Betz v. APW Ltd, et al., and
Market Street Securities v. APW Ltd., et al. The complaints for all three suits
allege violations of the Federal securities laws and seek certification of a
plaintiff class consisting of all purchasers of the Company's common stock
between September 26, 2000 and March 20, 2001, inclusive. The complaint does not
quantify the damages. The Company has not yet been served with the complaints
but understands that the respective plaintiffs intend to seek consolidation of
the suits. At this time, the Company cannot evaluate the merits of these claims.

Note 10 - Liquidity, Debt Covenant Compliance and Management's Plans
--------------------------------------------------------------------

     On September 27, 2001, the Company's lenders amended certain debt covenants
associated with APW Ltd.'s Multi-Currency Credit Agreement, UK Revolving Credit
Agreement and the Accounts Receivable Facility (collectively, "credit
facilities"). These revised covenants were established based upon APW Ltd.
management's financial forecasts prior to the events of September 11, 2001.
Following the events of September 11 and throughout the fiscal 2002 first
quarter, APW Ltd. experienced a significant decline in net sales compared to
prior periods and a further decline compared to management's financial forecasts
that were the basis for the financial covenants set forth in the September 27,
2001

                                       10

<PAGE>

amendment. Such declines are related to a number of factors, certain of which
were impacted by the terrorist attacks that took place in the United States on
September 11, 2001. On December 13, 2001, the Company's lenders amended certain
debt covenants associated with the Company's credit facilities to reflect the
Company's revised financial forecasts as of that point in time. The revisions in
the covenants were considered necessary due to the magnitude of the decline in
the fiscal 2002 first quarter actual results compared to prior periods and
management's forecasts. In addition, the amendment repriced the outstanding
warrants issued in conjunction with the May 15, 2001 amendment to the closing
price of APW Ltd.'s common stock on December 10, 2001 of $1.98 and eliminates
the previous reduction provision if the Company met repayment targets by August
31, 2002. The Company also issued warrants for 9.9% of the common stock
outstanding on December 13, 2001 (approximately 4.1 million shares) at a price
of $0.01. These $0.01 warrants are cancelled if the credit facilities are repaid
by July 31, 2002 (entirely cancelled) or September 30, 2002 (49.5% cancelled).
During the second quarter of fiscal 2002, $8.5 million was recorded as the
estimated fair value of the warrants issued in conjunction with the December
amendment and was recorded as an increase in deferred financing costs and an
increase in share premium.

     As a result of the restatement for the year ended August 31, 2001, the
Company believes that it would have been in default of certain debt covenants as
of August 31, 2001, unless the Company had obtained waivers or the Company's
lenders had amended the debt covenants. Accordingly, the Company has classified
borrowings under the Revolving Multi-Currency Credit Agreement and the U.K.
Facility Agreement as a current liability as of August 31, 2001 in the restated
consolidated financial statements.

     During the quarter ended February 28, 2002, the Company amended its credit
facilities on three different occasions. The net result of these amendments was:
(i) to provide a temporary deferment of cash interest payment obligations until
April 15, 2002; (ii) to increase the size of the UK Revolving Credit Facility by
approximately $5.0 million under the UK Revolving Credit Agreement; (iii) to
allow for the sale of the assets of the Company's Zero Cases division; and (iv)
to provide a waiver of all financial covenant requirements for the period from
January 31, 2002 until April 15, 2002.

     Prior to considering the effects of the restatement as of February 28,
2002, the Company was in compliance under its credit facilities as a result of
having all of the financial covenants waived. Based on its current projections,
the Company believes that it is probable that it will not meet certain of these
covenants for the period ending May, 31, 2002 unless further waived or otherwise
amended through ongoing negotiations with its lenders. As such, in accordance
with Emerging Issues Task Force Issue ("EITF") 86-30, the Company has classified
all of its debt obligations as current as of February 28, 2002. The Company has
been pursuing discussions with its lenders concerning a recapitalization plan.
The discussions have centered around a recapitalization of the balance sheet
that is intended to result in no disruption to the operating subsidiaries and
their suppliers, who will be paid in full in the normal course of business. In
connection with the recapitalization plan, the Company intends that such plan
would entail the following: (i) the conversion of $550.0 million of the current
and outstanding debt plus accrued interest to common stock; (ii) the allowance
of a new financing line of credit of $110.0 million; (iii) the issuance of
common stock (and possible preferred stock or warrants) to the existing lenders
so that they would end up owning substantially all of the outstanding capital
stock of the Company; (iv) the issuance of warrants to the Company's existing
shareholders for some number of additional shares which become exercisable if
the lenders receive a return of their initial investment; and (v) the retention
of existing management. The Company has been negotiating this plan with the
lenders and primarily through its steering committee. To date, the Company and
the lenders have agreed in principal on the main terms of the recapitalization
plan, but no definitive agreement has yet been agreed to and executed. It is
anticipated that the plan will be implemented through a pre-packaged or
pre-negotiated Chapter 11 of APW Ltd., the holding company. Consequently, the
lenders will have agreed to the terms of the recapitalization plan prior to the
filing. This plan would be structured in such a way so that all of the
obligations of APW Ltd. (see Note 2 - Holding Company Structure) could be
assumed, adjusted or eliminated in a bankruptcy proceeding. The Company and its
lenders are structuring the recapitalization of the Company so that only APW
Ltd., the holding company, should be affected. Under this plan, the Chapter 11
filing of APW Ltd., the holding company, will not effect, in any direct way the
operating subsidiaries and their ability to conduct business normally with their
customers and suppliers. In particular, there is no intent to impair the
suppliers of the operating subsidiaries. If the Company cannot execute the
recapitalization plan as currently conceived, APW Ltd. would likely be forced to
file and seek protection under the bankruptcy laws. Given, that at this point
there is not a definitive recapitalization plan document agreed to with the
Company's lending group and as such, prospectively the Company could be required
to meet the future financial covenants of our current amended credit facilities
(unless otherwise waived or amended), which the Company feels that at this point
is not probable, coupled with the Company's current level of liquidity, there is
substantial doubt about the Company's ability to continue as a going concern.

     In order to facilitate the finalization of negotiations regarding the terms
of the recapitalization and the related documentation, on April 15, 2002, the
Company unanimously received an extension with regard to the deferment of
interest payments and a waiver of all financial covenants for the period through
May 14, 2002. The Accounts Receivable Facility will terminate on May 15, 2002
unless terminated earlier according to its terms (including, without limitation
the occurrence of a "termination event" that is not waived or amended) or
extended by mutual agreement of parties thereto. The Company does not currently
expect that the facility will be extended beyond the May 15, 2002 termination
date.

     APW Ltd.'s management plans to continue to aggressively pursue additional
revenue opportunities within its

                                       11

<PAGE>

core customer markets. APW Ltd. adopted several restructuring plans during
fiscal 2001 and throughout the first six months of fiscal 2002 in an effort to
reduce costs in the wake of declining net sales experienced during those
periods. These programs resulted in restructuring charges during fiscal 2001 and
the first six months of fiscal 2002 and have provided cost savings that are
expected to continue into the future. Management plans to consider additional
cost-reduction programs, as necessary, to further align the Company's cost base
with net sales.

     In December 2001, a subsidiary of the Company received notification from
the lessor of two of its aircraft that the lease contracts ("contracts") for the
two aircraft would be terminated effective March 4, 2002. In conjunction with
the termination, the terms of the contracts would require the Company to pay the
lessor approximately $12.3 million for the two aircraft and, in exchange, the
lessor would convey all of its rights, title and interest in the two aircraft to
the Company. The Company is actively working with the lessor to identify a third
party which would purchase and/or lease the two aircraft, thereby eliminating
the Company's $12.3 million payment obligation. The lessor has informed the
Company that it is willing to continue to work with the Company to find third
party alternatives to eliminate the cost of terminating this contract, provided
the Company continues to make scheduled lease payments. As such, the Company has
recorded a charge of $2.0 million during the second quarter related to its
decision to discontinue use of the related aircraft. This charge reflects
management's current estimates relating to future required lease payments and
the ultimate disposition timing and proceeds of the two aircraft.

Note 11 - Income Taxes
----------------------

     Due to the size of APW Ltd.'s net operating loss carry-forwards in relation
to the Company's recent history of unprofitable operations and to the continuing
uncertainties surrounding recoverability of these losses and other net deferred
tax assets, a valuation allowance of $138.5 million has been established to
reduce the Company's net deferred tax assets to $0.4 million as of February 28,
2002. APW Ltd. currently provides for income taxes only to the extent that the
Company expects to pay taxes for current income, as well as for deferred taxes
for those tax jurisdictions in which the Company continues to be profitable.


Note 12 - Subsequent Events
---------------------------

     On April 2, 2002, the Company received notification from the New York Stock
Exchange ("NYSE") that the Company's shares of common stock have been suspended
and that the issue has been removed from the NYSE's trading list due to its
non-compliance with the exchange's continuing listing criteria. As of April 8,
2002 the Company commenced trading on the OTC Bulletin Board under the ticker
"APWLF".

     On April 15, 2002 the Company unanimously received an extension with regard
to the deferment of interest payments and a waiver of all financial covenants
for the period through May 14, 2002.



                                       12

<PAGE>

Note 13--Restated Financials
----------------------------


         As described in Note 1, the consolidated financial statements as of
February 28, 2002 and 2001 and for the three months and six months ended
February 28, 2002 and 2001 have been restated. These quarterly statements are
unaudited. A review of the consolidated financial statements for the three and
six month periods ended February 28, 2001 has not been performed by the
Company's independent accountants. A summary of the effects of the restatements
follows:

                                    APW Ltd.
                      Consolidated Statement of Operations
                  (Dollars in millions, except per share data)


<TABLE>
<CAPTION>


                                                            For the 3 Months Ended February 28, 2002 (Unaudited)
                                                         ---------------------------------------------------------
                                                               Previously
                                                                Reported      Adjustments        As Restated
                                                              ----------      -----------        -----------
<S>                                                          <C>             <C>                <C>
Net sales                                                        $ 200.9         $   --            $ 200.9
Costs of products sold                                             185.2            1.0              186.2
                                                                 -------         ------            -------
Gross profit                                                        15.7           (1.0)              14.7
Engineering, selling and administrative expenses                    51.2            (.3)              50.9
Amortization of intangible assets                                  397.4             --              397.4
Restructuring charges                                                7.5             --                7.5
Gain on sale of subsidiary                                          (8.2)            --               (8.2)
                                                                 -------         ------            -------
Operating loss                                                    (432.2)           (.7)            (432.9)
Net financing costs                                                 16.4             --               16.4

Other income, net                                                    (.1)            --                (.1)
                                                                 -------         ------            -------
Loss before income tax expense                                    (448.5)           (.7)            (449.2)
Income tax expense                                                  40.3            4.0               44.3
                                                                 -------         ------            -------
Net loss                                                         $(488.8)        $ (4.7)           $(493.5)
                                                                 =======         ======            =======
Basic and diluted loss per share:

Loss per share                                                   $(12.20)        $ (.12)           $(12.32)
Weighted average common shares outstanding                        40,055             --             40,055

</TABLE>


                                       13

<PAGE>

                                    APW Ltd.
                      Consolidated Statement of Operations
                  (Dollars in millions, except per share data)

<TABLE>
<CAPTION>


                                                      For the 6 Months Ended February 28, 2002 (Unaudited)
                                                      ----------------------------------------------------
                                                          Previously
                                                           Reported      Adjustments        As Restated
                                                          ----------     -----------        -----------
<S>                                                      <C>            <C>                <C>
Net sales                                                  $ 420.7        $    --             $ 420.7
Costs of products sold                                       383.2            2.0               385.2
                                                           -------        -------             -------
Gross profit                                                  37.5           (2.0)               35.5
Engineering, selling and administrative expenses              91.5            (.5)               91.0
Amortization of intangible assets                            403.7             --               403.7
Restructuring charges                                         17.5             --                17.5
Gain on sale of subsidiary                                    (8.2)            --                (8.2)
                                                           -------        -------             -------
Operating loss                                              (467.0)          (1.5)             (468.5)
Net financing costs                                           30.9             --                30.9

Other income, net                                              (.5)            --                 (.5)
                                                           -------        -------             -------
Loss before income tax expense                              (497.4)          (1.5)             (498.9)
Income tax expense                                            28.1            3.7                31.8
                                                           -------        -------             -------
Net loss                                                   $(525.5)       $  (5.2)            $(530.7)
                                                           =======        =======             =======
Basic and diluted loss per share:

Loss per share                                             $(13.12)       $  (.13)            $(13.25)
Weighted average common shares outstanding                  40,050             --              40,050


</TABLE>

                                       14

<PAGE>

                                    APW Ltd.
                           Consolidated Balance Sheet
                              (Dollars in millions)


<TABLE>
<CAPTION>


                                                                            February 28, 2002 (Unaudited)
                                                                -----------------------------------------------------
                                                                       Previously
                                                                        Reported       Adjustments      As Restated
                                                                       ----------      -----------      -----------
<S>                                                                   <C>             <C>              <C>
ASSETS
------
Current assets

  Cash and cash equivalents                                             $    9.0      $    (2.1)           $   6.9
  Accounts receivable, net                                                  94.4             --               94.4
  Inventories                                                              104.1           (6.2)              97.9
  Prepaid expenses                                                          16.8            (.3)              16.5
                                                                -----------------    -----------  -----------------
    Total current assets                                                   224.3           (8.6)             215.7

Property, plant and equipment                                              431.7             --              431.7
  Less: Accumulated depreciation                                          (212.2)            --             (212.2)
                                                                -----------------    -----------  -----------------
    Net property, plant and equipment                                      219.5             --              219.5

Goodwill, net                                                              301.6             --              301.6
Other intangibles, net                                                       4.2             --                4.2
Other assets                                                                47.5             .1               47.6
                                                                -----------------    -----------  -----------------
    Total assets                                                        $  797.1      $    (8.5)           $ 788.6
                                                                =================    ===========  =================

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities

  Short-term borrowings                                                 $  644.0      $      --            $ 644.0
  Trade accounts payable                                                    80.2            1.4               81.6
  Accrued compensation and benefits                                         28.2             .6               28.8
  Income taxes payable                                                      43.9             --               43.9
  Other current liabilities                                                 65.1             .6               65.7
                                                                -----------------    -----------  -----------------
    Total current liabilities                                              861.4            2.6              864.0

Other long-term liabilities                                                 38.3             --               38.3

Shareholders' equity

  Common stock                                                                .4             --                 .4
  Share premium                                                            679.4             --              679.4
  Accumulated deficit                                                     (753.4)         (11.1)            (764.5)
  Accumulated other comprehensive loss                                     (29.0)            --              (29.0)
                                                                -----------------    -----------  -----------------
    Total shareholders' equity                                            (102.6)         (11.1)            (113.7)
                                                                -----------------    -----------  -----------------
    Total liabilities and shareholders' equity                          $  797.1      $     (8.5)           $ 788.6
                                                                =================    ===========  =================

</TABLE>

                                       15


<PAGE>

                                    APW Ltd.
                 Consolidated Condensed Statement of Cash Flows
                              (Dollars in millions)


<TABLE>
<CAPTION>
                                               For the 6 Months Ended February 28, 2002 (Unaudited)
                                               ----------------------------------------------------
                                               Previously
                                                Reported           Adjustments          As Restated
                                               ----------          -----------          -----------

<S>                                            <C>                 <C>                  <C>
Net loss                                        $(525.5)              $(5.2)              $(530.7)

Net cash used in operating activities             (12.6)                 .2                 (12.4)

Net cash provided by investing activities          11.1                  --                  11.1

Net cash provided by financing activities           2.2                  --                   2.2

Effect of exchange rate changes on cash             (.2)                 --                   (.2)

Net increase in cash and cash equivalents            .5                  .2                    .7

Cash and cash equivalents-beginning of year         8.5                (2.3)                  6.2

Cash and cash equivalents-end of year           $   9.0               $(2.1)              $   6.9
</TABLE>


                                       16

<PAGE>

                                    APW Ltd.
                      Consolidated Statement of Operations
                  (Dollars in millions, except per share data)


<TABLE>
<CAPTION>


                                                      For the 3 Months Ended February 28, 2001 (Unaudited)
                                                      ----------------------------------------------------
                                                         Previously
                                                          Reported       Adjustments        As Restated
                                                         ----------      -----------        ------------
<S>                                                       <C>            <C>                <C>
Net sales                                                  $ 317.6        $    --            $ 317.6
Costs of products sold                                       254.2            1.7              255.9
                                                           -------        -------            -------
Gross profit                                                  63.4           (1.7)              61.7
Engineering, selling and administrative expenses              57.3            (.1)              57.2
Amortization of intangible assets                              6.4             --                6.4
                                                           -------        -------            -------
Operating loss                                                 (.3)          (1.6)              (1.9)
Net financing costs                                            7.3             --                7.3

Other expense, net                                              .8             --                 .8
                                                           -------        -------            -------
Loss before income tax benefit                                (8.4)          (1.6)             (10.0)
Income tax benefit                                            (2.5)           (.6)              (3.1)
                                                           -------        -------            -------
Net loss                                                   $  (5.9)       $  (1.0)           $  (6.9)
                                                           =======        =======            =======
Basic and diluted loss per share:

Loss per share                                             $  (.15)       $  (.03)           $  (.18)
Weighted average common shares outstanding                  39,444             --             39,444

</TABLE>

                                       17

<PAGE>

                                    APW Ltd.
                      Consolidated Statement of Operations
                  (Dollars in millions, except per share data)

<TABLE>
<CAPTION>


                                                      For the 6 Months Ended February 28, 2001 (Unaudited)
                                                      ----------------------------------------------------
                                                         Previously
                                                          Reported        Adjustments        As Restated
                                                         ----------       -----------        -----------
<S>                                                       <C>              <C>                <C>
Net sales                                                  $ 677.3          $    --            $ 677.3
Costs of products sold                                       523.2              3.3              526.5
                                                           -------          -------            -------

Gross profit                                                 154.1             (3.3)             150.8
Engineering, selling and administrative expenses             113.3               --              113.3
Amortization of intangible assets                             12.4               --               12.4
Loss on sale of subsidiary                                     2.7               --                2.7
                                                           -------          -------            -------
Operating earnings                                            25.7             (3.3)              22.4
Net financing costs                                           13.8               --               13.8

Other expense, net                                             1.0               --                1.0
                                                           -------          -------            -------
Earnings before income tax expense                            10.9             (3.3)               7.6
Income tax expense                                             4.0             (1.1)               2.9
                                                           -------          -------            -------
Net earnings                                               $   6.9          $  (2.2)           $   4.7

Basic earnings per share:
Earnings per share                                         $   .17          $  (.05)           $   .12
Weighted average common shares outstanding                  39,343               --             39,343

Diluted earnings per share:
Earnings per share                                         $   .17          $  (.06)           $   .11
Weighted average common shares outstanding                  41,219               --             41,219

</TABLE>

                                       18

<PAGE>

                                    APW Ltd.
                 Consolidated Condensed Statement of Cash Flows
                              (Dollars in millions)


<TABLE>
<CAPTION>
                                                  For the 6 Months Ended February 28, 2001 (Unaudited)
                                                  ----------------------------------------------------
                                                      Previously      Adjustments       As Restated
                                                       Reported
                                                      ----------      -----------       -----------
<S>                                                   <C>             <C>               <C>
Net earnings                                           $   6.9          $(2.2)           $   4.7

Net cash used in operating activities                    (31.4)          (1.2)             (32.6)

Net cash used in investing activities                   (298.0)            --             (298.0)

Net cash provided by financing activities                335.7             --              335.7

Effect of exchange rate changes on cash                   (2.6)            --               (2.6)

Net increase in cash and cash equivalents                  3.7           (1.2)               2.5

Cash and cash equivalents-beginning of year                 .6             .1                 .7

Cash and cash equivalents-end of year                  $   4.3          $(1.1)           $   3.2
</TABLE>


Note 14 - Reorganization Under Chapter 11

     On May 16, 2002, APW Ltd. (in provisional liquidation) (hereinafter
referred to as "APW Ltd.", "APW" or "the Company"), a Bermuda company, filed a
voluntary petition for relief under Chapter 11 of the United States Bankruptcy
Code ("Bankruptcy Code") in the United States Bankruptcy Court for the Southern
District of New York ("Bankruptcy Court") (Case No. 02-12335). The proceeding
involved only APW Ltd., the Bermuda company, and Vero Electronics, Inc., a
non-operating entity and subsidiary of APW Ltd. (Case No. 02-12334). All other
subsidiaries of the Company were excluded from the proceeding and continue to
conduct business with customers and suppliers in the ordinary course. The
Company continued to operate its business as a debtor-in-possession under the
jurisdiction of the Bankruptcy Court and in accordance with the applicable
provisions of the Bankruptcy Code. The bankruptcy proceedings are being jointly
administered under Case No. 02-12334 (PCB).

     On May 30, 2002, a proceeding (the "Bermuda Proceeding") was commenced
pursuant to the Companies Act 1981 with respect to APW Ltd. in the Bermuda
Supreme Court in connection with a winding-up petition. One of the purposes of
the filing was the imposition of a statutory stay preventing third parties from
continuing or taking actions against APW in Bermuda. On May 30, 2002, the
Bermuda Court appointed Malcolm L. Butterfield of KPMG Bermuda and Philip W.
Wallace of KPMG London, England as joint provisional liquidators of APW Ltd.
(or, as referred to herein, the JPLs) with limited supervisory powers. The
appointment of the JPL's and statutory stay enabled the JPL's to perform
supervisory and oversight of the management of APW while reviewing the Plan of
reorganization with a view to its treatment of creditors. On July 22, 2002, the
JPLs were granted various powers, including the power to authorize the sale of
any business, operation, subsidiary, division or other significant asset of APW
Ltd.

     APW Ltd. decided to pursue reorganization under Chapter 11 of the
Bankruptcy Code based upon the certainty of the elimination of pre-petition
indebtedness and as a consequence the ability of the Company to emerge from
bankruptcy significantly deleveraged. As a debtor-in-possession, APW Ltd. is
authorized to continue to operate as an ongoing business, but may not engage in
transactions outside the ordinary course of business without the approval of the
Bankruptcy Court, after notice and an opportunity for a hearing.

Confirmation of Plan of Reorganization

     On July 24, 2002 the Bankruptcy Court entered an order confirming APW
Ltd.'s and Vero's Amended and Restated Plan of Reorganization dated June 19,
2002 (as modified, amended or supplemented, the "Plan"). APW Ltd. emerged on
July 31, 2002.

     Pursuant to the terms of the Plan, certain assets and liabilities were
transferred to AWP Ltd. ("AWP"), a newly formed Bermuda company, including the
right to use the name "APW Ltd.," which became the successor-in-interest to APW
Ltd. After the consummation of the Plan, APW Ltd. changed its name to BQX Ltd.
and AWP Ltd. changed its name to APW Ltd. The above name changes became
effective on July 31, 2002.

     In addition, as of July 31, 2002 the effective date of the Plan, AWP (the
successor in interest to APW Ltd.) issued under the Plan the following:

     .    New Secured Notes in the aggregate principal amount of $100 million
          issued to its senior secured lenders,

     .    1,000,000 common shares of AWP (the successor in interest to APW Ltd.)
          (the "APW Common Shares") issued to its senior secured lenders which
          represents 100% of the outstanding common shares of AWP after the
          consummation of the Plan,

     .    Warrants to purchase up to 60,606 APW Common Shares at an exercise
          price of $448.95 per share issued to the current equity holders of APW
          Ltd., and

     .    Warrants to purchase up to 303,030 APW Common Shares at an exercise
          price of $0.02 per share issued to lenders under the Credit Facility
          (defined below).

     As of July 31, 2002, there were approximately 40.8 million common shares of
APW Ltd. outstanding. Under the Plan, holders of APW Ltd. common shares will
receive (a) warrants representing the right to purchase 60,606 APW Common Shares
as stated above and (b) retain existing common shares in APW Ltd. (which as a
practical matter will be liquidated and no distribution is expected to
shareholders). Subsequent to the effective date of the Plan, APW Ltd. will be
dissolved, liquidated or wound-up by joint provisional liquidators in connection
with a proceeding in Bermuda or otherwise pursuant to applicable Bermuda law,
and no assets are expected to be distributed to current shareholders.

     After the consummation of the Plan, AWP Ltd. (as successor to APW Ltd.) is
expected to have approximately 1.8 million authorized common shares, par value
$0.02 per share, of which 1,000,000 common shares will be outstanding. All such
1,000,000 shares will be issued as of the consummation of the Plan.

The Credit Facility

     Concurrent with the Chapter 11 filing, the Company entered into a new $110
million debtor-in-possession credit facility ("Credit Facility") to provide for
the payment of permitted pre-petition claims, working capital needs, letters of
credit and other general corporate purposes. The Credit Facility requires that
we maintain certain financial covenants and restrict liens, indebtedness,
capital expenditures, dividend payments and sale of assets. Upon emergence from
the Chapter 11 proceeding, the Credit Facility was extended until November 15,
2003 with respect to $90.0 million of the Credit Facility and May 15, 2004 with
respect to $20.0 million of the Credit Facility.

Fresh Start Accounting

     As a result of the bankruptcy, the Company will adopt fresh start
accounting pursuant to guidance provided by the American Institute of Certified
Public Accountant's Statement of Position 90-7, "Financial Reporting by Entities
in Reorganization under the Bankruptcy Code", as of July 31, 2002. In accordance
with the principles of fresh start accounting, the Company will adjust the
carrying values of its assets and liabilities to their fair values as of July
31, 2002. The application of fresh start accounting will result in material
changes to the carrying values of the Company's assets and liabilities.

Going Concern

     Following its emergence from the Chapter 11 proceeding, the ability of APW
Ltd., the successor company, to continue as a going concern is predicated upon,
among other things, compliance with the provisions of the Credit Facility and
the term loan agreement related to the $100 million in new secured notes issued
under the Plan and the ability to generate cash flows from operations and obtain
financing sources sufficient to satisfy future obligations.


                                       19

<PAGE>


Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations

This amendment on Form 10-Q/A #1 amends Items 1 and 2 of the Quarterly Report of
APW Ltd. (the "Company") on Form 10-Q previously filed for the three months and
six months ended February 28, 2002 and 2001. This Quarterly Report on Form
10-Q/A #1 is filed in connection with the Company's restatement of its financial
statements as of August 31, 2001 and 2000 and for the years ended August 31,
2001, 2000 and 1999 and for the quarters ended February 28, 2002, November 30,
2001, February 28, 2001 and November 30, 2000. Financial statement information
and related disclosures included in this amended filing reflect, where
appropriate, changes as a result of the restatements. All other information
contained in this Quarterly Report on Form 10-Q/A #1 is as of the date
referenced for such information in the original filing or, if no date is
referenced for information in the original filing, as of the date of such
filing.

      The following discussion of our financial condition and our results of
operations should be read in conjunction with our accompanying unaudited
condensed consolidated financial statements and related notes thereto.

Overview

      APW Ltd. is a leading global technically enabled manufacturing services
provider, focused on designing and integrating large electronic enclosure
products. We have the capabilities to design and manufacture various subsystems
for electronic products, including enclosures, power supplies, thermal
management systems, printed circuit board assemblies, and cabling, either as
individual subsystems or as integrated custom systems. We provide a wide range
of integrated design, manufacturing and logistics services to customers,
including product design, supply chain management, manufacturing, assembly,
testing and drop-ship services. Operating in over 30 locations throughout North
America, South America, Europe and Asia, we provide our solutions and services
to original equipment manufacturers, primarily in the communications (datacom
and telecom), computing (enterprise hardware - large servers, large data
storage, networking) and Internet (application service providers, Internet
service providers and web hosting) markets. Our customers include industry
leaders such as Applied Materials, Cisco, Compaq, Cymer, EMC, Ericsson, Fujitsu,
Hewlett-Packard, IBM, Lucent, Marconi, Motorola, NCR, Nortel Networks and Sun
Microsystems.

Reorganization Under Chapter 11

      On May 16, 2002, APW Ltd., (in provisional liquidation) (herinafter
referred to as "APW Ltd.", "APW" or "the Company"), a Bermuda company, filed a
voluntary petition for relief under Chapter 11 of the United States Bankruptcy
Code ("Bankruptcy Code") in the United States Bankruptcy Court for the Southern
District of New York ("Bankruptcy Court") (Case No. 02-12335). The proceeding
involved only APW Ltd., the Bermuda company, and Vero Electronics, Inc., a
non-operating entity and subsidiary of APW Ltd. (Case No. 02-12334). All other
subsidiaries of the Company were excluded from the proceeding and continue to
conduct business with customers and suppliers in the ordinary course. The
Company will continue to operate its business as a debtor-in-possession under
the jurisdiction of the Bankruptcy Court and in accordance with the applicable
provisions of the Bankruptcy Code. The bankruptcy proceedings are being jointly
administered under Case No. 02-12334 (PCB).

      On May 30, 2002, a proceeding (the "Bermuda Proceeding") was commenced
pursuant to the Companies Act 1981 with respect to APW Ltd. in the Bermuda
Supreme Court in connection with a winding-up petition. One of the purposes of
the filing was the imposition of a statutory stay preventing third parties from
continuing or taking actions against APW in Bermuda. On May 30, 2002, the
Bermuda court appointed Malcolm L. Butterfield of KPMG Bermuda and Philip W.
Wallace of KPMG, London, England as joint provisional liquidators of APW Ltd.
(or, as referred to herein, the JPLs) with limited supervisory powers. The
appointment of the JPL's and statutory stay enabled the JPL's to perform
supervisory and oversight of the management of APW while reviewing the Plan of
reorganization with a view to its treatment of creditors. On July 22, 2002, the
JPLs were granted various powers, including the power to authorize the sale of
any business, operation, subsidiary, division or other significant asset of APW
Ltd.

     APW Ltd. decided to pursue reorganization under Chapter 11 of the
Bankruptcy Code based upon the certainty of the elimination of pre-petition
indebtedness and as a consequence the ability of the Company to emerge from
bankruptcy significantly deleveraged. As a debtor-in-possession, APW Ltd. is
authorized to continue to operate as an ongoing business, but may not engage in
transactions outside the ordinary course of business without the approval of the
Bankruptcy Court, after notice and an opportunity for a hearing.

Confirmation of Plan of Reorganization

     On July 24, 2002 the Bankruptcy Court entered an order confirming APW
Ltd.'s and Vero's Amended and Restated Plan of Reorganization dated June 19,
2002 (as modified, amended or supplemented, the "Plan"). APW Ltd. emerged on
July 31, 2002. A copy of the Plan is attached hereto as Exhibit 2.1(b).

     Pursuant to the terms of the Plan, subject to the approval of the joint
provisional liquidators (the "JPLs") appointed in the Bermuda Proceeding and, if
required, the approval of the Bermuda Supreme Court, all of the assets and
liabilities which were to be retained by APW Ltd. under the original Plan will
be transferred to AWP Ltd. ("AWP"), a newly formed Bermuda company, including
the right to use the name "APW Ltd.," which became the successor-in-interest to
APW Ltd. After the consummation of the Plan, APW Ltd. changed its name to BQX
Ltd. and AWP Ltd. changed its name to APW Ltd. The above name changes became
effective on July 31, 2002.


      In addition, as of July 31, 2002 the effective date of the Plan, AWP (the
successor in interest to APW Ltd.) issued under the Plan the following:


      .   New Secured Notes in the aggregate principal amount of $100 million
          issued to its senior secured lenders,

      .   1,000,000 common shares of AWP (the successor in interest to APW Ltd.)
          (the "APW Common Shares") issued to its senior secured lenders which
          represents 100% of the outstanding common shares of AWP after the
          consummation of the Plan,

      .   Warrants to purchase up to 60,606 APW Common Shares at an exercise
          price of $448.95 per share issued to the current equity holders of APW
          Ltd., and

      .   Warrants to purchase up to 303,030 APW Common Shares at an exercise
          price of $0.02 per share issued to lenders under the Credit Facility
          (defined below).


      As of July 31, 2002, there were approximately 40.8 million common shares
of APW Ltd. outstanding. Under the Plan, holders of APW Ltd. common shares
received (a) warrants representing the right to purchase 60,606 APW Common
Shares as stated above and (b) retain existing common shares in APW Ltd. (which
as a practical matter will be liquidated and no distribution is expected to
shareholders). Subsequent to the effective date of the Plan, APW Ltd. will be
dissolved, liquidated or wound-up by joint provisional liquidators in connection
with a proceeding in Bermuda or otherwise pursuant to applicable Bermuda law,
and no assets are expected to be distributed to current shareholders.


      After the consummation of the Plan, AWP Ltd. (as successor to APW Ltd.)
is expected to have approximately 1.8 million authorized common shares, par
value $0.02 per share, of which 1,000,000 common shares will be outstanding. All
such 1,000,000 shares will be issued as of the consummation of the Plan.


      The board of directors of AWP Ltd. (as successor to APW Ltd.) after
consummation of the Plan are to consist of: Richard G. Sim, W. Peter Douglas,
Christopher S. Brothers, Stephen A. Kaplan, Michael P. Harmon, J. Richard Budd
and Toni J. Smith.


      In addition, the Plan provides for a new management incentive plan for
issuance of options to purchase to key employees or the opportunity for such key
employees to purchase 10% of the APW Common Shares on a fully diluted basis (or
151,515 shares).


The Credit Facility


      Concurrent with the Chapter 11 filing, the Company entered into a new $110
million debtor-in-possession credit facility ("Credit Facility") to provide for
the payment of permitted pre-petition claims, working capital needs, letters of
credit and other general corporate purposes. The Credit Facility requires that
we maintain certain financial covenants and restrict liens, indebtedness,
capital expenditures, dividend payments and sale of assets. Upon emergence from
the Chapter 11 proceeding, the Credit Facility was extended until November 15,
2003 with respect to $90.0 million of the Credit Facility and May 15, 2004 with
respect to $20.0 million of the Credit Facility.


                                       20

<PAGE>



Fresh Start Accounting

      As a result of the bankruptcy, the Company will adopt fresh start
accounting pursuant to guidance provided by the American Institute of Certified
Public Accountant's Statement of Position 90-7, "Financial Reporting by Entities
in Reorganization under the Bankruptcy Code", as of July 31, 2002. In accordance
with the principles of fresh start accounting, the Company will adjust the
carrying values of its assets and liabilities to their fair values as of July
31, 2002. The application of fresh start accounting will result in material
changes to the carrying values of the Company's assets and liabilities.

Going Concern


      Following its emergence from the Chapter 11 proceeding, the ability of APW
Ltd., the successor company, to continue as a going concern is predicated upon,
among other things, compliance with the provisions of the Credit Facility and
the term loan agreement related to the $100 million in new secured notes issued
under the Plan and the ability to generate cash flows from operations and obtain
financing sources sufficient to satisfy our future obligations.

Significant Accounting Policies

      Financial Reporting Release No. 60, which was recently released by the
Securities and Exchange Commission, requires all companies to include a
discussion of critical accounting policies or methods used in the preparation of
financial statements. These policies and methods are the most important to the
portrayal of the Company's financial condition and results, and require
management's most difficult, subjective and complex judgments. The following is
a brief discussion of the more significant accounting policies and methods used
by APW Ltd.

General

      The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. The most significant estimates and assumptions relate to the
recoverability of long-lived assets including goodwill and other intangibles,
the realization of deferred income taxes and the adequacy of restructuring
reserves. Actual amounts could differ significantly from these estimates.

Recoverability of long-lived assets, goodwill and other intangible assets

      We periodically assess the impairment of long-lived assets, goodwill and
other identifiable intangible assets under SFAS No. 121 and Accounting
Principles Board Opinion No. 17 whenever events or changes in circumstances
indicate that the carrying value may not be recoverable. Factors we consider
important which could trigger an impairment review include the following:

.. significant underperformance relative to expected historical or forecasted
  future operating results;
.. significant changes in the manner of our use of the acquired assets or the
  strategy for our overall business;
.. commitments by management to close certain facilities that are made as part of
  a company-wide restructuring initiative;
.. significant negative industry or economic trends;
.. significant decline in our stock price for a sustained period; and
.. our market capitalization relative to net book value.

      Upon the existence of one or more of the above indicators of impairment,
we estimate the future undiscounted cash flows and compare such estimates to the
related asset book value. If it is determined that these estimated future
undiscounted cash flows will not be sufficient to enable the recovery of the
related asset book value, we measure any impairment based on a projected
discounted cash flow method using a discount rate determined by our management
to be commensurate with the risk inherent in our current business model.

      Prospectively, we must continue to assess the recoverability of the
Company's long-lived assets, goodwill and other intangibles. In so doing, we
will be required to make assumptions regarding estimated future cash flows and
other factors to determine the fair value of the respective assets. While we
believe our estimates are reasonable, if our estimates or their related
assumptions change in the future, we may be required to record additional
impairment charges. Assumptions we make regarding estimated future cash flow
include: (i) future revenue growth (and mix); (ii) future composition of cost of
products sold and operating expenses; and (iii) future capital expenditure
requirements.

Accounting for income taxes

      As part of the process of preparing our consolidated financial statements,
we are required to estimate our income taxes in each of the tax jurisdictions in
which we operate. This process involves us estimating our current tax liability
together with assessing temporary differences resulting from differing treatment
of items for tax and book purposes. These differences result in deferred tax
assets and liabilities, which are included within our consolidated balance
sheet.

      Significant management judgment is required in determining our provision
for income taxes, deferred tax assets and liabilities and any related valuation
allowance recorded against our net deferred tax assets. Generally accepted
accounting principles require that we record a valuation allowance against our
deferred tax assets if it is "more likely than not" that we will not be able to
utilize them to offset future taxes.

Restructuring Reserves

      Restructuring charges as presented in our Condensed Consolidated Statement
of Operations are comprised of severance and lease exit costs. These charges are
recognized in accordance with Emerging Issues Task Force ("EITF") 94-3 and Staff
Accounting Bulleting ("SAB") 100. Our accruals for lease exit obligations
stemming from closed facilities are based on management's best estimate of the
total future cash flows required to exit such facilities. Actual costs could
differ materially due to factors such as our ability to secure subleases, the
creditworthiness of sub-lessees and our success at negotiating early termination
agreements with our lessors. These factors are significantly dependent on the
general health of the economy and the resultant demand for commercial property.



                                       21

<PAGE>

Fiscal 2002 Second Quarter Compared to the Fiscal 2001 Second Quarter

Net Sales

      Net sales for the fiscal 2002 second quarter were $200.9 million compared
to $317.6 million in the fiscal 2001 second quarter, a decrease of 36.7%. Net
sales in the fiscal 2002 second quarter were negatively impacted by the broad
based slow down in the technology sector which has resulted in reduced demand
for some of our customers products and in turn has negatively impacted the
demand those customers have for our products and services.

      Our fiscal 2002 second quarter sales were influenced by the inclusion of
acquisitions completed in the second quarter of fiscal 2001. Excluding these
acquisitions, net sales decreased 41.1% in the fiscal 2002 second quarter when
compared to sales in the fiscal 2001 second quarter.

Geographic Sales

                                         Three Months Ended
                                            February 28,
                                       -------------------------
                                            2002       2001      Change
                                       --------------------------------
                                             (In millions)

         Americas                        $   114.4   $   195.5   (41.5%)
         Europe and Asia                      86.5       122.1   (29.2%)
                                       --------------------------------
              Total                      $   200.9   $   317.6   (36.7%)
                                       ================================

      Net sales in the Americas for the fiscal 2002 second quarter were $114.4
million compared to $195.5 million in the fiscal 2001 second quarter, a decrease
of 41.5%. Our fiscal 2002 second quarter sales were influenced by the inclusion
of acquisitions completed in the second quarter of fiscal 2001. Excluding these
acquisitions, net sales decreased 48.5% in the fiscal 2002 second quarter when
compared to net sales in the fiscal 2001 second quarter. Net sales in Europe and
Asia for the fiscal 2002 second quarter were $86.5 million compared to $122.1
million in the fiscal 2001 second quarter, a decrease of 29.2%.

Gross Profit

      Gross profit for the fiscal 2002 second quarter was $14.6 million compared
to $61.7 million in the fiscal 2001 second quarter, a decrease of 76.3%. As a
percentage of net sales, the fiscal 2002 second quarter gross profit was 7.2%
compared to 19.4% in the fiscal 2001 second quarter. The decrease in gross
profit as a percentage of net sales is primarily a result of a combination of
factors: (i) $7.0 million of costs related to facility closures (primarily
equipment write-offs); (ii) under-absorption of costs resulting from the broad
based slow down in the technology sector which significantly reduced sales
volumes; and (iii) a shift in sales mix to programs with increased levels of
systems integration, which typically have lower margins.

                                       22

<PAGE>

Operating Expenses

      Operating expenses in the fiscal 2002 second quarter were $50.9 million
compared to $57.2 million in the fiscal 2001 second quarter. As a percentage of
net sales, operating expenses were 25.4% for the fiscal 2002 second quarter,
compared to 18.0% for the fiscal 2001 second quarter. Our operating expenses
consist primarily of engineering, selling, marketing, finance, information
technology and general administrative expenses. Operating expenses have been
reduced by $6.3 million from the fiscal 2001 second quarter. The reduction in
operating expenses is primarily due to the restructuring and cost reduction
efforts we have made. Although operating expenses have been reduced from the
fiscal 2001 second quarter, operating expenses as a percentage of net sales
increased due to the under-absorption of costs resulting from the broad based
slow down in the technology sector which significantly reduced sales volumes.

Amortization of Intangible Assets

      In the fiscal 2002 second quarter, we performed an impairment assessment
of our long-lived assets as a result of revised Company forecasts resulting from
continuing deterioration of our operating results. As a result of the
assessment, we recorded a $391.6 million impairment charge to reduce the
carrying value of goodwill and other intangible assets. Total amortization
expense, including the impairment charge, in the fiscal 2002 second quarter was
$397.4 million compared to $6.4 million in the fiscal 2001 second quarter.
Excluding the impairment charge, amortization for the fiscal 2002 second quarter
was $5.8 million compared to $6.4 million in the fiscal 2001 second quarter.

Restructuring and Other Charges

      Beginning in fiscal 2001 and continuing through the fiscal 2002 second
quarter, management has developed formal plans to exit certain facilities and
involuntarily terminate employees. Management's plans to exit certain facilities
included the identification of manufacturing and sales facilities for closure
and the transfer of the related operations to other facilities. Management
currently anticipates that the facility closures and all related activities will
be substantially complete within one year of the commitment dates of the
respective exit plans.

      A restructuring charge totaling $7.5 million was recorded during the
fiscal 2002 second quarter. The restructuring charge relates to the
rationalization of three facilities and the involuntary termination of both
salaried and hourly employees. Severance costs associated with the involuntary
termination of employees totaled $1.1 million. Lease exit costs resulting from
facility closures totaled $6.4 million. In addition to the restructuring charge
totaling $7.5 million, we incurred $9.4 million of other costs related to
facility closures (primarily equipment impairment charges). Of the $16.9 million
in rationalization charges, $9.3 million are cash costs and $7.6 million are
non-cash costs. Of the $9.3 million in cash costs, only $1.8 million are
incremental cash costs that would not have been incurred in the next 12 months
without undertaking these restructuring actions.

      Since commencing our restructuring plans in the third quarter of fiscal
2001, we have recorded restructuring and restructuring related charges totaling
$67.8 million. Our restructuring program was implemented to reduce our

                                       23

<PAGE>

aggregate fixed cost structure to mitigate the revenue decline we began to
experience as a result of a weak economic environment in the computing,
telecommunication, and semi-conductor markets we serve. We have rationalized 18
facilities through consolidating the operations of closed locations into
existing larger locations, thus eliminating fixed facility costs and redundant
headcount and better leveraging our existing infrastructure. Through February
28, 2002 we have spent approximately $23.1 million on cash restructuring, with
only approximately $3.0 million of the total being incremental cash costs that
would not have been incurred in the next 12 months without undertaking these
restructuring actions.

Divestiture

      On February 13, 2002, APW Ltd. completed the sale of its Zero Cases
division. Total consideration from the transaction was a net $19.2 million,
which resulted in a net book gain of $8.2 million.

Operating Loss

      We incurred an operating loss of $432.9 million in the fiscal 2002 second
quarter compared to $1.9 million in the fiscal 2001 second quarter. The
operating loss was primarily due to: (i) a $391.6 million goodwill and other
intangible asset impairment charge; (ii) a $7.5 million restructuring charge;
(iii) $9.4 million of costs related to facility closures (primarily equipment
impairment charges); and (iv) reduced sales volumes, driven by the broad based
slow down in the technology sector, which resulted in the under-absorption of
costs during the fiscal 2002 second quarter.

Financing Costs

      Financing costs in the fiscal 2002 second quarter were $16.4 million
compared to $7.3 million in the fiscal 2001 second quarter. Included in the
fiscal 2002 second quarter financing costs is $3.1 million of non-cash
amortization of capitalized costs and the value of warrants issued as a result
of amending our credit facilities during fiscal 2001 and through the first six
months of fiscal 2002. The increase in our net financing costs, excluding the
$3.1 million of non-cash amortization, is a result of the increase in our
outstanding indebtedness to fund acquisitions made in the second quarter of
fiscal 2001, capital expenditures, restructuring activities and operations.

Income Tax Expense

      We recorded income tax expense in the fiscal 2002 second quarter of $44.3
million compared to a $3.1 million income tax benefit in the fiscal 2001 second
quarter. Included in our fiscal 2002 second quarter tax expense is a charge of
$128.7 million to increase our valuation allowance to $138.5 million at February
28, 2002. As a result of this charge, our net deferred tax asset balance was
reduced to $0.4 million at February 28, 2002. We will continue to record a
valuation allowance to offset any future income tax benefits until it is more
likely than not that we will be able to realize such benefits.

                                       24

<PAGE>

Fiscal 2002 Six Months Compared to the Fiscal 2001 Six Months

Net Sales

     Net sales for the fiscal 2002 six months were $420.7 million compared to
$677.3 million in the fiscal 2001 six months, a decrease of 37.9%. Net sales in
the fiscal 2002 six months were negatively impacted by the broad based slow down
in the technology sector which has resulted in reduced demand for some of our
customers products and in turn has negatively impacted the demand those
customers have for our products and services. In addition to the broad based
slow down in the technology sector, the terrorist attacks that took place on
September 11, 2001 have had an adverse impact on our business.

     Our fiscal 2002 six month sales were influenced by the inclusion of
acquisitions completed in the second quarter of fiscal 2001. Excluding these
acquisitions, net sales decreased 42.8% in the fiscal 2002 six months when
compared to sales in the fiscal 2001 six months.

Geographic Sales

                                           Six Months Ended
                                             February 28,
                                        ---------------------
                                           2002        2001      Change
                                        ---------------------------------
                                            (In millions)

         Americas                       $   247.1   $   419.1    (41.0%)
         Europe and Asia                    173.6       258.2    (32.8%)
                                        --------------------------------
              Total                     $   420.7   $   677.3    (37.9%)
                                        ================================

     Net sales in the Americas for the fiscal 2002 six months were $247.1
million compared to $419.1 million in the fiscal 2001 six months, a decrease of
41.0%. Our fiscal 2002 six month sales were influenced by the inclusion of
acquisitions completed in the second quarter of fiscal 2001. Excluding these
acquisitions, net sales decreased 49% in the fiscal 2002 six months when
compared to net sales in the fiscal 2001 six months. Net sales in Europe and
Asia for the fiscal 2002 six months were $173.6 million compared to $258.2
million in the fiscal 2001 six months, a decrease of 32.8%.

Gross Profit

     Gross profit for the fiscal 2002 six months was $35.5 million compared to
$150.8 million in the fiscal 2001 six months, a decrease of 76.5%. As a
percentage of net sales, the fiscal 2002 six months gross profit was 8.4%
compared to 22.3% in the fiscal 2001 six months. The decrease in gross profit as
a percentage of net sales is primarily a result of a combination of factors: (i)
$16.6 million of costs related to facility closures (primarily equipment
write-offs); (ii) under-absorption of costs resulting from the broad based slow
down in the technology sector which significantly reduced sales volumes; and
(iii) a shift in sales mix to programs with increased levels of systems
integration, which typically have lower margins.

Operating Expenses

     Operating expenses in the fiscal 2002 six months were $91.1 million
compared to $113.3 million in the fiscal 2001 six months. As a percentage of net
sales, operating expenses were 21.7% for the fiscal 2002 six months, compared to
16.7% for the fiscal 2001 six months. Our operating expenses consist primarily
of engineering, selling, marketing, finance, information technology and general
administrative expenses. Operating expenses have been reduced by $21.8 million
from the fiscal 2001 six months. The reduction in operating expenses is
primarily due to the restructuring and cost reduction efforts we have made.
Although operating expenses have been reduced from the

                                       25

<PAGE>

fiscal 2001 six months, operating expenses as a percentage of net sales
increased due to the under-absorption of costs resulting from the broad based
slow down in the technology sector which significantly reduced sales volumes.

Amortization of Intangible Assets

     In the fiscal 2002 second quarter, we performed an impairment assessment of
our long-lived assets as a result of revised Company forecasts resulting from
continuing deterioration of our operating results. As a result of the
assessment, we recorded a $391.6 million impairment charge to reduce the
carrying value of goodwill and other intangible assets. Total amortization
expense, including the impairment charge, in the fiscal 2002 six months was
$403.7 million compared to $12.4 million in the fiscal 2001 six months.
Excluding the impairment charge, amortization for the fiscal 2002 six months was
$12.1 million compared to $12.4 million in the fiscal 2001 six months.

Restructuring and Other Charges

     Beginning in fiscal 2001 and continuing through the fiscal 2002 second
quarter, management has developed formal plans to exit certain facilities and
involuntarily terminate employees. Management's plans to exit certain facilities
included the identification of duplicate manufacturing and sales facilities for
closure and the transfer of the related operations to other facilities.
Management currently anticipates that the facility closures and all related
activities will be substantially complete within one year of the commitment
dates of the respective exit plans.

     A restructuring charge totaling $17.5 million was recorded during the
fiscal 2002 six months. The restructuring charge relates to the rationalization
of ten facilities and the involuntary termination of both salaried and hourly
employees. Severance costs associated with the involuntary termination of
employees totaled $7.5 million. Lease exit costs resulting from facility
closures totaled $10.0 million. In addition to the restructuring charge totaling
$17.5 million, we incurred $19.1 million of other costs related to facility
closures (primarily equipment impairment charges). Of the $36.5 million in
rationalization charges, $21.0 million are cash costs and $15.5 million are
non-cash costs. Of the $21.0 million in cash costs, only $3.5 million are
incremental cash costs that would not have been incurred in the next 12 months
without undertaking these restructuring actions.

     Since commencing our restructuring plans in the third quarter of fiscal
2001, we have recorded restructuring and restructuring related charges totaling
$67.8 million. Our restructuring program was implemented to reduce our aggregate
fixed cost structure to mitigate the revenue decline we began to experience as a
result of a weak economic environment in the computing, telecommunication, and
semi-conductor markets we serve. We have rationalized 18 facilities through
consolidating the operations of closed locations into existing larger locations,
thus eliminating fixed facility costs and redundant headcount and better
leveraging our existing infrastructure. Through February 28, 2002 we have spent
approximately $23.1 million on cash restructuring, with only approximately $3.0
million of the total being incremental cash costs that would not have been
incurred in the next 12 months without undertaking these restructuring actions.

                                       26

<PAGE>


Divestiture

     On February 13, 2002, APW Ltd. completed the sale of its Zero Cases
division. Total consideration from the transaction was a net $19.2 million,
which resulted in a net book gain of $8.2 million.

Operating Loss

     We incurred an operating loss of $468.5 million in the fiscal 2002 six
months compared to operating earnings of $22.4 million in the fiscal 2001 six
months. The operating loss was primarily due to: (i) a $391.6 million impairment
of goodwill and other intangible assets; (ii) a $17.5 million restructuring
charge; (iii) $19.1 million of costs related to facility closures (primarily
equipment impairment charges); and (iv) reduced sales volumes, driven by the
broad based slow down in the technology sector, which resulted in the
under-absorption of costs during the fiscal 2002 six months.

Financing Costs

     Financing costs in the fiscal 2002 six months were $30.9 million compared
to $13.8 million in the fiscal 2001 six months. Included in the fiscal 2002 six
months financing costs is $4.7 million of non-cash amortization of capitalized
fees and warrants issued as a result of amending our credit facilities during
fiscal 2001 and through the first six months of fiscal 2002. The increase in our
net financing costs, excluding the $4.7 million of non-cash amortization, is a
result of the increase in our outstanding indebtedness to fund acquisitions made
in the second quarter of fiscal 2001, capital expenditures, restructuring
activities and operations.

Income Tax Expense


     We recorded income tax expense in the fiscal 2002 six months of $31.8
million compared to $2.9 million in the fiscal 2001 six months. Included in our
fiscal 2002 six months tax expense is a charge of $128.7 million to increase our
valuation allowance to $138.5 million at February 28, 2002. As a result of this
charge, our net deferred tax asset balance was reduced to $0.4 million at
February 28, 2002. We will continue to record a valuation allowance to offset
any future income tax benefits until it is more likely than not that we will be
able to realize such benefits.


Liquidity and Capital Resources

Cash Flows

     Cash and cash equivalents totaled $6.9 million at February 28, 2002 and
$6.2 million at August 31, 2001.

     Net cash used in operating activities in the fiscal 2002 six months was
$12.4 million compared to $32.6 million used in the fiscal 2001 six months. The
net use of cash in the fiscal 2002 six months was primarily due to restructuring
and related payments totaling $12.0 million. Other net uses of cash included the
funding of operating losses, and payments to professional advisors, offset by a
source of cash from primary working capital (receivables, inventory, and
payables).

     Net cash provided by investing activities for the fiscal 2002 six months
was $11.1 million compared to net cash used in investing activities of $298.0
million for the fiscal 2001 six months. The net source of cash for the fiscal
2002 six months was primarily due to $19.2 million of proceeds on the sale of a
subsidiary offset by capital expenditures of $11.9 million.

                                       27

<PAGE>

     Net cash provided by financing activities for the fiscal 2002 six months
was $2.1 million compared to $335.7 million provided in the fiscal 2001 six
months. The net cash provided by financing activities for the fiscal 2002 six
months primarily came from net borrowings on our long-term debt facility of
$28.7 million, which was offset by $5.5 million in payments on short-term
borrowings, $2.1 million in debt financing costs and a reduction in sold
receivables of $18.9 million.

Off-Balance Sheet Arrangements, Contractual Obligations and Commercial
Commitments

     On January 22, 2002, the SEC issued FR-61, "Commission Statement about
Management's Discussion and Analysis of Financial Condition and Results of
Operations." FR-61 indicates that registrants should consider the need to
provide disclosures concerning transactions, arrangements and other
relationships with unconsolidated entities or other persons that are reasonably
likely to affect materially liquidity or the availability of, or requirements
for capital resources as well as disclosures concerning a registrant's
obligations and commitments to make future payments under contracts, such as
debt, leases, and contingent commitments. In response to this release, we have
outlined our off-balance sheet arrangement as well as our contractual
obligations and commercial commitments as they relate to the Company.

Accounts Receivable Facility

     APW North America Inc., a wholly owned subsidiary of APW Ltd., and certain
domestic subsidiaries (collectively, "Originators") sell trade accounts
receivable to Applied Power Credit Corporation ("APCC"), a wholly-owned, limited
purpose, consolidated subsidiary of the Company. APCC is a separate corporate
entity that sells participating interests in its pool of accounts receivable to
financial institutions ("Purchasers"). The Purchasers, in turn, receive an
ownership and security interest in the pool of receivables. Participation
interests in new receivables generated by the Originators are purchased by APCC
and resold to the Purchasers on a revolving basis as collections reduce
previously sold participation interests. The accounts receivable sold to
Purchasers are reflected as a reduction of receivables in the Condensed
Consolidated Balance Sheets. APCC has no risk of credit loss on such receivables
as they are sold without recourse. APW North America Inc. retains collection and
administrative responsibilities on the participation interests sold as servicer
for APCC and the Purchasers. Further, APCC is a bankruptcy remote corporation,
and as such, the assets held by APCC would not be available to satisfy the
claims of APW Ltd.'s creditors until all of the amounts owed to the Purchasers
have been paid in full.

     The Accounts Receivable Facility described above represents "off-balance
sheet financing." This results in assets being removed from our balance sheet,
rather than incurring a liability similar to that of traditional financing. The
receivables are sold on a revolving basis where new eligible receivables replace
collected receivables on a daily basis. The maximum amount of receivables that
can be sold under the current facility is $80.0 million. At February 28, 2002
and August 31, 2001, only $39.1 and $58.0 million, respectively, of this
facility was utilized due to this limitation. To the extent eligible receivables
under this facility decrease from this amount, cash collections on the sold
receivables must be repaid to the Purchaser, thereby reducing our availability
under the facility. Conversely, if more eligible receivables are generated due
to increased sales, we can increase the cash available to us under the facility
via the sale of these new eligible receivables up to the maximum allowed of
$80.0 million. Upon the facility's termination, the Purchaser would be entitled
to all cash collections on receivables sold to it by APCC until its net
investment ($39.1 million at February 28, 2002) had been repaid.

     The Accounts Receivable Facility will terminate on May 15, 2002 unless
terminated earlier according to its terms (including, without limitations the
occurrence of a "termination event" that is not waived or amended) or extended
by mutual agreement of parties thereto. We do not currently expect that the
facility will be extended beyond the May 15, 2002 termination date.

Contractual Obligations and Commercial Commitments

     Currently, we have classified all of our debt under the Multi-Currency
Credit facilities as current in accordance with EITF 86-30 which is discussed
further in the Liquidity section below.

     We lease, through various subsidiaries, certain facilities and equipment
under various lease agreements generally over periods of one to twenty years.
Under most arrangements, we also pay the property taxes, insurance, maintenance
and expenses related to the leased properties. Future obligations on
non-cancelable operating leases in effect at February 28, 2002 are: $21.3
million for the remainder of fiscal 2002; $25.5 million in fiscal 2003 and
$164.2 million thereafter. These amounts

                                       28

<PAGE>


represent amounts that have previously been disclosed in our Form 10-K/A for the
twelve months ended August 31, 2002 as adjusted for the current year's activity.
Included in the February 28, 2002 Condensed Consolidated Balance Sheet are $11.3
million of lease exit reserves that would reduce our future obligations listed
above. Total rental expense under operating leases for the fiscal 2002 six
months was approximately $14.5 million.


Capitalization

     Debt at February 28, 2002 totaled $644.0 million, an increase of
approximately $22.6 million from August 31, 2001. The increase in debt was
primarily due to restructuring costs, capital expenditures and the $18.9 million
decrease in receivables sold under the accounts receivable facility, offset by
$19.2 million of proceeds from the sale of a division.

     To reduce the risk of interest rate increases, we may periodically enter
into interest rate swap agreements. Our current interest rate swap activity is
limited to two agreements and is not significant.

Liquidity

     On September 27, 2001, the Company's lenders amended certain debt covenants
associated with APW Ltd.'s Multi-Currency Credit Agreement, UK Revolving Credit
Agreement and the Accounts Receivable Facility (collectively, "credit
facilities"). These revised covenants were established based upon APW Ltd.
management's financial forecasts prior to the events of September 11, 2001.
Following the events of September 11 and throughout the fiscal 2002 first
quarter, APW Ltd. experienced a significant decline in net sales compared to
prior periods and a further decline compared to management's financial forecasts
that were the basis for the financial covenants set forth in the September 27,
2001 amendment. Such declines are related to a number of factors, certain of
which were impacted by the terrorist attacks that took place in the United
States on September 11, 2001. On December 13, 2001, the Company's lenders
amended certain debt covenants associated with the Company's credit facilities
to reflect the Company's revised financial forecasts as of that point in time.
The revisions in the covenants were considered necessary due to the magnitude of
the decline in the fiscal 2002 first quarter actual results compared to prior
periods and management's forecasts. In addition, the amendment repriced the
outstanding warrants issued in conjunction with the May 15, 2001 amendment to
the closing price of APW Ltd.'s common stock on December 10, 2001 of $1.98 and
eliminates the previous reduction provision if the Company met repayment targets
by August 31, 2002. The Company also issued warrants for 9.9% of the common
stock outstanding on December 13, 2001 (approximately 4.1 million shares) at a
price of $0.01. These $0.01 warrants are cancelled if the credit facilities are
repaid by July 31, 2002 (entirely cancelled) or September 30, 2002 (49.5%
cancelled). During the second quarter of fiscal 2002, $8.5 million was recorded
as the estimated fair value of the warrants issued in conjunction with the
December amendment and was recorded as an increase in deferred financing costs
and an increase in share premium.

     As a result of the restatement for the year ended August 31, 2001, the
Company believes that it would have been in default of certain debt covenants as
of August 31, 2001, unless the Company had obtained waivers or the Company's
lenders had amended the debt covenants. Accordingly, the Company has classified
borrowings under the Revolving Multi-Currency Credit Agreement and the U.K.
Facility Agreement as a current liability as of August 31, 2001 in the restated
consolidated financial statements.

     During the quarter ended February 28, 2002, the Company amended its credit
facilities on three different occasions. The net result of these amendments was:
(i) to provide a temporary deferment of cash interest payment obligations until
April 15, 2002; (ii) to increase the size of the UK Revolving Credit Facility by
approximately $5.0 million under the UK Revolving Credit Agreement; (iii) to
allow for the sale of the assets of the Company's Zero Cases division; and (iv)
to provide a waiver of all financial covenant requirements for the period from
January 31, 2002 until April 15, 2002.


     Prior to considering the effects of the restatement, as of February 28,
2002 the Company was in compliance under its credit facilities as a result of
having all of the financial covenants waived. Based on its current projections,
the Company believes that it is probable that it will not meet certain of these
covenants for the period ending May, 31, 2002 unless further waived or otherwise
amended through ongoing negotiations with its lenders. As such, in accordance
with Emerging Issues Task Force Issue ("EITF") 86-30, the Company has classified
all of its debt obligations as current as of February 28, 2002. The Company has
been pursuing discussions with its lenders concerning a recapitalization plan.
The discussions have centered around a recapitalization of the balance sheet
that is intended to result in no disruption to the operating subsidiaries and
their suppliers, who will be paid in the normal course of business. In
connection with the recapitalization plan, the Company intends that such plan
would entail the following: (i) the conversion of $550.0 million of the current
and outstanding debt plus accrued interest to common stock; (ii) the allowance
of a new financing line of credit of $110.0 million; (iii) the issuance of
common stock (and possible preferred stock or warrants) to the existing lenders
so that they would end up owning substantially all of the outstanding capital
stock of the Company; (iv) the issuance of warrants to the Company's


                                       29


<PAGE>

existing shareholders for some number of additional shares which become
exercisable if the lenders receive a return of their initial investment; and (v)
the retention of existing management. The Company has been negotiating this plan
with the lenders and primarily through its steering committee. To date, the
Company and the lenders have agreed in principal on the main terms of the
recapitalization plan, but no definitive agreement has yet been agreed to and
executed. It is anticipated that the plan will be implemented through a
pre-packaged or pre-negotiated Chapter 11 of APW Ltd., the holding company.
Consequently, the lenders will have agreed to the terms of the recapitalization
plan prior to the filing. This plan would be structured in such a way so that
all of the obligations of APW Ltd. (see Note 2 to the Condensed Consolidated
Financial Statements - Holding Company Structure) could be assumed, adjusted or
eliminated in a bankruptcy proceeding. The Company and its lenders are
structuring the recapitalization of the Company so that only APW Ltd., the
holding company, should be affected. Under this plan, the Chapter 11 filing of
APW Ltd., the holding company, will not effect, in any direct way the operating
subsidiaries and their ability to conduct business normally with their customers
and suppliers. In particular, there is no intent to impair the suppliers of the
operating subsidiaries. If we cannot execute the recapitalization plan as
currently conceived, APW Ltd. would likely be forced to file and seek protection
under the bankruptcy laws. Given, that at this point there is not a definitive
recapitalization plan document agreed to with our lending group and as such,
prospectively the Company could be required to meet the future financial
covenants of our current amended credit facilities (unless otherwise waived or
amended), which the Company feels that at this point is not probable, coupled
with the Company's current level of liquidity, there is substantial doubt about
the Company's ability to continue as a going concern.

     In order to facilitate the finalization of negotiations regarding the terms
of the recapitalization and the related documentation, on April 15, 2002, the
Company unanimously received an extension with regard to the deferment of
interest payments and a waiver of all financial covenants for the period through
May 14, 2002. The Accounts Receivable Facility will terminate on May 15, 2002
unless terminated earlier according to its terms (including, without limitation
the occurrence of a "termination event" that is not waived or amended) or
extended by mutual agreement of parties thereto. We do not currently expect that
the facility will be extended beyond the May 15, 2002 termination date.

     APW Ltd.'s management plans to continue to aggressively pursue additional
revenue opportunities within its core customer markets. APW Ltd. adopted several
restructuring plans during fiscal 2001 and throughout the first six months of
fiscal 2002 in an effort to reduce costs in the wake of declining net sales
experienced during those periods. These programs resulted in restructuring
charges during fiscal 2001 and the first six months of fiscal 2002 and have
provided cost savings that are expected to continue into the future. Management
plans to consider additional cost-reduction programs, as necessary, to further
align the Company's cost base with net sales.

     In December 2001, a subsidiary of the Company received notification from
the lessor of two of its aircraft that the lease contracts ("contracts") for the
two aircraft would be terminated effective March 4, 2002. In conjunction with
the termination, the terms of the contracts would require the Company to pay the
lessor approximately $12.3 million for the two aircraft and, in exchange, the
lessor would convey all of its rights, title and interest in the two aircraft to
the Company. The Company is actively working with the lessor to identify a third
party which would purchase and/or lease the two aircraft, thereby eliminating
the Company's $12.3 million payment obligation. The lessor has informed the
Company that it is willing to continue to work with the Company to find third
party alternatives to eliminate the cost of terminating this contract, provided
the Company continues to make scheduled lease payments. As such, the Company has
recorded a charge of $2.0 million during the second quarter related to its
decision to discontinue use of the related aircraft. This charge reflects
management's current estimates relating to future required lease payments and
the ultimate disposition timing and proceeds of the two aircraft.

     At February 28, 2002 and March 31, 2002, we had $23.3 million and $12.3
million, respectively, of borrowings available under our two credit facilities
and $6.9 million in cash as of February 28, 2002. To provide additional
liquidity, we have been extending payables beyond their normal payment terms. At
February 28, 2002 and March 31, 2002, although we sold all eligible accounts
receivable under our accounts receivable facility, we had the availability to
sell an incremental $40.9 million and $40.8 million, respectively. Our future,
liquidity could further decline if we experience a negative variance from our
expected operating results or if we do not receive additional deferments of
interest on our credit facilities from our lenders.

New Accounting Pronouncements

     In June 2001, SFAS No. 141, "Business Combinations" and SFAS No. 142,
"Goodwill and Other Intangible Assets" were issued. The statements eliminate the
pooling-of-interests method of accounting for business combinations and require
that goodwill and certain intangible assets not be amortized. Instead, these
assets will be reviewed for impairment annually with any related losses
recognized in earnings when incurred. SFAS No. 141 was effective for us as of
July 31, 2001. SFAS No. 142 will be effective for us on September 1, 2002 for
existing goodwill and intangible assets. We are currently evaluating the impact
of SFAS No. 142.

                                       30

<PAGE>

     In June 2001, SFAS No. 143, "Accounting for Asset Retirement Obligations"
was issued. SFAS No. 143 sets forth the financial accounting and reporting to be
followed for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. SFAS No. 143 requires entities
to record the fair value of a liability for an asset retirement obligation in
the period in which it is incurred if a reasonable estimate of fair value can be
made. The associated asset retirement costs are to be capitalized as part of the
carrying amount of the long-lived asset. Subsequently, the recorded liability
will be accreted to its present value and the capitalized costs will be
depreciated. We are required to adopt SFAS No. 143 on September 1, 2002. We are
currently evaluating the impact of SFAS No. 143.


     In August 2001, SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" was issued. SFAS No. 144 modifies and expands the financial
accounting and reporting for the impairment or disposal of long-lived assets
other than goodwill, which is specifically addressed by SFAS No. 142. SFAS No.
144 maintains the requirement that an impairment loss be recognized for a
long-lived asset to be held and used if its carrying value is not recoverable
from its undiscounted cash flows, with the recognized impairment being the
difference between the carrying amount and fair value of the asset. With respect
to long-lived assets to be disposed of other than by sale, SFAS No. 144 requires
that the asset be considered held and used until it is actually disposed of but
requires that its depreciable life be revised in accordance with APB Opinion No.
20, "Accounting Changes." SFAS No. 144 also requires that an impairment loss be
recognized at the date a long-lived asset is exchanged for a similar productive
asset. We will be required to adopt SFAS No. 144 on September 1, 2002. We are
currently evaluating the impact of SFAS No. 144.

Seasonality

     Due to the shortened number of business days in the second quarter of our
fiscal year (from December 1 to February 28), we typically experience lower
sales volumes in the second quarter of each fiscal year as compared to the other
quarters in the fiscal year.

                                       31

<PAGE>

Forward-looking Statements and Cautionary Factors
-------------------------------------------------

     Certain statements contained in this document, as well as statements in
other Company communications, which are not historical facts, are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties. The terms
"anticipate", "believe", "estimate", "expect", "objective", "plan", "project"
and similar expressions are intended to identify forward-looking statements.
Such forward-looking statements are subject to inherent risks and uncertainties
that may cause actual results or events to differ materially from those
contemplated by such forward-looking statements. In addition to the assumptions
and other factors referred to specifically in connection with such statements,
factors that may cause actual results or events to differ materially from those
contemplated by such forward-looking statements include, without limitation,
general economic conditions, market conditions in the computer, semiconductor,
telecommunication, and electronic industries in North America, South America,
Europe and Asia, market acceptance of existing and new products, successful
integration of acquisitions, competitive product and pricing pressures, foreign
currency risk, interest rate risk, the Company's ability to access capital
markets, extension of forbearance of interest obligations and other factors that
may be referred to in APW Ltd.'s reports filed with the Securities and Exchange
Commission from time to time.

Item 3 - Quantitative and Qualitative Disclosures About Market Risk
-------------------------------------------------------------------

     We are exposed to market risk from changes in foreign exchange and interest
rates and, to a lesser extent, commodities. To reduce such risks, we selectively
use financial instruments.

     Currency Risk - We have significant international operations. In most
     -------------
instances, our products are produced at manufacturing facilities located near
the customer. As a result, significant volumes of finished goods are
manufactured in countries for sale into those markets. For goods purchased from
our affiliates, we denominate the transaction in the functional currency of the
producing operation.

     We have adopted the following guidelines to manage our foreign exchange
exposures:

          (i)   increase the predictability of costs associated with goods whose
                purchase price is not denominated in the functional currency of
                the buyer;

          (ii)  minimize the cost of hedging through the use of naturally
                offsetting positions (borrowing in local currency), netting,
                pooling; and

          (iii) where possible, sell product in the functional currency of the
                producing operation.

     Our identifiable foreign exchange exposures result primarily from the
anticipated purchase of product from affiliates and third-party suppliers along
with the repayment of intercompany loans with foreign subsidiaries denominated
in foreign currencies. We periodically identify naturally occurring offsetting
positions and then may purchase hedging instruments to protect against
anticipated exposures. The Company had no such foreign currency hedging
instruments at February 28, 2002. Based on our overall currency rate exposure,
including derivative financial instruments and nonfunctional currency
denominated receivables and payables, a near-term 10% appreciation or
depreciation of the U.S. dollar would not have a significant effect on our
financial position, results of operations and cash flows over the next fiscal
year.

     Interest Rate Risk - We periodically enter into interest rate swaps to
     ------------------
stabilize financing costs by minimizing the effect of potential interest rate
increases on floating-rate debt in a rising interest rate environment. Under
these agreements, we contract with a counter party to exchange the difference
between a fixed rate and a floating rate applied to the notional amount of the
swap. The effective portion of any gain or loss due to a change in the fair
value is initially recorded as a component of other comprehensive income (loss)
and subsequently reclassified into earnings when the hedged exposure affects
earnings. The fair value of our interest rate swap agreements was a liability of
$2.6 million and $2.4 million at February 28, 2002 and August 31, 2001,
respectively. A sixty-eight (10% of our weighted average interest rate)
basis-point change in interest rates on average long-term borrowings would have
impacted net interest expense by approximately $2.4 million for the six months
ended February 28, 2002.

     Commodity Prices - We are exposed to fluctuation in market prices for
     ----------------
steel. Therefore, we have established a program for centralized negotiation of
steel prices. This program allows APW Ltd. to take advantage of economies of
scale as well as to cap pricing. All business units are able to purchase steel
under this arrangement. In general, the contracts lock steel pricing for 18
months and enable APW Ltd. to pay less if market prices fall.

                                       32

<PAGE>

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings
--------------------------

         The Company, as well as one current, and one former executive have been
sued in three actions which are pending in the United States District Court for
the Eastern District of Wisconsin in connection with alleged violations of
Federal securities laws which preceded a drop in the price of its common stock
ending on March 20, 2001. The first of these suits which is captioned Stewart
Norman Hicks v. APW Ltd., et al., was filed on December 10, 2001. The
subsequently filed suits are captioned Robert Betz v. APW Ltd, et al., and
Market Street Securities v. APW Ltd., et al. The complaints for all three suits
allege violations of the Federal securities laws and seek certification of a
plaintiff class consisting of all purchasers of the Company's common stock
between September 26, 2000 and March 20, 2001, inclusive. The complaint does not
quantify the damages. The Company has not yet been served with the complaints
but understands that the respective plaintiffs intend to seek consolidation of
the suits. At this time, the Company cannot evaluate the merits of these claims.

Item 2 - Changes in Securities and Use of Proceeds
--------------------------------------------------

       On December 13, 2001, the Company issued warrants to purchase a total of
4,030,027 shares of the Company's common stock (3,455,610 to the Company's U.S.
lenders and 584,597 to the Company's U.K. lenders). The warrants are exercisable
at any time during a period from October 1, 2002 through May 15, 2006, at an
exercise price of $0.01 per share, although under certain limited circumstances
the exercise date may be accelerated. The warrants were issued to certain
lenders as an inducement in connection with the Company's renegotiations of its
Amended and Restated Multi-Currency Credit Agreement and Amended U.K. Facility
Agreement. The issuance of warrants did not generate any proceeds and no
underwriter was involved in the issuance. The warrants are subject to a complete
reduction if certain prepayment targets are met. The Company issued the warrants
in reliance upon Section 4(2) and Regulation D of the Securities Act of 1933, as
amended, in a transaction not involving a public offering. The lenders were the
only offerees in this transaction, and no public solicitation was made. The
warrant holders are investors with access to all relevant information necessary
to evaluate the investment and have represented to the Company that the shares
were being acquired for investment purposes. The shares of common stock
underlying the warrants are subject to certain transfer restrictions and have
registration rights.

Item 4 - Submissions of Matters to a Vote of Security Holders
-------------------------------------------------------------

       The Annual Meeting of Shareholders was held on January 14, 2002 and the
following proposals were voted on. The number of votes cast for, against,
abstained and withheld for each proposal is set forth below:

(a)    Election of Directors - Class of 2002

                             Share Votes For      Share Votes Withheld
                             ---------------      --------------------
Jack L. Heckel                  34,108,886                537,547
Gerald McGoey                   34,102,942                543,491
Bruno D'Avanzo                  34,102,379                544,054

       Mr. Heckel's and Mr. McGoey's terms expire in 2005 and Mr. D'Avanzo's
term expires in 2004.

(b)    Appointment of Independent Auditors

       The appointment of PricewaterhouseCoopers LLP as the independent auditors
was approved with 34,403,591 for, 191,673 against and 51,169 withheld.

Item 5 - Other Information
--------------------------

       In April 2002, Mr. Jack Heckel resigned as a director due to recent
health reasons that prevent him from participating in Board meetings.

                                       33

<PAGE>

Item 6 - Exhibits and Reports on Form 8-K
-----------------------------------------

(a)   Exhibit 4.3 Sixth Amendment to Amended and Restated Multicurrency
      Credit Agreement


(b)   Reports on Form 8-K

      On December 21, 2001, the Company filed a Current Report on Form 8-K dated
December 13, 2001, reporting under Item 5 the Company's renegotiations of its
Multi-Currency Credit Agreement, Facility Agreement with the Royal Bank of
Scotland and Receivables Purchasing Agreement, collectively, the "credit
facilities".

      On February 19, 2002 the Company filed a Current Report on Form 8-K dated
February 13, 2002, reporting under Item 5 the Company's divestiture of its Zero
Cases division.

       On February 25, 2002 the Company filed a Current Report on Form 8-K dated
January 15, 2002, reporting under Item 5 the Company's further negotiations of
its credit facilities.

      On February 28, 2002 the Company filed a Current Report on Form 8-K dated
February 15, 2002, reporting under Item 5 the Company's additional
renegotiations of its credit facilities.


(c)   Exhibit 99.1 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted
      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


(d)   Exhibit 99.2 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted
      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



                                    SIGNATURE
                                    ---------

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused Amendment No. 1 to this report to be signed on its
behalf by the undersigned thereunto duly authorized.



                                 APW Ltd. (n/k/a BQX Ltd.)
                                 (in provisional liquidation)

                                 -------------------------
                                 (Registrant)


Date:  November 12, 2002         By: /s/ Richard D. Carroll
                                     ----------------------

                                 Richard D. Carroll
                                 Vice President and Chief Financial Officer

                                 (Principal Financial Officer and duly
                                 authorized to sign on behalf of the registrant)

                                       34

<PAGE>


                                 CERTIFICATIONS

Chief Executive Officer
-----------------------

I, Richard G. Sim Certify that:

1. I have reviewed this quarterly report on Form 10-Q/A (Amendment No. 1) of APW
Ltd. (n/k/a BQX Ltd.);

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report; and

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report.


Date: November 12, 2002

/s/ Richard G. Sim
---------------------------
Richard G. Sim
President and Chief Executive Officer


                                       35

<PAGE>

Chief Financial Officer
-----------------------

I, Richard D. Carroll Certify that:

1. I have reviewed this quarterly report on Form 10-Q/A (Amendment No. 1) of APW
Ltd. (n/k/a BQX Ltd.);

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report; and

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report.



Date: November 12, 2002

/s/ Richard D. Carroll
----------------------
Richard D. Carroll
Vice President and Chief Financial Officer


                                       36