----

----

xANNUALREPORT PURSUANT TO SECTION 13 OR 15(D) OF THE

oTRANSITION REPORTPURSUANT TO SECTION 13 OR 15(D) OF THE

| Delaware                                                            | 04-2985631                                |
|---------------------------------------------------------------------|-------------------------------------------|
| (State      or other jurisdiction of incorporation or organization) | (I.R.S.      Employer Identification No.) |

| (Title      of Each Class)                  | (Name      of Exchange on Which Registered) |
|---------------------------------------------|---------------------------------------------|
| COMMON      STOCK, PAR VALUE $.10 PER SHARE | NASDAQ      CAPITAL MARKET                  |

| Large      accelerated filer o | Accelerated      filer o | Non-accelerated      filer o                       | Smaller      reporting company x |
|--------------------------------|--------------------------|----------------------------------------------------|----------------------------------|
|                           |                     | (Do      not check if a smaller reporting company) |                             |

----

INDEX

| ITEM                                                                                                                                                                                            | PAGE     |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| PART      I                                                                                                                                                                                     |     |
| 1.          BUSINESS                                                                                                                          |     |
| General description                                                                                                                                                                             | 3        |
| Marketing and sales                                                                                                                                                                             | 3        |
| Patents                                                                                                                                                                                         | 3        |
| Backlog                                                                                                                                                                                         | 3        |
| Raw      materials                                                                                                                                                                              | 3        |
| Competition                                                                                                                                                                                     | 3        |
| Research and development                                                                                                                                                                        | 4        |
| Environmental    regulations                                                                                                                                                                    | 4        |
| Employees      and labor relations                                                                                                                                                              | 4        |
| 1A.            RISK FACTORS                                                                                                                                       | 4        |
| 2.          PROPERTIES                                                                                                                        | 5        |
| 3.          LEGAL PROCEEDINGS                                                                                                                 | 5        |
| 4.          SUBMISSION OF MATTERS TO A VOTE OF SECURITY      HOLDERS                                                                          | 5        |
| PART      II                                                                                                                                                                                    |     |
| 5.          MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER      MATTERS ANDISSUER      PURCHASES OF EQUITY SECURITIES       |  5  |
| 7.          MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION      AND RESULTS OF OPERATIONS                                  | 6        |
| 7A.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT      MARKET RISK                                                                                    | 10       |
| 8.          FINANCIAL STATEMENTS AND SUPPLEMENTARY      DATA                                                                                  |     |
| Consolidated Balance Sheets at September 30, 2008      and 2007                                                                                                                                 | 12       |
| Consolidated Statements of Income for the Years      ended September 30, 2008 and 2007                                                                                                          | 13       |
| Consolidated Statements of Comprehensive Income      for the Years ended September 30, 2008 and 2007                                                                                            | 13       |
| Consolidated Statements of Stockholders’ Equity for      the Years ended September 30, 2008 and 2007                                                                                      | 14       |
| Consolidated Statements of Cash Flows for the Years      ended September 30, 2008 and 2007                                                                                                      | 15       |
| Notes      to Consolidated Financial Statements                                                                                                                                                 | 16       |
| Report of      Independent Registered Public Accounting Firm                                                                                                                                    | 27       |
| 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON      ACCOUNTING AND FINANCIAL DISCLOSURE                                        | 28       |
| 9A(T).   CONTROLS AND PROCEDURES                                                                                                                                                 | 28       |
| 9B.         OTHER INFORMATION                                                                                                                      | 28       |
| PART      III                                                                                                                                                                                   |     |
| 10.          DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE      GOVERNANCE                                                                      | 29       |
| 11.          EXECUTIVE COMPENSATION                                                                                                           | 29       |
| 12.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND      MANAGEMENT, AND RELATED         STOCKHOLDER MATTERS |  29 |
| 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND      DIRECTOR INDEPENDENCE                                                   | 30       |
| 14.          PRINCIPAL ACCOUNTING FEES AND      SERVICES                                                                                      | 30       |
| PART      IV                                                                                                                                                                                    |     |
| 15.          EXHIBITS, FINANCIAL STATEMENT      SCHEDULES                                                                                     |     |
| Exhibits                                                                                                                                                                                        | 30       |
| Financial statements andschedule                                                                                                                                                                | 30       |
| SIGNATURES                                                                                                                                                                                      | 31       |
| SCHEDULES                                                                                                                                                                                       |     |
| II          Reserves                                                                                                                          | 35       |

----

INDEX

BUSINESS

Description

Marketing

Patents

Backlog

Raw

Competition

----

INDEX

Research

Environmental 

Employees

RISK

----

INDEX

PROPERTIES

LEGAL

SUBMISSION

MARKET

|                                                   |   | Quarter      1 |           |   | Quarter      2 |    |           | Quarter      3 |   |    | Quarter      4  |   |   | Year    |            |
|--------------------------------------------------------|--------|----------------|----------------|--------|----------------|---------|----------------|----------------|--------|---------|-----------------|--------|--------|---------|-----------------|
| 2008      Quarters                                     |   |           |           |   |           |    |           |           |   |    |            |   |   |    |            |
| Cash      dividends per share                          |   | $              | .03            |   |           | $       | .03            |           |   | $       | .03             |   |   | $       | .03             |   |   | $ | .12 |   |
| Common      stock price per share -High- Low |   | $         | 9.07 6.30 |   |           | $  | 8.43 5.75 |           |   | $  | 8.55 6.30  |   |   | $  | 6.75 4.00  |   |   | $  | 9.07 4.00 |   |
| 2007      Quarters                                     |   |           |           |   |           |    |           |           |   |    |            |   |   |    |            |   |   |   |   |   |
| Cash      dividends per share                          |   | $              | .03            |   |           | $       | .03            |           |   | $       | .03             |   |   | $       | .03             |   |   | $ | .12 |   |
| Common      stock price per share  -High-Low |   | $         | 7.85 6.61 |   |           | $  | 7.94 6.40 |           |   | $  | 11.25 6.88 |   |   | $  | 11.93 7.80 |   |   | $  | 11.93 6.40 |   |

----

INDEX

MANAGEMENT

----

INDEX

----

INDEX

|  Plan      Assumption                                 |   | Change      in Assumption |   |   | Impact      on Funded Status (in thousands of dollars) |   |   | Change      in funded status |   |
|------------------------------------------------------------|--------|---------------------------|--------|--------|--------------------------------------------------------|--------|--------|------------------------------|--------|
| Assumptions      impacting accumulated benefit obligation: |   |                      |   |   |                                                   |   |   |                         |   |
| Discount      rate                                         |   |                      | 0.1%   |   |                                                   | $      | 450    |                         |   |   | 119% |   |
| Inflation      rate                                        |   |                      | 0.1%   |   |                                                   |   | 300    |                         |   |   | 79% |   |
| Salary      Increase                                       |   |                      | 0.5%   |   |                                                   |   | 775    |                         |   |   | 205% |   |
| Mortality      rate                                        |   | 1      year               |   |   |                                                   | 375    |   |                         |   | 99% |   |

|                                                                          |   |   |   |   |   |   |   | (in      thousands of dollars except percentages) |   |
|-------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|---------------------------------------------------|--------|
|                                                                          |   |   |   |   |   |   |   |                                              |   |   | %      change due to: |   |   |   |   |
|                                                                          |   | 2008   |   |   | 2007   |   |   | Total                                             |   |   | Currency |   |   | Volume      / other |   |
| Sales                                                                         |   |   |   |   |   |   |   |                                              |   |   |   |   |   |   |   |
| Controls - to external      customers                                         |   | $      | 37,280 |   |   | $      | 37,009 |                                              |   |   | 1 | % |   |   | 4 | % |   |   | -3 | % |
| Capacitors- to external      customers                                        |   |   | 1,939  |   |   |   | 2,204  |                                              |   |   | -12 | % |   |   | 0 | % |   |   | -12 | % |
| Capacitors -      inter-segment                                               |   |   | 45     |   |   |   | 52     |                                              |   |   | -13 | % |   |   | -1 | % |   |   | -12 | % |
| Capacitors – total                                                      |   |   | 1,984  |   |   |   | 2,256  |                                              |   |   | -12 | % |   |   | 0 | % |   |   | -12 | % |
| Total sales to external      customers                                        |   |   | 39,219 |   |   |   | 39,213 |                                              |   |   | 0 | % |   |   | 4 | % |   |   | -4 | % |
| Gross      Profit                                                             |   |   |   |   |   |   |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Controls                                                                      |   |   | 13,074 |   |   |   | 13,479 |                                              |   |   | 3 | % |   |   | 4 | % |   |   | -7 | % |
| Capacitors                                                                    |   |   | 700    |   |   |   | 869    |                                              |   |   | -19 | % |   |   | -1 | % |   |   | -18 | % |
| Total                                                                         |   |   | 13,774 |   |   |   | 14,348 |                                              |   |   | 4 | % |   |   | 4 | % |   |   | -8 | % |
| Selling      research and administrative expenses and restructuring    charge |   |   |   |   |   |   |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Controls                                                                      |   |   | 10,556 |   |   |   | 10,810 |                                              |   |   | -2 | % |   |   | 1 | % |   |   | -3 | % |
| Capacitors                                                                    |   |   | 884    |   |   |   | 1,158  |                                              |   |   | -24 | % |   |   | -1 | % |   |   | -23 | % |
| Restructuring    charge                                                       |   |   | 700    |   |   |   | -      |                                              |   |   | 100 | % |   |   | 0 | % |   |   | 100 | % |
| Unallocated corporate      expense                                            |   |   | 460    |   |   |   | 317    |                                              |   |   | 45 | % |   |   | 0 | % |   |   | 45 | % |
| Total                                                                         |   |   | 12,600 |   |   |   | 12,285 |                                              |   |   | 3 | % |   |   | 2 | % |   |   | 1 | % |
| Operating      income                                                         |   |   |   |   |   |   |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Controls                                                                      |   |   | 1,818  |   |   |   | 2,669  |                                              |   |   | -32 | % |   |   | 14 | % |   |   | -46 | % |
| Capacitors                                                                    |   |   | (184   | )      |   |   | (289   | )                                                 |   |   | 36 | % |   |   | 0 | % |   |   | 36 | % |
| Unallocated corporate      expense                                            |   |   | (460   | )      |   |   | (317   | )                                                 |   |   | 45 | % |   |   | 0 | % |   |   | 45 | % |
| Total                                                                         |   |   | 1,174  |   |   |   | 2,063  |                                              |   |   | -43 | % |   |   | 18 | % |   |   | -61 | % |
| Other      income and expense                                                 |   |   | 63     |   |   |   | (75    | )                                                 |   |   | 184 | % |   |   | 270 | % |   |   | -86 | % |
| Income      before income taxes                                               |   |   | 1,237  |   |   |   | 1,988  |                                              |   |   | -38 | % |   |   | 29 | % |   |   | -67 | % |
| Income      taxes                                                             |   |   | (433   | )      |   |   | (685   | )                                                 |   |   | -37 | % |   |   | 29 | % |   |   | -66 | % |
| Net      Income                                                               |   | $      | 804    |   |   | $      | 1,303  |                                              |   |   | -38 | % |   |   | 28 | % |   |   | -66 | % |

----

INDEX

|                                                         |   |   |   |   | (in      thousands of dollars except percentages) |   |
|--------------------------------------------------------------|--------|--------|--------|--------|---------------------------------------------------|--------|
|                                                         |   | Sales  |   |   | Cost      of sales                                |   |   | Gross      Profit |   |   | Gross      Profit % |   |
| Actual      Fiscal 2007                                      |   | $      | 39,213 |   |                                              | $      | 24,865 |   |   | $ | 14,348 |   |   |   | 36.6% |   |
| Change      in fiscal 2008 due to:                           |   |   |   |   |                                              |   |   |   |   |   |   |   |   |   |   |   |
| Foreign Currency      fluctuations                           |   |   | 1,420  |   |                                              |   | 960 |   |   |   | 460 |   |   |   | (0.2%) |   |
| Decreased volume, assuming 2007      gross profit percentage |   |   | (1,414 | )      |                                              |   | (896 | ) |   |   | (518 | ) |   |   |   |   |
| Other cost of sales changes,      net                        |   |   | -      |   |                                              |   | 516 |   |   |   | (516 | ) |   |   | (1.3%) |   |
| Actual      Fiscal 2008                                      |   | $      | 39,219 |   |                                              | $      | 25,445 |   |   | $ | 13,774 |   |   |   | 35.1% |   |

| Selling,      research and administrative expenses                                      |   | (in      thousands of dollars) |   |
|-----------------------------------------------------------------------------------------|--------|--------------------------------|--------|
| Reported      expense in fiscal 2008                                                    |   | $                              | 11,900 |   |
| Reported      expense in fiscal 2007                                                    |   |                           | 12,285 |   |
| Decrease      in expense                                                                |   |                           | (385   | ) |
| Increase      (decrease) due to:                                                        |   |                           |   |   |
| Effect of exchange rate      changes                                                    |   |                           | 170    |   |
| Lower research and sales and      marketing expense, net of currency effect             |   |                           | (221   | ) |
| Increase in administrative      expense, net of currency effect                         |   |                           | 54     |   |
| Management changes in the      capacitor business and controls business in fiscal 2007  |   |                           | (388   | ) |
| Total      decrease in selling research and administrative expenses in fiscal      2008 |   | $                              | (385   | ) |

----

INDEX

QUANTITATIVE

----

INDEX

|                                         |   | (in      thousands of dollars, except average contract rates) |   |
|----------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                         |   | Expected      maturity or transaction date                    |   |   |   |   |
|                                         |   | FY2009                                                        |   |   | FY2010 |   |   | Total |   |   | Fair      Value |   |
| On      balance sheet financial instruments: |   |                                                          |   |   |   |   |   |   |   |   |   |   |
| In $ US Functional      Currency             |   |                                                          |   |   |   |   |   |   |   |   |   |   |
| Accounts receivable in British      Pounds   |   |                                                          | 1,182  |   |   |   | - |   |   |   | 1,182 |   |   |   | 1,182 |   |
| Accounts receivable in      Euros            |   |                                                          | 2,108  |   |   |   | - |   |   |   | 2,108 |   |   |   | 2,108 |   |
| Accounts payable in British      Pounds      |   |                                                          | 509    |   |   |   | - |   |   |   | 509 |   |   |   | 509 |   |
| Accounts payable in      Euros               |   |                                                          | 1,838  |   |   |   | - |   |   |   | 1,838 |   |   |   | 1,838 |   |
| Anticipated      Transactions                |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| In $ US Functional      Currency             |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Firmly committed sales      contracts        |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| In British    Pounds                         |   |                                                          | 1,431  |   |   |   | - |   |   |   | 1,431 |   |   |   | 1,431 |   |
| In Euros                                     |   |                                                          | 1,157  |   |   |   | - |   |   |   | 1,157 |   |   |   | 1,157 |   |

----

INDEX

FINANCIAL

BALANCE 

| ASSETS                                                                                                      |   | 2008   |   |   | 2007   |   |
|-------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Current      assets:                                                                                        |   |   |   |   |   |   |
| Cash and cash      equivalents                                                                              |   | $      | 1,630  |   |   | $      | 1,014 |   |
| Receivables, net of allowances      for doubtful accounts of $86 in 2008 and $180 in 2007                   |   |   | 7,087  |   |   |   | 8,714 |   |
| Inventories                                                                                                 |   |   | 4,970  |   |   |   | 5,422 |   |
| Prepaid expenses and other      current assets                                                              |   |   | 862    |   |   |   | 916 |   |
| Total      current assets                                                                                   |   |   | 14,549 |   |   |   | 16,066 |   |
| Property,      plant and equipment, at cost:                                                                |   |   |   |   |   |   |   |   |
| Land and      improvements                                                                                  |   |   | 25     |   |   |   | 29 |   |
| Buildings and      improvements                                                                             |   |   | 2,166  |   |   |   | 2,462 |   |
| Equipment                                                                                                   |   |   | 9,409  |   |   |   | 9,774 |   |
|                                                                                                        |   |   | 11,600 |   |   |   | 12,265 |   |
| Less: accumulated depreciation      and amortization                                                        |   |   | 8,053  |   |   |   | 8,497 |   |
| Net      property, plant and equipment                                                                      |   |   | 3,547  |   |   |   | 3,768 |   |
| Long-term      deferred tax asset                                                                           |   |   | 202    |   |   |   | 657 |   |
| Goodwill                                                                                                    |   |   | 1,435  |   |   |   | 1,435 |   |
| Other      long-term assets                                                                                 |   |   | 22     |   |   |   | - |   |
| Total      assets                                                                                           |   | $      | 19,755 |   |   | $      | 21,926 |   |
|  LIABILITIES      AND STOCKHOLDERS’ EQUITY                                                       |   |   |   |   |   |   |   |   |
| Current      liabilities:                                                                                   |   |   |   |   |   |   |   |   |
| Accountspayable                                                                                             |   | $      | 3,713  |   |   | $      | 3,398 |   |
| Dividendpayable                                                                                             |   |   | 98     |   |   |   | 97 |   |
| Accruedexpenses                                                                                             |   |   | 2,410  |   |   |   | 3,162 |   |
| Accrued taxes on      income                                                                                |   |   | 56     |   |   |   | 530 |   |
| Total      current liabilities                                                                              |   |   | 6,277  |   |   |   | 7,187 |   |
| Liability      for pension benefits                                                                         |   |   | 378    |   |   |   | 2,244 |   |
| Other      long term liabilities                                                                            |   |   | 54     |   |   |   | 61 |   |
| Total      liabilities                                                                                      |   |   | 6,709  |   |   |   | 9,492 |   |
| Commitments      and contingencies (note 5)                                                                 |   |   |   |   |   |   |   |   |
| Stockholders’      equity                                                                             |   |   |   |   |   |   |   |   |
| Preferred stock, par value $.10      per share - authorized - 1,000,000 shares; outstanding –    none |   |   | -      |   |   |   | - |   |
| Common stock, par value $.10      per share - authorized - 8,000,000 shares; outstanding                    |   |   |   |   |   |   |   |   |
| 3,276,322 shares in 2008 and      3,238,702 shares in 2007                                                  |   |   | 328    |   |   |   | 324 |   |
| Premium paid in on common      stock                                                                        |   |   | 4,881  |   |   |   | 4,623 |   |
| Retained    earnings                                                                                        |   |   | 8,364  |   |   |   | 7,961 |   |
| Accumulated other comprehensive      loss                                                                   |   |   | (527   | )      |   |   | (474 | ) |
| Total      stockholders’ equity                                                                       |   |   | 13,046 |   |   |   | 12,434 |   |
| Total      liabilities and stockholders’ equity                                                       |   | $      | 19,755 |   |   | $      | 21,926 |   |

----

INDEX

INCOME

|                                               |   | 2008   |   |   | 2007   |   |
|----------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Net      sales                                     |   | $      | 39,219 |   |   | $      | 39,213 |   |
| Cost      of sales                                 |   |   | 25,445 |   |   |   | 24,865 |   |
| Gross      profit                                  |   |   | 13,774 |   |   |   | 14,348 |   |
| Selling,      research and administrative expenses |   |   | 11,900 |   |   |   | 12,285 |   |
| Restructuring      charge                          |   |   | 700    |   |   |   | - |   |
| Operating      income                              |   |   | 1,174  |   |   |   | 2,063 |   |
| Interest      expense                              |   |   | (108   | )      |   |   | (45 | ) |
| Interest      income                               |   |   | 8      |   |   |   | 10 |   |
| Foreign      currency gain (loss)                  |   |   | 163    |   |   |   | (40 | ) |
| Income      before income taxes                    |   |   | 1,237  |   |   |   | 1,988 |   |
| Income      taxes                                  |   |   | (433   | )      |   |   | (685 | ) |
| Net      income                                    |   | $      | 804    |   |   | $      | 1,303 |   |
| Basic      income per share                        |   | $      | .25    |   |   | $      | .41 |   |
| Diluted      income per share                      |   | $      | .25    |   |   | $      | .41 |   |

COMPREHENSIVE

|                                                  |   | 2008   |   |   | 2007   |   |
|-------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Net      income                                       |   | $      | 804    |   |   | $      | 1,303 |   |
| Foreign      currency translation adjustment          |   |   | (1,001 | )      |   |   | 732 |   |
| Changes      in fair market value of cash flow hedges |   |   | (3     | )      |   |   | 3 |   |
| Pension      liability adjustment, net of tax         |   |   | 951    |   |   |   | 507 |   |
| Comprehensive      income                             |   | $      | 751    |   |   | $      | 2,545 |   |

----

INDEX

STOCKHOLDERS

|                                                                                       |   |  Common      stock |   |   | Premium      paid in on common stock |   |   |  Retained      earnings |   |   | Unearned      compensation on restricted stock |   |   | Cumulative      other comprehensive income (loss) |   |   | Total      stockholders’ equity |   |
|--------------------------------------------------------------------------------------------|--------|-------------------------|--------|--------|--------------------------------------|--------|--------|------------------------------|--------|--------|------------------------------------------------|--------|--------|---------------------------------------------------|--------|--------|---------------------------------------|--------|
| Balance      September 30, 2006                                                            |   |                    | 321    |   |                                 |   | 4,309  |                         |   |   | 7,123                                          |   |   |                                              | -      |   |                                  |   | (1,716 | ) |   |   | 10,037 |   |
| Net      income                                                                            |   |                    | -      |   |                                 |   | -      |                         |   |   | 1,303                                          |   |   |                                              | -      |   |                                  |   | - |   |   |   | 1,303 |   |
| Dividends      ($.12 per share)                                                            |   |                    | -      |   |                                 |   | -      |                         |   |   | (387                                           | )      |   |                                              | -      |   |                                  |   | - |   |   |   | (387 | ) |
| Currency      translation adjustment                                                       |   |                    | -      |   |                                 |   | -      |                         |   |   | -                                              |   |   |                                              | -      |   |                                  |   | 732 |   |   |   | 732 |   |
| Change      in fair market value of cash flow hedge                                        |   |                    | -      |   |                                 |   | -      |                         |   |   | -                                              |   |   |                                              | -      |   |                                  |   | 3 |   |   |   | 3 |   |
| Issuance      of restricted stock                                                          |   |                    | 2      |   |                                 |   | (2     | )                            |   |   | -                                              |   |   |                                              | -      |   |                                  |   | - |   |   |   | - |   |
| Exercise      of stock options                                                             |   |                    | 2      |   |                                 |   | 94     |                         |   |   | -                                              |   |   |                                              | -      |   |                                  |   | - |   |   |   | 96 |   |
| Purchase      and retirement of common stock in connection with stock option      exercise |   |                    | (1     | )      |                                 |   | (11    | )                            |   |   | (78                                            | )      |   |                                              | -      |   |                                  |   | - |   |   |   | (90 | ) |
| Tax      benefit on exercise of stock options                                              |   |                    | -      |   |                                 |   | 40     |                         |   |   | -                                              |   |   |                                              | -      |   |                                  |   | - |   |   |   | 40 |   |
| Equity      compensation expense                                                           |   |                    |   |   |                                 |   | 193    |                         |   |   |                                           |   |   |                                              |   |   |                                  |   |   |   |   |   | 193 |   |
| Pension      liability adjustment, net of taxcharge of $239                                |   |                    | -      |   |                                 |   | -      |                         |   |   | -                                              |   |   |                                              | -      |   |                                  |   | 507 |   |   |   | 507 |   |
| Balance      September 30, 2007                                                            |   | $                       | 324    |   |                                 | $      | 4,623  |                         |   | $      | 7,961                                          |   |   | $                                                 | -      |   |                                  | $      | (474 | ) |   | $ | 12,434 |   |
| Net      income                                                                            |   |                    |   |   |                                 |   |   |                         |   |   | 804                                            |   |   |                                              |   |   |                                  |   |   |   |   |   | 804 |   |
| Dividends      ($.12 per share)                                                            |   |                    |   |   |                                 |   |   |                         |   |   | (392                                           | )      |   |                                              |   |   |                                  |   |   |   |   |   | (392 | ) |
| Currency      translation adjustment                                                       |   |                    |   |   |                                 |   |   |                         |   |   |                                           |   |   |                                              |   |   |                                  |   | (1,001 | ) |   |   | (1,001 | ) |
| Change      in fair market value of cash flow hedge                                        |   |                    |   |   |                                 |   |   |                         |   |   |                                           |   |   |                                              |   |   |                                  |   | (3 | ) |   |   | (3 | ) |
| Issuance      of restricted stock                                                          |   |                    | 3      |   |                                 |   | (3     | )                            |   |   |                                           |   |   |                                              |   |   |                                  |   |   |   |   |   | - |   |
| Exercise      of stock options                                                             |   |                    | 1      |   |                                 |   | 53     |                         |   |   |                                           |   |   |                                              |   |   |                                  |   |   |   |   |   | 54 |   |
| Purchase      and retirement of common stock in connection with stock option      exercise |   |                    |   |   |                                 |   |   |                         |   |   | (9                                             | )      |   |                                              |   |   |                                  |   |   |   |   |   | (9 | ) |
| Equity      compensation expense                                                           |   |                    |   |   |                                 |   | 208    |                         |   |   |                                           |   |   |                                              |   |   |                                  |   |   |   |   |   | 208 |   |
| Pension      liability adjustment, net of taxcharge of $437                                |   |                    |   |   |                                 |   |   |                         |   |   |                                           |   |   |                                              |   |   |                                  |   | 951 |   |   |   | 951 |   |
| Balance      September 30, 2008                                                            |   | $                       | 328    |   |                                 | $      | 4,881  |                         |   | $      | 8,364                                          |   |   | $                                                 | -      |   |                                  | $      | (527 | ) |   | $ | 13,046 |   |

----

INDEX

CASH

|                                                                                        |   | 2008   |   |   | 2007   |   |
|---------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Cash      flow from operating activities:                                                   |   |   |   |   |   |   |
| Net      income                                                                             |   | $      | 804    |   |   | $      | 1,303 |   |
| Adjustments      to reconcile net income to net cash from operating    activities:          |   |   |   |   |   |   |   |   |
| Depreciation and      amortization                                                          |   |   | 685    |   |   |   | 739 |   |
| Stock-based      compensation                                                               |   |   | 208    |   |   |   | 193 |   |
| Pension contributions in excess      of pension expenses                                    |   |   | (367   | )      |   |   | (45 | ) |
| Deferred tax (benefit)      provision                                                       |   |   | (6     | )      |   |   | 61 |   |
| Increase (decrease) in cash      resulting from changes in operating assets andliabilities: |   |   |   |   |   |   |   |   |
| Receivables                                                                                 |   |   | 1,459  |   |   |   | (2,058 | ) |
| Inventories                                                                                 |   |   | 26     |   |   |   | (372 | ) |
| Prepaid expenses and other      current assets                                              |   |   | (75    | )      |   |   | (45 | ) |
| Accounts    payable                                                                         |   |   | 778    |   |   |   | 815 |   |
| Accrued    expenses                                                                         |   |   | (742   | )      |   |   | 259 |   |
| Accrued taxes on      income                                                                |   |   | (437   | )      |   |   | (1 | ) |
| Net      cash generated from operating activities                                           |   |   | 2,333  |   |   |   | 849 |   |
| Cash      flow used by investing activities:                                                |   |   |   |   |   |   |   |   |
| Acquisition of property, plant      and equipment                                           |   |   | (931   | )      |   |   | (909 | ) |
| Net      cash used by investing activities                                                  |   |   | (931   | )      |   |   | (909 | ) |
| Cash      flow used by financing activities:                                                |   |   |   |   |   |   |   |   |
| Dividends paid                                                                              |   |   | (392   | )      |   |   | (386 | ) |
| Exercise of stock      options                                                              |   |   | 45     |   |   |   | 6 |   |
| Net cash used by financing      activities                                                  |   |   | (347   | )      |   |   | (380 | ) |
| Effect      of exchange rate changes on cash                                                |   |   | (439   | )      |   |   | 164 |   |
| Net      increase (decrease) in cash                                                        |   |   | 616    |   |   |   | (276 | ) |
| Beginning      balance - cash and cash equivalents                                          |   |   | 1,014  |   |   |   | 1,290 |   |
| Ending      balance - cash and cash equivalents                                             |   | $      | 1,630  |   |   | $      | 1,014 |   |
| Supplemental      disclosure of cash flow information:                                      |   |   |   |   |   |   |   |   |
| Cash paid for income      taxes                                                             |   | $      | 832    |   |   | $      | 677 |   |
| Cash paid for      interest                                                                 |   | $      | 108    |   |   | $      | 45 |   |
| Supplemental      disclosure of non-cash financing activity:                                |   |   |   |   |   |   |   |   |
| Dividenddeclared                                                                            |   | $      | 98     |   |   | $      | 97 |   |

----

INDEX

NOTES 

|                                                                                     |   | 2008   |   |   | 2007   |   |
|------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Warranty      reserves at beginning of year                                              |   | $      | 458    |   |   | $      | 364 |   |
| Decrease      in beginning balance for warranty obligations settled during the      year |   |   | (178   | )      |   |   | (308 | ) |
| Other      changes to pre-existing warranties                                            |   |   | -      |   |   |   | 16 |   |
| Net      increase in warranty reserves for products sold during the      year            |   |   | 82     |   |   |   | 386 |   |
| Warranty      reserves at end of year                                                    |   | $      | 362    |   |   | $      | 458 |   |

----

INDEX

|                |   | 2008   |   |   | 2007   |   |
|---------------------|--------|--------|--------|--------|--------|--------|
| Raw      materials  |   | $      | 930    |   |   | $      | 2,517 |   |
| Work-in-process     |   |   | 96     |   |   |   | 134 |   |
| Finished      goods |   |   | 3944   |   |   |   | 2,771 |   |
|                |   | $      | 4,970  |   |   | $      | 5,422 |   |

----

INDEX

|                                                                      |                                                                         | 2008                      |                                   | 2007                                           |
|---------------------------------------------------------------------------|------------------------------------------------------------------------------|---------------------------|----------------------------------------|------------------------------------------------|
|                                                                      | NotionalAmount                                                               | AverageContract      Rate | NotionalAmount                         | AverageContract      Rate                      |
| Sell      Euros for British PoundsSell      US Dollars for British Pounds | $      -$      - | N/AN/A                    | $2,942$2,700                           | €1.45      = £1$1.99      = £1 |
| Total                                                                     | $      -                                       |                      | $5,642                                 |                                           |
| Estimated      fair value *                                               | $      -                                       |                      | $         43            |                                           |
| Amount      recorded as other comprehensive income                        | $      -                                       |                      | $      3 |                                           |

|                                                         |   | 2008   |   |   | 2007   |   |
|--------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Net      income                                              |   | $      | 804    |   |   | $      | 1,303 |   |
| Weighted      average shares outstanding                     |   |   | 3,210  |   |   |   | 3,167 |   |
| Basic      income per share                                  |   | $      | .25    |   |   | $      | .41 |   |
| Common      stock equivalents                                |   |   | 29     |   |   |   | 47 |   |
| Average      common and common equivalent shares outstanding |   |   | 3,239  |   |   |   | 3,214 |   |
| Diluted      income per share                                |   | $      | .25    |   |   | $      | .41 |   |

----

INDEX

----

INDEX

|                                   |   |  Shares      under option |    |   |  Weighted      averageexercise      price |   | Weighted      average remaining contractual life (years) |   |  Aggregate      Intrinsic value |   |
|----------------------------------------|--------|--------------------------------|---------|--------|------------------------------------------------|--------|----------------------------------------------------------|--------|--------------------------------------|--------|
| Outstanding      at September 30, 2005 |   |                           | 182,000 |   |                                           | $      | 9.26                                                     |   |                                 |   |   |   |
| Exercised      in 2006                 |   |                           | (2,000  | )      |                                           | $      | 4.37                                                     |   |                                 |   |   |   |
| Cancelled      in 2006                 |   |                           | (8,000  | )      |                                           | $      | 8.46                                                     |   |                                 |   |   |   |
| Outstanding      at September 30, 2006 |   |                           | 172,000 |   |                                           | $      | 9.35                                                     |   | 3      years                         |   | $ | 175,000 |   |
| Exercised      in 2007                 |   |                           | (22,000 | )      |                                           | $      | 4.37                                                     |   |                                 |   |   |   |   |
| Cancelled      in 2007                 |   |                           | (21,000 | )      |                                           | $      | 13.84                                                    |   |                                 |   |   |   |   |
| Outstanding      at September 30, 2007 |   |                           | 129,000 |   |                                           | $      | 9.47                                                     |   | 2      years                         |   | $ | 204,000 |   |
| Exercised      in 2008                 |   |                           | (12,000 | )      |                                           | $      | 4.63                                                     |   |                                 |   |   |   |   |
| Cancelled      in 2008                 |   |                           | (53,500 | )      |                                           | $      | 13.66                                                    |   |                                 |   |   |   |   |
| Outstanding      at September 30, 2008 |   |                           | 63,500  |   |                                           | $      | 7.03                                                     |   | 3      years                         |   | $ | - |   |
| Exercisable      at September 30, 2008 |   |                           | 44,600  |   |                                           | $      | 7.29                                                     |   | 3      years                         |   | $ | - |   |

|  Price      range                           |  Shares      under option |  Weighted      average remaining contractual life |
|--------------------------------------------------|--------------------------------|--------------------------------------------------------|
| $   4.37      - $  6.56 | 36,000                         | 5 years                                                |
| $   6.57      - $  9.85 | 10,000                         | 3 years                                                |
| $   9.86      - $14.79            | 17,500                         | 1 year                                                 |
|                                             | 63,500                         | 3years                                                 |

----

INDEX

|                                                                |   | 2008   |   |   | 2007   |   |
|---------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Beginning      Balance – Non-vested                           |   |   | 55     |   |   |   | 65 |   |
| Granted      to employee – 5 year vesting                     |   |   | 15     |   |   |   | - |   |
| Granted      to employees – 8 month vesting                   |   |   | -      |   |   |   | 2 |   |
| Granted      to non-employee directors – 1 year vesting       |   |   | 12     |   |   |   | 12 |   |
| Vested                                                              |   |   | (28    | )      |   |   | (24 | ) |
| Forfeited                                                           |   |   | -      |   |   |   | - |   |
| Ending      Balance – Non-vested                              |   |   | 54     |   |   |   | 55 |   |
| Weighted-average      fair value for shares granted during the year |   | $      | 7.27   |   |   | $      | 7.77 |   |
| Weighted-average      fair value for shares vested during the year  |   | $      | 6.76   |   |   | $      | 5.72 |   |
| Weighted-average      fair value for ending balance - non-vested    |   | $      | 6.47   |   |   | $      | 6.22 |   |

|                                                     |   | 2008   |   |   | 2007   |   |
|----------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Stock option expense under SFAS      No.  123R |   | $      | 25     |   |   | $      | 33 |   |
| Restricted stock      grants:                            |   |   |   |   |   |   |   |   |
| Employees                                                |   | $      | 100    |   |   | $      | 84 |   |
| Non-employee      directors                              |   | $      | 83     |   |   | $      | 76 |   |
| Total stock based compensation      expense              |   | $      | 208    |   |   | $      | 193 |   |

|     |   | 2008   |   |   | 2007   |   |
|----------|--------|--------|--------|--------|--------|--------|
| Domestic |   | $      | (411   | )      |   | $      | (53 | ) |
| Foreign  |   |   | 1,648  |   |   |   | 2,041 |   |
|     |   | $      | 1,237  |   |   | $      | 1,988 |   |

|    |   | 2008    |   |
|---------|--------|---------|--------|
|    |   | Current |   |   | Deferred |   |
| Federal |   | $       | -      |   |   | $ | (57 | ) |
| State   |   |    | -      |   |   |   | (37 | ) |
| Foreign |   |    | 460    |   |   |   | 67 |   |
|    |   | $       | 460    |   |   | $ | (27 | ) |
|    |   | 2007    |   |
|    |   | Current |   |   | Deferred |   |
| Federal |   | $       | 60     |   |   | $ | (45 | ) |
| State   |   |    | 1      |   |   |   | (16 | ) |
| Foreign |   |    | 660    |   |   |   | 25 |   |
|    |   | $       | 721    |   |   | $ | (36 | ) |

----

INDEX

|                                                              |   | 2008   |   |   | 2007   |   |
|-------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Statutory      Federal income tax rate                            |   |   | 34%    |   |   |   | 34% |   |
| Computed      tax provision at statutory rate                     |   | $      | 420    |   |   | $      | 676 |   |
| Increases      (decreases) resulting from:                        |   |   |   |   |   |   |   |   |
| Foreign tax rate      differentials                               |   |   | (37    | )      |   |   | (64 | ) |
| State taxes net of federal tax      benefit                       |   |   | (24    | )      |   |   | 7 |   |
| Change in deferred tax valuation      allowance                   |   |   | (66    | )      |   |   | (18 | ) |
| Foreign dividends, net of      foreign tax credit                 |   |   | 66     |   |   |   | 118 |   |
| Other                                                             |   |   | 74     |   |   |   | (34 | ) |
| Income      tax provision in the Consolidated Statement of Income |   | $      | 433    |   |   | $      | 685 |   |

|                                    |   |                  |   |   | 2008                    |   |   |                 |   |
|-----------------------------------------|--------|-----------------------|--------|--------|-------------------------|--------|--------|----------------------|--------|
|                                    |   | Domestic      current |   |   | Domestic      long-term |   |   | Foreign      current |   |   | Foreign      long-term |   |
| Assets:                                 |   |                  |   |   |                    |   |   |                 |   |   |   |   |
| Pension accruals      (prepaid)         |   | $                     | 76     |   |                    | $      | 132    |                 |   | $ | - |   |   | $ | 14 |   |
| Inventory basis      differences        |   |                  | 77     |   |                    |   | -      |                 |   |   | - |   |   |   | - |   |
| Warranty reserves                       |   |                  | 32     |   |                    |   | -      |                 |   |   | - |   |   |   | - |   |
| Foreign tax credit carry      forwards  |   |                  | -      |   |                    |   | 130    |                 |   |   | - |   |   |   | - |   |
| Accrued compensation      expense       |   |                  | 59     |   |                    |   | -      |                 |   |   | - |   |   |   | 32 |   |
| Net operating    losses                 |   |                  | 154    |   |                    |   | -      |                 |   |   | - |   |   |   | - |   |
| Other (net)                             |   |                  | 145    |   |                    |   | -      |                 |   |   | 44 |   |   |   | - |   |
|                                    |   |                  | 543    |   |                    |   | 262    |                 |   |   | 44 |   |   |   | 46 |   |
| Liabilities:                            |   |                  |   |   |                    |   |   |                 |   |   |   |   |   |   |   |   |
| Property basis      differences         |   |                  |   |   |                    |   | 35     |                 |   |   | 4 |   |   |   | (36 | ) |
| Net      asset (liability)              |   |                  | 543    |   |                    |   | 297    |                 |   |   | 48 |   |   |   | 10 |   |
| Valuation      allowance                |   |                  | -      |   |                    |   | (105   | )                    |   |   | - |   |   |   | - |   |
| Net      deferred tax asset (liability) |   | $                     | 543    |   |                    | $      | 192    |                 |   | $ | 48 |   |   | $ | 10 |   |

|                                    |   |                  |   |   | 2007                    |   |   |                 |   |
|-----------------------------------------|--------|-----------------------|--------|--------|-------------------------|--------|--------|----------------------|--------|
|                                    |   | Domestic      current |   |   | Domestic      long-term |   |   | Foreign      current |   |   | Foreign      long-term |   |
| Assets:                                 |   |                  |   |   |                    |   |   |                 |   |   |   |   |
| Pension accruals      (prepaid)         |   | $                     | 78     |   |                    | $      | 160    |                 |   | $ | - |   |   | $ | 514 |   |
| Inventory basis      differences        |   |                  | 61     |   |                    |   | -      |                 |   |   | 62 |   |   |   | - |   |
| Warranty reserves                       |   |                  | 48     |   |                    |   | -      |                 |   |   | - |   |   |   | - |   |
| Foreign tax credit carry      forwards  |   |                  | 224    |   |                    |   | -      |                 |   |   | - |   |   |   | - |   |
| Accrued compensation      expense       |   |                  | 209    |   |                    |   | -      |                 |   |   | 62 |   |   |   | - |   |
| Other (net)                             |   |                  | 12     |   |                    |   | -      |                 |   |   | - |   |   |   | - |   |
|                                    |   |                  | 632    |   |                    |   | 160    |                 |   |   | 124 |   |   |   | 514 |   |
| Liabilities:                            |   |                  |   |   |                    |   |   |                 |   |   |   |   |   |   |   |   |
| Property basis      differences         |   |                  | -      |   |                    |   | -      |                 |   |   | - |   |   |   | (17 | ) |
| Net      asset (liability)              |   |                  | 632    |   |                    |   | 160    |                 |   |   | 124 |   |   |   | 497 |   |
| Valuation      allowance                |   |                  | (171   | )      |                    |   | -      |                 |   |   | - |   |   |   | - |   |
| Net      deferred tax asset (liability) |   | $                     | 461    |   |                    | $      | 160    |                 |   | $ | 124 |   |   | $ | 497 |   |

----

INDEX

|                                        |   | 2008   |   |   | 2007   |   |
|---------------------------------------------|--------|--------|--------|--------|--------|--------|
| Accrued      compensation and related costs |   | $      | 603    |   |   | $      | 1,118 |   |
| Warranty      reserves                      |   |   | 362    |   |   |   | 458 |   |
| Other      accrued expenses                 |   |   | 1,445  |   |   |   | 1,586 |   |
|                                        |   | $      | 2,410  |   |   | $      | 3,162 |   |

|                                                              |   | 2008   |   |   | 2007   |   |
|-------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Change      in benefit obligation:                                |   |   |   |   |   |   |
| Benefit      obligation at beginning of year                      |   | $      | 24,524 |   |   | $      | 20,476 |   |
| Service      cost                                                 |   |   | 565    |   |   |   | 592 |   |
| Interest      cost                                                |   |   | 1,383  |   |   |   | 1,159 |   |
| Plan      participants contributions                              |   |   | 264    |   |   |   | 289 |   |
| Actuarial      (gain) loss                                        |   |   | (3,372 | )      |   |   | 510 |   |
| Losses      (gains) on curtailments                               |   |   | (271   | )      |   |   | - |   |
| Benefits      paid                                                |   |   | (2,078 | )      |   |   | (234 | ) |
| Foreign      currency exchange rate changes                       |   |   | (2,475 | )      |   |   | 1,732 |   |
| Benefit      obligation at end of year                            |   |   | 18,540 |   |   |   | 24,524 |   |
| Change      in plan assets:                                       |   |   |   |   |   |   |   |   |
| Fair      value of plan assets at beginning of year               |   |   | 22,280 |   |   |   | 17,590 |   |
| Return      on plan assets                                        |   |   | (622   | )      |   |   | 2,333 |   |
| Employer      contributions                                       |   |   | 727    |   |   |   | 758 |   |
| Plan      participants contributions                              |   |   | 264    |   |   |   | 289 |   |
| Benefits      paid                                                |   |   | (2,078 | )      |   |   | (234 | ) |
| Foreign      currency exchange rate changes                       |   |   | (2,409 | )      |   |   | 1,544 |   |
| Fair      value of plan assets at end of year                     |   |   | 18,162 |   |   |   | 22,280 |   |
| Funded      status                                                |   |   | (378   | )      |   |   | (2,244 | ) |
| Unrecognized      transition obligation (asset)                   |   |   | n/a    |   |   |   | n/a |   |
| Unrecognized      prior service cost                              |   |   | n/a    |   |   |   | n/a |   |
| Unrecognized      net actuarial (gain) loss                       |   |   | n/a    |   |   |   | n/a |   |
| Accrued      benefit cost                                         |   |   | n/a    |   |   |   | n/a |   |
| Liability      for pension benefits recorded in the balance sheet |   | $      | (378   | )      |   | $      | (2,244 | ) |

----

INDEX

|                                          |   | 2008   |   |   | 2007   |   |
|-----------------------------------------------|--------|--------|--------|--------|--------|--------|
| Components      of net periodic benefit cost: |   |   |   |   |   |   |
| Service cost                                  |   | $      | 565    |   |   | $      | 592 |   |
| Interest cost                                 |   |   | 1,383  |   |   |   | 1,159 |   |
| Expected return on plan      assets           |   |   | (1,421 | )      |   |   | (1,148 | ) |
| Losses (gains) on      curtailments           |   |   | (272   | )      |   |   | - |   |
| Amortization of transition      obligation    |   |   | -      |   |   |   | (1 | ) |
| Amortization of prior service      cost       |   |   | 60     |   |   |   | 59 |   |
| Recognized net actuarial gain      (loss)     |   |   | -      |   |   |   | 14 |   |
| Net periodic benefit      cost                |   | $      | 315    |   |   | $      | 675 |   |
| Net cost of defined      contribution plans   |   | $      | 46     |   |   | $      | 147 |   |

|                                          |   | 2008   |   |   | 2007   |   |
|-----------------------------------------------|--------|--------|--------|--------|--------|--------|
| Plan      obligations:                        |   |   |   |   |   |   |
| Discount rate                                 |   |   | 6.89%  |   |   |   | 5.76 | % |
| Rate of compensation      increase            |   |   | 4.47%  |   |   |   | 4.25 | % |
| Net      periodic benefit cost:               |   |   |   |   |   |   |   |   |
| Discount rate                                 |   |   | 6.89%  |   |   |   | 5.76 | % |
| Expected long term return on      plan assets |   |   | 6.78%  |   |   |   | 6.50 | % |
| Rate of compensation      increase            |   |   | 4.47%  |   |   |   | 4.25 | % |

|                   |   |         |   |   | 2008         |   |   |   |   |   |         |   |   | 2007         |   |   |   |   |
|------------------------|--------|--------------|--------|--------|--------------|--------|--------|--------|--------|--------|--------------|--------|--------|--------------|--------|--------|--------|--------|
|                   |   | US      Plan |   |   | UK      Plan |   |   | Total  |   |   | US      Plan |   |   | UK      Plan |   |   | Total  |   |
| Equity      securities |   |         | 34%    |   |         |   | 55%    |   |   |   | 53%          |   |   |         | 40%    |   |   |   | 53% |   |   |   | 52% |   |
| Debt      securities   |   |         | 57%    |   |         |   | 26%    |   |   |   | 29%          |   |   |         | 54%    |   |   |   | 26% |   |   |   | 28% |   |
| Real      estate       |   |         | -      |   |         |   | 16%    |   |   |   | 15%          |   |   |         | -      |   |   |   | 17% |   |   |   | 16% |   |
| Other                  |   |         | 9%     |   |         |   | 3%     |   |   |   | 3%           |   |   |         | 6%     |   |   |   | 4% |   |   |   | 4% |   |
| Total                  |   |         | 100%   |   |         |   | 100%   |   |   |   | 100%         |   |   |         | 100%   |   |   |   | 100% |   |   |   | 100% |   |

| 2009                   | $143        |
|------------------------|-------------|
| 2010                   |  182   |
| 2011                   |  277   |
| 2012                   |  396   |
| 2013                   |  431   |
| 2014      – 2018 |  4,247 |

----

INDEX

|                               |   |     |   |   |       |   |   | 2008      |   |   |   |   |
|------------------------------------|--------|----------|--------|--------|------------|--------|--------|-----------|--------|--------|--------|--------|
|                               |   | Controls |   |   | Capacitors |   |   | Corporate |   |   | Total  |   |
| Sales      to external customers   |   | $        | 37,280 |   |       | $      | 1,939  |      |   | $      | -      |   |   | $ | 39,219 |   |
| Inter-segment      revenues        |   |     | -      |   |       |   | 45     |      |   |   | -      |   |   |   | 45 |   |
| Operating      income              |   |     | 1,818  |   |       |   | (184   | )         |   |   | (460   | )      |   |   | 1,174 |   |
| Depreciation      and amortization |   |     | 637    |   |       |   | 48     |      |   |   | -      |   |   |   | 685 |   |
| Identifiable      assets           |   |     | 18,511 |   |       |   | 722    |      |   |   | 522    |   |   |   | 19,755 |   |
| Capital      expenditures          |   |     | 890    |   |       |   | 41     |      |   |   | -      |   |   |   | 931 |   |
|                               |   |     |   |   |       |   |   |      |   | 2007   |   |   |   |   |   |
|                               |   | Controls |   |   | Capacitors |   |   | Corporate |   |   | Total  |   |
| Sales      to external customers   |   | $        | 37,009 |   |       | $      | 2,204  |      |   | $      | -      |   |   | $ | 39,213 |   |
| Inter-segment      revenues        |   |     | -      |   |       |   | 52     |      |   |   | -      |   |   |   | 52 |   |
| Operating      income              |   |     | 2,669  |   |       |   | (289   | )         |   |   | (317   | )      |   |   | 2,063 |   |
| Depreciation      and amortization |   |     | 683    |   |       |   | 56     |      |   |   | -      |   |   |   | 739 |   |
| Identifiable      assets           |   |     | 20,338 |   |       |   | 1,090  |      |   |   | 498    |   |   |   | 21,296 |   |
| Capital      expenditures          |   |     | 823    |   |       |   | 87     |      |   |   | -      |   |   |   | 910 |   |

|                    |   | 2008   |   |   | 2007   |   |
|-------------------------|--------|--------|--------|--------|--------|--------|
| Sales:-                 |   |   |   |   |   |   |
| US      sales           |   | $      | 15,953 |   |   | $      | 14,832 |   |
| Foreign      sales:     |   |   |   |   |   |   |   |   |
| United Kingdom          |   |   | 11,766 |   |   |   | 12,338 |   |
| France                  |   |   | 11,500 |   |   |   | 12,043 |   |
| Total      Foreign      |   |   | 23,266 |   |   |   | 24,381 |   |
| Total      sales        |   | $      | 39,219 |   |   | $      | 39,213 |   |
| Long-lived      assets: |   |   |   |   |   |   |   |   |
| USA                     |   | $      | 1,660  |   |   | $      | 1,516 |   |
| Foreign:                |   |   |   |   |   |   |   |   |
| United Kingdom          |   |   | 3,363  |   |   |   | 3,530 |   |
| France                  |   |   | 113    |   |   |   | 142 |   |
| Korea and Japan         |   |   | 31     |   |   |   | 8 |   |
| Total      Foreign      |   |   | 3,507  |   |   |   | 3,680 |   |
| Total                   |   | $      | 5,167  |   |   | $      | 5,196 |   |

|                                                    |   | 2008   |   |   | 2007   |   |
|---------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Electronic      controllers for battery driven vehicles |   | $      | 25,818 |   |   | $      | 25,308 |   |
| Accessory      and aftermarket products and services    |   |   | 11,462 |   |   |   | 11,701 |   |
| Total      controls segment revenues                    |   | $      | 37,280 |   |   | $      | 37,009 |   |

----

INDEX

| Severance      and other related costs |   | $      | 685 |   |
|----------------------------------------|--------|--------|-----|--------|
| Professional      fees                 |   |   | 15  |   |
| Total      restructuring charge        |   | $      | 700 |   |

|                                   |   | Balance      atOctober      1,2007 |   |   |  Charges |   |   |  Payments |   |   | Balance      atSeptember      30,2008 |   |
|----------------------------------------|--------|------------------------------------|--------|--------|---------------|--------|--------|----------------|--------|--------|---------------------------------------|--------|
| Severance      and other related costs |   | $                                  | -      |   |          | $      | 685    |           |   | $      | 617                                   |   |   | $ | 68 |   |
| Professional      fees                 |   |                               | -      |   |          |   | 15     |           |   |   | 15                                    |   |   |   | - |   |
| Total                                  |   | $                                  | -      |   |          | $      | 700    |           |   | $      | 632                                   |   |   | $ | 68 |   |

----

INDEX

Report

----

INDEX

CHANGES 

CONTROLS

| ·   | Pertain      to the maintenance of records that in reasonable detail accurately and      fairly reflect the transactions and dispositions of our      assets; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Provide      reasonable assurance that transactions are recorded as necessary to permit      preparation of financial statements in accordance with generally accepted      accounting principles, and that our receipts and expenditures are being      made only in accordance with authorizations of our management and      directors; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Provide      reasonable assurance regarding prevention or timely detection of      unauthorized acquisition, use or disposition of our assets that could have      a material effect on the financialstatements. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

OTHER

----

INDEX

DIRECTORS

EXECUTIVE

| Name      of Officer  | Age | Position                                                      |
|-----------------------|-----|---------------------------------------------------------------|
| Matthew      Boyle    | 46  | President      & Chief Executive Officer                  |
| Paul      N. Farquhar | 46  | Vice      President, Treasurer & Chief Financial  Officer |

EXECUTIVE 

 SECURITY 

| Plan      Category                                                                                                              |   | Number      of securities to be issued upon exercise of outstanding options warrants      and rights |                          |   | Weighted-average      exercise price of outstanding options, warrants and rights |   |            | Number      of securities remaining available for future issuance under equity      compensation plans (excluding securities reflected in column (a)) at end      of year |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------|-------------------------------|--------|----------------------------------------------------------------------------------|--------|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                            |   | (a)                                                                                                  |                          |   | (b)                                                                              |   |            | (c)                                                                                                                                                                       |   |
| Equity      compensation plans approved by security holders:1996 Equity Incentive      Plan1998 Director Stock Option      Plan |   |                                                                                                 |  58,500  5,000 |   |                                                                             | $      | 7.17 $5.40 |                                                                                                                                                                      |   |   | 104,500 - |   |
| Sub Total                                                                                                                       |   |                                                                                                 | 63,500                        |   |                                                                             | $      | 7.03            |                                                                                                                                                                      |   |   | 104,500 |   |
| Equity      compensation plans not approved by security holders                                                                 |   |                                                                                                 | -                             |   |                                                                             |   | -               |                                                                                                                                                                      |   |   | - |   |
| Total                                                                                                                           |   |                                                                                                 | 63,500                        |   |                                                                             | $      | 7.03            |                                                                                                                                                                      |   |   | 104,500 |   |

----

INDEX

RELATIONSHIPS

ACCOUNTING

EXHIBITS

| (a)    | Financial      statements and schedule                                                                                    |
|--------|---------------------------------------------------------------------------------------------------------------------------|
|   | The      financial statements and financial statement schedule are filed as part of      this Annual Report on Form 10-K. |
| (b)    | Exhibits                                                                                                                  |
|   | The      exhibits filed as part of this Annual Report on Form 10-K are listed on      the Exhibit Index below.            |

INDEX

|  *(3)(a)       | Certificate      of Incorporation of the registrant (incorporated by reference to Exhibit      (3) (a) to Quarterly Report on Form 10-Q for the quarter ended July 3,      2004).                                                           |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *(3)(b)             | Amended      and Restated by-laws of the registrant (incorporated by reference to      Exhibit 3.2 to current report on form 8-K filed on September 19,      2008).                                                                         |
|   (4)(a)  | Specimen      common stock certificate of the registrant (filed    herewith).                                                                                                                                                               |
| *(10)(a)            | Tech/Ops      Sevcon, Inc. 1996 Equity Incentive Plan (incorporated by reference to the      Registrant's 2004 Proxy Statement filed on December 29,    2003).                                                                              |
| *(10)(b)            | Form      of Option for 1996 Equity Incentive Plan (incorporated by reference to      Exhibit (10) (b) to Annual Report for the fiscal year ended September 30,      2002).                                                                 |
| *(10)(c)            | Form      of Restricted Stock Agreement for employees for 1996 Equity Incentive Plan      (incorporated by reference to Exhibit (10) (c) to Annual Report for the      fiscal year ended September 30, 2004).                               |
| *(10)(d)            | Form      of Restricted Stock Agreement for non-employee directors for 1996 Equity      Incentive Plan (incorporated by reference to Exhibit (10) (d) to Annual      Report for the fiscal year ended September 30, 2004).                  |
| *(10)(e)            | Form      of Indemnification Agreement dated January 4, 1988 between the registrant      and each of its directors (incorporated by reference to Exhibit (10) (e)      to Annual Report for the fiscal year ended September 30,      1994). |
| *(10)(f)            | Directors’      Retirement Plan (incorporated by reference to Exhibit (10) (b) to Annual      Report for the fiscal year ended September 30, 1990).                                                                                   |
| *(10)(g)            | Board      resolution terminating Directors’ Retirement Plan (incorporated by      reference to Exhibit (10) (e) to Annual Report for the fiscal year ended      September 30, 1997).                                                 |
| *(10)(h)            | Tech/Ops      Sevcon, Inc. 1998 Director Stock Option Plan (incorporated by reference to      Exhibit 10 to Quarterly Report on Form 10-Q for the quarter ended March      31, 1998).                                                       |
|   (10)(i) | Summary      of Director and Executive Officer Non-Plan Compensation (filed      herewith).                                                                                                                                                 |
|   (21)    | Subsidiaries      of the registrant (filed herewith).                                                                                                                                                                                       |
|   (23)    | Consent      of Vitale Caturano & Company, Ltd. (filedherewith).                                                                                                                                                                        |
|   (31.1)  | Certification      of Principal Executive Officer pursuant to section 302 of the      Sarbanes-Oxley Act of 2002. (Filed herewith)                                                                                                          |
|   (31.2)  | Certification      of Principal Financial Officer pursuant to section 302 of the      Sarbanes-Oxley Act of 2002. (Filed herewith)                                                                                                          |
|   (32.1)  | Certification      of Principal Executive Officer and Principal Financial Officer pursuant to      section 906 of the Sarbanes-Oxley Act of 2002. (Filed      herewith)                                                                     |

----

INDEX

SIGNATURES

|   | TECH/OPS      SEVCON, INC.                 |                   |
|--------|--------------------------------------------|------------------------|
|   |                                       |                   |
|   | By      /s/      Matthew Boyle             | December      29, 2008 |
|   | Matthew      Boyle                         |                   |
|   | President      and Chief Executive Officer |                   |

| SIGNATURE                     | TITLE                                                      | DATE                   |
|-------------------------------|------------------------------------------------------------|------------------------|
| /s/ Matthew      Boyle        | President,      Chief Executive                            | December      29, 2008 |
| Matthew Boyle                 | Officer      and Director                                  |                   |
|                          | (Principal      Executive Officer)                         |                   |
|                          |                                                       |                   |
| /s/ Paul N.      Farquhar     | Vice      President, Chief Financial Officer and Treasurer | December      29, 2008 |
| Paul N. Farquhar              | (Principal      Accounting Officer)                        |                   |
|                          |                                                       |                   |
| /s/ Maarten D.      Hemsley   | Director                                                   | December      29, 2008 |
| Maarten D.Hemsley             |                                                       |                   |
|                          |                                                       |                   |
| /s/ Paul B.      Rosenberg    | Director                                                   | December      29, 2008 |
| Paul B. Rosenberg             |                                                       |                   |
|                          |                                                       |                   |
| /s/ Marvin G.      Schorr     | Director                                                   | December      29, 2008 |
| Marvin G. Schorr              |                                                       |                   |
|                          |                                                       |                   |
| /s/ Bernard F.      Start     | Director                                                   | December      29, 2008 |
| Bernard F. Start              |                                                       |                   |
|                          |                                                       |                   |
| /s/ David R. A.      Steadman | Director                                                   | December      29, 2008 |
| David R. A.    Steadman       |                                                       |                   |
|                          |                                                       |                   |
| /s/ Paul O.      Stump        | Director                                                   | December      29, 2008 |
| Paul O. Stump                 |                                                       |                   |
|                          |                                                       |                   |

----

INDEX

SCHEDULE

| Allowance      for doubtful accounts         |   | 2008   |   |   | 2007   |   |
|----------------------------------------------|--------|--------|--------|--------|--------|--------|
| Balance      at beginning of year            |   |   | 180    |   |   |   | 141 |   |
| Additions      charged to costs and expenses |   |   | -      |   |   |   | 38 |   |
| Deductions      from reserves:               |   |   |   |   |   |   |   |   |
| Accounts    collected                        |   |   | (1     | )      |   |   | (11 | ) |
| Reduction in      reserve                    |   |   | (97    | )      |   |   | - |   |
| Write off of uncollectible      accounts     |   |   | 4      |   |   |   | (1 | ) |
| Foreign      currency translation adjustment |   |   | -      |   |   |   | 13 |   |
| Balance      at end of year                  |   |   | 86     |   |   |   | 180 |   |

----

INDEX

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