| Delaware                                |   | 75-1277589                                          |
|-----------------------------------------|--------|-----------------------------------------------------|
| (State                of Incorporation) |   | (I.R.S.                Employer Identification No.) |

|   | Yes                x |   | No** **o |   |
|--------|----------------------|--------|---------------|--------|

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

|   | Yes                o |   | No** **x |   |
|--------|----------------------|--------|---------------|--------|

| Class                                     |   | Outstanding                at July 31, 2006 |
|-------------------------------------------|--------|---------------------------------------------|
| Common                Stock, $1 Par Value |   | 7,963,577                Shares             |

----

|          |                        |                                                                                    |  Page |
|---------------|-----------------------------|-----------------------------------------------------------------------------------------|------------|
|  PART I  |  FINANCIAL INFORMATION |                                                                                    |       |
|          |                        |                                                                                    |       |
|          |  Item 1.               |  Financial                Statements:                                              |       |
|          |                        |                                                                                    |       |
|          |                        |  Condensed Consolidated Balance              Sheets                                |       |
|          |                        |  June 30, 2006 and December 31, 2005              (unaudited)                      |  3,4  |
|          |                        |                                                                                    |       |
|          |                        |  Condensed              Consolidated Statements of Operations                      |       |
|          |                        |  Three Months and Six Months Ended June              30, 2006 and 2005 (unaudited) |  5    |
|          |                        |                                                                                    |       |
|          |                        |  Condensed              Consolidated Statements of Cash Flows                      |       |
|          |                        |  Six Months Ended June 30, 2006 and 2005              (unaudited)                  |  6    |
|          |                        |                                                                                    |       |
|          |                        |  Notes to Condensed Consolidated              Financial Statements (unaudited)     |  7    |
|          |                        |                                                                                    |       |
|          |  Item 2.               |  Management's              Discussion and Analysis of Financial                    |       |
|          |                        |  Condition and Results of              Operations                                  |  30   |
|          |                        |                                                                                    |       |
|          |  Item 3.               |  Quantitative and Qualitative              Disclosures about Market Risk           |  45   |
|          |                        |                                                                                    |       |
|          |  Item 4.               |  Controls and Procedures                                                           |  45   |
|          |                        |                                                                                    |       |
|          |                        |                                                                                    |       |
|  PART II |  OTHER INFORMATION     |                                                                                    |       |
|          |                        |                                                                                    |       |
|          |  Item 1.          |  Legal Proceedings                                                                 |  48   |
|          |                        |                                                                                    |       |
|          |  Item 1A.              |  Risk Factors                                                                      |  48   |
|          |                        |                                                                                    |       |
|          |  Item 2.               |  Unregistered Sales of Equity Securities              and Use of Proceeds          |  48   |
|          |                        |                                                                                    |       |
|          |  Item 3.               |  Defaults Upon Senior              Securities                                      |  48   |
|          |                        |                                                                                    |       |
|          |  Item 4.          |  Submission of Matters to a Vote of              Security Holders                  |  48   |
|          |                        |                                                                                    |       |
|          |  Item 5.               |  Other Information                                                                 |  49   |
|          |                        |                                                                                    |       |
|          |  Item 6.               |  Exhibits                                                                     |  49   |
|          |                        |                                                                                    |       |
|          |  Signatures       |                                                                                    |  52   |

----

|                                                                            |   | June                  30, |    | December                  31, |   |
|----------------------------------------------------------------------------|--------|---------------------------|---------|-------------------------------|--------|
|                                                                       |   |                      | 2006    |                          |   | 2005 |   |
| CURRENT                  ASSETS:                                           |   |                      |    |                          |   |   |   |
|                                                                       |   |                      |    |                          |   |   |   |
| Cash                  and cash equivalents                            |   | $                         | 4,565   |                          | $      | 8,421 |   |
| Accounts                  receivable, net                             |   |                      | 54,102  |                          |   | 63,612 |   |
| Inventories,                  net                                     |   |                      | 57,522  |                          |   | 62,799 |   |
| Other                  current assets                                 |   |                      | 3,653   |                          |   | 3,600 |   |
|                                                                       |   |                      |    |                          |   |   |   |
|  Total                  current assets                                |   |                      | 119,842 |                          |   | 138,432 |   |
|                                                                       |   |                      |    |                          |   |   |   |
|                                                                       |   |                      |    |                          |   |   |   |
| OTHER                  ASSETS:                                             |   |                      |    |                          |   |   |   |
|                                                                       |   |                      |    |                          |   |   |   |
| Goodwill                                                              |   |                      | 665     |                          |   | 665 |   |
| Intangibles,                  net                                     |   |                      | 6,563   |                          |   | 6,946 |   |
| Other                                                                 |   |                      | 9,706   |                          |   | 8,643 |   |
|                                                                       |   |                      |    |                          |   |   |   |
|  Total                  other assets                                  |   |                      | 16,934  |                          |   | 16,254 |   |
|                                                                       |   |                      |    |                          |   |   |   |
|                                                                       |   |                      |    |                          |   |   |   |
| PROPERTY                  AND EQUIPMENT                                    |   |                      |    |                          |   |   |   |
| Land                  and improvements                                |   |                      | 1,789   |                          |   | 1,732 |   |
| Buildings                  and improvements                           |   |                      | 13,255  |                          |   | 14,011 |   |
| Machinery                  and equipment                              |   |                      | 138,233 |                          |   | 140,514 |   |
|                                                                       |   |                      |    |                          |   |   |   |
|                                                                       |   |                      | 153,277 |                          |   | 156,257 |   |
| Less                  - Accumulated depreciation                      |   |                      | (99,673 | )                             |   | (98,260 | ) |
|                                                                       |   |                      |    |                          |   |   |   |
|  Property                  and equipment, net                         |   |                      | 53,604  |                          |   | 57,997 |   |
|                                                                       |   |                      |    |                          |   |   |   |
|  Total                  assets                                        |   | $                         | 190,380 |                          | $      | 212,683 |   |
|                                                                       |   |                      |    |                          |   |   |   |
| See                  Notes to Condensed Consolidated Financial Statements. |   |                      |    |                          |   |   |   |

----

|                                                                                                               |   | June                  30, |    | December                  31, |   |
|---------------------------------------------------------------------------------------------------------------|--------|---------------------------|---------|-------------------------------|--------|
|                                                                                                          |   |                      | 2006    |                          |   | 2005 |   |
| CURRENT                  LIABILITIES:                                                                         |   |                      |    |                          |   |   |   |
|                                                                                                          |   |                      |    |                          |   |   |   |
| Accounts                  payable                                                                        |   | $                         | 28,714  |                          | $      | 47,449 |   |
| Accrued                  compensation                                                                    |   |                      | 3,583   |                          |   | 4,071 |   |
| Accrued                  expenses                                                                        |   |                      | 38,208  |                          |   | 37,713 |   |
| Current                  maturities of long-term debt                                                    |   |                      | 2,857   |                          |   | 2,857 |   |
| Revolving                  credit agreement                                                              |   |                      | 49,056  |                          |   | 41,946 |   |
|                                                                                                          |   |                      |    |                          |   |   |   |
|  Total                  current liabilities                                                              |   |                      | 122,418 |                          |   | 134,036 |   |
|                                                                                                          |   |                      |    |                          |   |   |   |
| LONG-TERM                  DEBT, less current maturities                                                      |   |                      | 10,248  |                          |   | 12,857 |   |
|                                                                                                          |   |                      |    |                          |   |   |   |
| OTHER                  LIABILITIES                                                                            |   |                      | 8,764   |                          |   | 10,497 |   |
|                                                                                                          |   |                      |    |                          |   |   |   |
| Total                  liabilities                                                                            |   |                      | 141,430 |                          |   | 157,390 |   |
|                                                                                                          |   |                      |    |                          |   |   |   |
| COMMITMENTS                  AND CONTINGENCIES (Note 9)                                                       |   |                      | -       |                          |   | - |   |
|                                                                                                          |   |                      |    |                          |   |   |   |
| STOCKHOLDERS’                  EQUITY                                                                   |   |                      |    |                          |   |   |   |
| 15%                  Convertible Preferred Stock, $100 par value,                  authorized            |   |                      |    |                          |   |   |   |
|  1,200,000                  shares, issued and outstanding 1,131,551 shares,                             |   |                      |    |                          |   |   |   |
|  liquidation                  value $113,155                                                             |   |                      | 108,256 |                          |   | 108,256 |   |
| Common                  stock, $1 par value, authorized 35,000,000 shares,                               |   |                      |    |                          |   |   |   |
|  issued                  9,822,304 shares                                                                |   |                      | 9,822   |                          |   | 9,822 |   |
| Additional                  paid-in capital                                                              |   |                      | 26,969  |                          |   | 27,016 |   |
| Accumulated                  other comprehensive income                                                  |   |                      | 4,045   |                          |   | 3,158 |   |
| Accumulated                  deficit                                                                     |   |                      | (78,088 | )                             |   | (70,415 | ) |
| Treasury                  stock, at cost, 1,856,027 and 1,874,027 shares,                  respectively  |   |                      | (22,054 | )                             |   | (22,544 | ) |
|                                                                                                          |   |                      |    |                          |   |   |   |
|  Total                  stockholders' equity                                                             |   |                      | 48,950  |                          |   | 55,293 |   |
|                                                                                                          |   |                      |    |                          |   |   |   |
|  Total                  liabilities and stockholders' equity                                             |   | $                         | 190,380 |                          | $      | 212,683 |   |
|                                                                                                          |   |                      |    |                          |   |   |   |
| See                  Notes to Condensed Consolidated Financial Statements.                                    |   |                      |         |                          |   |   |   |

----

|                                                                                                |   | Three                  Months   |   | Six                  Months     |   |
|-----------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|---------------------------------|--------|
|                                                                                                     |   | Ended                  June 30, |   | Ended                  June 30, |   |
|                                                                                                |   |                            | 2006   |                            |   | 2005 |   |   | 2006 |   |   | 2005 |   |
|                                                                                                |   |                            |   |                            |   |   |   |   |   |   |   |   |   |
| Net                  sales                                                                          |   | $                               | 92,080 |                            | $      | 93,835 |   | $ | 172,335 |   | $ | 185,087 |   |
| Cost                  of goods sold                                                                 |   |                            | 79,786 |                            |   | 83,074 |   |   | 149,222 |   |   | 165,505 |   |
| Gross                  profit                                                                  |   |                            | 12,294 |                            |   | 10,761 |   |   | 23,113 |   |   | 19,582 |   |
| Selling,                  general and administrative expenses                                       |   |                            | 12,702 |                            |   | 15,594 |   |   | 25,809 |   |   | 27,681 |   |
| Severance,                  restructuring and related charges                                       |   |                            | 71     |                            |   | 466 |   |   | 853 |   |   | 638 |   |
| (Gain)                  loss on sale of assets                                                      |   |                            | (48    | )                               |   | (352 | ) |   | 54 |   |   | (166 | ) |
| Operating                  loss                                                                |   |                            | (431   | )                               |   | (4,947 | ) |   | (3,603 | ) |   | (8,571 | ) |
| Interest                  expense                                                                   |   |                            | (1,743 | )                               |   | (1,350 | ) |   | (3,483 | ) |   | (2,574 | ) |
| Other,                  net                                                                         |   |                            | 83     |                            |   | 38 |   |   | 420 |   |   | (10 | ) |
|                                                                                                |   |                            |   |                            |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations before provision (benefit)                         |   |                            |   |                            |   |   |   |   |   |   |   |   |   |
| for                  income taxes                                                              |   |                            | (2,091 | )                               |   | (6,259 | ) |   | (6,666 | ) |   | (11,155 | ) |
| Provision                  (benefit) for income taxes from continuing operations                    |   |                            | 406    |                            |   | (134 | ) |   | 658 |   |   | (2 | ) |
|                                                                                                |   |                            |   |                            |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations                                                    |   |                            | (2,497 | )                               |   | (6,125 | ) |   | (7,324 | ) |   | (11,153 | ) |
| Income                  from operations of discontinued businesses                                  |   |                            |   |                            |   |   |   |   |   |   |   |   |   |
| (net                  of tax)                                                                  |   |                            | 545    |                            |   | 79 |   |   | 337 |   |   | 459 |   |
| Gain                  on sale of discontinued businesses (net of tax)                               |   |                            | 70     |                            |   | - |   |   | 70 |   |   | - |   |
|                                                                                                |   |                            |   |                            |   |   |   |   |   |   |   |   |   |
| Loss                  before cumulative effect of a change in accounting                  principle |   |                            | (1,882 | )                               |   | (6,046 | ) |   | (6,917 | ) |   | (10,694 | ) |
| Cumulative                  effect of a change in accounting principle (net of tax)                 |   |                            | -      |                            |   | - |   |   | (756 | ) |   | - |   |
|                                                                                                |   |                            |   |                            |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                                           |   | $                               | (1,882 | )                               | $      | (6,046 | ) | $ | (7,673 | ) | $ | (10,694 | ) |
|                                                                                                |   |                            |   |                            |   |   |   |   |   |   |   |   |   |
| Loss                  per share of common stock - Basic and diluted:                                |   |                            |   |                            |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations                                               |   | $                               | (0.31  | )                               | $      | (0.77 | ) | $ | (0.92 | ) | $ | (1.40 | ) |
| Discontinued                  operations                                                       |   |                            | 0.08   |                            |   | 0.01 |   |   | 0.05 |   |   | 0.05 |   |
| Cumulative                  effect of a change in accounting principle                         |   |                            | -      |                            |   | - |   |   | (0.09 | ) |   | - |   |
| Net                  loss                                                                      |   | $                               | (0.23  | )                               | $      | (0.76 | ) | $ | (0.96 | ) | $ | (1.35 | ) |
|                                                                                                |   |                            |   |                            |   |   |   |   |   |   |   |   |   |
| Weighted                  average common shares outstanding (thousands):                            |   |                            |   |                            |   |   |   |   |   |   |   |   |   |
|  Basic                  and diluted                                                            |   |                            | 7,979  |                            |   | 7,948 |   |   | 7,975 |   |   | 7,947 |   |
|                                                                                                |   |                            |   |                            |   |   |   |   |   |   |   |   |   |
| See                  Notes to Condensed Consolidated Financial Statements.                          |   |                            |   |                            |   |   |   |   |   |   |   |   |   |

----

|                                                                          |   |   | 2006    |   |   | 2005    |   |
|-------------------------------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|
| Cash                  flows from operating activities:                        |   |   |    |   |   |    |   |
| Net                  loss                                                |   | $      | (7,673  | )      | $      | (10,694 | )      |
| Income                  from operations of discontinued business         |   |   | (407    | )      |   | (459    | )      |
| Loss                  from continuing operations                         |   |   | (8,080  | )      |   | (11,153 | )      |
| Cumulative                  effect of a change in accounting principle   |   |   | 756     |   |   | -       |   |
| Depreciation                  and amortization                           |   |   | 5,191   |   |   | 5,705   |   |
| Amortization                  of debt issuance costs                     |   |   | 582     |   |   | 557     |   |
| Stock                  option expense                                    |   |   | 371     |   |   | 1,953   |   |
| Loss                  (gain) on sale of assets                           |   |   | 54      |   |   | (166    | )      |
|                                                                          |   |   | (1,126  | )      |   | (3,104  | )      |
| Changes                  in operating assets and liabilities:            |   |   |    |   |   |    |   |
|  Accounts                  receivable                                    |   |   | 10,640  |   |   | 9,526   |   |
|  Inventories                                                             |   |   | 2,545   |   |   | 5,132   |   |
|  Other                  assets                                           |   |   | 19      |   |   | (330    | )      |
|  Accounts                  payable                                       |   |   | (13,576 | )      |   | (5,277  | )      |
|  Accrued                  expenses                                       |   |   | 559     |   |   | (4,246  | )      |
|  Other,                  net                                             |   |   | (2,733  | )      |   | (2,217  | )      |
|                                                                          |   |   | (2,546  | )      |   | 2,588   |   |
|                                                                          |   |   |    |   |   |    |   |
| Net                  cash used in continuing operations                       |   |   | (3,672  | )      |   | (516    | )      |
| Net                  cash (used in) provided by discontinued operations       |   |   | (520    | )      |   | 1,004   |   |
| Net                  cash (used in) provided by operating activities     |   |   | (4,192  | )      |   | 488     |   |
|                                                                          |   |   |    |   |   |    |   |
| Cash                  flows from investing activities:                        |   |   |    |   |   |    |   |
| Capital                  expenditures of continuing operations           |   |   | (1,857  | )      |   | (2,943  | )      |
| Capital                  expenditures of discontinued operations         |   |   | -       |   |   | (11     | )      |
| Collections                  of note receivable from sale of subsidiary  |   |   | -       |   |   | 106     |   |
| Proceeds                  from sale of discontinued operations, net      |   |   | 2,542   |   |   | -       |   |
| Proceeds                  from sale of assets                            |   |   | 238     |   |   | 600     |   |
| Net                  cash provided by (used in) investing activities     |   |   | 923     |   |   | (2,248  | )      |
|                                                                          |   |   |    |   |   |    |   |
| Cash                  flows from financing activities:                        |   |   |    |   |   |    |   |
| Net                  borrowings (repayments) on revolving loans          |   |   | 6,835   |   |   | (410    | )      |
| Decrease                  in book overdraft                              |   |   | (4,315  | )      |   | -       |   |
| Repayments                  of term loans                                |   |   | (2,609  | )      |   | (2,142  | )      |
| Direct                  costs associated with debt facilities            |   |   | (166    | )      |   | (135    | )      |
| Repurchases                  of common stock                             |   |   | (75     | )      |   | -       |   |
| Proceeds                  from the exercise of stock options             |   |   | 147     |   |   | -       |   |
| Net                  cash used in financing activities                   |   |   | (183    | )      |   | (2,687  | )      |
|                                                                          |   |   |    |   |   |    |   |
| Effect                  of exchange rate changes on cash and cash equivalents |   |   | (404    | )      |   | (15     | )      |
| Net                  decrease in cash and cash equivalents                    |   |   | (3,856  | )      |   | (4,462  | )      |
| Cash                  and cash equivalents, beginning of period               |   |   | 8,421   |   |   | 8,525   |   |
| Cash                  and cash equivalents, end of period                     |   | $      | 4,565   |   | $      | 4,063   |   |
|                                                                          |   |   |    |   |   |    |   |
| Supplemental                  disclosure of non-cash investing activities:    |   |   |    |   |   |    |   |
| Note                  receivable from sale of discontinued operations    |   | $      | 1,200   |   | $      | -       |   |
|                                                                          |   |   |    |   |   |    |   |
| See                  Notes to Condensed Consolidated Financial Statements.    |   |   |    |   |   |    |   |

----

|                                                        |   | June                  30, |   | December                  31, |   |
|--------------------------------------------------------|--------|---------------------------|--------|-------------------------------|--------|
|                                                   |   |                      | 2006   |                          |   | 2005 |   |
|                                                   |   |                      |   |                          |   |   |   |
| Raw                  materials                         |   | $                         | 16,696 |                          | $      | 23,314 |   |
| Work                  in process                       |   |                      | 775    |                          |   | 1,766 |   |
| Finished                  goods                        |   |                      | 50,362 |                          |   | 48,949 |   |
| Excess                  and obsolete inventory reserve |   |                      | (4,286 | )                             |   | (4,548 | ) |
| LIFO                  reserve                          |   |                      | (6,025 | )                             |   | (6,682 | ) |
|                                                   |   | $                         | 57,522 |                          | $      | 62,799 |   |
|                                                   |   |                      |   |                          |   |   |   |

** **

*Inventory      Costs, an amendment of ARB No. 43, Chapter 4*

----

*Accounting      for Asset Retirement Obligations*

| SFAS                  No. 143 Obligation at December 31, 2005 |   | $      | 1,068  |   |
|---------------------------------------------------------------|--------|--------|--------|--------|
| Accretion                  expense                            |   |   | 26     |   |
| Changes                  in estimates, including timing       |   |   | -      |   |
| SFAS                  No. 143 Obligation at June 30, 2006     |   | $      | 1,094  |   |
|                                                          |   |   |   |   |

*Accounting      for Stock Issued to Employees*
*Accounting      for Stock-Based Compensation *
*Accounting      for Stock-Based Compensation - Transition and Disclosure *

*Share-Based      Payment*

----

|                                                                   |   | Three                  Months   |   | Six                  Months     |   |
|------------------------------------------------------------------------|--------|---------------------------------|--------|---------------------------------|--------|
|                                                                   |   | Ended                  June 30, |   | Ended                  June 30, |   |
|                                                                   |   |                            | 2006   |                            |   | 2006 |   |
|                                                                   |   |                            |   |                            |   |   |   |
| Selling,                  general and administrative expense           |   | $                               | (462   | )                               | $      | 27 |   |
| Cumulative                  effect of a change in accounting principle |   |                            | -      |                            |   | 756 |   |
|                                                                   |   | $                               | (462   | )                               | $      | 783 |   |
|                                                                   |   |                            |   |                            |   |   |   |

*Share-Based      Payment*

----

|                                                              |   | Three                  Months   |   | Six                  Months     |   |
|-------------------------------------------------------------------|--------|---------------------------------|--------|---------------------------------|--------|
|                                                                   |   | Ended                  June 30, |   | Ended                  June 30, |   |
|                                                              |   |                            | 2005   |                            |   | 2005 |   |
| Net                  loss                                         |   | $                               | (6,046 | )                               | $      | (10,694 | ) |
| Add:                  Stock-based employee compensation expense   |   |                            |   |                            |   |   |   |
| included                  in reported net income, with no related |   |                            |   |                            |   |   |   |
| tax                  effects                                      |   |                            | 1,953  |                            |   | 1,953 |   |
| Deduct:                  Total stock-based employee               |   |                            |   |                            |   |   |   |
| compensation                  expense determined under fair       |   |                            |   |                            |   |   |   |
| value                  based method for all awards, with no       |   |                            |   |                            |   |   |   |
| related                  tax effects                              |   |                            | (14    | )                               |   | (14 | ) |
|                                                              |   |                            |   |                            |   |   |   |
| Pro                  forma net loss                               |   | $                               | (4,107 | )                               | $      | (8,755 | ) |
|                                                              |   |                            |   |                            |   |   |   |
| Loss                  per share:                                  |   |                            |   |                            |   |   |   |
| Basic                  and diluted - as reported                  |   | $                               | (0.76  | )                               | $      | (1.35 | ) |
| Basic                  and diluted - pro forma                    |   | $                               | (0.52  | )                               | $      | (1.10 | ) |

*Accounting      for Derivative Financial Instruments and Hedging Activities*

----

|   |                                                                                                                                                             |   |                             |   |                       |   |                           |   |                            |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|----------------------------|--------|--------------------------------|--------|---------------------------------|
|   | Notional                  Amount                                                                                                                                 |   | Maturity                         |   | Rate                  Paid |   | Rate                  Received |   | Fair                  Value (2) |
|   | $                  25,000                                                                                                                                        |   | August                  17, 2007 |   | 4.49%                      |   | LIBOR                  (1)     |   | $                  199          |
|   |                                                                                                                                                             |   |                             |   |                       |   |                           |   |                            |
| (1)    |  LIBOR                  rate is determined on the 23rd of each month and continues up to                  and                  including the maturity date. |
|   |                                                                                                                                                             |   |                             |   |                       |   |                           |   |                            |
| (2)    |  The                  fair value is the mark-to-market                  value.                                                                              |

|                                                                |   | Three                    Months Ended June 30, |   | Six                    Months Ended June 30, |   |
|----------------------------------------------------------------|--------|------------------------------------------------|--------|----------------------------------------------|--------|
|                                                           |   |                                           | 2006   |                                         |   | 2005 |   |   | 2006 |   |   | 2005 |   |
| Net                    loss                                    |   | $                                              | (1,882 | )                                            | $      | (6,046 | ) | $ | (7,673 | ) | $ | (10,694 | ) |
| Foreign                    currency translation gains (losses) |   |                                           | 838    |                                         |   | (1,045 | ) |   | 754 |   |   | (1,444 | ) |
| Unrealized                    gains on interest rate swap      |   |                                           | 40     |                                         |   | - |   |   | 133 |   |   | - |   |
|                                                           |   |                                           | 878    |                                         |   | (1,045 | ) |   | 887 |   |   | (1,444 | ) |
| Comprehensive                    loss                          |   | $                                              | (1,004 | )                                            | $      | (7,091 | ) | $ | (6,786 | ) | $ | (12,138 | ) |
|                                                           |   |                                           |   |                                         |   |   |   |   |   |   |   |   |   |

*Accounting      for Uncertainty in Income Taxes*

----

|                                 |   | June                  30, |   | December                  31, |   |
|---------------------------------|--------|---------------------------|--------|-------------------------------|--------|
|                            |   | 2006                      |   | 2005                          |   |
|                                 |   | Gross                     |   | Accumulated                   |   | Net                  Carrying |   | Gross |   | Accumulated |   | Net                  Carrying |   |
|                                 |   | Amount                    |   | Amortization                  |   | Amount |   | Amount |   | Amortization |   | Amount |   |
| Patents                         |   | $                         | 1,420  |                          | $      | (993 | ) | $ | 427 |   | $ | 1,409 |   | $ | (954 | ) | $ | 455 |   |
| Customer                  lists |   |                      | 10,438 |                          |   | (8,016 | ) |   | 2,422 |   |   | 10,643 |   |   | (7,997 | ) |   | 2,646 |   |
| Tradenames                      |   |                      | 5,522  |                          |   | (2,208 | ) |   | 3,314 |   |   | 5,498 |   |   | (2,075 | ) |   | 3,423 |   |
| Other                           |   |                      | 441    |                          |   | (41 | ) |   | 400 |   |   | 441 |   |   | (19 | ) |   | 422 |   |
| Total                           |   | $                         | 17,821 |                          | $      | (11,258 | ) | $ | 6,563 |   | $ | 17,991 |   | $ | (11,045 | ) | $ | 6,946 |   |
|                            |   |                      |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

*Offsetting      of Amounts Related to Certain Contracts*

----

*Consolidation      of Variable Interest Entities*

| 2006   |   | $      | 1,500  |   |
|--------|--------|--------|--------|--------|
| 2007   |   |   | 400    |   |
|   |   | $      | 1,900  |   |
|   |   |   |   |   |

----

|                                                                                           |   | June                  30, |    | December                  31, |   |
|-------------------------------------------------------------------------------------------|--------|---------------------------|---------|-------------------------------|--------|
|                                                                                      |   |                      | 2006    |                          |   | 2005 |   |
|                                                                                      |   |                      |    |                          |   |   |   |
| Term                  loan payable under Bank of America Credit Agreement, interest based |   |                      |    |                          |   |   |   |
| on                  LIBOR and Prime Rates (8.38% - 9.50%), due through 2009               |   | $                         | 13,105  |                          | $      | 15,714 |   |
| Revolving                  loans payable under the Bank of America Credit Agreement,      |   |                      |    |                          |   |   |   |
| interest                  based on LIBOR and Prime Rates (8.00% - 9.25%)                  |   |                      | 49,056  |                          |   | 41,946 |   |
| Total                  debt                                                               |   |                      | 62,161  |                          |   | 57,660 |   |
| Less                  revolving loans, classified as current (see below)                  |   |                      | (49,056 | )                             |   | (41,946 | ) |
| Less                  current maturities                                                  |   |                      | (2,857  | )                             |   | (2,857 | ) |
| Long-term                  debt                                                           |   | $                         | 10,248  |                          | $      | 12,857 |   |
|                                                                                      |   |                      |    |                          |   |   |   |

| 2006 | $      | 1,429 |
|------|--------|-------|
| 2007 |   | 2,857 |
| 2008 |   | 2,857 |
| 2009 |   | 5,962 |

** **

----

----

*Minimum      Availability*

*Fixed      Charge Coverage Ratio*

*Capital      Expenditures*

*Leverage      Ratio*

*Balance      Sheet Classification of Borrowings Outstanding under Revolving Credit Agreements      that Include Both a Subjective Acceleration Clause and a Lock-Box      Arrangement*

----

|                                                      |   | Pension                  Benefits |   |
|-----------------------------------------------------------|--------|-----------------------------------|--------|
|                                                      |   | Three                  Months     |   | Six                  Months |   |
|                                                           |   | Ended                  June 30,   |   | Ended                  June 30, |   |
|                                                      |   |                              | 2006   |   |   | 2005 |   |   | 2006 |   |   | 2005 |   |
| Components                  of net periodic benefit cost: |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Service                  cost                             |   | $                                 | 2      |   | $ | 2 |   | $ | 4 |   | $ | 4 |   |
| Interest                  cost                            |   |                              | 22     |   |   | 24 |   |   | 44 |   |   | 47 |   |
| Expected                  return on plan assets           |   |                              | (22    | ) |   | (26 | ) |   | (44 | ) |   | (52 | ) |
| Amortization                  of net gain                 |   |                              | 14     |   |   | 19 |   |   | 28 |   |   | 39 |   |
| Net                  periodic benefit cost                |   | $                                 | 16     |   | $ | 19 |   | $ | 32 |   | $ | 38 |   |
|                                                      |   |                              |   |   |   |   |   |   |   |   |   |   |   |

|                                                      |   | Other                  Benefits |   |
|-----------------------------------------------------------|--------|---------------------------------|--------|
|                                                      |   | Three                  Months   |   | Six                  Months |   |
|                                                      |   | Ended                  June 30, |   | Ended                  June 30, |   |
|                                                      |   |                            | 2006   |   |   | 2005 |   |   | 2006 |   |   | 2005 |   |
| Components                  of net periodic benefit cost: |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  cost                            |   | $                               | 36     |   | $ | 48 |   | $ | 72 |   | $ | 95 |   |
| Amortization                  of prior service cost       |   |                            | 14     |   |   | 15 |   |   | 28 |   |   | 30 |   |
| Amortization                  of net gain                 |   |                            | 10     |   |   | 15 |   |   | 20 |   |   | 30 |   |
| Net                  periodic benefit cost                |   | $                               | 60     |   | $ | 78 |   | $ | 120 |   | $ | 155 |   |
|                                                      |   |                            |   |   |   |   |   |   |   |   |   |   |   |

----

----

|                                                          |   |    |      |   |     |   |        | Weighted                        |                        |   |   |   |
|----------------------------------------------------------|--------|---------|-----------|--------|----------|--------|-------------|---------------------------------|-----------------------------|--------|--------|--------|
|                                                          |   |    |      |   | Weighted |   | Average     |                            | Aggregate                   |   |
|                                                          |   |    |      |   | Average  |   | Remaining   |                            | Intrinsic                   |   |
|                                                          |   |    |      |   | Exercise |   | Contractual |                            | Value                       |   |
|                                                          |   | Options |      | Price  |     | Life   |        | (in                  thousands) |
|                                                     |   |    |      |   |     |   |        |                            |                        |   |   |   |   |
| Outstanding                  at December 31, 2005        |   |    | 1,856,350 |   | $        | 3.99   |        |                            |                        |   |   |   |   |
|                                                     |   |    |      |   |     |   |        |                            |                        |   |   |   |   |
| Granted                                                  |   |    | -         |   | $        | 0.00   |        |                            |                        |   |   |   |   |
| Exercised                                                |   |    | (45,000   | )      | $        | 3.26   |        |                            |                        |   |   |   |   |
| Expired                                                  |   |    | (6,000    | )      | $        | 13.57  |        |                            |                        |   |   |   |   |
| Cancelled                                                |   |    | (31,000   | )      | $        | 5.12   |        |                            |                        |   |   |   |   |
|                                                     |   |    |      |   |     |   |        |                            |                        |   |   |   |   |
| Outstanding                  at June 30, 2006            |   |    | 1,774,350 |   | $        | 3.96   |        |                            | 6.99                  years |   | $      | -      |   |
|                                                     |   |    |      |   |     |   |        |                            |                        |   |   |   |   |
| Vested                  and Exercisable at June 30, 2006 |   |    | 1,094,350 |   | $        | 4.76   |        |                            | 5.73                  years |   | $      | -      |   |
|                                                     |   |    |      |   |     |   |        |                            |                        |   |   |   |   |

----

| Non-Vested                  at December 31, 2005    |   |   | 85,115  |   |
|-----------------------------------------------------|--------|--------|---------|--------|
|                                                |   |   |    |   |
| Granted                                             |   |   | 20,000  |   |
| Vested                                              |   |   | (44,997 | )      |
|                                                |   |   |    |   |
| Non-Vested                  at June 30, 2006        |   |   | 60,118  |   |
|                                                |   |   |    |   |
| Total                  Outstanding at June 30, 2006 |   |   | 837,281 |   |
|                                                |   |   |    |   |

*General      Environmental Claims*

----

*W.J.      Smith Wood Preserving Company (“W.J. Smith”)*

*Asbestos      Claims *

----

*Non-Environmental      Litigation - Banco del Atlantico, S.A.*

*Banco      del Atlantico, S.A. v. Woods Industries, Inc., et al.*
** **
*Civil      Action No.*
*** ***
*L-96-139      (now *
*      U.S.      District Court, Southern District of Indiana).*

*with      prejudice *

----

*Other      Claims*

----

|                                                |    |                                               |   |   |    |   |   | Three                  months ended June 30, |   | Six                  months ended June 30, |    |
|------------------------------------------------|---------|----------------------------------------------------|--------|--------|---------|--------|--------|----------------------------------------------|--------|--------------------------------------------|---------|
|                                           |    |                                               |   |   |    |   |   |                                         | 2006   |                                       |    | 2005 |   |   | 2006 |   |   | 2005 |   |
| Maintenance                  Products Group    |    |                                               |   |   |    |   |   |                                         |   |                                       |    |   |   |   |   |   |   |   |   |
| Net                  external sales            |    |                                               |   |   |    |   |   | $                                            | 58,334 |                                       | $       | 59,494 |   | $ | 112,744 |   | $ | 116,706 |   |
| Operating                  income (loss)       |    |                                               |   |   |    |   |   |                                         | 11     |                                       |    | (1,401 | ) |   | 739 |   |   | (5,914 | ) |
| Operating                  margin (deficit)    |    |                                               |   |   |    |   |   |                                         | 0.0    | %                                          |    | (2.4 | %) |   | 0.7 | % |   | (5.1 | %) |
| Depreciation                  and amortization |    |                                               |   |   |    |   |   |                                         | 2,326  |                                       |    | 2,556 |   |   | 4,657 |   |   | 4,962 |   |
| Capital                  expenditures          |    |                                               |   |   |    |   |   |                                         | 855    |                                       |    | 1,502 |   |   | 1,508 |   |   | 2,792 |   |
|                                           |    |                                               |   |   |    |   |   |                                         |   |                                       |    |   |   |   |   |   |   |   |   |
| Electrical                  Products Group     |    |                                               |   |   |    |   |   |                                         |   |                                       |    |   |   |   |   |   |   |   |   |
| Net                  external sales            |    |                                               |   |   |    |   |   | $                                            | 33,746 |                                       | $       | 34,341 |   | $ | 59,591 |   | $ | 68,381 |   |
| Operating                  income              |    |                                               |   |   |    |   |   |                                         | 1,922  |                                       |    | 1,154 |   |   | 1,981 |   |   | 4,067 |   |
| Operating                  margin              |    |                                               |   |   |    |   |   |                                         | 5.7    | %                                          |    | 3.4 | % |   | 3.3 | % |   | 5.9 | % |
| Depreciation                  and amortization |    |                                               |   |   |    |   |   |                                         | 223    |                                       |    | 349 |   |   | 462 |   |   | 703 |   |
| Capital                  expenditures          |    |                                               |   |   |    |   |   |                                         | 173    |                                       |    | 44 |   |   | 336 |   |   | 151 |   |
|                                           |    |                                               |   |   |    |   |   |                                         |   |                                       |    |   |   |   |   |   |   |   |   |
| Total                                          |    |                                               |   |   |    |   |   |                                         |   |                                       |    |   |   |   |   |   |   |   |   |
| Net                  external sales            |  - |  Operating                segments            |   | $      | 92,080  |   | $      | 93,835                                       |   | $                                          | 172,335 |   | $ | 185,087 |   |
|                                           |    |  Total                                        |   | $      | 92,080  |   | $      | 93,835                                       |   | $                                          | 172,335 |   | $ | 185,087 |   |
|                                           |    |                                               |   |   |    |   |   |                                         |   |                                       |    |   |   |   |  |   |   |   |   |
| Operating                  income (loss)       | -       |   Operating                  segments    |   | $      | 1,933   |   | $      | (247                                         | )      | $                                          | 2,720   |   | $ | (1,847 | ) |
|                                           | -       |  Unallocated                corporate         |   |   | (2,341  | )      |   | (4,586                                       | )      |                                       | (5,416  | ) |   | (6,252 | ) |
|                                           | -       |  Severance,                restructuring,     |   |   |    |   |   |                                         |   |                                       |    |   |   |   |   |
|                                           |    |  and                related charges      |   |   | (71     | )      |   | (466                                         | )      |                                       | (853    | ) |   | (638 | ) |
|                                           |  - |  Gain                (loss) on sale of assets |   |   | 48      |   |   | 352                                          |   |                                       | (54     | ) |   | 166 |   |
|                                                |    |  Total                                   |   | $      | (431    | )      | $      | (4,947                                       | )      | $                                          | (3,603  | ) | $ | (8,571 | ) |
|                                           |    |                                               |   |   |    |   |   |                                         |   |                                       |    |  |   |   |  |   |   |   |   |
|                                           |    |                                               |   |   |    |        |   |                                         |   |                                       |    |  |   |   |  |   |   |   |   |
| Depreciation                  and amortization |  - |  Operating                segments            |   | $      | 2,549   |   | $      | 2,905                                        |   | $                                          | 5,119   |   | $ | 5,665 |   |
|                                           |  - |  Unallocated                corporate         |   |   | 38      |   |   | 36                                           |   |                                       | 72      |   |   | 40 |   |
|                                                |    |  Total                                   |   | $      | 2,587   |   | $      | 2,941                                        |   | $                                          | 5,191   |   | $ | 5,705 |   |
|                                           |    |                                               |   |   |    |   |   |                                         |   |                                       |    |   |   |   |   |   |   |   |   |
| Capital                  expenditures          |  - |  Operating                segments            |   | $      | 1,028   |   | $      | 1,546                                        |   | $                                          | 1,844   |   | $ | 2,943 |   |
|                                           |  - |  Unallocated                corporate         |   |   | 13      |   |   | -                                            |   |                                       | 13      |   |   | - |   |
|                                           |  - |  Discontinued                operations       |   |   | -       |   |   | 11                                           |   |                                       | -       |   |   | 11 |   |
|                                           |    |  Total                                   |   | $      | 1,041   |   | $      | 1,557                                        |   | $                                          | 1,857   |   | $ | 2,954 |   |
|                                           |    |                                               |   |   |    |   |   |                                         |   |                                       |    |   |   |   |   |   |   |   |   |
|                                           |    |                                               |   |   |    |   |   | June                  30,                    |   | December                  31,              |    |   |   |   |   |   |   |
|                                           |    |                                               |   |   |    |   |   |                                         | 2006   |                                       |    | 2005 |   |   |   |   |   |   |   |
| Total                  assets                  |  - |  Maintenance                Products Group    |   | $      | 119,440 |   | $      | 125,446                                      |   |                                       |    |   |   |   |   |
|                                           |  - |  Electrical                Products Group     |   |   | 59,570  |   |   | 66,744                                       |   |                                       |    |   |   |   |   |
|                                           |  - |  Other                [a]                     |   | 5,021  |    |   | 9,957  |                                         |   |                                       |    |   |   |   |
|                                           |  - |  Unallocated                corporate         |   |   | 6,349   |   |   | 10,536                                       |   |                                       |    |   |   |   |   |
|                                                |    |  Total                                   |   | $      | 190,380 |   | $      | 212,683                                      |   |                                       |    |   |   |   |   |
|                                           |    |                                               |   |   |    |   |   |                                         |        |                                       |    |  |   |   |   |   |   |   |   |

----

|                                                                                   |   | Three                  Months Ended June 30, |   | Six                  Months Ended June 30, |   |
|-----------------------------------------------------------------------------------|--------|----------------------------------------------|--------|--------------------------------------------|--------|
|                                                                              |   |                                         | 2006   |                                       |   | 2005 |   |   | 2006 |   |   | 2005 |   |
| Consolidation                  of St. Louis manufacturing/distribution facilities |   | $                                            | -      |                                       | $      | (101 | ) | $ | 699 |   | $ | (46 | ) |
| Consolidation                  of Glit facilities                                 |   |                                         | -      |                                       |   | 567 |   |   | - |   |   | 682 |   |
| Consolidation                  of administrative functions for CCP                |   |                                         | -      |                                       |   | - |   |   | - |   |   | 21 |   |
| Shutdown                  of Woods Canada manufacturing                           |   |                                         | -      |                                       |   | - |   |   | - |   |   | (19 | ) |
| Corporate                  office relocation                                      |   |                                         | 71     |                                       |   | - |   |   | 154 |   |   | - |   |
| Total                  severance, restructuring and related charges               |   | $                                            | 71     |                                       | $      | 466 |   | $ | 853 |   | $ | 638 |   |
|                                                                              |   |                                         |   |                                       |   |   |   |   |   |   |   |   |   |

|                                                            |   |   |   |                          | One-time    |                       | Contract    |   |
|-----------------------------------------------------------------|--------|--------|--------|-------------------------------|-------------|----------------------------|-------------|--------|
|                                                                 |   |   |   |                          | Termination |                       | Termination |   |
|                                                                 |   | Total  |   | Benefits                  [a] |        | Costs                  [b] |        |
| Restructuring                  liabilities at December 31, 2005 |   | $      | 1,845  |                          | $           | -                          |        | $      | 1,845 |   |
| Additions                                                       |   |   | 699    |                          |        | -                          |        |   | 699 |   |
| Payments                                                        |   |   | (359   | )                             |        | -                          |        |   | (359 | ) |
| Restructuring                  liabilities at June 30, 2006     |   | $      | 2,185  |                          | $           | -                          |        | $      | 2,185 |   |
|                                                            |   |   |   |                          |        |                       |        |   |   |   |

----

|                                                                 |   |   |   |                          | One-time    |                       | Contract    |   |
|-----------------------------------------------------------------|--------|--------|--------|-------------------------------|-------------|----------------------------|-------------|--------|
|                                                                 |   |   |   |                          | Termination |                       | Termination |   |
|                                                                 |   | Total  |   | Benefits                  [a] |        | Costs                  [b] |        |
| Restructuring                  liabilities at December 31, 2005 |   | $      | 505    |                          | $           | 255                        |        | $      | 250 |   |
| Additions                                                       |   |   | -      |                          |        | -                          |        |   | - |   |
| Payments                                                        |   |   | (166   | )                             |        | (166                       | )           |   | - |   |
| Restructuring                  liabilities at June 30, 2006     |   | $      | 339    |                          | $           | 89                         |        | $      | 250 |   |
|                                                            |   |   |   |                          |        |                       |        |   |   |   |

|                                                            |   |   |   |                          | One-time    |                       | Contract    |   |
|-----------------------------------------------------------------|--------|--------|--------|-------------------------------|-------------|----------------------------|-------------|--------|
|                                                            |   |   |   |                          | Termination |                       | Termination |   |
|                                                                 |   | Total  |   | Benefits                  [a] |        | Costs                  [b] |        |
| Restructuring                  liabilities at December 31, 2005 |   | $      | 195    |                          | $           | 20                         |        | $      | 175 |   |
| Additions                                                       |   |   | -      |                          |        | -                          |        |   | - |   |
| Payments                                                        |   |   | (77    | )                             |        | (1                         | )           |   | (76 | ) |
| Restructuring                  liabilities at June 30, 2006     |   | $      | 118    |                          | $           | 19                         |        | $      | 99 |   |
|                                                            |   |   |   |                          |        |                       |        |   |   |   |

----

|                                                                 |   |   |   |                          | One-time    |                       | Contract    |   |
|-----------------------------------------------------------------|--------|--------|--------|-------------------------------|-------------|----------------------------|-------------|--------|
|                                                            |   |   |   |                          | Termination |                       | Termination |   |
|                                                            |   | Total  |   | Benefits                  [a] |        | Costs                  [b] |        |
| Restructuring                  liabilities at December 31, 2005 |   | $      | 717    |                          | $           | -                          |        | $      | 717 |   |
| Additions                                                       |   |   | -      |                          |        | -                          |        |   | - |   |
| Payments                                                        |   |   | (78    | )                             |        | -                          |        |   | (78 | ) |
| Restructuring                  liabilities at June 30, 2006     |   | $      | 639    |                          | $           | -                          |        | $      | 639 |   |
|                                                            |   |   |   |                          |        |                       |        |   |   |   |

|                                                                 |   | One-time                      |   |
|-----------------------------------------------------------------|--------|-------------------------------|--------|
|                                                            |   | Termination                   |   |
|                                                            |   | Benefits                  [a] |   |
| Restructuring                  liabilities at December 31, 2005 |   | $                             | 157    |   |
| Additions                                                       |   |                          | 154    |   |
| Payments                                                        |   |                          | (311   | ) |
| Restructuring                  liabilities at June 30, 2006     |   | $                             | -      |   |
|                                                            |   |                          |   |   |

|                                                            |   |   |   |                          |        |                       |        |   |   |   |
|-----------------------------------------------------------------|--------|--------|--------|-------------------------------|-------------|----------------------------|-------------|--------|--------|--------|
|                                                            |   |   |   |                          | One-time    |                       | Contract    |   |
|                                                                 |   |   |   |                          | Termination |                       | Termination |   |
|                                                            |   | Total  |   | Benefits                  [a] |        | Costs                  [b] |        |
| Restructuring                  liabilities at December 31, 2005 |   | $      | 3,419  |                          | $           | 432                        |        | $      | 2,987  |   |
| Additions                                                       |   |   | 853    |                          |        | 154                        |        |   | 699    |   |
| Payments                                                        |   |   | (991   | )                             |        | (478                       | )           |   | (513   | )      |
| Restructuring                  liabilities at June 30, 2006 [c] |   | $      | 3,281  |                          | $           | 108                        |        | $      | 3,173  |   |
|                                                            |   |   |   |                          |        |                       |        |   |        |   |

----

|                                                                 |   |   |   |   | Maintenance |   | Electrical |      |   |   |   |
|-----------------------------------------------------------------|--------|--------|--------|--------|-------------|--------|------------|-----------|--------|--------|--------|
|                                                                 |   |   |   |   | Products    |   | Products   |      |   |   |   |
|                                                                 |   | Total  |   | Group  |        | Group  |       | Corporate |   |
| Restructuring                  liabilities at December 31, 2005 |   | $      | 3,419  |   | $           | 2,350  |       | $         | 912    |   | $      | 157 |   |
| Additions                                                       |   |   | 853    |   |        | 699    |       |      | -      |   |   | 154 |   |
| Payments                                                        |   |   | (991   | )      |        | (525   | )          |      | (155   | )      |   | (311 | ) |
| Restructuring                  liabilities at June 30, 2006     |   | $      | 3,281  |   | $           | 2,524  |       | $         | 757    |   | $      | - |   |
|                                                            |   |   |   |   |        |   |       |      |   |   |   |   |   |

|                                 |   |   |   |   | Maintenance |   | Electrical |      |   |   |   |
|---------------------------------|--------|--------|--------|--------|-------------|--------|------------|-----------|--------|--------|--------|
|                            |   |   |   |   | Products    |   | Products   |      |   |   |   |
|                                 |   | Total  |   | Group  |        | Group  |       | Corporate |   |
| 2006                            |   | $      | 944    |   | $           | 707    |       | $         | 237    |   | $      | - |   |
| 2007                            |   |   | 656    |   |        | 412    |       |      | 244    |   |   | - |   |
| 2008                            |   |   | 610    |   |        | 359    |       |      | 251    |   |   | - |   |
| 2009                            |   |   | 357    |   |        | 332    |       |      | 25     |   |   | - |   |
| 2010                            |   |   | 348    |   |        | 348    |       |      | -      |   |   | - |   |
| Thereafter                      |   |   | 366    |   |        | 366    |       |      | -      |   |   | - |   |
| Total                  Payments |   | $      | 3,281  |   | $           | 2,524  |       | $         | 757    |   | $      | - |   |
|                            |   |   |   |   |        |   |       |      |   |   |   |   |   |

----

|                                              |   | June                  30, |    | December                  31, |   |
|----------------------------------------------|--------|---------------------------|---------|-------------------------------|--------|
|                                         |   |                      | 2006    |                          |   | 2005 |   |
|                                         |   |                      |    |                          |   |   |   |
| Current                  assets:             |   |                      |    |                          |   |   |   |
| Accounts                  receivable, net    |   | $                         | 2,804   |                          | $      | 2,419 |   |
| Inventories,                  net            |   |                      | -       |                          |   | 3,422 |   |
| Other                  current assets        |   |                      | -       |                          |   | 5 |   |
|                                         |   | $                         | 2,804   |                          | $      | 5,846 |   |
|                                         |   |                      |    |                          |   |   |   |
| Non-current                  assets:         |   |                      |    |                          |   |   |   |
| Intangibles,                  net            |   | $                         | -       |                          | $      | 166 |   |
| Property                  and equipment, net |   |                      | -       |                          |   | 1,728 |   |
|                                              |   | $                         |  - |                          | $      | 1,894 |   |
|                                         |   |                      |    |                          |   |   |   |
| Current                  liabilities:        |   |                      |    |                          |   |   |   |
| Accounts                  payable            |   | $                         | 344     |                          | $      | 1,741 |   |
| Accrued                  compensation        |   |                      | 395     |                          |   | 530 |   |
| Accrued                  expenses            |   |                      | 1,974   |                          |   | 1,219 |   |
|                                         |   | $                         | 2,713   |                          | $      | 3,490 |   |
|                                         |   |                      |    |                          |   |   |   |
| Other                  liabilities:          |   | $                         | -       |                          | $      | 1,486 |   |
|                                         |   |                      |    |                          |   |   |   |

|                                                                  |   | Three                  Months Ended June 30, |   | Six                  Months Ended June 30, |   |
|------------------------------------------------------------------|--------|----------------------------------------------|--------|--------------------------------------------|--------|
|                                                             |   |                                         | 2006   |                                       |   | 2005 |   |   | 2006 |   |   | 2005 |   |
|                                                             |   |                                         |   |                                       |   |   |   |   |   |   |   |   |   |
| Net                  sales                                       |   | $                                            | 3,102  |                                       | $      | 4,375 |   | $ | 6,743 |   | $ | 8,636 |   |
| Pre-tax                  profit                                  |   | $                                            | 545    |                                       | $      | 79 |   | $ | 337 |   | $ | 459 |   |
| Pre-tax                  gain on sale of discontinued operations |   | $                                            | 70     |                                       | $      | - |   | $ | 70 |   | $ | - |   |
|                                                             |   |                                         |   |                                       |   |   |   |   |   |   |   |   |   |

----

|                                                                                                |   | 2006                                                          |   | 2005                        |   |
|-----------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------|--------|-----------------------------|--------|
|                                                                                                     |   | (Amounts                  in Millions, Except Per Share Data) |   |
|                                                                                                |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
|                                                                                                |   | $                                                             |   | %                  to Sales |   | $ |   | %                  to Sales |   |
| Net                  sales                                                                          |   | $                                                             | 92.1   |                        |   | 100.0 |   | $ | 93.8 |   |   | 100.0 |   |
| Cost                  of goods sold                                                                 |   |                                                          | 79.8   |                        |   | 86.6 |   |   | 83.1 |   |   | 88.5 |   |
| Gross                  profit                                                                       |   |                                                          | 12.3   |                        |   | 13.4 |   |   | 10.7 |   |   | 11.5 |   |
| Selling,                  general and administrative expenses                                       |   |                                                          | 12.7   |                        |   | 13.8 |   |   | 15.6 |   |   | 16.6 |   |
| Severance,                  restructuring and related charges                                       |   |                                                          | 0.1    |                        |   | 0.1 |   |   | 0.4 |   |   | 0.5 |   |
| Gain                  of sale of assets                                                             |   |                                                          | (0.1   | )                           |   | (0.1 | ) |   | (0.4 | ) |   | (0.4 | ) |
| Operating                  loss                                                                     |   |                                                          | (0.4   | )                           |   | (0.5 | ) |   | (4.9 | ) |   | (5.3 | ) |
|                                                                                                |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
| Interest                  expense                                                                   |   |                                                          | (1.7   | )                           |   |   |   |   | (1.3 | ) |   |   |   |
| Other,                  net                                                                         |   |                                                          | -      |                        |   |   |   |   | - |   |   |   |   |
|                                                                                                |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations before provision (benefit)                         |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
| for                  income taxes                                                                   |   |                                                          | (2.1   | )                           |   |   |   |   | (6.2 | ) |   |   |   |
| Provision                  (benefit) for income taxes from continuing operations                    |   |                                                          | 0.4    |                        |   |   |   |   | (0.1 | ) |   |   |   |
|                                                                                                |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations                                                    |   |                                                          | (2.5   | )                           |   |   |   |   | (6.1 | ) |   |   |   |
| Income                  from operations of discontinued businesses                                  |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
| (net                  of tax)                                                                       |   |                                                          | 0.5    |                        |   |   |   |   | 0.1 |   |   |   |   |
| Gain                  on sale of discontinued businesses (net of tax)                               |   |                                                          | 0.1    |                        |   |   |   |   | - |   |   |   |   |
|                                                                                                |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
| Loss                  before cumulative effect of a change in accounting                  principle |   |                                                          | (1.9   | )                           |   |   |   |   | (6.0 | ) |   |   |   |
| Cumulative                  effect of a change in accounting principle                              |   |                                                          | -      |                        |   |   |   |   |   |   |   |   |   |
|                                                                                                |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                                           |   | $                                                             | (1.9   | )                           |   |   |   | $ | (6.0 | ) |   |   |   |
|                                                                                                |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
| Loss                  per share of common stock - basic and diluted:                                |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
|                                                                                                |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations                                                    |   | $                                                             | (0.31  | )                           |   |   |   | $ | (0.77 | ) |   |   |   |
| Discontinued                  operations                                                            |   |                                                          | 0.08   |                        |   |   |   |   | 0.01 |   |   |   |   |
| Cumulative                  effect of a change in accounting principle                              |   |                                                          | -      |                        |   |   |   |   | - |   |   |   |   |
| Net                  loss                                                                           |   | $                                                             | (0.23  | )                           |   |   |   | $ | (0.76 | ) |   |   |   |
|                                                                                                |   |                                                          |        |                        |   |   |   |   |  |   |   |   |   |

----

*Maintenance      Products Group*

*Electrical      Products Group*

|                                                               |   | Three                  months ended June 30, |   |                      |   |   |   |                      |   |
|---------------------------------------------------------------|--------|----------------------------------------------|--------|---------------------------|--------|--------|--------|---------------------------|--------|
|                                                               |   | (Amounts                  in Millions)       |   |                      |   |   |   |                      |   |
| **Operating                  income (loss)**                  |   | 2006                                         |   | 2005                      |   | Change |   |
|                                                          |   | $                                            |   | %                  Margin |   | $      |   | %                  Margin |   | $ |   | %                  Margin |   |
| Maintenance                  Products Group                   |   | $                                            | -      |                      |   | 0.0    |   | $                         | (1.4   | ) |   | (2.4 | ) | $ | 1.4 |   |   | 2.4 |   |
| Electrical                  Products Group                    |   |                                         | 1.9    |                      |   | 5.7    |   |                      | 1.1    |   |   | 3.4 |   |   | 0.8 |   |   | 2.3 |   |
| Unallocated                  corporate expense                |   |                                         | (2.3   | )                         |   |   |   |                      | (4.6   | ) |   |   |   |   | 2.3 |   |   |   |   |
|                                                          |   |                                         | (0.4   | )                         |   | (0.4   | )      |                      | (4.9   | ) |   | (5.2 | ) |   | 4.5 |   |   | 4.8 |   |
|                                                          |   |                                         |   |                      |   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Severance,                  restructuring and related charges |   |                                         | (0.1   | )                         |   |   |   |                      | (0.4   | ) |   |   |   |   | 0.3 |   |   |   |   |
| Gain                  on sale of assets                       |   |                                         | 0.1    |                      |   |   |   |                      | 0.4    |   |   |   |   |   | (0.3 | ) |   |   |   |
| Operating                  loss                               |   | $                                            | (0.4   | )                         |   | (0.5   | )      | $                         | (4.9   | ) |   | (5.3 | ) | $ | 4.5 |   |   | 4.8 |   |
|                                                          |   |                                         |   |                      |   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |

----

*Maintenance      Products Group*

*Electrical      Products Group*

*Corporate*

*Severance,      Restructuring and Related Charges*

----

|                                                                                                |   | 2006                                                          |   | 2005                        |   |
|-----------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------|--------|-----------------------------|--------|
|                                                                                                     |   | (Amounts                  in Millions, Except Per Share Data) |   |
|                                                                                                |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
|                                                                                                |   | $                                                             |   | %                  to Sales |   | $ |   |   | %                  to Sales |   |
| Net                  sales                                                                          |   | $                                                             | 172.3  |                        |   | 100.0 |   | $ | 185.1 |   |   | 100.0 |   |
| Cost                  of goods sold                                                                 |   |                                                          | 149.2  |                        |   | 86.6 |   |   | 165.5 |   |   | 89.4 |   |
| Gross                  profit                                                                       |   |                                                          | 23.1   |                        |   | 13.4 |   |   | 19.6 |   |   | 10.6 |   |
| Selling,                  general and administrative expenses                                       |   |                                                          | 25.8   |                        |   | 15.0 |   |   | 27.7 |   |   | 15.0 |   |
| Severance,                  restructuring and related charges                                       |   |                                                          | 0.8    |                        |   | 0.5 |   |   | 0.6 |   |   | 0.3 |   |
| Gain                  (loss) of sale of assets                                                      |   |                                                          | 0.1    |                        |   | 0.0 |   |   | (0.1 | ) |   | (0.1 | ) |
| Operating                  loss                                                                     |   |                                                          | (3.6   | )                           |   | (2.1 | ) |   | (8.6 | ) |   | (4.6 | ) |
| Interest                  expense                                                                   |   |                                                          | (3.5   | )                           |   |   |   |   | (2.6 | ) |   |   |   |
| Other,                  net                                                                         |   |                                                          | 0.4    |                        |   |   |   |   | - |   |   |   |   |
|                                                                                                |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations before provision (benefit)                         |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
| for                  income taxes                                                                   |   |                                                          | (6.7   | )                           |   |   |   |   | (11.2 | ) |   |   |   |
| Provision                  (benefit) for income taxes from continuing operations                    |   |                                                          | 0.6    |                        |   |   |   |   | - |   |   |   |   |
|                                                                                                |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations                                                    |   |                                                          | (7.3   | )                           |   |   |   |   | (11.2 | ) |   |   |   |
| (Loss)                  income from operations of discontinued businesses                           |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
| (net                  of tax)                                                                       |   |                                                          | 0.3    |                        |   |   |   |   | 0.5 |   |   |   |   |
| Loss                  on sale of discontinued businesses (net of tax)                               |   |                                                          | 0.1    |                        |   |   |   |   | - |   |   |   |   |
|                                                                                                |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
| Loss                  before cumulative effect of a change in accounting                  principle |   |                                                          | (6.9   | )                           |   |   |   |   | (10.7 | ) |   |   |   |
| Cumulative                  effect of a change in accounting principle (net of tax)                 |   |                                                          | (0.8   | )                           |   |   |   |   |   |   |   |   |   |
|                                                                                                |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                                           |   | $                                                             | (7.7   | )                           |   |   |   | $ | (10.7 | ) |   |   |   |
|                                                                                                |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
| Loss                  per share of common stock - basic and diluted:                                |   |                                                          |   |                        |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations                                                    |   | $                                                             | (0.92  | )                           |   |   |   | $ | (1.40 | ) |   |   |   |
| Discontinued                  operations                                                            |   |                                                          | 0.05   |                        |   |   |   |   | 0.05 |   |   |   |   |
| Cumulative                  effect of a change in accounting principle                              |   |                                                          | (0.09  | )                           |   |   |   |   | - |   |   |   |   |
| Net                  loss                                                                           |   | $                                                             | (0.96  | )                           |   |   |   | $ | (1.35 | ) |   |   |   |
|                                                                                                |   |                                                          |        |                        |   |   |   |   |  |   |   |   |   |

----

*Maintenance      Products Group*

*Electrical      Products Group*

|                                                               |   | Six                  months ended June 30, |   |                      |   |   |   |                      |   |
|---------------------------------------------------------------|--------|--------------------------------------------|--------|---------------------------|--------|--------|--------|---------------------------|--------|
|                                                          |   | (Amounts                  in Millions)     |   |                      |   |   |   |                      |   |
| **Operating                  income (loss)**                  |   | 2006                                       |   | 2005                      |   | Change |   |
|                                                          |   | $                                          |   | %                  Margin |   | $      |   | %                  Margin |   | $ |   | %                  Margin |   |
| Maintenance                  Products Group                   |   | $                                          | 0.7    |                      |   | 0.7    |   | $                         | (5.9   | ) |   | (5.1 | ) | $ | 6.6 |   |   | 5.8 |   |
| Electrical                  Products Group                    |   |                                       | 2.0    |                      |   | 3.3    |   |                      | 4.1    |   |   | 5.9 |   |   | (2.1 | ) |   | (2.6 | ) |
| Unallocated                  corporate expense                |   |                                       | (5.4   | )                         |   |   |   |                      | (6.3   | ) |   |   |   |   | 0.9 |   |   |   |   |
|                                                          |   |                                       | (2.7   | )                         |   | (1.6   | )      |                      | (8.1   | ) |   | (4.4 | ) |   | 5.4 |   |   | 2.8 |   |
|                                                          |   |                                       |   |                      |   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Severance,                  restructuring and related charges |   |                                       | (0.8   | )                         |   |   |   |                      | (0.6   | ) |   |   |   |   | (0.2 | ) |   |   |   |
| (Loss)                  gain on sale of assets                |   |                                       | (0.1   | )                         |   |   |   |                      | 0.1    |   |   |   |   |   | (0.2 | ) |   |   |   |
| Operating                  loss                               |   | $                                          | (3.6   | )                         |   | (2.1   | )      | $                         | (8.6   | ) |   | (4.6 | ) | $ | 5.0 |   |   | 2.5 |   |
|                                                          |   |                                       |   |                      |   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |

*Maintenance      Products Group*

----

*Electrical      Products Group*

*Corporate*

*Severance,      Restructuring and Related Charges*

----

** **

----

*Minimum      Availability*

*Fixed      Charge Coverage Ratio*

*Capital      Expenditures*

*Leverage      Ratio*

----

*Balance      Sheet Classification of Borrowings Outstanding under Revolving Credit Agreements      that Include Both a Subjective Acceleration Clause and a Lock-Box      Arrangement*

| Contractual                  Cash Obligations    |   | Total  |    |  Due                  in less than 1 year |   |  Due                  in 1-3 years |   |  Due                  in 3-5 years |   |  Due                  after 5 years |   |
|--------------------------------------------------|--------|--------|---------|------------------------------------------------|--------|-----------------------------------------|--------|-----------------------------------------|--------|------------------------------------------|--------|
| Revolving                  credit facility [a]   |   | $      | 49,056  |                                           | $      | 49,056                                  |   | $                                       | -      |                                     | $      | - |   | $ | - |   |
| Term                  loans                      |   |   | 13,105  |                                           |   | 2,857                                   |   |                                    | 10,248 |                                     |   | - |   |   | - |   |
| Interest                  on debt [b]            |   |   | 12,135  |                                           |   | 4,786                                   |   |                                    | 7,349  |                                     |   | - |   |   | - |   |
| Operating                  leases [c]            |   |   | 25,673  |                                           |   | 7,781                                   |   |                                    | 12,373 |                                     |   | 4,571 |   |   | 948 |   |
| Severance                  and restructuring [c] |   |   | 1,535   |                                           |   | 804                                     |   |                                    | 445    |                                     |   | 220 |   |   | 66 |   |
| SESCO                  payable to Montenay [d]   |   |   | 1,900   |                                           |   | 1,900                                   |   |                                    | -      |                                     |   | - |   |   | - |   |
| Post-retirement                  benefits [e]    |   |   | 5,831   |                                           |   | 929                                     |   |                                    | 1,522  |                                     |   | 1,318 |   |   | 2,062 |   |
| Total                  Contractual Obligations   |   | $      | 109,235 |                                           | $      | 68,113                                  |   | $                                       | 31,937 |                                     | $      | 6,109 |   | $ | 3,076 |   |
|                                             |   |   |    |                                           |   |                                    |   |                                    |   |                                     |   |   |   |   |   |   |
|                                             |   |   |    |                                           |   |                                    |   |                                    |   |                                     |   |   |   |   |   |   |
| Other                  Commercial Commitments    |   | Total  |    | Due                  in less than  1 year |   |  Due                  in 1-3 years |   |  Due                  in 3-5 years |   |  Due                  after 5 years |   |
| Commercial                  letters of credit    |   | $      | 655     |                                           | $      | 655                                     |   | $                                       | -      |                                     | $      | - |   | $ | - |   |
| Stand-by                  letters of credit      |   |   | 7,472   |                                           |   | 7,472                                   |   |                                    | -      |                                     |   | - |   |   | - |   |
| Guarantees                  [f]                  |   |   | -       |                                           |   | -                                       |   |                                    | -      |                                     |   | - |   |   | - |   |
| Total                  Commercial Commitments    |   | $      | 8,127   |                                           | $      | 8,127                                   |   | $                                       | -      |                                     | $      | - |   | $ | - |   |
|                                             |   |   |    |                                           |   |                                    |   |                                    |   |                                     |   |   |   |   |   |   |

----

----

*Operating      Activities*

*Investing      Activities*

*Financing      Activities*

|                                                                                   |   | Three                  Months Ended June 30, |   | Six                  Months Ended June 30, |   |
|-----------------------------------------------------------------------------------|--------|----------------------------------------------|--------|--------------------------------------------|--------|
|                                                                              |   |                                         | 2006   |                                       |   | 2005 |   |   | 2006 |   |   | 2005 |   |
| Consolidation                  of St. Louis manufacturing/distribution facilities |   | $                                            | -      |                                       | $      | (101 | ) | $ | 699 |   | $ | (46 | ) |
| Consolidation                  of Glit facilities                                 |   |                                         | -      |                                       |   | 567 |   |   | - |   |   | 682 |   |
| Consolidation                  of administrative functions for CCP                |   |                                         | -      |                                       |   | - |   |   | - |   |   | 21 |   |
| Shutdown                  of Woods Canada manufacturing                           |   |                                         | -      |                                       |   | - |   |   | - |   |   | (19 | ) |
| Corporate                  office relocation                                      |   |                                         | 71     |                                       |   | - |   |   | 154 |   |   | - |   |
| Total                  severance, restructuring and related charges               |   | $                                            | 71     |                                       | $      | 466 |   | $ | 853 |   | $ | 638 |   |
|                                                                              |   |                                         |   |                                       |   |   |   |   |   |   |   |   |   |

----

|                                             |   |  Total                  Expected Cost  |   |  Total                  Provision to Date |   |
|---------------------------------------------|--------|--------------------------------------------------|--------|------------------------------------------------|--------|
|                                        |   |                                             |   |                                           |   |   |   |
| Maintenance                  Products Group |   | $                                                | 21,942 |                                           | $      | 21,692 |   |
| Electrical                  Products Group  |   |                                             | 12,776 |                                           |   | 12,776 |   |
| Corporate                                   |   |                                             | 12,323 |                                           |   | 12,227 |   |
|                                        |   | $                                                | 47,041 |                                           | $      | 46,695 |   |
|                                        |   |                                             |   |                                           |   |   |   |

|                                                            |   |   |   |                          |        |                       |        |   |   |   |
|-----------------------------------------------------------------|--------|--------|--------|-------------------------------|-------------|----------------------------|-------------|--------|--------|--------|
|                                                                 |   |   |   |                          | One-time    |                       | Contract    |   |
|                                                                 |   |   |   |                          | Termination |                       | Termination |   |
|                                                                 |   | Total  |   | Benefits                  [a] |        | Costs                  [b] |        |
| Restructuring                  liabilities at December 31, 2005 |   | $      | 3,419  |                          | $           | 432                        |        | $      | 2,987  |   |
| Additions                                                       |   |   | 853    |                          |        | 154                        |        |   | 699    |   |
| Payments                                                        |   |   | (991   | )                             |        | (478                       | )           |   | (513   | )      |
| Restructuring                  liabilities at June 30, 2006 [c] |   | $      | 3,281  |                          | $           | 108                        |        | $      | 3,173  |   |
|                                                            |   |   |   |                          |        |                       |        |   |        |   |

----

** **

----

| -   | Increases                in the cost of, or in some cases continuation of, the current price                levels                of plastic resins, copper, paper board packaging, and other raw                materials. |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | Our                inability to reduce product costs, including manufacturing, sourcing,                freight, and other product costs. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------|

| -   | Greater                reliance on third parties for our finished goods as we increase the                portion of our manufacturing that is outsourced. |
|---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | Our                inability to reduce administrative costs through consolidation of                functions and systems improvements. |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| -   | Our                inability to execute our systems integration plan. |
|---------------|-----------------------------------------------------------------------|

| -   | Our                inability to successfully integrate our operations as a result of                the                facility consolidations. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | Our                inability to achieve product price increases, especially as they                relate to                potentially higher raw material                costs. |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| -   | The                potential impact of losing lines of business at large mass merchant                retailers in the discount and do-it-yourself                markets. |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | Competition                from foreign competitors. |
|---------------|------------------------------------------------------|

| -   | The                potential impact of rising interest rates on our LIBOR-based Bank                of                America Credit Agreement. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | Our                inability to meet covenants associated with the Bank of America Credit                Agreement. |
|---------------|---------------------------------------------------------------------------------------------------------------------|

| -   | The                potential impact of rising costs for insurance for properties and                various                forms of liabilities. |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | The                potential impact of changes in foreign currency exchange rates related                to                our foreign operations. |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | Labor                issues, including union activities that require an increase in production                costs or lead to a strike, thus impairing production and decreasing                sales.                We are also subject to labor relations issues at entities involved                in our                supply chain, including both suppliers and those involved in                transportation and shipping. |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | Changes                in significant laws and government regulations affecting environmental                compliance and income taxes. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------|

*Accounting      for Uncertainty in Income Taxes*

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| (a)   | Evaluation                of Disclosure Controls and                Procedures |
|-----------------|--------------------------------------------------------------------------------|

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| (b)   | Change                in Internal Controls |
|-----------------|--------------------------------------------|

| ·   | Implementation                of short term corrective actions in shipping and receiving                -                Revised shipping, receiving, physical inventory, period end cut-off                and                returned goods procedures have been issued. Training to reinforce                the                importance of the physical verification was provided to all appropriate                material handlers. Products loaded for shipment are now verified                against                system generated bill of ladings. A receiving log was implemented                in the                first quarter of 2005 and is reviewed at least weekly by the distribution                manager. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Establishment                of improved interim recording of raw material usage - The shop floor                module in PRMS (the facility’s ERP system) was activated on July 1, 2005.                Large raw material variances are now reviewed and/or isolated by                work                order to allow bill of material (“BOM”) corrections as required.                Miscellaneous inventory transactions are being downloaded and reviewed                at                least weekly by cost accounting. A supplemental system was also                re-implemented to allow the daily review of costed non-woven production                runs to identify process or material variances. The output of this                system                yields a daily cost per yard of non-woven material produced, as well                as an                average cost per yard over multiple batches/runs. This information                was                used as a reference point and allowed material cost verifications                with                PRMS formula BOMs. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Reestablishment                of a monthly physical inventory until the PRMS perpetual inventory                process                is re-implemented - This location’s monthly physical inventory was                reinstituted for the February 2005 accounting close. We continue                taking a                monthly physical inventory throughout the remaining part of 2005                and into                2006. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | Establishment                of security measures to mitigate the risk of theft - All employees                were issued parking permits to help identify on-site traffic of                non-employees. A security camera system was installed and became                operational in June 2005. Cameras provide monitoring of key plant                areas by                both security personnel and key                managers. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Improvement                in bill of material and routing accuracy - In July 2005, a BOM                accuracy project was completed which encompassed the review of the                most                significant BOMs across all product lines. Efforts are now ongoing                to                review remaining BOMs, prioritizing based on sales volumes and comparative                analysis with other BOMs of like material/sizes. All remaining significant                BOMs, based on volume levels, were updated by February 1,                2006. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Proper                staffing and planning of PRMS re-implementation - The PRMS                re-implementation was completed at the end of July 2005. The Material                Planning and Scheduling module of PRMS was completed in the fourth                quarter                of 2005. The total re-implementation was facilitated by a consultant                with                expertise with both PRMS and ERP system implementation across varied                industries. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Establishment                of procedures for production reporting and inventory transactions -                Detailed procedures for reporting of production in PRMS have been                issued.                The implementation of scanning for inventory transactions was completed                in                August and documented procedures were completed in September, 2005.                Any                additional procedures will be finalized and documented when they                are                validated. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Activation                of PRMS production and inventory system - The system was fully                activated on February 1, 2006 which allows the accumulation and reporting                of transactions, maintenance of perpetual inventory records, and                the                calculation of standard cost and related variances. The system will                continue to operate in parallel with the monthly physical inventory                until                all significant variances will be identified and                corrected. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| CLASS                I DIRECTORS:      |                     |                          |
|----------------------------------------|--------------------------|-------------------------------|
| Name                                   | Votes                For | Votes                Withheld |
| Robert                M. Baratta       | 7,214,652                | 366,177                       |
| Daniel                B. Carroll       | 7,275,701                | 305,128                       |
| Wallace                E. Carroll, Jr. | 7,274,258                | 306,571                       |
| Anthony                T. Castor III   | 7,482,647                | 98,182                        |

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| Votes                For | Votes                Against | Votes                Abstained |
|--------------------------|------------------------------|--------------------------------|
| 7,562,292                | 17,126                       | 1,410                          |

| **Exhibit****Number** |  **Exhibit                Title**                                                                                                                                                                                                                                                                                                                                   |     |
|-----------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
|                  |                                                                                                                                                                                                                                                                                                                                                                     |     |
| 2                | Preferred                Stock Purchase and Recapitalization Agreement, dated as of June 2,                2001                (incorporated by reference to Annex B to the Company’s Proxy Statement on                Schedule 14A filed June 8, 2001).                                                                                                     | *   |
| 3.1              | The                Amended and Restated Certificate of Incorporation of the Company                (incorporated by reference to Exhibit 3.1 of the Company’s Current Report                on Form 8-K on July 13, 2001).                                                                                                                                    | *   |
| 3.2              | The                By-laws of the Company, as amended (incorporated by reference to                Exhibit                3.1 of the Company’s Quarterly Report on Form 10-Q filed May 15,                2001).                                                                                                                                              | *   |
| 4.1              | Rights                Agreement dated as of January 13, 1995 between Katy and Harris Trust                and                Savings Bank as Rights Agent (incorporated by reference to Exhibit                2.1 of                the Company’s Form 8-A filed January 17, 1995).                                                                          | *   |
| 4.1a             | First                Amendment to Rights Agreement, dated as of October 30, 1996, between                Katy                and Harris Trust and Savings Bank as Rights Agent.                                                                                                                                                                                     | **  |
| 4.1b             | Second                Amendment to Rights Agreement, dated as of January 8, 1999, between                Katy                and LaSalle National Bank as Rights Agent (incorporated by reference                to                Exhibit 4.1(b) of the Company’s Annual Report on Form 10-K filed March 18,                1999).                           | *   |
| 4.1c             | Third                Amendment to Rights Agreement, dated as of March 30, 2001, between                Katy                and LaSalle Bank, N.A. as Rights Agent (incorporated by reference                to                Exhibit (e) (3) to the Company’s Solicitation/Recommendation Statement on                Schedule 14D-9 filed April 25, 2001).  | *   |
| 4.1d             | Forth                Amendment to Rights Agreement, dated as of June 2, 2001, between                Katy and                LaSalle Bank N.A. as Rights Agent.                                                                                                                                                                                                     | **  |
| 10.1             | Amended                and Restated Katy Industries, Inc. 1995 Long-Term Incentive                Plan.                                                                                                                                                                                                                                                             | **  |
| 10.2             | Katy                Industries, Inc. Non-Employee Director Stock Option Plan (incorporated                by                reference to Katy’s Registration Statement on Form S-8 filed June 21,                1995).                                                                                                                                       | *   |
| 10.3             | Katy                Industries, Inc. Supplemental Retirement and Deferral Plan effective                as of                June 1, 1995 (incorporated by reference to Exhibit 10.4 to Company’s                Annual Report on Form 10-K filed April 1, 1996).                                                                                             | *   |
| 10.4             | Katy                Industries, Inc. Directors’ Deferred Compensation Plan effective as of                June 1, 1995 (incorporated by reference to Exhibit 10.5 to Company’s                Annual Report on Form 10-K filed April 1, 1996).                                                                                                          | *   |
| 10.5             | Employment                Agreement dated as of June 1, 2005 between Anthony T. Castor III                and the                Company (incorporated by reference to Exhibit 10.1 to the Company’s                Quarterly Report on Form 10-Q filed August 15, 2005).                                                                                     | *   |

----

| 10.6   | Katy                Industries, Inc. 2005 Chief Executive Officer’s Plan (incorporated by                reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q                filed August 15, 2005).                                                                                                                                                                                                | *    |
|-------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|
| 10.7   | Employment                Agreement dated as of September 1, 2001 between Amir Rosenthal and                the                Company (incorporated by reference to Exhibit 10.2 to the Company’s                Quarterly Report on Form 10-Q dated November 14, 2001).                                                                                                                                                     | *    |
| 10.8   | Amendment                dated as of October 1, 2004 to the Employment Agreement dated as                of                September 1, 2001 between Amir Rosenthal and the Company (incorporated                by                reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q                dated November 10, 2004).                                                                          | *    |
| 10.9   | Katy                Industries, Inc. 2001 Chief Financial Officer’s Plan (incorporated by                reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q                dated November 14, 2001).                                                                                                                                                                                              | *    |
| 10.10  | Katy                Industries, Inc. 2002 Stock Appreciation Rights Plan, dated November                21,                2002, (incorporated by reference to Exhibit 10.17 to the Company’s Annual                Report on Form 10-K dated April 15, 2003).                                                                                                                                                                | *    |
| 10.11  | Katy                Industries, Inc. Executive Bonus Plan dated December 2001 (incorporated                by                reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K                dated April 15, 2005).                                                                                                                                                                                     | *    |
| 10.12  | Amended                and Restated Loan Agreement dated as of April 20, 2004 with Fleet                Capital                Corporation, (incorporated by reference to Exhibit 10.1 to the Company’s                Quarterly Report on Form 10-Q dated May 10, 2004).                                                                                                                                                     | *    |
| 10.13  | First                Amendment to Amended and Restated Loan Agreement dated as of June                29, 2004                with Fleet Capital Corporation, (incorporated by reference to Exhibit                10.1                to the Company’s Quarterly Report on Form 10-Q dated August 16,                2004).                                                                                                  | *    |
| 10.14  | Second                Amendment to Amended and Restated Loan Agreement dated as of March                29,                2005 with Fleet Capital Corporation (incorporated by reference to                Exhibit                10.1 of the Company’s Current Report on Form 8-K filed April 1,                2005).                                                                                                      | *    |
| 10.15  | Third                Amendment to Amended and Restated Loan Agreement dated as of April                13,                2005 with Fleet Capital Corporation (incorporated by reference to                Exhibit                10.17 of the Company’s Annual Report on Form 10-K dated April 15,                2005).                                                                                                     | *    |
| 10.16  | Fourth                Amendment to Amended and Restated Loan Agreement dated as of June                8, 2005                with Fleet Capital Corporation (incorporated by reference to Exhibit                10.2                of the Company’s Quarterly Report on Form 10-Q dated August 15,                2005).                                                                                                   | *    |
| 10.17  | Fifth                Amendment to Amended and Restated Loan Agreement dated as of August                4,                2005 with Fleet Capital Corporation (incorporated by reference to                Exhibit                10.3 of the Company’s Quarterly Report on Form 10-Q dated August 15,                2005).                                                                                                  | *    |
| 10.18  | Sixth                Amendment to Amended and Restated Loan Agreement dated as of March                9, 2006                with Fleet Capital Corporation (incorporated by reference to Exhibit                10.18                of the Company’s Annual Report on Form 10-K dated March 31,                2006).                                                                                                      | *    |
| 10.19  | ISDA                Master Agreement and Schedule dated as of August 11, 2005, between                Bank of                America, N.A. and Katy Industries, Inc. and Transaction Confirmation                dated                as of August 16, 2005 (incorporated by reference to Exhibit 10.1                of the                Company’s Quarterly Report on Form 10-Q dated November 15,                2005).  | *    |
| 10.20  | Amended                and Restated Katy Industries, Inc. 1997 Long-Term Incentive                Plan.                                                                                                                                                                                                                                                                                                                             | **   |
| 31.1   | CEO                Certification pursuant to Securities Exchange Act Rule 13a-14, as                adopted                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                               | **   |
| 31.2   | CFO                Certification pursuant to Securities Exchange Act Rule 13a-14, as                adopted                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                | **   |
| 32.1   | CEO                Certification required by 18 U.S.C. Section 1350, as adopted pursuant                to                Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                            | **#  |
| 32.2   | CFO                Certification required by 18 U.S.C. Section 1350, as adopted pursuant                to                Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                            | **#  |

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