----

----

----

----

|   | x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|---|---------------------------------------------------------------------------------------------------|

|   |  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|--------|----------------------------------------------------------------------------------------------------|

| Delaware                                                 |   | 22-1657413                              |
|----------------------------------------------------------|--------|-----------------------------------------|
| (State or other jurisdiction of                          |   | (I.R.S. Employer Identification Number) |
| incorporation or organization)                           |   |                                    |
|                                                     |   |                                    |
| 445 Broadhollow Road, Suite 100, Melville, New York |   | 11747                                   |
| (Address of principal executive offices)                 |   | (Zip Code)                              |

----

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

----

----

----

----

|                                      |                                                                                                                                       | PAGE      |
|-------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------|-----------|
|                                      |                                                                                                                                       |      |
| PART I — FINANCIAL INFORMATION |   2                                                                                                                                   |
|                                      |                                                                                                                                       |      |
| Item 1.                                   | Financial Statements                                                                                                                       |   2  |
|                                      |                                                                                                                                       |      |
|                                      | Consolidated Condensed Balance Sheets as of June 30, 2010 (unaudited) (restated) and December 31, 2009                           |   2  |
|                                      |                                                                                                                                       |      |
|                                      | Consolidated Condensed Statements of Operations for the three and six months ended June 30, 2010 (restated) and 2009 (unaudited) |   4  |
|                                      |                                                                                                                                       |      |
|                                      | Consolidated Condensed Statement of Shareholders’ Equity for the six months ended June 30, 2010 (restated)                 |   5  |
|                                      |                                                                                                                                       |      |
|                                      | Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 2010 (unaudited) (restated) and 2009                |   6  |
|                                      |                                                                                                                                       |      |
|                                      | Notes to Consolidated Condensed Financial Statements                                                                                       |   8  |
|                                      |                                                                                                                                       |      |
| Item 2.                                   | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                |   19 |
|                                      |                                                                                                                                       |      |
| Item 4                                    | Controls and Procedures                                                                                                                    |   27 |
|                                      |                                                                                                                                       |      |
| PART II — OTHER INFORMATION    |   28                                                                                                                                  |
|                                      |                                                                                                                                       |      |
| Item 6.                                   | Exhibits                                                                                                                                   |   28 |
|                                      |                                                                                                                                       |      |
| Signature                                 |   29                                                                                                                                  |
|                                      |                                                                                                                                       |
| Exhibit Index                        |   30                                                                                                                                  |

----

| Item 1.  | Financial Statements |
|--------------------|----------------------|

|                                           |   | June 30, 2010 |       |   | December 31, 2009 |   |
|------------------------------------------------|--------|-------------------------|------------|--------|-----------------------------|--------|
|                                           |   | (unaudited)             |       |   | (See Note 1)      |   |
|                                           |   | (Restated)              |       |   |                        |   |
| ASSETS                                         |   |                    |       |   |                        |   |
| CURRENT ASSETS                                 |   |                    |       |   |                        |   |
|                                           |   |                    |       |   |                        |   |
| Cash                                           |   | $                       | 820,000    |   |                        | $      | 546,000 |   |
| Accounts receivable — net                |   |                    | 7,596,000  |   |                        |   | 7,545,000 |   |
| Inventories - net                              |   |                    | 17,931,000 |   |                        |   | 19,746,000 |   |
| Notes and other receivables                    |   |                    | 92,000     |   |                        |   | 110,000 |   |
| Deferred income taxes — net              |   |                    | 670,000    |   |                        |   | 670,000 |   |
| Income tax refund receivable                   |   |                    | 49,000     |   |                        |   | 3,270,000 |   |
| Prepaid expenses and other current assets      |   |                    | 209,000    |   |                        |   | 169,000 |   |
| Assets of discontinued operations              |   |                    | 23,000     |   |                        |   | 10,797,000 |   |
| TOTAL CURRENT ASSETS                           |   |                    | 27,390,000 |   |                        |   | 42,853,000 |   |
|                                           |   |                    |       |   |                        |   |   |   |
| PROPERTY AND EQUIPMENT                         |   |                    |       |   |                        |   |   |   |
| Land                                           |   |                    | 1,550,000  |   |                        |   | 1,550,000 |   |
| Buildings and improvements                     |   |                    | 7,480,000  |   |                        |   | 7,476,000 |   |
| Machinery and equipment                        |   |                    | 16,199,000 |   |                        |   | 16,130,000 |   |
|                                           |   |                    | 25,229,000 |   |                        |   | 25,156,000 |   |
| Less accumulated depreciation and amortization |   |                    | 12,792,000 |   |                        |   | 11,990,000 |   |
| NET PROPERTY AND EQUIPMENT                     |   |                    | 12,437,000 |   |                        |   | 13,166,000 |   |
|                                           |   |                    |       |   |                        |   |   |   |
| GOODWILL                                       |   |                    | 5,150,000  |   |                        |   | 5,150,000 |   |
|                                           |   |                    |       |   |                        |   |   |   |
| OTHER INTANGIBLE ASSETS — net            |   |                    | 2,476,000  |   |                        |   | 2,651,000 |   |
|                                           |   |                    |       |   |                        |   |   |   |
| DEFERRED INCOME TAXES — net              |   |                    | 1,437,000  |   |                        |   | 1,437,000 |   |
|                                           |   |                    |       |   |                        |   |   |   |
| ASSETS OF DISCONTINUED OPERATIONS              |   |                    | —    |   |                        |   | 3,924,000 |   |
|                                           |   |                    |       |   |                        |   |   |   |
| OTHER ASSETS — net                       |   |                    | 509,000    |   |                        |   | 237,000 |   |
|                                           |   |                    |       |   |                        |   |   |   |
| TOTAL ASSETS                                   |   | $                       | 49,399,000 |   |                        | $      | 69,418,000 |   |

----

|                                                                                                                      |   | June 30, 2010 |       |   | December 31, 2009 |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|------------|--------|-----------------------------|--------|
|                                                                                                                      |   | (unaudited)             |       |   | (See Note 1)      |   |
|                                                                                                                      |   | (Restated)              |       |   |                        |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                 |   |                    |       |   |                        |   |
| CURRENT LIABILITIES                                                                                                       |   |                    |       |   |                        |   |
|                                                                                                                      |   |                    |       |   |                        |   |
| Short-term borrowings                                                                                                     |   | $                       | 11,300,000 |   |                        | $      | 16,300,000 |   |
| Accounts payable                                                                                                          |   |                    | 2,530,000  |   |                        |   | 1,396,000 |   |
| Other accrued liabilities                                                                                                 |   |                    | 3,020,000  |   |                        |   | 2,003,000 |   |
| Liabilities of discontinued operations                                                                                    |   |                    | 32,000     |   |                        |   | 9,719,000 |   |
| Current maturities of long-term debt                                                                                      |   |                    | 4,883,000  |   |                        |   | 5,015,000 |   |
| TOTAL CURRENT LIABILITIES                                                                                                 |   |                    | 21,765,000 |   |                        |   | 34,433,000 |   |
|                                                                                                                      |   |                    |       |   |                        |   |   |   |
| Long–term debt, less current maturities                                                                             |   |                    | 1,688,000  |   |                        |   | 4,148,000 |   |
| Liabilities of discontinued operations                                                                                    |   |                    | 313,000    |   |                        |   | 5,222,000 |   |
|                                                                                                                      |   |                    |       |   |                        |   |   |   |
| TOTAL LIABILITIES                                                                                                         |   |                    | 23,766,000 |   |                        |   | 43,803,000 |   |
|                                                                                                                      |   |                    |       |   |                        |   |   |   |
| COMMITMENTS AND CONTINGENCIES                                                                                             |   |                    |       |   |                        |   |   |   |
|                                                                                                                      |   |                    |       |   |                        |   |   |   |
| SHAREHOLDERS’ EQUITY                                                                                                |   |                    |       |   |                        |   |   |   |
| Preferred stock - $10 par; authorized - 2,000,000 shares; no shares issued                                                |   |                    | —    |   |                        |   | — |   |
| Common stock                                                                                                              |   |                    |       |   |                        |   |   |   |
| Class A - $1 par; authorized - 7,000,000 shares; issued - 3,956,000 at June 30, 2010 and December 31, 2009 |   |                    | 3,956,000  |   |                        |   | 3,956,000 |   |
| Class B - $1 par; authorized - 2,000,000 shares; no shares issued                                                    |   |                    | —    |   |                        |   | — |   |
| Additional paid-in capital                                                                                                |   |                    | 10,684,000 |   |                        |   | 10,615,000 |   |
| Retained earnings                                                                                                         |   |                    | 13,948,000 |   |                        |   | 13,999,000 |   |
| Treasury stock, at cost – 342,000 shares at June 30, 2010 and December 31, 2009                           |   |                    | (2,955,000 | )      |                        |   | (2,955,000 | ) |
|                                                                                                                      |   |                    |       |   |                        |   |   |   |
| TOTAL SHAREHOLDERS’ EQUITY                                                                                          |   |                    | 25,633,000 |   |                        |   | 25,615,000 |   |
|                                                                                                                      |   |                    |       |   |                        |   |   |   |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                          |   | $                       | 49,399,000 |   |                        | $      | 69,418,000 |   |

----

|                                                                                                                                                                                                             |   | Three months        |       |   | Six months          |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|------------|--------|--------------------------|--------|
|                                                                                                                                                                                                             |   | ended June 30, |       |   | ended June 30, |   |
|                                                                                                                                                                                                             |   | 2010                     |       |   | 2009                     |   |   | 2010 |   |   | 2009 |   |
|                                                                                                                                                                                                             |   | (Restated)               |       |   |                     |   |   | (Restated) |   |   |   |   |
|                                                                                                                                                                                                             |   |                     |       |   |                     |   |   |   |   |   |   |   |
| Net revenue                                                                                                                                                                                                      |   | $                        | 13,320,000 |   |                     | $      | 14,073,000 |   |   | $ | 24,467,000 |   |   | $ | 26,294,000 |   |
| Cost of sales                                                                                                                                                                                                    |   |                     | 8,630,000  |   |                     |   | 10,105,000 |   |   |   | 15,778,000 |   |   |   | 18,226,000 |   |
| Gross profit                                                                                                                                                                                                     |   |                     | 4,690,000  |   |                     |   | 3,968,000 |   |   |   | 8,689,000 |   |   |   | 8,068,000 |   |
| Selling, general and administrative expenses                                                                                                                                                                     |   |                     | 4,084,000  |   |                     |   | 3,823,000 |   |   |   | 8,401,000 |   |   |   | 8,026,000 |   |
| Operating income                                                                                                                                                                                                 |   |                     | 606,000    |   |                     |   | 145,000 |   |   |   | 288,000 |   |   |   | 42,000 |   |
| Interest expense                                                                                                                                                                                                 |   |                     | 337,000    |   |                     |   | 322,000 |   |   |   | 726,000 |   |   |   | 627,000 |   |
| Income (loss) from continuing operations before income taxes                                                                                                                                                     |   |                     | 269,000    |   |                     |   | (177,000 | ) |   |   | (438,000 | ) |   |   | (585,000 | ) |
| Income tax benefit                                                                                                                                                                                               |   |                     | —    |   |                     |   | (106,000 | ) |   |   | — |   |   |   | (175,000 | ) |
| Net income (loss) from continuing operations                                                                                                                                                                     |   |                     | 269,000    |   |                     |   | (71,000 | ) |   |   | (438,000 | ) |   |   | (410,000 | ) |
|                                                                                                                                                                                                             |   |                     |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from discontinued operations (no tax benefits for the three and six-month periods ended June 30, 2010 and $268,000 and $326,000 for the three and six-month periods ended June 30, 2009) |   |                     | 379,000    |   |                     |   | (494,000 | ) |   |   | 387,000 |   |   |   | (761,000 | ) |
|                                                                                                                                                                                                             |   |                     |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                                                                                                                                                                                |   | $                        | 648,000    |   |                     | $      | (565,000 | ) |   | $ | (51,000 | ) |   | $ | (1,171,000 | ) |
|                                                                                                                                                                                                             |   |                     |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted earnings (loss) per share                                                                                                                                                                      |   |                     |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Continuing operations                                                                                                                                                                                            |   | $                        | 0.07       |   |                     | $      | (0.02 | ) |   | $ | (0.12 | ) |   | $ | (0.11 | ) |
| Discontinued operations                                                                                                                                                                                          |   |                     | 0.10       |   |                     |   | (0.14 | ) |   |   | 0.10 |   |   |   | (0.21 | ) |
| Net income (loss)                                                                                                                                                                                                |   | $                        | 0.17       |   |                     | $      | (0.16 | ) |   | $ | (0.02 | ) |   | $ | (0.32 | ) |
|                                                                                                                                                                                                             |   |                     |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding:                                                                                                                                                                      |   |                     |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                             |   |                     |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted                                                                                                                                                                                                |   |                     | 3,615,000  |   |                     |   | 3,615,000 |   |   |   | 3,615,000 |   |   |   | 3,615,000 |   |

----

|                          |   |   |       |   | Class A CommonStock, $1 Par |   |      | Additionalpaid-in |   |   | Retained  |   |   | Treasury stock |       |
|-------------------------------|--------|--------|------------|--------|-------------------------------------------------|--------|-----------|-------------------|--------|--------|-----------|--------|--------|---------------------|------------|
|                          |   | Total  |       |   | Shares                                          |   |      | Amount            |   |   | capital   |   |   | earnings            |       |   | Shares |   |   | Amount |   |
|                          |   |   |       |   |                                            |   |      |              |   |   |      |   |   |                |       |   |   |   |   |   |   |
| Balance, January 1, 2010 |   | $      | 25,615,000 |   |                                            |   | 3,956,000 |              |   | $      | 3,956,000 |   |   | $                   | 10,615,000 |   |   | $ | 13,999,000 |   |   |   | 342,000 |   |   | $ | (2,955,000 | ) |
|                          |   |   |       |   |                                            |   |      |              |   |   |      |   |   |                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                      |   |   | (51,000    | )      |                                            |   |      |              |   |   |      |   |   |                |       |   |   |   | (51,000 | ) |   |   |   |   |   |   |   |   |
| Stock-based compensation      |   |   | 69,000     |   |                                            |   |      |              |   |   |      |   |   |                | 69,000     |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |   |       |   |                                            |   |      |              |   |   |      |   |   |                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, June 30, 2010   |   | $      | 25,633,000 |   |                                            |   | 3,956,000 |              |   | $      | 3,956,000 |   |   | $                   | 10,684,000 |   |   | $ | 13,948,000 |   |   |   | 342,000 |   |   | $ | (2,955,000 | ) |

----

|                                                                                                     |   | Six monthsended June 30, |      |
|----------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|-----------|
|                                                                                                     |   | 2010                                    |      |   | 2009 |   |
|                                                                                                     |   | (Restated)                              |      |   |   |   |
| Cash Flows from Operating Activities                                                                     |   |                                    |      |   |   |   |
| Net loss                                                                                                 |   | $                                       | (51,000   | ) |   | $ | (1,171,000 | ) |
|                                                                                                     |   |                                    |      |   |   |   |   |   |
| Adjustments to reconcile net loss to net cash provided by operating activities of continuing operations: |   |                                    |      |   |   |   |   |   |
| (Income) loss from discontinued operations                                                               |   |                                    | (387,000  | ) |   |   | 761,000 |   |
| Non-cash charges:                                                                                        |   |                                    |      |   |   |   |   |   |
| Depreciation and amortization                                                                            |   |                                    | 826,000   |   |   |   | 779,000 |   |
| Amortization of other intangible assets                                                                  |   |                                    | 175,000   |   |   |   | 175,000 |   |
| Amortization of other assets                                                                             |   |                                    | 38,000    |   |   |   | 6,000 |   |
| Provision for losses on accounts receivable - net                                                        |   |                                    | 27,000    |   |   |   | (22,000 | ) |
| Stock-based compensation                                                                                 |   |                                    | 69,000    |   |   |   | 138,000 |   |
| Deferred income taxes - net                                                                              |   |                                    | —   |   |   |   | 651,000 |   |
| (Gain) loss on sale of fixed assets                                                                      |   |                                    | 2,000     |   |   |   | (2,000 | ) |
| Changes in operating assets and liabilities:                                                             |   |                                    |      |   |   |   |   |   |
| Accounts receivable                                                                                      |   |                                    | (78,000   | ) |   |   | (1,614,000 | ) |
| Notes and other receivables                                                                              |   |                                    | 18,000    |   |   |   | (34,000 | ) |
| Inventories                                                                                              |   |                                    | 1,815,000 |   |   |   | 3,131,000 |   |
| Income tax refund receivable                                                                             |   |                                    | 3,221,000 |   |   |   | (411,000 | ) |
| Prepaid expenses and other current assets                                                                |   |                                    | (40,000   | ) |   |   | (419,000 | ) |
| Other assets                                                                                             |   |                                    | (310,000  | ) |   |   | (184,000 | ) |
| Accounts payable                                                                                         |   |                                    | 1,135,000 |   |   |   | 2,153,000 |   |
| Accrued liabilities                                                                                      |   |                                    | 820,000   |   |   |   | (149,000 | ) |
| Income taxes payable                                                                                     |   |                                    | 196,000   |   |   |   | — |   |
| Total adjustments                                                                                        |   |                                    | 7,527,000 |   |   |   | 4,959,000 |   |
| Net cash provided by operating activities of continuing operations                                       |   |                                    | 7,476,000 |   |   |   | 3,788,000 |   |

----

|                                               |   | Six monthsended June 30, |       |
|----------------------------------------------------|--------|-----------------------------------------|------------|
|                                               |   | 2010                                    |       |   | 2009 |   |
|                                               |   | (Restated)                              |       |   |   |   |
| Cash Flows from Investing Activities:              |   |                                    |       |   |   |   |
|                                               |   |                                    |       |   |   |   |
| Capital expenditures                               |   | $                                       | (99,000    | ) |   | $ | (1,066,000 | ) |
| Proceeds from sale of fixed assets                 |   |                                    | —    |   |   |   | 3,000 |   |
| Additional purchase price – Hy-Tech          |   |                                    | —    |   |   |   | (2,362,000 | ) |
| Net cash used in investing activities              |   |                                    | (99,000    | ) |   |   | (3,425,000 | ) |
|                                               |   |                                    |       |   |   |   |   |   |
| Cash Flows from Financing Activities:              |   |                                    |       |   |   |   |   |   |
| Proceeds from short-term borrowings                |   |                                    | —    |   |   |   | 10,484,000 |   |
| Repayments of short-term borrowings                |   |                                    | (5,000,000 | ) |   |   | (8,484,000 | ) |
| Term loan advances                                 |   |                                    | 957,000    |   |   |   | — |   |
| Repayments of term loan                            |   |                                    | (3,835,000 | ) |   |   | (6,889,000 | ) |
| Net proceeds from equipment lease financing        |   |                                    | —    |   |   |   | 348,000 |   |
| Principal payments on long-term debt               |   |                                    | (464,000   | ) |   |   | (35,000 | ) |
| Proceeds from notes payable                        |   |                                    | 750,000    |   |   |   | 1,583,000 |   |
| Net cash used in financing activities              |   |                                    | (7,592,000 | ) |   |   | (2,993,000 | ) |
|                                               |   |                                    |       |   |   |   |   |   |
| Cash Flows from Discontinued Operations:           |   |                                    |       |   |   |   |   |   |
| Operating activities                               |   |                                    | 489,000    |   |   |   | 825,000 |   |
| Investing activities                               |   |                                    | —    |   |   |   | (13,799,000 | ) |
| Financing activities                               |   |                                    | —    |   |   |   | 15,194,000 |   |
| Net cash provided by Discontinued Operations       |   |                                    | 489,000    |   |   |   | 2,220,000 |   |
|                                               |   |                                    |       |   |   |   |   |   |
| NET INCREASE (DECREASE) IN CASH                    |   |                                    | 274,000    |   |   |   | (410,000 | ) |
| Cash at beginning of period                        |   |                                    | 546,000    |   |   |   | 845,000 |   |
| Cash at end of period                              |   | $                                       | 820,000    |   |   | $ | 435,000 |   |
|                                               |   |                                    |       |   |   |   |   |   |
| Supplemental disclosures of cash flow information: |   |                                    |       |   |   |   |   |   |
|                                               |   |                                    |       |   |   |   |   |   |
| Cash paid for:                                     |   |                                    |       |   |   |   |   |   |
| Interest                                           |   | $                                       | 694,000    |   |   | $ | 627,000 |   |
| Income taxes                                       |   | $                                       | 16,000     |   |   | $ | 30,000 |   |

----

----

----

----

| Consolidated condensed balance sheet |   |
|-----------------------------------------------------|--------|
| As at June 30, 2010             |   |
|                                                |   | As Reported |   |   | Adjustments |   |   | As Restated |   |
| Assets of discontinued operations - current         |   | $ | 188,000 |   |   | $ | (165,000 | ) |   | $ | 23,000 |   |
| Total current assets                                |   |   | 27,555,000 |   |   |   | (165,000 | ) |   |   | 27,390,000 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Assets of discontinued operations                   |   |   | 16,000 |   |   |   | (16,000 | ) |   |   | — |   |
| Other assets - net                                  |   |   | 233,000 |   |   |   | 276,000 |   |   |   | 509,000 |   |
| Total Assets                                        |   | $ | 49,304,000 |   |   | $ | 95,000 |   |   | $ | 49,399,000 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities of discontinued operations - current    |   | $ | 12,870,000 |   |   | $ | (12,838,000 | ) |   | $ | 32,000 |   |
| Other accrued liabilities                           |   |   | 3,103,000 |   |   |   | (83,000 | ) |   |   | 3,020,000 |   |
| Total current liabilities                           |   |   | 34,686,000 |   |   |   | (12,921,000 | ) |   |   | 21,765,000 |   |
| Total Liabilities                                   |   |   | 36,687,000 |   |   |   | (12,921,000 | ) |   |   | 23,766,000 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Retained earnings                                   |   |   | 932,000 |   |   |   | 13,016,000 |   |   |   | 13,948,000 |   |
| Total shareholders’ equity                    |   |   | 12,617,000 |   |   |   | 13,016,000 |   |   |   | 25,633,000 |   |
| Total liabilities and shareholders’ equity    |   | $ | 49,304,000 |   |   | $ | 95,000 |   |   | $ | 49,399,000 |   |

| Consolidated condensed statement of operations                                           |   |
|--------------------------------------------------------------------------------------------------------------|--------|
| For the three month period ended June 30, 2010                       |   |
|                                                                                                         |   | As Reported |   |   | Adjustments |   |   | As Restated |   |
|                                                                                                         |   |   |   |   |   |   |   |   |   |
| (Loss) income from discontinued operations (no tax benefits for the three -month period ended June 30, 2010) |   | $ | (10,885,000 | ) |   | $ | 11,264,000 |   |   | $ | 379,000 |   |
| Net (loss) income                                                                                            |   | $ | (10,616,000 | ) |   | $ | 11,264,000 |   |   | $ | 648,000 |   |
|                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted earnings (loss) per share                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Discontinued operations                                                                                      |   | $ | (3.01 | ) |   | $ | 3.11 |   |   | $ | 0.10 |   |
| Net (loss) income                                                                                            |   | $ | (2.94 | ) |   | $ | 3.11 |   |   | $ | 0.17 |   |

| Consolidated condensed statement of operations                                         |   |
|------------------------------------------------------------------------------------------------------------|--------|
| For the six month period ended June 30, 2010                       |   |
|                                                                                                       |   | As Reported |   |   | Adjustments |   |   | As Restated |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |
| (Loss) income from discontinued operations (no tax benefits for the six -month period ended June 30, 2010) |   | $ | (12,629,000 | ) |   | $ | 13,016,000 |   |   | $ | 387,000 |   |
| Net (loss)                                                                                                 |   | $ | (13,067,000 | ) |   | $ | 13,016,000 |   |   | $ | (51,000 | ) |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted earnings (loss) per share                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
|    Discontinued operations                                                                  |   | $ | (3.49 | ) |   | $ | 3.59 |   |   | $ | 0.10 |   |
| Net loss                                                                                                   |   | $ | (3.61 | ) |   | $ | (3.59 | ) |   | $ | (0.02 | ) |

----

| Consolidated condensed statement of shareholders’ equity |   |
|-----------------------------------------------------------------------------------------|--------|
| For the six month period ended June 30, 2010    |   |
|                                                                               |   | As Reported |   |   | Adjustments |   |   | As Restated |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                |   | $ | (13,067,000 | ) |   | $ | 13,016,000 |   |   | $ | (51,000 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance June 30, 2010                                                                   |   | $ | 12,617,000 |   |   | $ | 13,016,000 |   |   | $ | 25,633,000 |   |

| Consolidated condensed statement of cash flows         |   |
|---------------------------------------------------------------------------------|--------|
| For the six month period ended June 30, 2010 |   |
|                                                                            |   | As Reported |   |   | Adjustments |   |   | As Restated |   |
|                                                                            |   |   |   |   |   |   |   |   |   |
| Loss (Income) from discontinued operations                                      |   | $ | 12,629,000 |   |   | $ | (13,016,000 | ) |   | $ |  (387,000 | ) |
| Total adjustments                                                               |   |   | 20,902,000 |   |   |   | (13,375,000 | ) |   |   | 7,527,000 |   |
|                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Net cash provided by operating activities of continuing operations              |   |   | 7,835,000 |   |   |   | (359,000 | ) |   |   | 7,476,000 |   |
|                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash Flows from Discontinued Operations:                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating activities                                                            |   |   | 258,000 |   |   |   | 231,000 |   |   |   | 489,000 |   |
| Investing activities                                                            |   |   | 460,000 |   |   |   | (460,000 | ) |   |   | — |   |
| Financing activities                                                            |   |   | (588,000 | ) |   |   | 588,000 |   |   |   | — |   |
| Net cash provided by Discontinued Operations                                    |   |   | 130,000 |   |   |   | 359,000 |   |   |   | 489,000 |   |

|                                                                                                  |   | Three months ended |      |   | Six months ended |   |
|-------------------------------------------------------------------------------------------------------|--------|------------------------------|-----------|--------|----------------------------|--------|
|                                                                                                  |   | June 30,                |      |   | June 30,              |   |
|                                                                                                  |   | 2010                         |      |   | 2009                       |   |   | 2010 |   |   | 2009 |   |
| Numerator:                                                                                            |   |                         |      |   |                       |   |   |   |   |   |   |   |
| Numerator for basic and diluted earnings (loss) per common share:                                     |   |                         |      |   |                       |   |   |   |   |   |   |   |
| Earnings (loss) from continuing operations                                                            |   | $                            | 269,000   |   |                       | $      | (71,000 | ) |   | $ | (438,000 | ) |   | $ | (410,000 | ) |
| Earnings (loss) from discontinued operations                                                          |   |                         | 379,000   |   |                       |   | (494,000 | ) |   |   | 387,000 |   |   |   | (761,000 | ) |
| Net income (loss)                                                                                     |   | $                            | 648,000   |   |                       | $      | (565,000 | ) |   | $ | (51,000 | ) |   | $ | (1,171,000 | ) |
|                                                                                                  |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Denominator:                                                                                          |   |                         |      |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Denominator for basic earnings (loss) per share  weighted average common shares outstanding |   |                         | 3,615,000 |   |                       |   | 3,615,000 |   |   |   | 3,615,000 |   |   |   | 3,615,000 |   |

----

|                                                    |   | Three months ended |    |   | Six months ended |   |
|---------------------------------------------------------|--------|------------------------------|---------|--------|----------------------------|--------|
|                                                    |   | June 30,                |    |   | June 30,              |   |
|                                                    |   | 2010                         |    |   | 2009                       |   |   | 2010 |   |   | 2009 |   |
| Weighted average antidilutive stock options outstanding |   |                         | 515,000 |   |                       |   | 554,000 |   |   |   | 515,000 |   |   |   | 554,000 |   |

|                              |   | Option Shares |    |   | WeightedAverageExercisePrice |   |    | Weighted AverageRemainingContractual Life(Years) |   |   | AggregateIntrinsicValue |   |
|-----------------------------------|--------|--------------------|---------|--------|------------------------------|--------|---------|------------------------------------------------------------|--------|--------|-------------------------|--------|
| Outstanding, January 1, 2010 |   |               | 514,624 |   |                         | $      | 7.26    |                                                       |   |   | 6.0                     |   |   |   | — |   |
| Granted                           |   |               | — |   |                         |   | — |                                                       |   |   |                    |   |   |   |   |   |
| Exercised                         |   |               | — |   |                         |   | — |                                                       |   |   |                    |   |   |   |   |   |
| Forfeited                         |   |               | — |   |                         |   | — |                                                       |   |   |                    |   |   |   |   |   |
| Expired                           |   |               | — |   |                         |   | — |                                                       |   |   |                    |   |   |   |   |   |
| Outstanding, June 30, 2010   |   |               | 514,624 |   |                         | $      | 7.26    |                                                       |   |   | 5.5                     |   |   |   | — |   |
|                              |   |               |    |   |                         |   |    |                                                       |   |   |                    |   |   |   |   |   |
| Vested, June 30, 2010        |   |               | 419,291 |   |                         | $      | 7.96    |                                                       |   |   | 8.0                     |   |   |   | — |   |

----

|                                    |   | Option Shares |    |   | WeightedAverage Grant-DateFair Value |   |
|-----------------------------------------|--------|--------------------|---------|--------|------------------------------------------------|--------|
| Non-vested shares, January 1, 2010 |   |               | 147,667 |   |                                           | $      | 2.85 |   |
| Granted                                 |   |               | — |   |                                           |   |   |   |
| Vested                                  |   |               | 52,334  |   |                                           |   | 3.61 |   |
| Forfeited                               |   |               | — |   |                                           |   |   |   |
| Non-vested shares, June 30, 2010   |   |               | 95,333  |   |                                           | $      | 2.44 |   |

|                            |   | June 30, 2010 |      |   | December 31, 2009 |   |
|---------------------------------|--------|-------------------------|-----------|--------|-----------------------------|--------|
| Accounts receivable             |   | $                       | 7,772,000 |   |                        | $      | 7,694,000 |   |
| Allowance for doubtful accounts |   |                    | (176,000  | )      |                        |   | (149,000 | ) |
|                            |   | $                       | 7,596,000 |   |                        | $      | 7,545,000 |   |

|                                             |   | June 30, 2010 |       |   | December 31, 2009 |   |
|--------------------------------------------------|--------|-------------------------|------------|--------|-----------------------------|--------|
| Raw material                                     |   | $                       | 1,983,000  |   |                        | $      | 2,086,000 |   |
| Work in process                                  |   |                    | 535,000    |   |                        |   | 680,000 |   |
| Finished goods                                   |   |                    | 16,859,000 |   |                        |   | 18,532,000 |   |
|                                             |   |                    | 19,377,000 |   |                        |   | 21,298,000 |   |
| Reserve for obsolete and slow-moving inventories |   |                    | (1,446,000 | )      |                        |   | (1,552,000 | ) |
|                                             |   | $                       | 17,931,000 |   |                        | $      | 19,746,000 |   |

|                                       |   | June 30, 2010 |      |   | December 31, 2009 |   |
|--------------------------------------------|--------|-------------------------|-----------|--------|-----------------------------|--------|
|                                       |   | Cost                    |      |   | Accumulatedamortization     |   |   | Net bookvalue |   |   | Cost |   |   | Accumulatedamortization |   |   | Net bookvalue |   |
| Other intangible assets:                   |   |                    |      |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Customer relationships                     |   | $                       | 5,070,000 |   |                        | $      | 3,092,000 |   |   | $ | 1,978,000 |   |   | $ | 5,070,000 |   |   | $ | 2,930,000 |   |   | $ | 2,140,000 |   |
| Non-compete and Employment agreements |   |                    | 760,000   |   |                        |   | 760,000 |   |   |   | — |   |   |   | 760,000 |   |   |   | 760,000 |   |   |   | — |   |
| Trademarks                                 |   |                    | 199,000   |   |                        |   | — |   |   |   | 199,000 |   |   |   | 199,000 |   |   |   | — |   |   |   | 199,000 |   |
| Drawings                                   |   |                    | 290,000   |   |                        |   | 49,000 |   |   |   | 241,000 |   |   |   | 290,000 |   |   |   | 41,000 |   |   |   | 249,000 |   |
| Licensing                                  |   |                    | 105,000   |   |                        |   | 47,000 |   |   |   | 58,000 |   |   |   | 105,000 |   |   |   | 42,000 |   |   |   | 63,000 |   |
| Totals                                     |   | $                       | 6,424,000 |   |                        | $      | 3,948,000 |   |   | $ | 2,476,000 |   |   | $ | 6,424,000 |   |   | $ | 3,773,000 |   |   | $ | 2,651,000 |   |

----

| Three months ended June 30, |   |   | Six months ended June 30, |   |
|-------------------------------------------------|--------|--------|-----------------------------------------------|--------|
| 2010                                            |   |   | 2009                                          |   |   | 2010 |   |   | 2009 |   |
| $                                               | 87,000 |   |                                          | $      | 87,000 |   |   | $ | 175,000 |   |   | $ | 175,000 |   |

|                                                               |   | Six-months ended June 30, |     |
|--------------------------------------------------------------------|--------|------------------------------------------|----------|
|                                                               |   | 2010                                     |     |   | 2009 |   |
| Balance, beginning of period                                       |   | $                                        | 183,000  |   |   | $ | 337,000 |   |
| Warranties issued and changes in estimated pre-existing warranties |   |                                     | 211,000  |   |   |   | 241,000 |   |
| Actual warranty costs incurred                                     |   |                                     | (166,000 | ) |   |   | (262,000 | ) |
| Balance, end of period                                             |   | $                                        | 228,000  |   |   | $ | 316,000 |   |

----

----

| Three months ended June 30, 2010 |   | Consolidated |       |   | Tools  |   |       | Hardware |   |
|-----------------------------------------------------------|--------|--------------|------------|--------|--------|--------|------------|----------|--------|
|                                                      |   |         |       |   |   |   |       |     |   |
| Revenues from unaffiliated customers                      |   | $            | 13,320,000 |   |   | $      | 8,695,000  |     |   | $ | 4,625,000 |   |
|                                                      |   |         |       |   |   |   |       |     |   |   |   |   |
| Segment operating income                                  |   | $            | 1,941,000  |   |   | $      | 1,095,000  |     |   | $ | 846,000 |   |
| General corporate expense                                 |   |         | (1,335,000 | )      |   |   |       |     |   |   |   |   |
| Interest expense – net                              |   |         | (337,000   | )      |   |   |       |     |   |   |   |   |
| Earnings before income taxes                              |   | $            | 269,000    |   |   |   |       |     |   |   |   |   |
|                                                      |   |         |       |   |   |   |       |     |   |   |   |   |
| Segment assets                                            |   | $            | 45,705,000 |   |   | $      | 35,684,000 |     |   | $ | 10,021,000 |   |
| Corporate assets                                          |   |         | 3,599,000  |   |   |   |       |     |   |   |   |   |
| Total assets                                              |   | $            | 49,304,000 |   |   |   |       |     |   |   |   |   |
|                                                      |   |         |       |   |   |   |       |     |   |   |   |   |
| Long-lived assets, including $382,000 at corporate        |   | $            | 20,063,000 |   |   | $      | 15,044,000 |     |   | $ | 4,637,000 |   |

| Three months ended June 30, 2009 |   | Consolidated |       |   | Tools  |   |       | Hardware |   |
|-----------------------------------------------------------|--------|--------------|------------|--------|--------|--------|------------|----------|--------|
|                                                      |   |         |       |   |   |   |       |     |   |
| Revenues from unaffiliated customers                      |   | $            | 14,073,000 |   |   | $      | 9,336,000  |     |   | $ | 4,737,000 |   |
|                                                      |   |         |       |   |   |   |       |     |   |   |   |   |
| Segment operating income                                  |   | $            | 1,080,000  |   |   | $      | 589,000    |     |   | $ | 491,000 |   |
| General corporate expense                                 |   |         | (935,000   | )      |   |   |       |     |   |   |   |   |
| Interest expense – net                              |   |         | (322,000   | )      |   |   |       |     |   |   |   |   |
| Loss before income taxes                                  |   | $            | (177,000   | )      |   |   |       |     |   |   |   |   |
|                                                      |   |         |       |   |   |   |       |     |   |   |   |   |
| Segment assets                                            |   | $            | 55,170,000 |   |   | $      | 43,557,000 |     |   | $ | 11,613,000 |   |
| Corporate assets                                          |   |         | 7,704,000  |   |   |   |       |     |   |   |   |   |
| Total assets                                              |   | $            | 62,874,000 |   |   |   |       |     |   |   |   |   |
|                                                      |   |         |       |   |   |   |       |     |   |   |   |   |
| Long-lived assets, including $161,000 at corporate        |   | $            | 21,333,000 |   |   | $      | 16,441,000 |     |   | $ | 4,731,000 |   |

| Six months ended June 30, 2010 |   | Consolidated |       |   | Tools  |   |       | Hardware |   |
|---------------------------------------------------------|--------|--------------|------------|--------|--------|--------|------------|----------|--------|
|                                                    |   |         |       |   |   |   |       |     |   |
| Revenues from unaffiliated customers                    |   | $            | 24,467,000 |   |   | $      | 16,515,000 |     |   | $ | 7,952,000 |   |
|                                                    |   |         |       |   |   |   |       |     |   |   |   |   |
| Segment operating income                                |   | $            | 3,209,000  |   |   | $      | 1,948,000  |     |   | $ | 1,261,000 |   |
| General corporate expense                               |   |         | (2,921,000 | )      |   |   |       |     |   |   |   |   |
| Interest expense – net                            |   |         | (726,000   | )      |   |   |       |     |   |   |   |   |
| Loss before income taxes                                |   | $            | (438,000   | )      |   |   |       |     |   |   |   |   |
|                                                    |   |         |       |   |   |   |       |     |   |   |   |   |
| Segment assets                                          |   | $            | 45,705,000 |   |   | $      | 35,684,000 |     |   | $ | 10,021,000 |   |
| Corporate assets                                        |   |         | 3,599,000  |   |   |   |       |     |   |   |   |   |
| Total assets                                            |   | $            | 49,304,000 |   |   |   |       |     |   |   |   |   |
|                                                    |   |         |       |   |   |   |       |     |   |   |   |   |
| Long-lived assets, including $382,000 at corporate      |   | $            | 20,063,000 |   |   | $      | 15,044,000 |     |   | $ | 4,637,000 |   |

----

| Six months ended June 30, 2009 |   | Consolidated |       |   | Tools  |   |       | Hardware |   |
|---------------------------------------------------------|--------|--------------|------------|--------|--------|--------|------------|----------|--------|
|                                                    |   |         |       |   |   |   |       |     |   |
| Revenues from unaffiliated customers                    |   | $            | 26,294,000 |   |   | $      | 18,481,000 |     |   | $ | 7,813,000 |   |
|                                                    |   |         |       |   |   |   |       |     |   |   |   |   |
| Segment operating income                                |   | $            | 2,179,000  |   |   | $      | 1,596,000  |     |   | $ | 583,000 |   |
| General corporate expense                               |   |         | (2,137,000 | )      |   |   |       |     |   |   |   |   |
| Interest expense – net                            |   |         | (627,000   | )      |   |   |       |     |   |   |   |   |
| Loss before income taxes                                |   | $            | (585,000   | )      |   |   |       |     |   |   |   |   |
|                                                    |   |         |       |   |   |   |       |     |   |   |   |   |
| Segment assets                                          |   | $            | 55,170,000 |   |   | $      | 43,557,000 |     |   | $ | 11,613,000 |   |
| Corporate assets                                        |   |         | 7,704,000  |   |   |   |       |     |   |   |   |   |
| Total assets                                            |   | $            | 62,874,000 |   |   |   |       |     |   |   |   |   |
|                                                    |   |         |       |   |   |   |       |     |   |   |   |   |
| Long-lived assets, including $161,000 at corporate      |   | $            | 21,333,000 |   |   | $      | 16,441,000 |     |   | $ | 4,731,000 |   |

----

----

----

|              |   | Three-months Ended June 30, |       |   |   |   |       |     |   |
|-------------------|--------|--------------------------------------------|------------|--------|--------|--------|------------|----------|--------|
|              |   | 2010                                       |       |   | 2009   |   |       | Variance |   |   | Variance |   |
|              |   |                                       |       |   |   |   |       | $        |   |   | % |   |
| Tools             |   |                                       |       |   |   |   |       |     |   |   |   |   |   |
| Florida Pneumatic |   | $                                          | 5,115,000  |   |   | $      | 6,121,000  |     |   | $ | (1,006,000 | ) |   |   | (16.4 | )% |
| Hy-Tech           |   |                                       | 3,580,000  |   |   |   | 3,215,000  |     |   |   | 365,000 |   |   |   | 11.3 |   |
| Tools Total       |   |                                       | 8,695,000  |   |   |   | 9,336,000  |     |   |   | (641,000 | ) |   |   | (6.9 | ) |
|              |   |                                       |       |   |   |   |       |     |   |   |   |   |   |   |   |   |
| Hardware          |   |                                       |       |   |   |   |       |     |   |   |   |   |   |   |   |   |
|              |   |                                       |       |   |   |   |       |     |   |   |   |   |   |   |   |   |
| Other hardware    |   |                                       | 4,625,000  |   |   |   | 4,737,000  |     |   |   | (112,000 | ) |   |   | (2.4 | ) |
| Hardware Total    |   |                                       | 4,625,000  |   |   |   | 4,737,000  |     |   |   | (112,000 | ) |   |   | (2.4 | ) |
|              |   |                                       |       |   |   |   |       |     |   |   |   |   |   |   |   |   |
| Consolidated      |   | $                                          | 13,320,000 |   |   | $      | 14,073,000 |     |   | $ | (753,000 | ) |   |   | (5.3 | )% |

----

|              |   | Six-months Ended June 30, |       |   |   |   |       |     |   |
|-------------------|--------|------------------------------------------|------------|--------|--------|--------|------------|----------|--------|
|              |   | 2010                                     |       |   | 2009   |   |       | Variance |   |   | Variance |   |
|              |   |                                     |       |   |   |   |       | $        |   |   | % |   |
| Tools             |   |                                     |       |   |   |   |       |     |   |   |   |   |   |
| Florida Pneumatic |   | $                                        | 9,661,000  |   |   | $      | 10,830,000 |     |   | $ | (1,169,000 | ) |   |   | (10.8 | )% |
| Hy-Tech           |   |                                     | 6,854,000  |   |   |   | 7,651,000  |     |   |   | (797,000 | ) |   |   | (10.4 | ) |
| Tools Total       |   |                                     | 16,515,000 |   |   |   | 18,481,000 |     |   |   | (1,966,000 | ) |   |   | (10.6 | ) |
|              |   |                                     |       |   |   |   |       |     |   |   |   |   |   |   |   |   |
| Hardware          |   |                                     |       |   |   |   |       |     |   |   |   |   |   |   |   |   |
| Other hardware    |   |                                     | 7,952,000  |   |   |   | 7,813,000  |     |   |   | 139,000 |   |   |   | 1.8 |   |
| Hardware Total    |   |                                     | 7,952,000  |   |   |   | 7,813,000  |     |   |   | 139,000 |   |   |   | 1.8 |   |
|              |   |                                     |       |   |   |   |       |     |   |   |   |   |   |   |   |   |
| Consolidated      |   | $                                        | 24,467,000 |   |   | $      | 26,294,000 |     |   | $ | (1,827,000 | ) |   |   | (6.9 | )% |

|                    |   | Three-months Ended June 30, |      |   |   |   |      |     |   |
|-------------------------|--------|--------------------------------------------|-----------|--------|--------|--------|-----------|----------|--------|
|                    |   | 2010                                       |      |   | 2009   |   |      | Variance |   |   | Variance |   |
|                    |   |                                       |      |   |   |   |      | $        |   |   | % |   |
| Other Hardware          |   |                                       |      |   |   |   |      |     |   |   |   |   |   |
| Fence and gate hardware |   | $                                          | 3,115,000 |   |   | $      | 2,794,000 |     |   | $ | 321,000 |   |   |   | 11.5 | % |
| Kitchen and Bath        |   |                                       | 703,000   |   |   |   | 856,000   |     |   |   | (153,000 | ) |   |   | (17.9 | ) |
| OEM                     |   |                                       | 557,000   |   |   |   | 948,000   |     |   |   | (391,000 | ) |   |   | (41.2 | ) |
| Patio                   |   |                                       | 250,000   |   |   |   | 139,000   |     |   |   | 111,000 |   |   |   | 79.9 |   |
| Total Other Hardware    |   | $                                          | 4,625,000 |   |   | $      | 4,737,000 |     |   | $ | (112,000 | ) |   |   | (2.4 | ) |

----

|                    |   | Six-months Ended June 30, |      |   |   |   |      |     |   |
|-------------------------|--------|------------------------------------------|-----------|--------|--------|--------|-----------|----------|--------|
|                    |   | 2010                                     |      |   | 2009   |   |      | Variance |   |   | Variance |   |
|                    |   |                                     |      |   |   |   |      | $        |   |   | % |   |
| Other Hardware          |   |                                     |      |   |   |   |      |     |   |   |   |   |   |
| Fence and gate hardware |   | $                                        | 4,964,000 |   |   | $      | 4,425,000 |     |   | $ | 539,000 |   |   |   | 12.2 | % |
| Kitchen and Bath        |   |                                     | 1,523,000 |   |   |   | 1,701,000 |     |   |   | (178,000 | ) |   |   | (10.5 | ) |
| OEM                     |   |                                     | 1,006,000 |   |   |   | 1,377,000 |     |   |   | (371,000 | ) |   |   | (26.9 | ) |
| Patio                   |   |                                     | 459,000   |   |   |   | 310,000   |     |   |   | 149,000 |   |   |   | 48.1 |   |
| Total Other Hardware    |   | $                                        | 7,952,000 |   |   | $      | 7,813,000 |     |   | $ | 139,000 |   |   |   | 1.8 | % |

| Three months ended June 30, |   |         |   | Consolidated |      |   | Tools  |   |      | Hardware |   |
|-------------------------------------------------|--------|--------------|--------|--------------|-----------|--------|--------|--------|-----------|----------|--------|
| 2010                                            |   | Gross Profit |   | $            | 4,690,000 |   |   | $      | 2,937,000 |     |   | $ | 1,753,000 |   |
|                                            |   | Gross Margin |   |         | 35.2      | %      |   |   | 33.8      | %        |   |   | 37.9 | % |
|                                            |   |         |   |         |      |   |   |   |      |     |   |   |   |   |
| 2009                                            |   | Gross Profit |   | $            | 3,968,000 |   |   | $      | 2,524,000 |     |   | $ | 1,444,000 |   |
|                                            |   | Gross Margin |   |         | 28.2      | %      |   |   | 27.0      | %        |   |   | 30.5 | % |

| Six months ended June 30, |   |         |   | Consolidated |      |   | Tools  |   |      | Hardware |   |
|-----------------------------------------------|--------|--------------|--------|--------------|-----------|--------|--------|--------|-----------|----------|--------|
| 2010                                          |   | Gross Profit |   | $            | 8,689,000 |   |   | $      | 5,644,000 |     |   | $ | 3,045,000 |   |
|                                          |   | Gross Margin |   |         | 35.5      | %      |   |   | 34.2      | %        |   |   | 38.3 | % |
|                                          |   |         |   |         |      |   |   |   |      |     |   |   |   |   |
| 2009                                          |   | Gross Profit |   | $            | 8,068,000 |   |   | $      | 5,724,000 |     |   | $ | 2,344,000 |   |
|                                          |   | Gross Margin |   |         | 30.7      | %      |   |   | 31.0      | %        |   |   | 30.4 | % |

----

----

|                                     |   | June 30, 2010 |       |   | December 31, 2009 |   |
|------------------------------------------|--------|-------------------------|------------|--------|-----------------------------|--------|
| Working Capital of continuing operations |   | $                       | 5,634,000  |   |                        | $      | 7,342,000 |   |
| Current Ratio of continuing operations   |   | 1.26 to 1.0             |       |   | 1.30 to 1.0                 |   |
| Shareholders’ Equity               |   | $                       | 25,633,000 |   |                        | $      | 25,615,000 |   |

----

----

----

| Item 6. | Exhibits                                                                  |
|---------|---------------------------------------------------------------------------|
|    |                                                                      |
|    | See “Exhibit Index” immediately following the signature page. |

----

|                | P&F INDUSTRIES, INC. |
|---------------------|--------------------------|
|                | (Registrant)             |
|                |                     |
|                | By             | /s/ Joseph A. Molino, Jr. |
|                |                     | Joseph A. Molino, Jr. |
|                |                     | Chief Financial Officer |
| Dated: May 13, 2011 |                     | (Principal Financial and Chief Accounting Officer) |

----

| ExhibitNumber |   | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.1          |   | Amendment No. 21 and Waiver to Credit Agreement, dated as of April 23, 2010, by and among the Registrant, Florida Pneumatic Manufacturing Corporation, Embassy Industries, Inc., Green Manufacturing, Inc., Countrywide Hardware, Inc., Nationwide Industries, Inc., Woodmark International, L.P., Pacific Stair Products, Inc., WILP Holdings, Inc., Continental Tool Group, Inc., Hy-Tech Machine, Inc. and Citibank, N.A., as Administrative Agent, and the lenders party thereto (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated April 23, 2010). |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.2          |   | Secured Subordinated Promissory Note, dated as of April 23, 2010, by and among the Registrant, Florida Pneumatic Manufacturing Corporation, Embassy Industries, Inc., Green Manufacturing, Inc., Countrywide Hardware, Inc., Nationwide Industries, Inc., Woodmark International, L.P., Pacific Stair Products, Inc., WILP Holdings, Inc., Continental Tool Group, Inc., Hy-Tech Machine, Inc. in favor of Marc Schorr in the principal amount of $500,000 (Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-Kdated April 23, 2010).                            |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.3          |   | Secured Subordinated Promissory Note, dated as of April 23, 2010, by and among the Registrant, Florida Pneumatic Manufacturing Corporation, Embassy Industries, Inc., Green Manufacturing, Inc., Countrywide Hardware, Inc., Nationwide Industries, Inc., Woodmark International, L.P., Pacific Stair Products, Inc., WILP Holdings, Inc., Continental Tool Group, Inc., Hy-Tech Machine, Inc. in favor of Richard A. Horowitz in the principal amount of $500,000 (Incorporated by reference to Exhibit 10.3 to Registrant’s Current Report on Form 8-K dated April 23, 2010).                   |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.4          |   | Security Agreement, dated as of April 23, 2010, between Marc Schorr and Richard A. Horowitz, as secured parties, and the Registrant, as debtor (Incorporated by reference to Exhibit 10.4 to Registrant’s Current Report on Form 8-K dated April 23, 2010).                                                                                                                                                                                                                                                                                                                                       |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.5          |   | Security Agreement, dated as of April 23, 2010, between Marc Schorr and Richard A. Horowitz, as secured parties, and Florida Pneumatic Manufacturing Corporation, as debtor (Incorporated by reference to Exhibit 10.5 to Registrant’s Current Report on Form 8-K dated April 23, 2010).                                                                                                                                                                                                                                                                                                          |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.6          |   | Security Agreement, dated as of April 23, 2010, between Marc Schorr and Richard A. Horowitz, as secured parties, and Embassy Industries, Inc., as debtor (Incorporated by reference to Exhibit 10.6 to Registrant’s Current Report on Form 8-K dated April 23, 2010).                                                                                                                                                                                                                                                                                                                             |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.7          |   | Security Agreement, dated as of April 23, 2010, between Marc Schorr and Richard A. Horowitz, as secured parties, and Green Manufacturing, Inc., as debtor (Incorporated by reference to Exhibit 10.7 to Registrant’s Current Report on Form 8-K dated April 23, 2010).                                                                                                                                                                                                                                                                                                                            |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.8          |   | Security Agreement, dated as of April 23, 2010, between Marc Schorr and Richard A. Horowitz, as secured parties, and Countrywide Hardware, Inc., as debtor (Incorporated by reference to Exhibit 10.8 to Registrant’s Current Report on Form 8-K dated April 23, 2010).                                                                                                                                                                                                                                                                                                                           |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.9          |   | Security Agreement, dated as of April 23, 2010, between Marc Schorr and Richard A. Horowitz, as secured parties, and Nationwide Industries, Inc., as debtor (Incorporated by reference to Exhibit 10.9 to Registrant’s Current Report on Form 8-K dated April 23, 2010).                                                                                                                                                                                                                                                                                                                          |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.10         |   | Security Agreement, dated as of April 23, 2010, between Marc Schorr and Richard A. Horowitz, as secured parties, and Woodmark International, L.P, as debtor (Incorporated by reference to Exhibit 10.10 to Registrant’s Current Report on Form 8-K dated April 23, 2010).                                                                                                                                                                                                                                                                                                                         |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.11         |   | Security Agreement, dated as of April 23, 2010, between Marc Schorr and Richard A. Horowitz, as secured parties, and WILP Holdings, Inc., as debtor (Incorporated by reference to Exhibit 10.11 to Registrant’s Current Report on Form 8-K dated April 23, 2010).                                                                                                                                                                                                                                                                                                                                 |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.12         |   | Security Agreement, dated as of April 23, 2010, between Marc Schorr and Richard A. Horowitz, as secured parties, and Continental Tool Group, Inc., as debtor (Incorporated by reference to Exhibit 10.12 to Registrant’s Current Report on Form 8-K dated April 23, 2010)                                                                                                                                                                                                                                                                                                                         |

----

| 10.13  |   | Security Agreement, dated as of April 23, 2010, between Marc Schorr and Richard A. Horowitz, as secured parties, and Hy-Tech Machine, Inc., as debtor (Incorporated by reference to Exhibit 10.13 to Registrant’s Current Report on Form 8-K dated April 23, 2010).                                                                                                                                                                                                                                                                                                                                                   |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.14  |   | Second Loan Documents Modification Agreement, dated April 22, 2010, between Countrywide Hardware, Inc. and Wells Fargo, National Association (successor by merger to Wachovia Bank, National Association) as modifying the related (i) Mortgage, Security Agreement and Absolute Assignment of Leases, (ii) Promissory Note, and (iii) Loan  Agreement, each dated May 24, 2002, between Countrywide Hardware, Inc. and Wachovia Bank, National Association, as previously amended (Incorporated by reference to Exhibit 10.15 to Registrant’s Current Report on  Form 8-K dated April 23, 2010). |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.15  |   | Indemnification Agreement, dated as of April 23, 2010, by the Registrant in favor of Marc Schorr and Richard A. Horowitz (Incorporated by reference to Exhibit 10.16 to Registrant’s Current Report on Form 8-K dated April 23, 2010).                                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.16  |   | P&F Industries, Inc. 2010 CEO Deferred Compensation Plan (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated April 26, 2010).                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.17  |   | Lease Agreement, dated as of March 30, 2007, by and between AGNL Coffman, L.L.C. and Coffman Stairs, LLC and Visador Holding Corporation (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated June 16, 2009).                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.18  |   | First Amendment to Lease Agreement, dated as of June 8, 2009, made by AGNL Coffman, L.L.C. and WM Coffman LLC  (Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K dated June 10, 2009).                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.19  |   | Acknowledgment of Events of Default and Peaceful Possession Letter, dated June 4, 2010, by WM Coffman LLC in favor of PNC Bank National Association (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated June 7, 2010).                                                                                                                                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.20  |   | Mutual Release Agreement, dated as of June 4, 2010, by and among PNC Bank, National Association, as agent P & F Industries, Inc., Continental Tool Group, Inc., Florida Pneumatic Manufacturing Corporation, Hy-Tech Machine, Inc., Countrywide Hardware, Inc., WILP Holdings, Inc., Green Manufacturing, Inc., Embassy Industries, Inc., Nationwide Industries, Inc., Pacific Stair Products, Inc. and Woodmark International, L.P. (Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K dated June 7, 2010).                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 31.1   |   | Certification of Richard A. Horowitz, Principal Executive Officer of the Registrant, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 31.2   |   | Certification of Joseph A. Molino, Jr., Principal Financial Officer of the Registrant, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 32.1   |   | Certification of Richard A. Horowitz, Principal Executive Officer of the Registrant, Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 32.2   |   | Certification of Joseph A. Molino, Jr., Principal Financial Officer of the Registrant, Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                            |

----