<Page>

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

                                    ---------
                                    FORM 10-Q
                                    ---------

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                    FOR THE QUARTER ENDED SEPTEMBER 30, 2001

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

                         COMMISSION FILE NUMBER 1 - 5332


                             P & F INDUSTRIES, INC.
             (Exact name of Registrant as specified in its charter)


           DELAWARE                                    22-1657413
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
 incorporation or organization)


     300 SMITH STREET, FARMINGDALE, NEW YORK             11735
     (Address of principal executive offices)          (Zip Code)


       Registrant's telephone number, including area code: (631) 694-1800

                                 ---------------

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
YES  ( X )    NO  (   )


         As of November 8, 2001, there were 3,531,648 shares of the Registrant's
Class A Common Stock outstanding.
<Page>

                             P & F INDUSTRIES, INC.

                                    FORM 10-Q

                    FOR THE QUARTER ENDED SEPTEMBER 30, 2001


                                TABLE OF CONTENTS

                                                                          PAGE
PART I                                                                    ----

Item 1.  Financial Statements

                    Consolidated Balance Sheets as of
                      September 30, 2001 and December 31, 2000            1 - 2

                    Consolidated Statements of Income for the
                      three months and the nine months ended
                      September 30, 2001 and 2000                             3

                    Consolidated Statement of Shareholders' Equity
                      for the nine months ended September 30, 2001            4

                    Consolidated Statements of Cash Flows for the
                      nine months ended September 30, 2001 and 2000       5 - 6

                    Notes to Consolidated Financial Statements           7 - 11

Item 2.  Management's Discussion and Analysis of Financial
                    Condition and Results of Operations                 12 - 16

Item 3.  Quantitative and Qualitative Disclosures About
                    Market Risk                                              17

PART II

Item 1.           Legal Proceedings                                          18

Item 2.           Changes in Securities and Use of proceeds                  18

Item 3.           Defaults Upon Senior Securities                            18

Item 4.           Submission of Matters to a Vote of Security Holders        18

Item 5.           Other Information                                          18

Item 6.           Exhibits and Reports on Form 8-K                           18


SIGNATURES                                                                   19

EXHIBIT INDEX                                                           20 - 21


                                       i
<Page>

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                     P & F INDUSTRIES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                     =======================================

<Table>
<Caption>
                                          SEPTEMBER 30,   DECEMBER 31,
                                              2001           2000
                                          ------------   ------------
<S>                                       <C>            <C>
   ASSETS
   ------
CURRENT:
  Cash                                    $     64,571   $    388,422
  Accounts receivable, less allowance
    for possible losses of $502,527
    in 2001 and $496,569 in 2000             9,853,471     10,468,504
  Inventories                               20,805,249     23,418,990
  Deferred income taxes                        528,000        528,000
  Prepaid expenses and other                   874,044        762,548
                                          ------------   ------------
      TOTAL CURRENT ASSETS                  32,125,335     35,566,464
                                          ------------   ------------

PROPERTY AND EQUIPMENT:
  Land                                       1,182,938      1,182,938
  Buildings and improvements                 5,989,454      5,983,654
  Machinery and equipment                   12,864,644     12,129,262
                                          ------------   ------------
                                            20,037,036     19,295,854
  Less accumulated depreciation
    and amortization                         9,584,064      8,506,651
                                          ------------   ------------
      NET PROPERTY AND EQUIPMENT            10,452,972     10,789,203
                                          ------------   ------------

GOODWILL, net of accumulated
  amortization of $2,082,238 in
  2001 and $1,838,911 in 2000                7,382,720      7,626,047

OTHER ASSETS                                   152,329        171,103
                                          ------------   ------------
      TOTAL ASSETS                        $ 50,113,356   $ 54,152,817
                                          ============   ============
</Table>


                                       1
<Page>

                     P & F INDUSTRIES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                                   (CONTINUED)
                     =======================================

<Table>
<Caption>
                                          SEPTEMBER 30,   DECEMBER 31,
                                              2001           2000
                                          ------------   ------------
<S>                                       <C>            <C>
   LIABILITIES AND SHAREHOLDERS' EQUITY
   ------------------------------------
CURRENT LIABILITIES:
  Short-term borrowings                   $  4,000,000   $  9,000,000
  Accounts payable                           2,882,738      3,177,469
  Accruals:
    Compensation                             1,413,139      2,242,110
    Other                                    2,978,093      1,713,486
  Current maturities of long-term debt         304,874        296,106
                                          ------------   ------------
      TOTAL CURRENT LIABILITIES             11,578,844     16,429,171

LONG-TERM DEBT, less current maturities      3,747,999      3,862,512

DEFERRED INCOME TAXES                          869,000        869,000
                                          ------------   ------------
                                            16,195,843     21,160,683
                                          ------------   ------------

SHAREHOLDERS' EQUITY:
  Preferred stock - $10 par;
    authorized - 2,000,000 shares;
    no shares outstanding                           --             --
  Common stock:
    Class A - $1 par;
      authorized - 7,000,000 shares;
      issued - 3,677,593 shares              3,677,593      3,677,593
    Class B - $1 par;
      authorized -  2,000,000 shares;
      no shares issued or outstanding               --             --
  Additional paid-in capital                 8,464,139      8,464,139
  Retained earnings                         22,896,399     21,560,475
  Treasury stock, at cost
    (131,645 shares and 72,185 shares)      (1,120,618)      (710,073)
                                          ------------   ------------
      TOTAL SHAREHOLDERS' EQUITY            33,917,513     32,992,134
                                          ------------   ------------
      TOTAL LIABILITIES AND
        SHAREHOLDERS' EQUITY              $ 50,113,356   $ 54,152,817
                                          ============   ============
</Table>


                                       2
<Page>

                     P & F INDUSTRIES, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)
                     =======================================

<Table>
<Caption>
                                           THREE MONTHS ENDED           NINE MONTHS ENDED
                                              SEPTEMBER 30,               SEPTEMBER 30,
                                           ------------------           -----------------
                                           2001          2000          2001          2000
                                       ------------  ------------  ------------  ------------
<S>                                    <C>           <C>           <C>           <C>
REVENUES:
  Net sales                            $ 16,011,708  $ 21,645,406  $ 49,262,386  $ 61,035,604
  Other                                     437,150       199,351       876,412       569,848
                                       ------------  ------------  ------------  ------------
                                         16,448,858    21,844,757    50,138,798    61,605,452
                                       ------------  ------------  ------------  ------------

COSTS AND EXPENSES:
  Cost of sales                          11,380,596    15,639,334    34,745,361    42,717,447
  Selling, administrative and general     4,102,867     4,262,709    12,542,528    12,910,501
  Interest - net                            174,019       389,897       679,985     1,067,011
                                       ------------  ------------  ------------  ------------
                                         15,657,482    20,291,940    47,967,874    56,694,959
                                       ------------  ------------  ------------  ------------

INCOME BEFORE TAXES ON INCOME               791,376     1,552,817     2,170,924     4,910,493

TAXES ON INCOME                             303,000       593,000       835,000     1,864,000
                                       ------------  ------------  ------------  ------------

NET INCOME                             $    488,376  $    959,817  $  1,335,924  $  3,046,493
                                       ============  ============  ============  ============

Weighted average common
  shares outstanding:
    Basic                                 3,553,974     3,584,324     3,561,636     3,546,203

    Diluted                               3,626,007     3,699,113     3,636,216     3,691,470

Earnings per share of common stock:
  Basic                                       $ .14         $ .27         $ .38         $ .86

  Diluted                                     $ .13         $ .26         $ .37         $ .83
</Table>


                                       3
<Page>

                     P & F INDUSTRIES, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                                   (UNAUDITED)
                 ==============================================

<Table>
<Caption>
                                        ADDITIONAL
                            COMMON       PAID-IN       RETAINED     TREASURY
                            STOCK        CAPITAL       EARNINGS      STOCK
                         -----------   -----------   ------------  -----------
<S>                      <C>           <C>           <C>           <C>
Balance,
  January 1, 2001        $ 3,677,593   $ 8,464,139   $ 21,560,475  ($  710,073)

Net income for the
  nine months ended
  September 30, 2001              --            --      1,335,924           --

Purchase of Class A
  Common Stock                    --            --             --     (410,545)
                         -----------   -----------   ------------  -----------
Balance,
  September 30, 2001     $ 3,677,593   $ 8,464,139   $ 22,896,399  ($1,120,618)
                         ===========   ===========   ============  ===========
</Table>


                                       4
<Page>

                     P & F INDUSTRIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                    =======================================

<Table>
<Caption>
                                              NINE MONTHS ENDED
                                                SEPTEMBER 30,
                                              -----------------
                                              2001          2000
                                          ------------  ------------
<S>                                       <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                              $  1,335,924     3,046,493
                                          ------------  ------------

  Adjustments to reconcile net income
    to net cash provided by (used in)
    operating activities:
      Depreciation                           1,080,502     1,067,799
      Amortization                             257,056       254,520
      (Gain) on disposal of fixed assets        (3,089)      (41,193)
      Provision for losses on
        accounts receivable - net                5,958         2,655
  Decrease (increase):
    Accounts receivable                        609,075    (2,139,862)
    Inventories                              2,613,741    (5,490,341)
    Prepaid expenses and other                (111,496)     (336,379)
    Other assets                                 5,046          (844)
  Increase (decrease):
    Accounts payable                          (294,731)      783,446
    Accruals and other                         435,636      (278,159)
                                          ------------  ------------
      Total adjustments                      4,597,698    (6,178,358)
                                          ------------  ------------
        Net cash provided by (used in)
          operating activities               5,933,622    (3,131,865)
                                          ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures                        (741,182)     (973,741)
  Proceeds from sale of fixed assets                --        41,194
                                          ------------  ------------
        Net cash used in
          investing activities                (741,182)     (932,547)
                                          ------------  ------------
</Table>


                                       5
<Page>

                     P & F INDUSTRIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                   (CONTINUED)
                     ======================================

<Table>
<Caption>
                                               NINE MONTHS ENDED
                                                 SEPTEMBER 30,
                                               -----------------
                                              2001          2000
                                          ------------  ------------
<S>                                       <C>           <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from short-term borrowings        3,500,000     7,000,000
  Repayments of short-term borrowings       (8,500,000)   (3,000,000)
  Principal payments on long-term debt        (105,746)     (598,094)
  Purchase of Class A Common Stock            (410,545)           --
  Proceeds from exercise of stock options           --       124,687
                                          ------------  ------------
        Net cash provided by (used in)
          financing activities              (5,516,291)    3,526,593
                                          ------------  ------------

NET INCREASE (DECREASE) IN CASH               (323,851)     (537,819)

CASH AT BEGINNING OF PERIOD                    388,422     1,305,351
                                          ------------  ------------

CASH AT END OF PERIOD                     $     64,571  $    767,532
                                          ============  ============


SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION:
    Cash paid during the period for:

      Income taxes                        $    541,000  $  1,826,470
                                          ============  ============


      Interest                            $    721,669  $  1,064,695
                                          ============  ============
</Table>

    During the nine months ended September 30, 2000 the Company received 19,925
shares of Class A Common Stock in connection with the exercise of stock options.
The value of these shares was recorded at $192,500.


                                       6
<Page>

                     P & F INDUSTRIES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ==========================================

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

         The consolidated financial statements contained herein include the
accounts of P & F Industries, Inc. and its subsidiaries (the "Company"). All
significant intercompany balances and transactions have been eliminated.

         The Company conducts its business operations through its three
wholly-owned subsidiaries. Florida Pneumatic Manufacturing Corporation ("Florida
Pneumatic") is engaged in the importation, manufacture and sale of pneumatic
hand tools, primarily for the industrial and retail markets, and the importation
and sale of compressor air filters. Florida Pneumatic also markets, through its
Berkley Tool division, a line of pipe cutting and threading tools, wrenches and
replacement electrical components for a widely-used brand of pipe cutting and
threading machines. Green Manufacturing, Inc. ("Green") is engaged primarily in
the manufacture, development and sale of heavy-duty welded custom designed
hydraulic cylinders. Green also manufactures a line of access equipment for the
petro-chemical industry and a line of post hole digging equipment for the
agricultural industry. Embassy Industries, Inc. ("Embassy") is engaged in the
manufacture and sale of baseboard heating products and the importation and sale
of radiant heating systems. Embassy also imports a line of door and window
hardware items through its Franklin Manufacturing hardware division. Note 4
presents financial information for the segments of the Company's business.

BASIS OF FINANCIAL STATEMENT PRESENTATION

         The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information, and with the rules
and regulations of the Securities and Exchange Commission regarding interim
financial reporting. Accordingly, these interim financial statements do not
include all of the information and footnotes required by accounting principles
generally accepted in the United States of America for complete financial
statements. In the opinion of the Company, these unaudited consolidated
financial statements include all adjustments necessary to present fairly the
information set forth therein. All such adjustments are of a normal recurring
nature. Results for interim periods are not necessarily indicative of results to
be expected for a full year, since the operations of some of the Company's
subsidiaries are seasonal in nature.


                                       7
<Page>

                     P & F INDUSTRIES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ==========================================

BASIS OF FINANCIAL STATEMENT PRESENTATION (CONTINUED)

         The consolidated balance sheet information for December 31, 2000 was
derived from the audited financial statements included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2000. The interim financial
statements contained herein should be read in conjunction with that Report.

         In preparing financial statements in conformity with accounting
principles generally accepted in the United States of America, management is
required to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.


NOTE 2 - INVENTORIES

         Major classes of inventory were as follows:

<Table>
<Caption>
                                    SEPTEMBER 30,    DECEMBER 31,
                                        2001            2000
                                    ------------    ------------
<S>                                 <C>             <C>
       Finished goods               $ 16,519,059    $ 18,511,265
       Work in process                   839,026         934,283
       Raw materials and supplies      3,447,164       3,973,442
                                    ------------    ------------
                                    $ 20,805,249    $ 23,418,990
                                    ============    ============
</Table>

NOTE 3 - CAPITAL STOCK TRANSACTIONS

         During the nine months ended September 30, 2001, the Company purchased
59,460 shares of its Class A Common Stock at a cost of $410,545.

         During the nine months ended September 30, 2000, the Company received
19,925 shares of Class A Common Stock in connection with the exercise of stock
options. The value of these shares was recorded at $192,500.


                                       8
<Page>

                     P & F INDUSTRIES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ==========================================

NOTE 4 - SEGMENTS OF BUSINESS

         The following tables present financial information by segment for the
periods ended September 30, 2001 and 2000. Segment profit (loss) excludes
general corporate expenses, interest expense and income taxes. There were no
intersegment revenues.

<Table>
<Caption>
                                  PNEUMATIC
                                  TOOLS AND
  NINE MONTHS ENDED       CON-     RELATED   HYDRAULIC   HEATING
  SEPTEMBER 30, 2001   SOLIDATED  EQUIPMENT  CYLINDERS   PRODUCTS  HARDWARE
  ------------------   ---------  ---------  ---------   --------  --------
    (In thousands)
<S>                    <C>        <C>        <C>        <C>        <C>
 Revenues from
   external customers  $  50,139  $  28,782  $  11,115  $   6,704  $ 3,538
                       =========  =========  =========  =========  =======

 Segment profit (loss) $   5,004  $   4,869  $    (260) $     287  $   108
                       =========  =========  =========  =========  =======

<Caption>
                                  PNEUMATIC
                                  TOOLS AND
  NINE MONTHS ENDED       CON-     RELATED   HYDRAULIC   HEATING
  SEPTEMBER 30, 2000   SOLIDATED  EQUIPMENT  CYLINDERS   PRODUCTS  HARDWARE
  ------------------   ---------  ---------  ---------   --------  --------
    (In thousands)
<S>                    <C>        <C>        <C>        <C>        <C>
 Revenues from
   external customers  $  61,605  $  33,575  $  16,328  $   7,285  $ 4,417
                       =========  =========  =========  =========  =======

 Segment profit        $   8,272  $   6,376  $   1,052  $     539  $   305
                       =========  =========  =========  =========  =======

<Caption>
                                  PNEUMATIC
                                  TOOLS AND
  THREE MONTHS ENDED      CON-     RELATED   HYDRAULIC   HEATING
  SEPTEMBER 30, 2001   SOLIDATED  EQUIPMENT  CYLINDERS   PRODUCTS  HARDWARE
  ------------------   ---------  ---------  ---------   --------  --------
    (In thousands)
<S>                    <C>        <C>        <C>        <C>        <C>
 Revenues from
   external customers  $  16,449  $   9,135  $   3,508  $   2,579  $ 1,227
                       =========  =========  =========  =========  =======

 Segment profit (loss) $   1,622  $   1,603  $    (139) $     113  $    45
                       =========  =========  =========  =========  =======
</Table>


                                       9
<Page>

                     P & F INDUSTRIES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ==========================================

NOTE 4 - SEGMENTS OF BUSINESS (CONTINUED)

<Table>
<Caption>
                                  PNEUMATIC
                                  TOOLS AND
  THREE MONTHS ENDED      CON-     RELATED   HYDRAULIC   HEATING
  SEPTEMBER 30, 2000   SOLIDATED  EQUIPMENT  CYLINDERS   PRODUCTS  HARDWARE
  ------------------   ---------  ---------  ---------   --------  --------
    (In thousands)
<S>                    <C>        <C>        <C>        <C>        <C>
 Revenues from
   external customers  $  21,844  $  12,543  $   4,971  $   2,895  $ 1,435
                       =========  =========  =========  =========  =======

 Segment profit        $   2,674  $   2,035  $     267  $     298  $    74
                       =========  =========  =========  =========  =======
</Table>

         The reconciliation of combined operating profits for reportable
segments to consolidated income before income taxes is as follows:

<Table>
<Caption>
                                               NINE MONTHS ENDED
                                                  SEPTEMBER 30,
                                            -----------------------
                                               2001         2000
                                            ----------   ----------
<S>                                         <C>          <C>
   Total profit for reportable segments     $5,003,953   $8,272,041

   General corporate expenses               (2,153,044)  (2,294,537)

   Interest expense                           (679,985)  (1,067,011)
                                            ----------   ----------

   Income before income taxes               $2,170,924   $4,910,493
                                            ==========   ==========

<Caption>
                                               THREE MONTHS ENDED
                                                  SEPTEMBER 30,
                                            -----------------------
                                               2001         2000
                                            ----------   ----------
<S>                                         <C>          <C>
   Total profit for reportable segments     $1,622,305   $2,673,930

   General corporate expenses                 (656,910)    (731,216)

   Interest expense                           (174,019)    (389,897)
                                            ----------   ----------
   Income before income taxes               $  791,376   $1,552,817
                                            ==========   ==========
</Table>


                                       10
<Page>

                     P & F INDUSTRIES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ==========================================

NOTE 5 - EARNINGS PER SHARE

         The following table sets forth the computation of basic and diluted
earnings per common share:

<Table>
<Caption>
                                         THREE MONTHS ENDED        NINE MONTHS ENDED
                                            SEPTEMBER 30,            SEPTEMBER 30,
                                         ------------------        -----------------
                                         2001         2000         2001         2000
                                      -----------  -----------  -----------  -----------
<S>                                   <C>          <C>          <C>          <C>
  Numerator:
    Numerator for basic and diluted
      earnings per common share -
      income available to common
      shareholders                    $   488,376  $   959,817  $ 1,335,924  $ 3,046,493
                                      ===========  ===========  ===========  ===========

  Denominator:
    Denominator for basic
      earnings per common
      share - weighted average
      common shares outstanding         3,553,974    3,584,324    3,561,636    3,546,203

    Effect of dilutive securities:
      Common stock options                 72,033      114,789       74,580      145,267
                                      -----------  -----------  -----------  -----------
    Denominator for diluted
      earnings per common
      share - adjusted weighted
      average common shares and
      assumed conversions               3,626,007    3,699,113    3,636,216    3,691,470
                                      ===========  ===========  ===========  ===========

  Earnings per common share:
    Basic                                   $ .14        $ .27        $ .38        $ .86
                                            =====        =====        =====        =====

    Diluted                                 $ .13        $ .26        $ .37        $ .83
                                            =====        =====        =====        =====
</Table>


                                       11
<Page>

                     P & F INDUSTRIES, INC. AND SUBSIDIARIES
                     =======================================

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

THIRD QUARTER ENDED SEPTEMBER 30, 2001 COMPARED WITH THIRD QUARTER ENDED
SEPTEMBER 30, 2000

         Consolidated revenues decreased 24.7%, from $21,844,757 to $16,448,858.
Revenues from pneumatic tools and related equipment decreased 27.2%, from
$12,543,705 to $9,134,963, due primarily to the cancellation of two special fall
promotions by one customer, as well as to a reduction in prices to another large
customer. Selling prices of pneumatic tools and related equipment were unchanged
from the prior year, with the exception of prices to the foregoing customer,
which were reduced by an average of 16%. Revenues from hydraulic cylinders and
other equipment decreased 29.4%, from $4,970,459 to $3,507,980, due primarily to
lower demand for recycled cardboard and large capital goods, which in turn
reduced demand for cylinders sold to the refuse and aerial lift markets,
respectively, as well as to the discontinuance by one major aerial lift customer
of a significant portion of its product line. Selling prices of hydraulic
cylinders and other equipment were unchanged from the prior year. Revenues from
heating equipment decreased 10.9%, from $2,895,530 to $2,579,239, due primarily
to a decrease in sales of baseboard products, including the loss of a
significant baseboard customer. This decrease in sales was partially offset by
an increase in sales of radiant products and by sales of the new boiler
products. Selling prices of heating equipment were unchanged from the prior
year. Revenues from hardware decreased 14.5%, from $1,435,063 to $1,226,676, due
primarily to the loss of two significant customers who declared bankruptcy since
the third quarter of 2000. Selling prices of hardware products were unchanged
from the prior year.

         Consolidated gross profit, as a percentage of revenues, increased from
28.4% to 30.8%. Gross profit from pneumatic tools and related equipment
increased from 31.9% to 40.0%, due primarily to increases in the value of the
U.S. dollar as compared to both the Japanese yen and the New Taiwan dollar,
which decreased the cost of imported product. Gross profit from hydraulic
cylinders and other equipment decreased from 15.9% to 8.4%, due primarily to a
significant reduction in manufacturing activity resulting from the large
decrease in revenues, which has dramatically reduced the absorption of fixed
expenses and lowered gross profit. In addition, significant production labor
resources were expended to produce prototypes and initial short-run orders for
new customers. These new account activities generate little to no gross profit.
Labor productivity increases partially offset these negatives. Gross profit from
heating equipment decreased from 35.4% to 31.1%, due primarily to a reduction in
manufacturing activity resulting from the large decrease in revenues, which has
reduced the absorption of fixed expenses and lowered gross profit. Gross profit
was also negatively impacted by a less favorable product mix. Gross profit from
hardware decreased from 26.9% to 26.1%, due primarily to a less favorable
product mix.


                                       12
<Page>

         Consolidated selling, general and administrative expenses decreased
3.8%, from $4,262,709 to $4,102,867, due primarily to the overall decrease in
revenues for the period.

         Interest expense decreased 55.4%, from $389,897 to $174,019, due
primarily to decreases in both the average outstanding balance of the Company's
borrowings and the average interest rate on these borrowings.

         The effective tax rates for the quarters ended September 30, 2001 and
2000 were 38.3% and 38.2%, respectively.


NINE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED WITH NINE MONTHS ENDED
SEPTEMBER 30, 2000

         Consolidated revenues decreased 18.6%, from $61,605,452 to $50,138,798.
Revenues from pneumatic tools and related equipment decreased 14.3%, from
$33,575,538 to $28,781,405, due primarily to the cancellation of two special
fall promotions by a significant customer and, to a lesser extent, to a decrease
in sales to the catalog and industrial markets. These decreases in sales were
partially offset by an increase in sales to one large customer. Selling prices
of pneumatic tools and related equipment were unchanged from the prior year,
with the exception of prices to one significant customer, which were reduced by
an average of 16% in the third quarter. Revenues from hydraulic cylinders and
other equipment decreased 31.9%, from $16,327,893 to $11,114,768, due primarily
to lower demand for recycled cardboard and large capital goods, which in turn
reduced demand for cylinders sold to the refuse, aerial lift and wrecker
markets, , as well as to the discontinuance by one major aerial lift customer of
a significant portion of its product line Selling prices of hydraulic cylinders
and other equipment were unchanged from the prior year. Revenues from heating
equipment decreased 8.0%, from $7,285,172 to $6,704.234, due primarily to a
decrease in sales of baseboard products, including the loss of a significant
baseboard customer. This decrease in sales was partially offset by an increase
in sales of radiant products and by sales of the new boiler products. Selling
prices of heating equipment were unchanged from the prior year. Revenues from
hardware decreased 19.9%, from $4,416,849 to $3,538,391, due primarily to the
loss of two significant customers who declared bankruptcy since the third
quarter of 2000. Selling prices of hardware products were unchanged from the
prior year.

         Consolidated gross profit, as a percentage of revenues, was unchanged
at 30.7%. Gross profit from pneumatic tools and related equipment increased from
37.4% to 38.7%, due primarily to increases in the value of the U.S. dollar as
compared to both the Japanese yen and the New Taiwan dollar, which decreased the
cost of imported product. Gross profit from hydraulic cylinders and other
equipment decreased from 15.7% to 9.8%, due primarily to a significant reduction
in manufacturing activity resulting from the large decrease in revenues, which
has dramatically reduced the absorption of fixed expenses and lowered gross
profit. In addition, significant production labor resources were expended to
produce prototypes and initial short-run orders for new customers. These new
account activities generate little


                                       13
<Page>

to no gross profit. Labor productivity increases partially offset these
negatives. Gross profit from heating equipment decreased from 34.8% to 33.4%,
due primarily to a reduction in manufacturing activity resulting from the large
decrease in revenues, which has reduced the absorption of fixed expenses and
lowered gross profit. Gross profit was also negatively impacted by a less
favorable product mix. Gross profit from hardware decreased from 27.9% to 26.6%,
due primarily to a less favorable product mix.

         Consolidated selling, general and administrative expenses decreased
2.9%, from $12,910,501 to $12,542,528, due primarily to the overall decrease in
revenues for the period.

         Interest expense decreased 36.3%, from $1,067,011 to $679,985, due
primarily to decreases in both the average outstanding balance of the Company's
borrowings and the average interest rate on these borrowings.

         The effective tax rates for the nine months ended September 30, 2001
and 2000 were 38.5% and 38.0%, respectively.

LIQUIDITY AND CAPITAL RESOURCES

         The Company gauges its liquidity and financial stability by the
measurements shown in the following table (dollar amounts in thousands):

<Table>
<Caption>
                           SEPTEMBER 30,   DECEMBER 31,   SEPTEMBER 30,
                               2001            2000           2000
                           -------------   ------------   ------------
<S>                          <C>            <C>            <C>
    Working Capital          $  20,546      $  19,137      $  20,838
    Current Ratio            2.77 to 1      2.16 to 1      1.96 to 1
    Shareholders' Equity     $  33,918      $  32,992      $  32,196
</Table>

         During the nine months ended September 30, 2001, gross accounts
receivable decreased by approximately $610,000, with decreases of approximately
$695,000 at Florida Pneumatic and approximately $65,000 at Green being partially
offset by an increase of approximately $150,000 at Embassy. The decreases at
Florida Pneumatic and Green were the result of decreased sales and slight
improvements in the average days' sales outstanding. The increase at Embassy was
due primarily to the timing of receipts from customers.

         During the nine months ended September 30, 2001, inventories decreased
by approximately $2,610,000, with decreases of approximately $2,734,000 at
Florida Pneumatic and approximately $460,000 at Green being partially offset by
an increase of approximately $580,000 at Embassy. The decreases at Florida
Pneumatic and Green were primarily the result of ongoing efforts to bring
inventory balances in line with lower anticipated sales. The increase at Embassy
was primarily to support the new boiler product line. Inventories at Embassy
also increased as a result of lower than expected sales of baseboard products.


                                       14
<Page>

LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)

         During the nine months ended September 30, 2001, accounts payable
decreased by approximately $295,000, with decreases of approximately $215,000 at
Embassy and approximately $265,000 at Green being partially offset by an
increase of approximately $185,000 at Florida Pneumatic. The decrease at Embassy
and the increase at Florida Pneumatic were both primarily due to the timing of
inventory receipts. The decrease at Green was primarily the result of lower
overall business activity. Short-term borrowings decreased by $5,000,000,
primarily as a result of the decrease in working capital requirements consistent
with a contraction of the business.

         On June 25, 2001, the Company renewed its credit agreement, as amended,
with European American Bank through July 26, 2002. This agreement provides the
Company with various credit facilities, including revolving credit loans, term
loans for acquisitions and a foreign exchange line. The revolving credit loan
facility provides a total of $12,000,000, with various sublimits, for direct
borrowings, letters of credit, bankers' acceptances and equipment loans. At
September 30, 2001, there was $4,000,000 outstanding against the revolving
credit loan facility. There were no commitments for open letters of credit at
September 30, 2001.

         The term loan facility provides a commitment of $15,000,000 to finance
acquisitions subject to the lending bank's approval. There was no loan balance
outstanding against this facility at September 30, 2001. There was, however, a
standby letter of credit totaling approximately $670,000 outstanding against
this facility at September 30, 2001. This standby letter of credit was used to
secure the Economic Development Revenue Bond assumed as part of the acquisition
of Green.

         The foreign exchange line provides for the availability of up to
$10,000,000 in foreign currency forward contracts. These contracts fix the
exchange rate on future purchases of Japanese yen needed for payments to foreign
suppliers. The total amount of foreign currency forward contracts outstanding at
September 30, 2001 was approximately $1,310,000.

         The Company's credit agreement is subject to annual review by the
lending bank. Under this agreement, the Company is required to adhere to certain
financial covenants. At September 30, 2001, and for the nine months then ended,
the Company satisfied all of these covenants.

         Capital spending for the nine months ended September 30, 2001 was
approximately $750,000. The total amount was provided from working capital.
Capital expenditures for the rest of 2001 are expected to total approximately
$220,000, some of which may be financed through the Company's credit facilities.
Included in the expected total for the rest of 2001 are capital expenditures
relating to new products, expansion of existing product lines and replacement of
old equipment.


                                       15
<Page>

LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)

         The Company, through Florida Pneumatic, imports a significant amount of
its purchases from Japan, with payment due in Japanese yen. As a result, the
Company is subject to the effects of foreign currency exchange fluctuations. The
Company uses a variety of techniques to protect itself from any adverse effects
from these fluctuations, including increasing its selling prices, obtaining
price reductions from its overseas suppliers, using alternative supplier sources
and entering into foreign currency forward contracts. The strengthening of the
U.S. dollar versus the Japanese yen over the last 12 months has had a positive
effect on the Company's results of operations and its financial position. There
can be no assurance however, that this situation will continue. See "Item 3 -
Quantitative and Qualitative Disclosures About Market Risk,"

NEW ACCOUNTING PRONOUNCEMENT

         In June 2001, the Financial Accounting Standards Board issued SFAS No.
142, "Accounting for Goodwill and Other Intangible Assets." SFAS No. 142 is
effective for transactions entered into after March 15, 2001. This statement
addresses financial accounting and reporting for acquired goodwill and other
intangible assets and supersedes APB Opinion No. 17, "Intangible Assets". Among
other intangible assets, this statement addresses how goodwill should be
accounted for after it has been initially recognized in the financial
statements. For years beginning after December 15, 2001, companies are no longer
required to amortize goodwill but instead must evaluate the carrying value of
the goodwill for impairment. If the goodwill is impaired, then the Company will
be required to write down the carrying value of its goodwill to its estimated
net realizable value at the time it is impaired. The Company has not determined
the impact the adoption of this statement might have.


                                       16
<Page>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company is exposed to market risks relating to changes in foreign
currency exchange rates. The Company attempts to reduce the risks related to
foreign currency exchange rate fluctuation by utilizing financial instruments,
pursuant to Company policy.

         The value of the U.S. dollar affects the Company's financial results.
Changes in exchange rates may positively or negatively affect the Company's
gross profit and operating expenses. The Company engages in hedging programs
aimed at limiting, in part, the impact of currency fluctuations. Using primarily
forward exchange contracts, the Company hedges some of those transactions that,
when remeasured according to accounting principles generally accepted in the
United States of America, impact the income statement. Factors that could impact
the effectiveness of the Company's programs include volatility of the currency
markets and availability of hedging instruments. All currency contracts that are
entered into by the Company are components of hedging programs and are entered
into for the sole purpose of hedging an existing or anticipated currency
exposure, not for speculation. The Company does not buy or sell financial
instruments for trading purposes. Although the Company maintains these programs
to reduce the impact of changes in currency exchange rates, when the U.S. dollar
sustains a weakening exchange rate against currencies in which the Company
incurs costs, the Company's costs are adversely affected. At September 30, 2001,
the Company held open hedge forward contracts to deliver approximately
$1,310,000 of Japanese yen. The potential loss in value of the Company's net
investment in these foreign currency forward contracts resulting from a
hypothetical 10 percent adverse change in yen exchange rates at September 30,
2001 is approximately $150,000.


                                       17
<Page>

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS
         The Registrant is not a party to any litigation that is expected to
         have a material adverse effect on its business.


ITEM 2.  CHANGES IN SECURITIES
         None.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
         None.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         None.


ITEM 5.  OTHER INFORMATION
         None.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
         (a)      Exhibits
                    See "Exhibit Index" immediately following the
                    signature page.

         (b)      Reports on Form 8-K
                    No reports on Form 8-K were filed by the Registrant
                    during the quarter ended September 30, 2001.


                                       18
<Page>

                                   SIGNATURES

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


                                 P & F INDUSTRIES, INC.
                                 (Registrant)


                                 By /s/ Joseph A. Molino, Jr.
                                   -------------------------------
                                        Joseph A. Molino, Jr.
                                           Vice President
Dated: November 14, 2001            (Principal Financial Officer)


                                       19
<Page>

                                  EXHIBIT INDEX

EXHIBIT
NO.
-------

2.1      Asset Purchase Agreement, dated as of September 16, 1998, by and
         between Green Manufacturing, Inc., an Ohio corporation, and the
         Registrant (Incorporated by reference to Exhibit 2.1 of the
         Registrant's Current Report on Form 8-K dated September 16, 1998).
         Pursuant to Item 601(b)(2) of Regulation S-K, the Registrant agrees to
         furnish supplementally a copy of any exhibit or schedule omitted from
         the Asset Purchase Agreement to the Commission upon request.

3.1      Restated Certificate of Incorporation of the Registrant (Incorporated
         by reference to Exhibit 3.1 to the Registrant's Annual Report on Form
         10-K for the fiscal year ended December 31, 1999).

3.2      Amended By-laws of the Registrant (Incorporated by reference to Exhibit
         3.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter
         ended September 30, 1999).

4.1      Rights Agreement, dated as of August 23, 1994, between the Registrant
         and American Stock Transfer & Trust Company, as Rights Agent
         (Incorporated by reference to Exhibit 1 to the Registrant's
         Registration Statement on Form 8-A dated August 24, 1994).

4.2      Amendment to Rights Agreement, dated as of April 11, 1997, between the
         Registrant and American Stock Transfer & Trust Company, as Rights Agent
         (Incorporated by reference to Exhibit 4.1 to the Registrant's Current
         Report on Form 8-K dated April 11, 1997).

4.3      Credit Agreement, dated as of July 23, 1998, by and among the
         Registrant, Florida Pneumatic Manufacturing Corporation, a Florida
         corporation, Embassy Industries, Inc., a New York corporation, and
         European American Bank, a New York banking corporation (Incorporated by
         reference to Exhibit 4.3 to the Registrant's Annual Report on Form
         10-K/A for the fiscal year ended December 31, 1998).

4.4      Amendment No. 1 to Credit Agreement, dated as of September 16, 1998, by
         and among the Registrant, Florida Pneumatic Manufacturing Corporation,
         a Florida corporation, Embassy Industries, Inc., a New York
         corporation, Green Manufacturing, Inc., a Delaware corporation, and
         European American Bank, a New York banking corporation (Incorporated by
         reference to Exhibit 4.4 to the Registrant's Annual Report on Form
         10-K/A for the fiscal year ended December 31, 1998).


                                       20
<Page>

                                  EXHIBIT INDEX
                                   (CONTINUED)

EXHIBIT
NO.
-------

4.5      Amendment No. 2 to Credit Agreement, dated as of July 28, 1999, by and
         among the Registrant, Florida Pneumatic Manufacturing Corporation, a
         Florida corporation, Embassy Industries, Inc., a New York corporation,
         Green Manufacturing, Inc., a Delaware corporation, and European
         American Bank, a New York banking corporation (Incorporated by
         reference to Exhibit 4.5 to the Registrant's Quarterly Report on Form
         10-Q for the quarter ended June 30, 1999).

4.6      Amendment No. 3 to Credit Agreement, dated as of July 26, 2000, by and
         among the Registrant, Florida Pneumatic Manufacturing Corporation, a
         Florida corporation, Embassy Industries, Inc., a New York corporation,
         Green Manufacturing, Inc., a Delaware corporation, and European
         American Bank, a New York banking corporation (Incorporated by
         reference to Exhibit 4.5 to the Registrant's Quarterly Report on Form
         10-Q for the quarter ended June 30, 2000).

4.7      Amendment No. 4 to Credit Agreement, dated as of June 25, 2001, by and
         among the Registrant, Florida Pneumatic Manufacturing Corporation, a
         Florida corporation, Embassy Industries, Inc., a New York corporation,
         Green Manufacturing, Inc., a Delaware corporation, and European
         American Bank, a New York banking corporation (Incorporated by
         reference to Exhibit 4.7 to the Registrant's Quarterly Report on Form
         10-Q for the quarter ended September 30, 2000).

4.8      Certain instruments defining the rights of holders of the long-term
         debt securities of the Registrant are omitted pursuant to Section
         (b)(4)(iii)(A) of Item 601 of Regulation S-K. The Registrant agrees to
         furnish supplementally copies of these instruments to the Commission
         upon request.

10.1     Second Amended and Restated Employment Agreement, dated as of May 30,
         2001, between the Registrant and Richard A. Horowitz (Incorporated by
         reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form
         10-Q for the quarter ended September 30, 2000).


                                       21