----

----

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|   | 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) |   |                        |

----

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|                                      |                                                                                                                      | PAGE      |
|-------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|-----------|
|                                      |                                                                                                                      |      |
| PART I — FINANCIAL INFORMATION |   1                                                                                                                  |
|                                      |                                                                                                                      |      |
| Item 1.                                   | Financial Statements                                                                                                      |   1  |
|                                      |                                                                                                                      |      |
|                                      | Consolidated Condensed Balance Sheets as of March 31, 2011 (unaudited) and December 31, 2010                         |   1  |
|                                      |                                                                                                                      |      |
|                                      | Consolidated Condensed Statements of Operations for the three months ended March 31, 2011 and 2010 (unaudited)       |   3  |
|                                      |                                                                                                                      |      |
|                                      | Consolidated Condensed Statement of Shareholders’ Equity for the three months ended March 31, 2011 (unaudited) |   4  |
|                                      |                                                                                                                      |      |
|                                      | Consolidated Condensed Statements of Cash Flows for the three months ended March 31, 2011 and 2010 (unaudited)       |   5  |
|                                      |                                                                                                                      |      |
|                                      | Notes to Consolidated Condensed Financial Statements                                                                      |   7  |
|                                      |                                                                                                                      |      |
| Item 2.                                   | Management’s Discussion and Analysis of Financial Condition and Results of Operations                               |   14 |
|                                      |                                                                                                                      |      |
| Item 3.                                   | Quantitative and Qualitative Disclosures About Market Risk                                                                |   19 |
|                                      |                                                                                                                      |      |
| Item 4                                    | Controls and Procedures                                                                                                   |   19 |
|                                      |                                                                                                                      |      |
| PART II — OTHER INFORMATION    |   21                                                                                                                 |
|                                      |                                                                                                                      |      |
| Item 1.                                   | Legal Proceedings                                                                                                         |   21 |
|                                      |                                                                                                                      |      |
| Item 1A.                                  | Risk Factors                                                                                                              |   21 |
|                                      |                                                                                                                      |      |
| Item 2.                                   | Unregistered Sales of Equity Securities and Use of Proceeds                                                               |   21 |
|                                      |                                                                                                                      |      |
| Item 3.                                   | Defaults Upon Senior Securities                                                                                           |   21 |
|                                      |                                                                                                                      |      |
| Item 4.                                   | RESERVED                                                                                                                  |   21 |
|                                      |                                                                                                                      |      |
| Item 5.                                   | Other Information                                                                                                         |   21 |
|                                      |                                                                                                                      |      |
| Item 6.                                   | Exhibits                                                                                                                  |   21 |
|                                      |                                                                                                                      |      |
| Signature                                 |   22                                                                                                                 |
|                                      |                                                                                                                      |
| Exhibit Index                        |   23                                                                                                                 |

----

|                                           |   | March 31, 2011 |       |   | December 31, 2010 |   |
|------------------------------------------------|--------|--------------------------|------------|--------|-----------------------------|--------|
|                                           |   | (unaudited)              |       |   | (See Note 1)      |   |
| ASSETS                                         |   |                     |       |   |                        |   |
| CURRENT ASSETS                                 |   |                     |       |   |                        |   |
|                                           |   |                     |       |   |                        |   |
| Cash                                           |   | $                        | 901,000    |   |                        | $      | 874,000 |   |
| Accounts receivable — net                |   |                     | 7,957,000  |   |                        |   | 6,986,000 |   |
| Inventories – net                        |   |                     | 17,730,000 |   |                        |   | 18,430,000 |   |
| Deferred income taxes — net              |   |                     | 233,000    |   |                        |   | 233,000 |   |
| Prepaid expenses and other current assets      |   |                     | 624,000    |   |                        |   | 417,000 |   |
| Current assets of discontinued operations      |   |                     | 23,000     |   |                        |   | 23,000 |   |
| TOTAL CURRENT ASSETS                           |   |                     | 27,468,000 |   |                        |   | 26,963,000 |   |
|                                           |   |                     |       |   |                        |   |   |   |
| PROPERTY AND EQUIPMENT                         |   |                     |       |   |                        |   |   |   |
| Land                                           |   |                     | 1,550,000  |   |                        |   | 1,550,000 |   |
| Buildings and improvements                     |   |                     | 7,480,000  |   |                        |   | 7,480,000 |   |
| Machinery and equipment                        |   |                     | 16,493,000 |   |                        |   | 16,340,000 |   |
|                                           |   |                     | 25,523,000 |   |                        |   | 25,370,000 |   |
| Less accumulated depreciation and amortization |   |                     | 13,968,000 |   |                        |   | 13,599,000 |   |
| NET PROPERTY AND EQUIPMENT                     |   |                     | 11,555,000 |   |                        |   | 11,771,000 |   |
|                                           |   |                     |       |   |                        |   |   |   |
| GOODWILL                                       |   |                     | 5,150,000  |   |                        |   | 5,150,000 |   |
|                                           |   |                     |       |   |                        |   |   |   |
| OTHER INTANGIBLE ASSETS — net            |   |                     | 2,213,000  |   |                        |   | 2,300,000 |   |
|                                           |   |                     |       |   |                        |   |   |   |
| DEFERRED INCOME TAXES — net              |   |                     | 1,874,000  |   |                        |   | 1,874,000 |   |
|                                           |   |                     |       |   |                        |   |   |   |
| OTHER ASSETS — net                       |   |                     | 766,000    |   |                        |   | 837,000 |   |
|                                           |   |                     |       |   |                        |   |   |   |
| TOTAL ASSETS                                   |   | $                        | 49,026,000 |   |                        | $      | 48,895,000 |   |

----

|                                                                                                                  |   | March 31, 2011 |       |   | December 31, 2010 |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|--------------------------|------------|--------|-----------------------------|--------|
|                                                                                                                  |   | (unaudited)              |       |   | (See Note 1)      |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                            |   |                     |       |   |                        |   |
| CURRENT LIABILITIES                                                                                                   |   |                     |       |   |                        |   |
|                                                                                                                  |   |                     |       |   |                        |   |
| Short-term borrowings                                                                                                 |   | $                        | 10,203,000 |   |                        | $      | 9,996,000 |   |
| Accounts payable                                                                                                      |   |                     | 1,687,000  |   |                        |   | 1,673,000 |   |
| Accrued liabilities                                                                                                   |   |                     | 2,627,000  |   |                        |   | 3,115,000 |   |
| Current liabilities of discontinued operations                                                                        |   |                     | 32,000     |   |                        |   | 27,000 |   |
| Current maturities of long-term debt                                                                                  |   |                     | 406,000    |   |                        |   | 406,000 |   |
| TOTAL CURRENT LIABILITIES                                                                                             |   |                     | 14,955,000 |   |                        |   | 15,217,000 |   |
|                                                                                                                  |   |                     |       |   |                        |   |   |   |
| Long–term debt, less current maturities                                                                         |   |                     | 6,872,000  |   |                        |   | 6,973,000 |   |
| Liabilities of discontinued operations                                                                                |   |                     | 303,000    |   |                        |   | 306,000 |   |
|                                                                                                                  |   |                     |       |   |                        |   |   |   |
| TOTAL LIABILITIES                                                                                                     |   |                     | 22,130,000 |   |                        |   | 22,496,000 |   |
|                                                                                                                  |   |                     |       |   |                        |   |   |   |
| 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 March 31, 2011 and December 31, 2010 |   |                     | 3,956,000  |   |                        |   | 3,956,000 |   |
| Class B - $1 par; authorized - 2,000,000 shares; no shares issued                                                |   |                     | —    |   |                        |   | — |   |
| Additional paid-in capital                                                                                            |   |                     | 10,753,000 |   |                        |   | 10,718,000 |   |
| Retained earnings                                                                                                     |   |                     | 15,142,000 |   |                        |   | 14,680,000 |   |
| Treasury stock, at cost – 342,000 shares at March 31, 2011 and December 31, 2010                           |   |                     | (2,955,000 | )      |                        |   | (2,955,000 | ) |
|                                                                                                                  |   |                     |       |   |                        |   |   |   |
| TOTAL SHAREHOLDERS’ EQUITY                                                                                      |   |                     | 26,896,000 |   |                        |   | 26,399,000 |   |
|                                                                                                                  |   |                     |       |   |                        |   |   |   |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                      |   | $                        | 49,026,000 |   |                        | $      | 48,895,000 |   |

----

|                                                                                                          |   | Three Months Ended March 31, |       |
|---------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|------------|
|                                                                                                          |   | 2011                                             |       |   | 2010 |   |
| Net revenue                                                                                                   |   | $                                                | 13,453,000 |   |   | $ | 11,147,000 |   |
| Cost of sales                                                                                                 |   |                                             | 8,330,000  |   |   |   | 7,148,000 |   |
| Gross profit                                                                                                  |   |                                             | 5,123,000  |   |   |   | 3,999,000 |   |
| Selling, general and administrative expenses                                                                  |   |                                             | 4,423,000  |   |   |   | 4,317,000 |   |
| Operating income (loss)                                                                                       |   |                                             | 700,000    |   |   |   | (318,000 | ) |
| Interest expense                                                                                              |   |                                             | 221,000    |   |   |   | 389,000 |   |
| Income (loss) from continuing operations before income taxes                                                  |   |                                             | 479,000    |   |   |   | (707,000 | ) |
| Income tax expense                                                                                            |   |                                             | —    |   |   |   | — |   |
| Net income (loss) from continuing operations                                                                  |   |                                             | 479,000    |   |   |   | (707,000 | ) |
|                                                                                                          |   |                                             |       |   |   |   |   |   |
| Loss from discontinued operations (no tax benefits for the three month periods ended March 31, 2011 and 2010) |   |                                             | (17,000    | ) |   |   | (1,744,000 | ) |
|                                                                                                          |   |                                             |       |   |   |   |   |   |
| Net income (loss)                                                                                             |   | $                                                | 462,000    |   |   | $ | (2,451,000 | ) |
|                                                                                                          |   |                                             |       |   |   |   |   |   |
| Basic and diluted earnings (loss) per share                                                                   |   |                                             |       |   |   |   |   |   |
| Continuing operations                                                                                         |   | $                                                | 0.13       |   |   | $ | (0.20 | ) |
| Discontinued operations                                                                                       |   |                                             | —    |   |   |   | (0.48 | ) |
| Net income (loss)                                                                                        |   | $                                                | 0.13       |   |   | $ | (0.68 | ) |
|                                                                                                          |   |                                             |       |   |   |   |   |   |
| Weighted average common shares outstanding:                                                                   |   |                                             |       |   |   |   |   |   |
| Basic                                                                                                         |   |                                             | 3,615,000  |   |   |   | 3,615,000 |   |
| Diluted                                                                                                       |   |                                             | 3,678,000  |   |   |   | 3,615,000 |   |

----

|                          |   |   |       |   | Class A CommonStock, $1 Par |   |      | Additionalpaid-in |   |   | Retained  |   |   | Treasury stock |       |
|-------------------------------|--------|--------|------------|--------|-------------------------------------------------|--------|-----------|-------------------|--------|--------|-----------|--------|--------|---------------------|------------|
|                          |   | Total  |       |   | Shares                                          |   |      | Amount            |   |   | capital   |   |   | earnings            |       |   | Shares |   |   | Amount |   |
|                          |   |   |       |   |                                            |   |      |              |   |   |      |   |   |                |       |   |   |   |   |   |   |
| Balance, January 1, 2011 |   | $      | 26,399,000 |   |                                            |   | 3,956,000 |              |   | $      | 3,956,000 |   |   | $                   | 10,718,000 |   |   | $ | 14,680,000 |   |   |   | (342,000 | ) |   | $ | (2,955,000 | ) |
|                          |   |   |       |   |                                            |   |      |              |   |   |      |   |   |                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                    |   |   | 462,000    |   |                                            |   |      |              |   |   |      |   |   |                |       |   |   |   | 462,000 |   |   |   |   |   |   |   |   |   |
| Stock-based compensation      |   |   | 35,000     |   |                                            |   |      |              |   |   |      |   |   |                | 35,000     |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |   |       |   |                                            |   |      |              |   |   |      |   |   |                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, March 31, 2011       |   | $      | 26,896,000 |   |                                            |   | 3,956,000 |              |   | $      | 3,956,000 |   |   | $                   | 10,753,000 |   |   | $ | 15,142,000 |   |   |   | (342,000 | ) |   | $ | (2,955,000 | ) |

----

|                                                                                                              |   | Three monthsended March 31, |     |
|-------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|----------|
|                                                                                                              |   | 2011                                       |     |   | 2010 |   |
| Cash Flows from Operating Activities                                                                              |   |                                       |     |   |   |   |
| Net income (loss)                                                                                                 |   | $                                          | 462,000  |   |   | $ | (2,451,000 | ) |
|                                                                                                              |   |                                       |     |   |   |   |   |   |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities of continuing operations: |   |                                       |     |   |   |   |   |   |
| Loss from discontinued operations                                                                                 |   |                                       | 17,000   |   |   |   | 1,744,000 |   |
| Non-cash charges:                                                                                                 |   |                                       |     |   |   |   |   |   |
| Depreciation and amortization                                                                                     |   |                                       | 398,000  |   |   |   | 413,000 |   |
| Amortization of other intangible assets                                                                           |   |                                       | 87,000   |   |   |   | 87,000 |   |
| Amortization of other assets                                                                                      |   |                                       | 71,000   |   |   |   | 3,000 |   |
| Provision for losses on accounts receivable                                                                       |   |                                       | 19,000   |   |   |   | 8,000 |   |
| Stock-based compensation                                                                                          |   |                                       | 35,000   |   |   |   | 35,000 |   |
| Loss on sale of fixed assets                                                                                      |   |                                       | —  |   |   |   | 2,000 |   |
| Changes in operating assets and liabilities:                                                                      |   |                                       |     |   |   |   |   |   |
| Accounts receivable                                                                                               |   |                                       | (990,000 | ) |   |   | 283,000 |   |
| Notes and other receivables                                                                                       |   |                                       | 45,000   |   |   |   | (88,000 | ) |
| Inventories                                                                                                       |   |                                       | 700,000  |   |   |   | 945,000 |   |
| Income tax refund receivable                                                                                      |   |                                       | —  |   |   |   | (5,000 | ) |
| Prepaid expenses and other current assets                                                                         |   |                                       | (252,000 | ) |   |   | 175,000 |   |
| Other assets                                                                                                      |   |                                       | —  |   |   |   | (226,000 | ) |
| Accounts payable                                                                                                  |   |                                       | 14,000   |   |   |   | 1,273,000 |   |
| Accrued liabilities                                                                                               |   |                                       | (488,000 | ) |   |   | 975,000 |   |
| Total adjustments                                                                                                 |   |                                       | (344,000 | ) |   |   | 5,624,000 |   |
| Net cash provided by operating activities of continuing operations                                                |   |                                       | 118,000  |   |   |   | 3,173,000 |   |

----

|                                                   |   | Three monthsended March 31, |       |
|--------------------------------------------------------|--------|--------------------------------------------|------------|
|                                                   |   | 2011                                       |       |   | 2010 |   |
| Cash Flows from Investing Activities:                  |   |                                       |       |   |   |   |
| Capital expenditures                                   |   | $                                          | (183,000   | ) |   | $ | (46,000 | ) |
| Proceeds from disposal of fixed assets                 |   |                                       | 1,000      |   |   |   | — |   |
| Net cash used in investing activities                  |   |                                       | (182,000   | ) |   |   | (46,000 | ) |
|                                                   |   |                                       |       |   |   |   |   |   |
| Cash Flows from Financing Activities:                  |   |                                       |       |   |   |   |   |   |
| Proceeds from short-term borrowings                    |   |                                       | 7,525,000  |   |   |   | — |   |
| Repayments of short-term borrowings                    |   |                                       | (7,318,000 | ) |   |   | (2,400,000 | ) |
| Repayments of term loan                                |   |                                       | (101,000   | ) |   |   | (1,253,000 | ) |
| Repayments of equipment lease financing                |   |                                       | —    |   |   |   | (106,000 | ) |
| Principal payments on long-term debt                   |   |                                       | —    |   |   |   | (49,000 | ) |
| Net cash provided by (used in) financing activities    |   |                                       | 106,000    |   |   |   | (3,808,000 | ) |
|                                                   |   |                                       |       |   |   |   |   |   |
| Cash Flows from Discontinued Operations:               |   |                                       |       |   |   |   |   |   |
| Operating activities                                   |   |                                       | (15,000    | ) |   |   | (154,000 | ) |
| Investing activities                                   |   |                                       | —    |   |   |   | 245,000 |   |
| Financing activities                                   |   |                                       | —    |   |   |   | 44,000 |   |
| Net cash (used in) provided by Discontinued Operations |   |                                       | (15,000    | ) |   |   | 135,000 |   |
|                                                   |   |                                       |       |   |   |   |   |   |
| Net Increase (decrease) in cash                        |   |                                       | 27,000     |   |   |   | (546,000 | ) |
| Cash at beginning of period                            |   |                                       | 874,000    |   |   |   | 546,000 |   |
| Cash at end of period                                  |   | $                                          | 901,000    |   |   | $ | — |   |
|                                                   |   |                                       |       |   |   |   |   |   |
| Supplemental disclosures of cash flow information:     |   |                                       |       |   |   |   |   |   |
|                                                   |   |                                       |       |   |   |   |   |   |
| Cash paid for:                                         |   |                                       |       |   |   |   |   |   |
| Interest                                               |   | $                                          | 200,000    |   |   | $ | 347,000 |   |
| Income taxes                                           |   | $                                          | —    |   |   | $ | 16,000 |   |

----

----

----

|                                                                                  |   | Three months ended |      |
|---------------------------------------------------------------------------------------|--------|------------------------------|-----------|
|                                                                                  |   | March 31,                    |      |
|                                                                                  |   | 2011                         |      |   | 2010 |   |
| Numerator:                                                                            |   |                         |      |   |   |   |
| Numerator for basic and diluted earnings (loss) per common share:                     |   |                         |      |   |   |   |
| Earnings (loss) from continuing operations                                            |   | $                            | 479,000   |   |   | $ | (707,000 | ) |
| (Loss) from discontinued operations                                                   |   |                         | (17,000   | ) |   |   | (1,744,000 | ) |
| Net earnings (loss)                                                                   |   | $                            | 462,000   |   |   | $ | (2,451,000 | ) |
|                                                                                  |   |                         |      |   |   |   |   |   |
| Denominator:                                                                          |   |                         |      |   |   |   |   |   |
| Denominator for basic earnings per share-weighted average common shares outstanding   |   |                         | 3,615,000 |   |   |   | 3,615,000 |   |
| Dilutive securities                                                                   |   |                         | 63,000    |   |   |   | — |   |
|                                                                                  |   |                         |      |   |   |   |   |   |
| Denominator for diluted earnings per share-weighted average common shares outstanding |   |                         | 3,678,000 |   |   |   | 3,615,000 |   |

|                                                    |   | Three months ended |    |
|---------------------------------------------------------|--------|------------------------------|---------|
|                                                    |   | March 31,                    |    |
|                                                    |   | 2011                         |    |   | 2010 |   |
| Weighted average antidilutive stock options outstanding |   |                         | 514,000 |   |   |   | 515,000 |   |

----

|                                   |   | Option Shares |    |   | WeightedAverageExercisePrice |   |    | Weighted AverageRemainingContractual Life(Years) |   |   | AggregateIntrinsicValue |   |
|----------------------------------------|--------|--------------------|---------|--------|------------------------------|--------|---------|------------------------------------------------------------|--------|--------|-------------------------|--------|
| Outstanding, January 1, 2011      |   |               | 585,624 |   |                         | $      | 6.73    |                                                       |   |   |                    |   |   | — |   |
| Granted                                |   |               |    |   |                         |   |    |                                                       |   |   |                    |   |   | — |   |
| Exercised                              |   |               | — |   |                         |   | — |                                                       |   |   |                    |   |   |   |   |
| Forfeited                              |   |               | — |   |                         |   | — |                                                       |   |   |                    |   |   |   |   |
| Expired                                |   |               | — |   |                         |   | — |                                                       |   |   |                    |   |   |   |   |
| Outstanding, March 31,  2011 |   |               | 585,624 |   |                         | $      | 6.73    |                                                       |   |   | 5.4                     |   |   |   | 41,000 |   |
|                                   |   |               |    |   |                         |   |    |                                                       |   |   |                    |   |   |   |   |   |
| Vested, March 31, 2011                 |   |               | 420,291 |   |                         | $      | 7.93    |                                                       |   |   | 4.2                     |   |   |   | 3,000 |   |

|                                    |   | Option Shares |    |   | Weighted Average Grant-Date Fair Value |   |
|-----------------------------------------|--------|--------------------|---------|--------|------------------------------------------------------------|--------|
| Non-vested shares, January 1, 2011 |   |               | 165,333 |   |                                                       | $      | 2.19 |   |
| Granted                                 |   |               | — |   |                                                       |   | — |   |
| Vested                                  |   |               | — |   |                                                       |   | — |   |
| Forfeited                               |   |               | — |   |                                                       |   | — |   |
| Non-vested shares, March 31, 2011       |   |               | 165,333 |   |                                                       | $      | 2.19 |   |

|                            |   | March 31, 2011 |      |   | December 31, 2010 |   |
|---------------------------------|--------|--------------------------|-----------|--------|-----------------------------|--------|
| Accounts receivable             |   | $                        | 8,201,000 |   |                        | $      | 7,211,000 |   |
| Allowance for doubtful accounts |   |                     | (244,000  | )      |                        |   | (225,000 | ) |
|                            |   | $                        | 7,957,000 |   |                        | $      | 6,986,000 |   |

|                                             |   | March 31, 2011 |       |   | December 31, 2010 |   |
|--------------------------------------------------|--------|--------------------------|------------|--------|-----------------------------|--------|
| Raw material                                     |   | $                        | 1,999,000  |   |                        | $      | 1,932,000 |   |
| Work in process                                  |   |                     | 645,000    |   |                        |   | 561,000 |   |
| Finished goods                                   |   |                     | 16,521,000 |   |                        |   | 17,302,000 |   |
|                                             |   |                     | 19,165,000 |   |                        |   | 19,795,000 |   |
| Reserve for obsolete and slow-moving inventories |   |                     | (1,435,000 | )      |                        |   | (1,365,000 | ) |
|                                             |   | $                        | 17,730,000 |   |                        | $      | 18,430,000 |   |

----

|                                       |   | March 31, 2011 |      |   | December 31, 2010 |   |
|--------------------------------------------|--------|--------------------------|-----------|--------|-----------------------------|--------|
|                                       |   | Cost                     |      |   | Accumulatedamortization     |   |   | Net bookvalue |   |   | Cost |   |   | Accumulatedamortization |   |   | Net bookvalue |   |
| Other intangible assets:                   |   |                     |      |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Customer relationships                     |   | $                        | 5,070,000 |   |                        | $      | 3,336,000 |   |   | $ | 1,734,000 |   |   | $ | 5,070,000 |   |   | $ | 3,255,000 |   |   | $ | 1,815,000 |   |
| 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   |   |                        |   | 60,000 |   |   |   | 230,000 |   |   |   | 290,000 |   |   |   | 56,000 |   |   |   | 234,000 |   |
| Licensing                                  |   |                     | 105,000   |   |                        |   | 55,000 |   |   |   | 50,000 |   |   |   | 105,000 |   |   |   | 53,000 |   |   |   | 52,000 |   |
| Totals                                     |   | $                        | 6,424,000 |   |                        | $      | 4,211,000 |   |   | $ | 2,213,000 |   |   | $ | 6,424,000 |   |   | $ | 4,124,000 |   |   | $ | 2,300,000 |   |

| Three months ended March 31, |   |
|--------------------------------------------------|--------|
| 2011                                             |   |   | 2010 |   |
| $                                                | 87,000 |   |   | $ | 88,000 |   |

|                                                               |   | Three months ended March 31, |     |
|--------------------------------------------------------------------|--------|--------------------------------------------------|----------|
|                                                               |   | 2011                                             |     |   | 2010 |   |
| Balance, beginning of period                                       |   | $                                                | 250,000  |   |   | $ | 183,000 |   |
| Warranties issued and changes in estimated pre-existing warranties |   |                                             | 114,000  |   |   |   | 112,000 |   |
| Actual warranty costs incurred                                     |   |                                             | (152,000 | ) |   |   | (88,000 | ) |
| Balance, end of period                                             |   | $                                                | 212,000  |   |   | $ | 207,000 |   |

----

| Three months ended March 31, 2011 |   | Consolidated |       |   | Tools  |   |       | Hardware |   |
|------------------------------------------------------------|--------|--------------|------------|--------|--------|--------|------------|----------|--------|
|                                                       |   |         |       |   |   |   |       |     |   |
| Revenues from unaffiliated customers                       |   | $            | 13,453,000 |   |   | $      | 9,720,000  |     |   | $ | 3,733,000 |   |
|                                                       |   |         |       |   |   |   |       |     |   |   |   |   |
| Segment operating income                                   |   | $            | 2,054,000  |   |   | $      | 1,617,000  |     |   | $ | 437,000 |   |
| General corporate expense                                  |   |         | (1,354,000 | )      |   |   |       |     |   |   |   |   |
| Interest expense – net                               |   |         | (221,000   | )      |   |   |       |     |   |   |   |   |
| Earnings before income taxes                               |   | $            | 479,000    |   |   |   |       |     |   |   |   |   |
|                                                       |   |         |       |   |   |   |       |     |   |   |   |   |
| Segment assets                                             |   | $            | 45,682,000 |   |   | $      | 33,705,000 |     |   | $ | 11,977,000 |   |
| Corporate assets                                           |   |         | 3,344,000  |   |   |   |       |     |   |   |   |   |
| Total assets                                               |   | $            | 49,026,000 |   |   |   |       |     |   |   |   |   |
|                                                       |   |         |       |   |   |   |       |     |   |   |   |   |
| Long-lived assets, including $331,000 at corporate         |   | $            | 18,918,000 |   |   | $      | 14,079,000 |     |   | $ | 4,508,000 |   |

----

| Three months ended March 31, 2010 |   | Consolidated |       |    | Tools  |   |       | Hardware |   |
|------------------------------------------------------------|--------|--------------|------------|---------|--------|--------|------------|----------|--------|
|                                                       |   |         |       |    |   |   |       |     |   |
| Revenues from unaffiliated customers                       |   | $            | 11,147,000 |    |   | $      | 7,820,000  |     |   | $ | 3,327,000 |   |
|                                                       |   |         |       |    |   |   |       |     |   |   |   |   |
| Segment operating income                                   |   | $            | 1,268,000  |    |   | $      | 853,000    |     |   | $ | 415,000 |   |
| General corporate expense                                  |   |         | (1,586,000 | )       |   |   |       |     |   |   |   |   |
| Interest expense – net                               |   |         | (389,000   | )       |   |   |       |     |   |   |   |   |
| Loss before income taxes                                   |   | $            | (707,000   | )  |   |   |       |     |   |   |   |   |
|                                                       |   |         |       |    |   |   |       |     |   |   |   |   |
| Segment assets                                             |   | $            | 46,349,000 |    |   | $      | 36,889,000 |     |   | $ | 9,460,000 |   |
| Corporate assets                                           |   |         | 6,251,000  |    |   |   |       |     |   |   |   |   |
| Total assets                                               |   | $            | 52,600,000 |    |   |   |       |     |   |   |   |   |
|                                                       |   |         |       |    |   |   |       |     |   |   |   |   |
| Long-lived assets, including $435,000 at corporate         |   | $            | 20,510,000 |    |   | $      | 15,408,000 |     |   | $ | 4,667,000 |   |

----

----

----

|              |   | Three-months Ended March 31, |       |   |   |   |       |     |   |
|-------------------|--------|---------------------------------------------|------------|--------|--------|--------|------------|----------|--------|
|              |   | 2011                                        |       |   | 2010   |   |       | Variance |   |   | Variance |   |
|              |   |                                        |       |   |   |   |       | $        |   |   | % |   |
| Tools             |   |                                        |       |   |   |   |       |     |   |   |   |   |
| Florida Pneumatic |   | $                                           | 5,574,000  |   |   | $      | 4,546,000  |     |   | $ | 1,028,000 |   |   |   | 22.6 | % |
| Hy-Tech           |   |                                        | 4,146,000  |   |   |   | 3,274,000  |     |   |   | 872,000 |   |   |   | 26.6 |   |
| Tools Total       |   |                                        | 9,720,000  |   |   |   | 7,820,000  |     |   |   | 1,900,000 |   |   |   | 24.3 |   |
|              |   |                                        |       |   |   |   |       |     |   |   |   |   |   |   |   |   |
| Hardware          |   |                                        |       |   |   |   |       |     |   |   |   |   |   |   |   |   |
| Hardware Total    |   |                                        | 3,733,000  |   |   |   | 3,327,000  |     |   |   | 406,000 |   |   |   | 12.2 |   |
|              |   |                                        |       |   |   |   |       |     |   |   |   |   |   |   |   |   |
| Consolidated      |   | $                                           | 13,453,000 |   |   | $      | 11,147,000 |     |   | $ | 2,306,000 |   |   |   | 20.7 | % |

|                    |   | Three-months Ended March 31, |      |   |   |   |      |     |   |
|-------------------------|--------|---------------------------------------------|-----------|--------|--------|--------|-----------|----------|--------|
|                    |   | 2011                                        |      |   | 2010   |   |      | Variance |   |   | Variance |   |
|                    |   |                                        |      |   |   |   |      | $        |   |   | % |   |
| Hardware                |   |                                        |      |   |   |   |      |     |   |   |   |   |
| Fence and gate hardware |   | $                                           | 2,402,000 |   |   | $      | 1,849,000 |     |   | $ | 553,000 |   |   |   | 30.0 | % |
| Kitchen & Bath      |   |                                        | 760,000   |   |   |   | 820,000   |     |   |   | (60,000 | ) |   |   | (7.3 | ) |
| OEM                     |   |                                        | 367,000   |   |   |   | 448,000   |     |   |   | (81,000 | ) |   |   | (18.1 | ) |
| Patio                   |   |                                        | 204,000   |   |   |   | 210,000   |     |   |   | (6,000 | ) |   |   | (2.9 | ) |
| Total Hardware          |   | $                                           | 3,733,000 |   |   | $      | 3,327,000 |     |   | $ | 406,000 |   |   |   | 12.2 |   |

----

| Three months ended March 31, |   |              |   | Consolidated |      |   | Tools  |   |      | Hardware |   |
|---------------------------------------------|--------|-------------------|--------|--------------|-----------|--------|--------|--------|-----------|----------|--------|
| 2011                                        |   | Gross Profit |   | $            | 5,123,000 |   |   | $      | 3,711,000 |     |   | $ | 1,412,000 |   |
|                                        |   | Gross Margin |   |         | 38.1      | %      |   |   | 38.2      | %        |   |   | 37.8 | % |
|                                        |   |              |   |         |      |   |   |   |      |     |   |   |   |   |
| 2010                                        |   | Gross Profit |   | $            | 3,999,000 |   |   | $      | 2,707,000 |     |   | $ | 1,292,000 |   |
|                                        |   | Gross Margin |   |         | 35.9      | %      |   |   | 34.6      | %        |   |   | 38.8 | % |

----

|                                     |   | March 31, 2011 |       |   | December 31, 2010 |   |
|------------------------------------------|--------|--------------------------|------------|--------|-----------------------------|--------|
| Working Capital of continuing operations |   | $                        | 12,522,000 |   |                        | $      | 11,750,000 |   |
| Current Ratio of continuing operations   |   | 1.84 to 1.0              |       |   | 1.77 to 1.0                 |   |
| Shareholders’ Equity               |   | $                        | 26,896,000 |   |                        | $      | 26,399,000 |   |

----

| Item 3.  | Quantitative And Qualitative Disclosures About Market Risk |
|--------------------|------------------------------------------------------------|

| Item 4.  | Controls and Procedures |
|--------------------|-------------------------|

----

----

| Item 1. | Legal Proceedings |
|---------|-------------------|

| Item 1A. | Risk Factors |
|----------|--------------|

| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
|---------|-------------------------------------------------------------|

| Item 3. | Defaults Upon Senior Securities |
|---------|---------------------------------|

| Item 4. | [RESERVED] |
|---------|------------|

| Item 5. | Other Information |
|---------|-------------------|

| Item 6. | Exhibits |
|---------|----------|

----

|                | 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          |   | Termination of Agreements, Settlement of Claim and Mutual General Releases, dated March 3, 2011, among the Registrant, Old Stairs Co LLC, CS Divestiture LLC and Visador Holdings, LLC (Incorporated by reference to Exhibit 10.56 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 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.                                                                                                                                      |

----