##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

|  |  |                                                                                         
|- |  | ----------------------------------------------------------------------------------------
|X |  | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 
| 
| 
| 
| 
|  |  | For the quarterly period ended April 27, 2002, or                                       
| 
| 
| 
| 
|_ |  | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| 
| 
| 
| 
|  |  | For the transition period from      to                                                  

Commission file number 333-38223

ARGO-TECH CORPORATION
(Exact name of registrant as specified in its charter)

|                                                                        |  |                                                
|----------------------------------------------------------------------- |  | -----------------------------------------------
|Delaware
(State or other jurisdiction of
incorporation or organization) |  | 31-1521125
(I.R.S. employer
identification no.)

|                                         |  |           
|---------------------------------------- |  | ----------
|23555 Euclid Avenue
Cleveland, Ohio      |  | 44117     
|                                        
|                                        
|                                        
|                                        
|(Address of principal executive offices) |  | (Zip code)

|                                                    
|----------------------------------------------------
|(216) 692-6000                                      
|                                                    
|                                                    
|                                                    
|                                                    
|(Registrants telephone number, including area code)

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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. X YES                      NO



| |                                                                                           
| | ------------------------------------------------------------------------------------------
| | All of the outstanding capital stock of the registrant is held by
AT Holdings Corporation.



| |                                                                                               
| | ----------------------------------------------------------------------------------------------
| | As of June 1, 2001, 1 share of the registrants common stock, $.01
par value, was outstanding.





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TABLE OF CONTENTS



|                               |                                                                                               |  |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | Item I -Condensed Financial Statements                                                       
|                               | CONSOLIDATED BALANCE SHEETS                                                                  
|                               | CONSOLIDATED STATEMENTS OF NET INCOME                                                        
|                               | CONSOLIDATED STATEMENTS OF CASH FLOWS                                                        
|                               | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                   
|                               | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|                               | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                            
|PART II  OTHER INFORMATION   
|                               | Item 6  Exhibits and Reports on Form 8-K                                                    
|SIGNATURE                     



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##### Table of Contents



INDEX

|                                                                                                            |  |         
|----------------------------------------------------------------------------------------------------------- |  | --------
|                                                                                                            |  | Page No.
|                                                                                                            |  |         
|PART I  FINANCIAL INFORMATION                                                                              |  |         
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Item 1  Condensed Financial Statements                                                                     |  |         
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Consolidated Balance Sheets as of April 27, 2002 and October 27, 2001                                       |  | 3       
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Consolidated Statements of Net Income for the 26 weeks and 13 weeks
ended April 27, 2002 and April 28, 2001 |  | 4       
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Consolidated Statements of Cash Flows for the 26 weeks ended April 27, 2002
and April 28, 2001              |  | 5       
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Notes to Consolidated Financial Statements                                                                  |  | 6  10  
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Item 2  Managements Discussion and Analysis of Financial Condition and Results
of Operations              |  | 10  13 
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Item 3  Quantitative and Qualitative Disclosure about Market Risk                                          |  | 14      
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|PART II  OTHER INFORMATION                                                                                 |  |         
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Item 6  Exhibits and Reports on Form 8-K                                                                   |  | 14      
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Signature                                                                                                   |  | 15      

2



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##### Table of Contents






PART I  FINANCIAL INFORMATION




ARGO-TECH CORPORATION AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of AT Holdings Corporation)




CONSOLIDATED BALANCE SHEETSAPRIL 27, 2002 AND OCTOBER 27, 2001
(In thousands, except share data)

|                                                        |                     |                                                                                       |                                         |        |         |         |         |        |         |         |  
|------------------------------------------------------- | ------------------- | ------------------------------------------------------------------------------------- | --------------------------------------- | ------ | ------- | ------- | ------- | ------ | ------- | ------- | -
|                                                        |                     |                                                                                       |                                         |        | 2002    |         | 2001   
|                                                        |                     |                                                                                       |                                         |        |         |         |        
|ASSETS                                                  |                     | (Unaudited)                                                                           |                                         |        |         |        
|                                                        |                     |                                                                                       |                                         |        |         |        
|CURRENT ASSETS:                                         |                     |                                                                                       |                                         |        |         |         |         |       
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Cash and cash equivalents                                                             |                                         | $      | 9,609   |         |         | $      | 8,057   |        
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Receivables, net                                                                      |                                         |        | 23,972  |         |         |        | 32,051  |        
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Income tax receivable                                                                 |                                         |        | 3,576   |         |         |        | 3,885   |        
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Inventories                                                                           |                                         |        | 29,580  |         |         |        | 28,861  |        
|                                                        |                     | Deferred income taxes and prepaid expenses                                            |                                         |        | 6,160   |         |         |        | 5,648   |        
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|                                                        |                     |                                                                                       | Total current assets                    |        |         | 72,897  |         |        |         | 78,502  |  
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|PROPERTY AND EQUIPMENT, net of
accumulated depreciation |                     |                                                                                       | 27,199                                  |        |         |         | 29,027  |       
|                                                       
|                                                       
|                                                       
|                                                       
|GOODWILL, net of accumulated amortization               |                     |                                                                                       | 111,335                                 |        |         |         | 108,933 |       
|                                                       
|                                                       
|                                                       
|                                                       
|INTANGIBLE ASSETS, net of accumulated amortization      |                     |                                                                                       | 40,038                                  |        |         |         | 44,145  |       
|                                                       
|                                                       
|                                                       
|                                                       
|OTHER ASSETS                                            |                     |                                                                                       | 11,562                                  |        |         |         | 12,967  |       
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|Total Assets                                            |                     | $                                                                                     | 263,031                                 |        |         | $       | 273,574 |       
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|LIABILITIES                                             |                     |                                                                                       |                                         |        |         |         |         |       
|                                                       
|                                                       
|                                                       
|                                                       
|CURRENT LIABILITIES:                                    |                     |                                                                                       |                                         |        |         |         |         |       
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Current portion of long-term debt                                                     |                                         | $      | 18,612  |         |         | $      | 18,612  |        
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Accounts payable                                                                      |                                         |        | 3,628   |         |         |        | 4,840   |        
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Accrued liabilities                                                                   |                                         |        | 16,740  |         |         |        | 19,146  |        
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|                                                        |                     |                                                                                       | Total current liabilities               |        |         | 38,980  |         |        |         | 42,598  |  
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|LONG-TERM DEBT, net of current maturities               |                     |                                                                                       | 225,598                                 |        |         |         | 234,768 |       
|                                                       
|                                                       
|                                                       
|                                                       
|OTHER NONCURRENT LIABILITIES                            |                     |                                                                                       | 22,663                                  |        |         |         | 24,333  |       
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|                                                        |                     |                                                                                       | Total Liabilities                       |        |         | 287,241 |         |        |         | 301,699 |  
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|REDEEMABLE ESOP STOCK                                   |                     |                                                                                       | 17,737                                  |        |         |         | 18,194  |       
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Unearned ESOP stock |                                                                                       |                                         | (3,360 | )       |         |         | (4,200 | )      
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|                                                        |                     |                                                                                       | 14,377                                  |        |         |         | 13,994  |       
|                                                       
|                                                       
|                                                       
|                                                       
|SHAREHOLDERS EQUITY/(DEFICIENCY):                      |                     |                                                                                       |                                         |        |         |         |         |       
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Common Stock, $.01 par value, authorized 3,000 shares;
1 share issued and outstanding |                                         |        |        |         |         |        |        |        
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Paid-in capital                                                                       |                                         |        |        |         |         |        |        |        
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Accumulated comprehensive loss                                                        |                                         |        | (2,041  | )       |         |        | (1,948  | )      
|                                                        |                     | Accumulated deficit                                                                   |                                         |        | (36,546 | )       |         |        | (40,171 | )      
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|                                                        |                     |                                                                                       | Total shareholders equity/(deficiency) |        |         | (38,587 | )       |        |         | (42,119 | )
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|Total Liabilities and Shareholders Equity/(Deficiency) |                     | $                                                                                     | 263,031                                 |        |         | $       | 273,574 |       
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       

The accompanying notes to consolidated financial statements are an integral
part of these statements.

3



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##### Table of Contents



ARGO-TECH CORPORATION AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of AT Holdings Corporation)




CONSOLIDATED STATEMENTS OF NET INCOME

(In thousands)
UNAUDITED

|                                    |                    |   |                |        |                |   |        |        |                |  |                |  |                |   |        |        |  |   |        |        | 
|----------------------------------- | ------------------ | - | -------------- | ------ | -------------- | - | ------ | ------ | -------------- |  | -------------- |  | -------------- | - | ------ | ------ |  | - | ------ | ------ | 
|                                    |                    |   | 26 Weeks Ended |        |                |   |        |        | 13 Weeks Ended
|                                    |                    |   |                |        |                |   |        |        |               
|                                    |                    |   | April 27, 2002 |        | April 28, 2001 |   |        |        |                |  | April 27, 2002 |  | April 28, 2001
|                                    |                    |   |                |        |                |   |        |        |                |  |                |  |               
|Net revenues                        |                    | $ | 74,537         |        |                | $ | 80,012 |        |                |  |                |  |                | $ | 39,346 |        |  | $ | 44,684 |       
|                                   
|                                   
|                                   
|                                   
|Cost of revenues                    |                    |   | 41,853         |        |                |   | 44,576 |        |                |  |                |  |                |   | 22,277 |        |  |   | 23,762 |       
|                                    |                    |   |                |        |                |   |        |        |                |  |                |  |                |   |        |        |  |   |        |       
|                                    | Gross profit       |   |                | 32,684 |                |   |        | 35,436 |                |  |                |  |                |   |        | 17,069 |  |   |        | 20,922 | 
|                                    |                    |   |                |        |                |   |        |        |                |  |                |  |                |   |        |        |  |   |        |       
|Selling, general and administrative |                    |   | 11,772         |        |                |   | 11,203 |        |                |  |                |  |                |   | 6,207  |        |  |   | 5,773  |       
|                                   
|                                   
|                                   
|                                   
|Research and development            |                    |   | 6,063          |        |                |   | 5,103  |        |                |  |                |  |                |   | 3,354  |        |  |   | 2,824  |       
|                                   
|                                   
|                                   
|                                   
|Amortization of intangible assets   |                    |   | 1,708          |        |                |   | 3,757  |        |                |  |                |  |                |   | 854    |        |  |   | 1,878  |       
|                                    |                    |   |                |        |                |   |        |        |                |  |                |  |                |   |        |        |  |   |        |       
|                                    | Operating expenses |   |                | 19,543 |                |   |        | 20,063 |                |  |                |  |                |   |        | 10,415 |  |   |        | 10,475 | 
|                                    |                    |   |                |        |                |   |        |        |                |  |                |  |                |   |        |        |  |   |        |       
|Income from operations              |                    |   | 13,141         |        |                |   | 15,373 |        |                |  |                |  |                |   | 6,654  |        |  |   | 10,447 |       
|                                   
|                                   
|                                   
|                                   
|Interest expense                    |                    |   | 10,857         |        |                |   | 12,641 |        |                |  |                |  |                |   | 5,266  |        |  |   | 6,130  |       
|                                   
|                                   
|                                   
|                                   
|Other, net                          |                    |   | (66            | )      |                |   | (224   | )      |                |  |                |  |                |   | (50    | )      |  |   | (107   | )     
|                                    |                    |   |                |        |                |   |        |        |                |  |                |  |                |   |        |        |  |   |        |       
|Income before income taxes          |                    |   | 2,350          |        |                |   | 2,956  |        |                |  |                |  |                |   | 1,438  |        |  |   | 4,424  |       
|                                    |                    |   |                |        |                |   |        |        |                |  |                |  |                |   |        |        |  |   |        |       
|Income tax provision                |                    |   | 94             |        |                |   | 1,305  |        |                |  |                |  |                |   | 236    |        |  |   | 1,681  |       
|                                    |                    |   |                |        |                |   |        |        |                |  |                |  |                |   |        |        |  |   |        |       
|Net income                          |                    | $ | 2,256          |        |                | $ | 1,651  |        |                |  |                |  |                | $ | 1,202  |        |  | $ | 2,743  |       
|                                    |                    |   |                |        |                |   |        |        |                |  |                |  |                |   |        |        |  |   |        |       

The accompanying notes to consolidated financial statements are an integral
part of these statements.

4



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##### Table of Contents



ARGO-TECH CORPORATION AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of AT Holdings Corporation)




CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 26 WEEKS ENDED APRIL 27, 2002 AND APRIL 28, 2001

(In thousands)
UNAUDITED

|                                       |                                                                                   |                               |       |        |        |      |       |        |        |  
|-------------------------------------- | --------------------------------------------------------------------------------- | ----------------------------- | ----- | ------ | ------ | ---- | ----- | ------ | ------ | -
|                                       |                                                                                   |                               |       | 2002   |        | 2001
|                                       |                                                                                   |                               |       |        |        |     
|CASH FLOWS FROM OPERATING ACTIVITIES:  |                                                                                   |                               |       |        |        |      |       |       
|                                      
|                                      
|                                      
|                                      
|                                       | Net income                                                                        |                               | $     | 2,256  |        |      | $     | 1,651  |       
|                                      
|                                      
|                                      
|                                      
|                                       | Adjustments to reconcile net income to net cash
provided by operating activities: |                               |       |        |        |      |       |        |       
|                                      
|                                      
|                                      
|                                      
|                                       | Depreciation                                                                      |                               |       | 2,484  |        |      |       | 2,794  |       
|                                      
|                                      
|                                      
|                                      
|                                       | Amortization of intangible assets and deferred financing costs                    |                               |       | 2,733  |        |      |       | 4,826  |       
|                                      
|                                      
|                                      
|                                      
|                                       | Accretion of bond discount                                                        |                               |       | 135    |        |      |       | 122    |       
|                                      
|                                      
|                                      
|                                      
|                                       | Compensation expense recognized in connection with
employee stock ownership plan  |                               |       | 1,260  |        |      |       | 1,680  |       
|                                      
|                                      
|                                      
|                                      
|                                       | Deferred income taxes                                                             |                               |       | (1,131 | )      |      |       | (546   | )     
|                                      
|                                      
|                                      
|                                      
|                                       | Changes in operating assets and liabilities:                                      |                               |       |        |        |      |       |        |       
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                   | Receivables                   |       |        | 8,388  |      |       |        | 440    |  
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                   | Inventories                   |       |        | (719   | )    |       |        | (1,322 | )
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                   | Prepaid expenses              |       |        | (450   | )    |       |        | (823   | )
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                   | Accounts payable              |       |        | (1,212 | )    |       |        | (314   | )
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                   | Accrued and other liabilities |       |        | (1,963 | )    |       |        | (1,920 | )
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                   | Other, net                    |       |        | 226    |      |       |        | (229   | )
|                                       |                                                                                   |                               |       |        |        |      |       |       
|                                       | Net cash provided by operating activities                                         |                               |       | 12,007 |        |      |       | 6,359  |       
|                                       |                                                                                   |                               |       |        |        |      |       |       
|CASH FLOWS FROM INVESTING ACTIVITIES:  |                                                                                   |                               |       |        |        |      |       |       
|                                      
|                                      
|                                      
|                                      
|                                       | Capital expenditures                                                              |                               |       | (656   | )      |      |       | (827   | )     
|                                       |                                                                                   |                               |       |        |        |      |       |       
|                                       | Net cash used in investing activities                                             |                               |       | (656   | )      |      |       | (827   | )     
|                                       |                                                                                   |                               |       |        |        |      |       |       
|CASH FLOWS FROM FINANCING ACTIVITIES:  |                                                                                   |                               |       |        |        |      |       |       
|                                      
|                                      
|                                      
|                                      
|                                       | Repayment of long-term debt                                                       |                               |       | (9,306 | )      |      |       | (4,655 | )     
|                                      
|                                      
|                                      
|                                      
|                                       | Purchase of AT Holdings stock from former ESOP participants                       |                               |       | (458   | )      |      |       | (1,340 | )     
|                                      
|                                      
|                                      
|                                      
|                                       | Dividend                                                                          |                               |       | (35    | )      |      |       | (40    | )     
|                                       |                                                                                   |                               |       |        |        |      |       |       
|                                       | Net cash used in financing activities                                             |                               |       | (9,799 | )      |      |       | (6,035 | )     
|                                       |                                                                                   |                               |       |        |        |      |       |       
|CASH AND CASH EQUIVALENTS:             |                                                                                   |                               |       |        |        |      |       |       
|                                      
|                                      
|                                      
|                                      
|Net increase (decrease) for the period |                                                                                   |                               | 1,552 |        |        |      | (503  | )     
|                                      
|                                      
|                                      
|                                      
|Balance, Beginning of period           |                                                                                   |                               | 8,057 |        |        |      | 5,174 |       
|                                       |                                                                                   |                               |       |        |        |      |       |       
|Balance, End of period                 |                                                                                   | $                             | 9,609 |        |        | $    | 4,671 |       
|                                       |                                                                                   |                               |       |        |        |      |       |       

The accompanying notes to consolidated financial statements are an integral
part of these statements.

5



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##### Table of Contents



ARGO-TECH CORPORATION AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of AT Holdings Corporation)




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE 26 WEEKS ENDED APRIL 27, 2002 AND APRIL 28, 2001
(Unaudited)



|1. |  | BASIS OF PRESENTATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The principal operations of Argo-Tech Corporation (a wholly-owned subsidiary
of AT Holdings Corporation) and its subsidiaries include the design,
manufacture and distribution of aviation products, primarily aircraft fuel
pumps, throughout the world. In addition, Argo-Tech leases a portion of its
Cleveland, Ohio manufacturing facility to other parties. Argo-Techs fiscal
year ends on the last Saturday in October. Argo-Tech is obligated to fulfill
certain obligations of AT Holdings Corporation. As a result, those
obligations have been reflected in its financial statements. Certain
reclassifications have been made in the prior years financial statements to
conform to the current year presentation.                                                                                                                                               
|  
|   |  | Argo-Tech Corporation is a parent, holding company with four wholly-owned
operating subsidiaries that guarantee Argo-Techs senior subordinated notes.
Argo-Tech has no outside assets, liabilities or operations apart from its
wholly-owned subsidiaries. The senior subordinated notes are fully,
unconditionally, jointly and severally guaranteed by the guarantor
subsidiaries, and therefore, separate financial statements of the guarantor
subsidiaries will not be presented. Management has determined that the
information presented by such separate financial statements is not material
to investors. All of Argo-Techs subsidiaries are guarantors except one
wholly-owned subsidiary that has inconsequential assets, liabilities and
equity. Its only operations are the result of intercompany activity, which
is immediately dividended back to Argo-Tech.
|  
|2. |  | UNAUDITED FINANCIAL INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   |  | The financial information included herein is unaudited; however, the
information reflects all adjustments (consisting solely of normal recurring
adjustments) that are, in the opinion of management, necessary for a fair
presentation of Argo-Techs financial position and results of operations and
cash flows for the interim periods presented. The results of operations for
the 26 weeks and 13 weeks ended April 27, 2002 are not necessarily indicative
of the results to be expected for the full year.                                                                                                                                                                                                                                                                                                                                                             
|  
|3. |  | INVENTORIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   |  | Inventories are stated at standard cost which approximates the costs which
would be determined using the first-in, first-out (FIFO) method. The
recorded value of inventories is not in excess of market value. Inventories
consist of the following (in thousands):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

|                                          |       |   |           |        |             |   |        |        | 
|----------------------------------------- | ----- | - | --------- | ------ | ----------- | - | ------ | ------ | 
|                                          |       |   | April 27, |        | October 27,
|                                          |       |   | 2002      |        | 2001       
|                                          |       |   |           |        |            
|Finished goods                            |       | $ | 1,808     |        |             | $ | 2,100  |       
|                                         
|                                         
|                                         
|                                         
|Work-in-process and purchased parts       |       |   | 18,427    |        |             |   | 17,696 |       
|                                         
|                                         
|                                         
|                                         
|Raw materials and supplies                |       |   | 12,981    |        |             |   | 12,975 |       
|                                          |       |   |           |        |             |   |        |       
|                                          | Total |   |           | 33,216 |             |   |        | 32,771 | 
|                                         
|                                         
|                                         
|                                         
|Reserve for excess and obsolete inventory |       |   | (3,636    | )      |             |   | (3,910 | )     
|                                          |       |   |           |        |             |   |        |       
|Inventories  net                         |       | $ | 29,580    |        |             | $ | 28,861 |       
|                                          |       |   |           |        |             |   |        |       

6



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##### Table of Contents





|4. |  | INTANGIBLE ASSETS                                                                   
|-- |  | ------------------------------------------------------------------------------------
|  
|   |  | The following is a summary of intangible assets, other than goodwill (in
thousands):

|                   |                     |       |   |                |        |                  |   |        |        |              |   |        |        |  |   |       |        | 
|------------------ | ------------------- | ----- | - | -------------- | ------ | ---------------- | - | ------ | ------ | ------------ | - | ------ | ------ |  | - | ----- | ------ | 
|                   |                     |       |   | April 27, 2002 |        | October 27, 2001
|                   |                     |       |   |                |        |                 
|                   |                     |       |   | Gross          |        | Accumulated      |   | Gross  |        | Accumulated 
|                   |                     |       |   | Amount         |        | Amortization     |   | Amount |        | Amortization
|                   |                     |       |   |                |        |                  |   |        |        |             
|Intangible assets: |                     |       |   |                |        |                  |   |        |        |              |   |        |        |  |   |      
|                  
|                  
|                  
|                  
|                   | Contracts           |       | $ | 17,100         |        |                  | $ | 7,838  |        |              | $ | 17,100 |        |  | $ | 6,983 |       
|                  
|                  
|                  
|                  
|                   | Spare parts annuity |       |   | 38,200         |        |                  |   | 7,697  |        |              |   | 38,200 |        |  |   | 6,857 |       
|                  
|                  
|                  
|                  
|                   | Patents             |       |   | 387            |        |                  |   | 114    |        |              |   | 387    |        |  |   | 102   |       
|                  
|                  
|                  
|                  
|                   | Workforce-in-place  |       |   |               |        |                  |   |       |        |              |   | 4,900  |        |  |   | 2,500 |       
|                   |                     |       |   |                |        |                  |   |        |        |              |   |        |        |  |   |      
|                   |                     | Total |   | $              | 55,687 |                  |   | $      | 15,649 |              |   | $      | 60,587 |  |   | $     | 16,442 | 
|                   |                     |       |   |                |        |                  |   |        |        |              |   |        |        |  |   |      



|   |  | Amortization expense recorded on the intangible assets for the 13 week and 26
week periods ended April 27, 2002 was $0.8 million and $1.7 million,
respectively, and for the 13 week and 26 week periods ended April 28, 2001
was $1.0 million and $2.0 million, respectively. The reduction in the gross
carrying amount and accumulated amortization in the table above reflect the
removal of the intangible asset, workforce in place, which was reclassified
from intangible assets to goodwill upon the adoption of SFAS No. 142. The
estimated amortization expense for each of the five succeeding fiscal years
2002 through 2006 is $3.4 million, respectively. 
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|5. |  | CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   |  | Environmental Matters  The soil and groundwater at Argo-Techs Cleveland,
Ohio facility and the Costa Mesa, California facility contain elevated levels
of certain contaminants which are currently in the process of being removed
and/or remediated. Because Argo-Tech has certain indemnification rights from
former owners of the facilities for liabilities arising from these or other
environmental matters, in the opinion of Argo-Techs management, the ultimate
outcome is not expected to materially affect its financial condition, results
of operations or liquidity.                                                                                    
|  
|   |  | Other Matters  Argo-Tech is subject to various legal actions and other
contingencies arising in the ordinary course of business. In the opinion of
Argo-Techs management, after reviewing the information which is currently
available with respect to such matters and consulting with Argo-Techs legal
counsel, any liability which may ultimately be incurred with respect to these
additional matters is not expected to materially affect Argo-Techs financial
condition, results of operations or liquidity.                                                                                                                                                   
|  
|6. |  | SEGMENT INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   |  | Argo-Tech operates in two business segments: Aerospace and Industrial. The
Aerospace segment includes the design, manufacture and distribution of
aviation products throughout the world consisting of aircraft fuel pumps,
fuel flow related products found on a planes airframe and aerial refueling
systems. The Industrial segment includes the design, manufacture and
distribution of industrial pumps, ground fueling system valves and related
components, industrial marine cryogenic pumps for transferring liquefied
natural gas and operation of a business park in Cleveland, Ohio where we
maintain our headquarters and one of our production facilities.
|  
|   |  | Argo-Tech evaluates the performance of its segments based primarily on
operating profit before amortization of goodwill, deferred financing fees and
other identified intangibles, interest expense, interest income, other
miscellaneous fees and income taxes.                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   |  | The following table presents revenues and other financial information by
business segment (in thousands):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

7



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13 Week Period Ended April 27, 2002

|                                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   |        |  
|-------------------------------------------------------------------------------- |  | --------- | ------ | ---------- |  | --------- | ----- | ------------ |  | - | ---- | - |  | - | ------ | -
|                                                                                 |  | Aerospace |        | Industrial |  | Corporate |       | Consolidated
|                                                                                 |  |           |        |            |  |           |       |             
|Net revenues                                                                     |  | $         | 30,948 |            |  | $         | 8,398 |              |  | $ |     |   |  | $ | 39,346 |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Operating profit(loss)                                                           |  |           | 7,963  |            |  |           | 291   |              |  |   | (746 | ) |  |   | 7,508  |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Amortization of intangible assets                                                |  |           |        |            |  |           |       |              |  |   |      |   |  |   | 854    |  
|                                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   |        |  
|Income from operations                                                           |  |           |        |            |  |           |       |              |  |   |      |   |  |   | 6,654  |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Interest expense                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   | 5,266  |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Other, net                                                                       |  |           |        |            |  |           |       |              |  |   |      |   |  |   | (50    | )
|                                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   |        |  
|Income before income taxes                                                       |  |           |        |            |  |           |       |              |  |   |      |   |  | $ | 1,438  |  
|                                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   |        |  
|Capital expenditures                                                             |  |           | 255    |            |  |           | 188   |              |  |   |      |   |  |   | 443    |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Depreciation                                                                     |  |           | 696    |            |  |           | 343   |              |  |   | 172  |   |  |   | 1,211  |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Compensation expense recognized
in connection with employee
stock ownership plan |  |           | 560    |            |  |           | 70    |              |  |   |      |   |  |   | 630    |  

13 Week Period Ended April 28, 2001

|                                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   |        |  
|-------------------------------------------------------------------------------- |  | --------- | ------ | ---------- |  | --------- | ----- | ------------ |  | - | ---- | - |  | - | ------ | -
|                                                                                 |  | Aerospace |        | Industrial |  | Corporate |       | Consolidated
|                                                                                 |  |           |        |            |  |           |       |             
|Net revenues                                                                     |  | $         | 37,211 |            |  | $         | 7,473 |              |  | $ |     |   |  | $ | 44,684 |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Operating profit(loss)                                                           |  |           | 13,050 |            |  |           | (474  | )            |  |   | (251 | ) |  |   | 12,325 |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Amortization of intangible assets                                                |  |           |        |            |  |           |       |              |  |   |      |   |  |   | 1,878  |  
|                                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   |        |  
|Income from operations                                                           |  |           |        |            |  |           |       |              |  |   |      |   |  |   | 10,447 |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Interest expense                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   | 6,130  |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Other, net                                                                       |  |           |        |            |  |           |       |              |  |   |      |   |  |   | (107   | )
|                                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   |        |  
|Income before income taxes                                                       |  |           |        |            |  |           |       |              |  |   |      |   |  | $ | 4,424  |  
|                                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   |        |  
|Capital expenditures                                                             |  |           | 541    |            |  |           | 131   |              |  |   |      |   |  |   | 672    |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Depreciation                                                                     |  |           | 803    |            |  |           | 369   |              |  |   | 237  |   |  |   | 1,409  |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Compensation expense recognized
in connection with employee
stock ownership plan |  |           | 742    |            |  |           | 98    |              |  |   |      |   |  |   | 840    |  

26 Week Period Ended April 27, 2002

|                                                                                 |  |           |        |            |  |           |        |              |  |   |      |   |  |   |        |  
|-------------------------------------------------------------------------------- |  | --------- | ------ | ---------- |  | --------- | ------ | ------------ |  | - | ---- | - |  | - | ------ | -
|                                                                                 |  | Aerospace |        | Industrial |  | Corporate |        | Consolidated
|                                                                                 |  |           |        |            |  |           |        |             
|Net revenues                                                                     |  | $         | 58,446 |            |  | $         | 16,091 |              |  | $ |     |   |  | $ | 74,537 |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Operating profit(loss)                                                           |  |           | 15,379 |            |  |           | 423    |              |  |   | (953 | ) |  |   | 14,849 |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Amortization of intangible assets                                                |  |           |        |            |  |           |        |              |  |   |      |   |  |   | 1,708  |  
|                                                                                 |  |           |        |            |  |           |        |              |  |   |      |   |  |   |        |  
|Income from operations                                                           |  |           |        |            |  |           |        |              |  |   |      |   |  |   | 13,141 |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Interest expense                                                                 |  |           |        |            |  |           |        |              |  |   |      |   |  |   | 10,857 |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Other, net                                                                       |  |           |        |            |  |           |        |              |  |   |      |   |  |   | (66    | )
|                                                                                 |  |           |        |            |  |           |        |              |  |   |      |   |  |   |        |  
|Income before income taxes                                                       |  |           |        |            |  |           |        |              |  |   |      |   |  | $ | 2,350  |  
|                                                                                 |  |           |        |            |  |           |        |              |  |   |      |   |  |   |        |  
|Capital expenditures                                                             |  |           | 384    |            |  |           | 272    |              |  |   |      |   |  |   | 656    |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Depreciation                                                                     |  |           | 1,418  |            |  |           | 681    |              |  |   | 385  |   |  |   | 2,484  |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Compensation expense recognized
in connection with employee
stock ownership plan |  |           | 1,120  |            |  |           | 140    |              |  |   |      |   |  |   | 1,260  |  

8



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##### Table of Contents



26 Week Period Ended April 28, 2001

|                                                                                 |  |           |        |            |  |           |        |              |  |   |      |   |  |   |        |  
|-------------------------------------------------------------------------------- |  | --------- | ------ | ---------- |  | --------- | ------ | ------------ |  | - | ---- | - |  | - | ------ | -
|                                                                                 |  | Aerospace |        | Industrial |  | Corporate |        | Consolidated
|                                                                                 |  |           |        |            |  |           |        |             
|Net revenues                                                                     |  | $         | 66,471 |            |  | $         | 13,541 |              |  | $ |     |   |  | $ | 80,012 |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Operating profit(loss)                                                           |  |           | 20,711 |            |  |           | (1,072 | )            |  |   | (509 | ) |  |   | 19,130 |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Amortization of intangible assets                                                |  |           |        |            |  |           |        |              |  |   |      |   |  |   | 3,757  |  
|                                                                                 |  |           |        |            |  |           |        |              |  |   |      |   |  |   |        |  
|Income from operations                                                           |  |           |        |            |  |           |        |              |  |   |      |   |  |   | 15,373 |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Interest expense                                                                 |  |           |        |            |  |           |        |              |  |   |      |   |  |   | 12,641 |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Other, net                                                                       |  |           |        |            |  |           |        |              |  |   |      |   |  |   | (224   | )
|                                                                                 |  |           |        |            |  |           |        |              |  |   |      |   |  |   |        |  
|Income before income taxes                                                       |  |           |        |            |  |           |        |              |  |   |      |   |  | $ | 2,956  |  
|                                                                                 |  |           |        |            |  |           |        |              |  |   |      |   |  |   |        |  
|Capital expenditures                                                             |  |           | 635    |            |  |           | 192    |              |  |   |      |   |  |   | 827    |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Depreciation                                                                     |  |           | 1,575  |            |  |           | 744    |              |  |   | 475  |   |  |   | 2,794  |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Compensation expense recognized
in connection with employee
stock ownership plan |  |           | 1,482  |            |  |           | 198    |              |  |   |      |   |  |   | 1,680  |  



|7. |  | OTHER COMPREHENSIVE INCOME (LOSS)                                                                                                                           
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | Other comprehensive income (loss) includes foreign currency translation
adjustments and changes in the fair value of the interest rate swaps (in
thousands).

|                                                                |                                                    |   |           |                |   |                |       |           |   |      |       |     |  |   |       |      |   | 
|--------------------------------------------------------------- | -------------------------------------------------- | - | --------- | -------------- | - | -------------- | ----- | --------- | - | ---- | ----- | --- |  | - | ----- | ---- | - | 
|                                                                |                                                    |   |           | 26 weeks ended |   | 13 weeks ended
|                                                                |                                                    |   |           |                |   |               
|                                                                |                                                    |   | April 27, | April 28,      |   | April 27,      |       | April 28,
|                                                                |                                                    |   |           | 2002           |   | 2001           |       | 2002      |   | 2001
|                                                                |                                                    |   |           |                |   |                |       |           |   |     
|Net income                                                      |                                                    | $ | 2,256     |                |   | $              | 1,651 |           |   | $    | 1,202 |     |  | $ | 2,743 |     
|                                                               
|                                                               
|                                                               
|                                                               
|Other comprehensive income (loss):                              |                                                    |   |           |                |   |                |       |           |   |      |       |     |  |   |       |     
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Foreign currency translation adjustment            |   |           | (93            | ) |                |       | 138       |   |      |       | 111 |  |   |       | 55   |  
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Cumulative effect of accounting change             |   |           |                |   |                |       | 284       |   |      |       |     |  |   |       |      |  
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Change in fair market value of interest
rate swaps |   |           |                |   |                |       | (419      | ) |      |       |     |  |   |       | (139 | )
|                                                                |                                                    |   |           |                |   |                |       |           |   |     
|Other comprehensive income (loss)
before tax                    |                                                    |   | (93       | )              |   |                | 3     |           |   |      | 111   |     |  |   | (84   | )   
|Income tax benefit related to other
comprehensive income (loss) |                                                    |   |           |                |   |                | 54    |           |   |      |       |     |  |   | 56    |     
|                                                                |                                                    |   |           |                |   |                |       |           |   |     
|Other comprehensive income (loss),
net of tax                   |                                                    |   | (93       | )              |   |                | 57    |           |   |      | 111   |     |  |   | (28   | )   
|                                                                |                                                    |   |           |                |   |                |       |           |   |     
|Comprehensive income                                            |                                                    | $ | 2,163     |                |   | $              | 1,708 |           |   | $    | 1,313 |     |  | $ | 2,715 |     
|                                                                |                                                    |   |           |                |   |                |       |           |   |     



|8. |  | NEW ACCOUNTING PRONOUNCEMENTS                                                                                                                                                                                                                                                                                                                                                                                      
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | Argo-Tech adopted Statement of Financial Accounting Standards (SFAS) No.
142, Goodwill and Other Intangible Assets as of October 28, 2001. Under
this statement, goodwill and other intangibles determined to have an
infinite life are no longer amortized; however, these assets are to be
reviewed for impairment on a periodic basis. The initial step of the
transitional impairment test is to be completed

9



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##### Table of Contents





| |  | within six months of
adoption of SFAS No. 142 and the final step of the transitional impairment
test, if required, is to be completed by the end of the fiscal year.
Argo-Tech tested goodwill for impairment during the second fiscal quarter of
2002 using a present value of future cash flows valuation method. This
process did not result in any impairment to be recorded upon the adoption of
SFAS No. 142.                  
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Upon adoption of SFAS No. 142, $2.4 million related to the unamortized
portion of the intangible asset, workforce in place, was reclassified from
intangible assets to goodwill and the related long-term deferred tax
liability of $1.0 million was reclassified to shareholders
equity/(deficiency). The following pro forma information shows what income
would have been had SFAS No. 142 been in effect as of October 29, 2000:

|                          |                                                |   |                |  |                |   |           |       |           |   |       |  |  |   |       |     | 
|------------------------- | ---------------------------------------------- | - | -------------- |  | -------------- | - | --------- | ----- | --------- | - | ----- |  |  | - | ----- | --- | 
|                          |                                                |   | 26 weeks ended |  | 13 weeks ended
|                          |                                                |   |                |  |               
|                          |                                                |   | April 27,      |  | April 28,      |   | April 27, |       | April 28,
|                          |                                                |   | 2002           |  | 2001           |   | 2002      |       | 2001     
|                          |                                                |   |                |  |                |   |           |       |          
|Net income as reported    |                                                | $ | 2,256          |  |                | $ | 1,651     |       |           | $ | 1,202 |  |  | $ | 2,743 |    
|                         
|                         
|                         
|                         
|Add amortization expense: |                                                |   |                |  |                |   |           |       |           |   |       |  |  |   |       |    
|                         
|                         
|                         
|                         
|                          | Goodwill                                       |   |                |  |                |   |           | 1,744 |           |   |       |  |  |   |       | 872 | 
|                         
|                         
|                         
|                         
|                          | Workforce in place, net of tax of
$122 and $61 |   |                |  |                |   |           | 184   |           |   |       |  |  |   |       | 92  | 
|                          |                                                |   |                |  |                |   |           |       |           |   |       |  |  |   |       |    
|Adjusted net income       |                                                | $ | 2,256          |  |                | $ | 3,579     |       |           | $ | 1,202 |  |  | $ | 3,707 |    
|                          |                                                |   |                |  |                |   |           |       |           |   |       |  |  |   |       |    



| |  | In June, 2001, the FASB issued SFAS No. 143, Accounting for Asset
Retirement Obligations. This statement requires entities to record the
fair value of a liability for an asset retirement obligation in the period
in which it is incurred. The amount recorded as a liability will be
capitalized by increasing the carrying amount of the related long-lived
asset. Subsequent to initial measurement, the liability is accreted to the
ultimate amount anticipated to be paid and is also adjusted for revisions to
the timing of the amount of estimated cash flows. The capitalized cost is
depreciated over the useful life of the related asset. Upon settlement of
the liability, an entity either settles the obligation for its recorded
amount or incurs a gain or loss upon settlement. The provisions of this
statement become effective for Argo-Techs fiscal year beginning October 27,
2002. Management has not determined the impact, if any, that this statement
will have on Argo-Techs consolidated financial statements.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long Lived Assets. This statement requires that one accounting model be used for long-lived
assets to be disposed of by sale, whether previously held and used or newly
acquired, and by broadening the presentation of discontinued operations to
include more disposal transactions. The provisions of this statement become
effective for Argo-Techs fiscal year beginning October 27, 2002.
Management has not determined the impact, if any, that this statement will
have on Argo-Techs consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                   




ITEM 2.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.

Argo-Tech Corporation is a leading designer, manufacturer and servicer of
high performance fuel flow devices for the aerospace industry providing a broad
range of products and services to substantially all commercial and domestic
military engine and airframe manufacturers, to airlines worldwide and to the
U.S. and certain foreign militaries. Argo-Tech is the worlds leading supplier
of main engine fuel pumps to the commercial aircraft industry and a leading
supplier of airframe products and aerial refueling systems. Argo-Tech is also
a leading manufacturer of components for ground fueling systems and is a
manufacturer of industrial marine cryogenic pumps.

10



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##### Table of Contents



The following is managements discussion and analysis of certain
significant factors which have affected Argo-Techs financial position and
operating results during the periods presented in the accompanying condensed
consolidated financial statements. Argo-Techs fiscal year ends on the last
Saturday of October and is identified according to the calendar year in which
it ends.

Results of Operations for the 13 Week Period Ended April 27, 2002 Compared With
the 13 Week Period Ended April 28, 2001

Net revenues for the 13 week period ended April 27, 2002 decreased $5.3
million, or 11.9%, to $39.3 million from $44.7 million for the 13 week period
ended April 28, 2001. This decrease was primarily due to a decrease in
aerospace revenues of $6.2 million offset by an increase of $0.9 million in
industrial revenues. The decrease in aerospace revenues was attributable to a
decrease of $8.1 million of commercial aerospace revenues offset by an increase
of $1.9 million in military revenues. Commercial OEM revenues decreased $2.4
million, or 29.6%, to $5.7 million and commercial aftermarket revenues
decreased $5.7 million, or 24.5%, to $17.6 million in the 13 week period ended
April 27, 2002. Commercial OEM revenues declined as a result of lower overall
engine requirements from our customers in response to decreasing aircraft build
rates. Commercial aftermarket revenues were lower primarily due to a decrease
in the demand for spare part sales as a result of the reduced flying capacity
of commercial airlines. Military revenues increased primarily due to revenue
related to increased sales of F-15 and F-16 airframe components and higher
sales of aftermarket parts on a variety of aerial refueling and airframe
programs. The $0.9 million increase in industrial revenues was primarily
attributable to increased ground fueling revenues offset by a slight decrease
in cryogenic pump and industrial gas turbine revenues.

Gross profit for the 13 week period ended April 27, 2002 decreased $3.8
million, or 18.2%, to $17.1 million from $20.9 million in the 13 week period
ended April 28, 2001. Gross margin decreased to 43.5% for the 13 week period
ended April 27, 2002 from 46.8% in the 13 week period ended April 28, 2001.
The decrease in gross profit and gross margin is primarily due to the decrease
of higher margin commercial aerospace aftermarket revenues and the lower
absorption of fixed manufacturing overhead.

Operating expenses for the 13 week period ended April 27, 2002 decreased
$0.1 million, or 1.0%, to $10.4 million from $10.5 million in the 13 week
period ended April 28, 2001. This decrease is primarily attributable to the
cessation of goodwill and workforce in place amortization of $1.0 million as a
result of adopting SFAS No. 142 on October 28, 2001, offset by an increase in
research and development expenses and selling, general and administrative
expenses, which includes a non-cash expense of $0.6 million related to a
salaried employee early retirement program. Operating expenses as a percent of
revenues increased to 26.5% for the 13 week period ended April 27, 2002 as
compared to 23.5% for the 13 week period ended April 28, 2001.

Income from operations for the 13 week period ended April 27, 2002
decreased $3.7 million, or 35.6%, to $6.7 million from $10.4 million in the 13
week period ended April 28, 2001. As a percent of revenues, income from
operations for the 13 week period ended April 27, 2002 decreased to 17.0% from
23.3% for the 13 week period ended April 28, 2001. These decreases were
primarily due to the decreased sales of higher margin commercial aerospace
aftermarket revenues and the lower absorption of fixed manufacturing overhead.

Interest expense for the 13 week period ended April 27, 2002 decreased
$0.8 million, or 13.1%, to $5.3 million from $6.1 million for the 13 week
period ended April 28, 2001 due to lower outstanding borrowings and lower
interest rates on the term loans.

The income tax provision for the 13 week period ended April 27, 2002
decreased $1.5 million to $0.2 million from $1.7 million in the 13 week period
ended April 28, 2001. This decrease is due to a lower level of taxable income
in the 13 week period ended April 27, 2002 as compared to the 13 week period
ended April 28, 2001.

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Net income for the 13 week period ended April 27, 2002 decreased $1.5
million to $1.2 million from $2.7 million for the 13 week period ended April
28, 2001 primarily due to the revenue and expense factors discussed above.

Results of Operations for the 26 Week Period Ended April 27, 2002 Compared With
the 26 Week Period Ended April 28, 2001

Net revenues for the 26 week period ended April 27, 2002 decreased $5.5
million, or 6.9%, to $74.5 million from $80.0 million for the 26 week period
ended April 28, 2001. This decrease was primarily due to a decrease in
aerospace revenues of $8.0 million offset by a $2.5 million increase in
industrial revenues. The decrease in aerospace revenues was attributable to a
decrease of $12.0 million of commercial aerospace revenues offset by an
increase of $4.0 million in military revenues. Commercial OEM revenues
decreased $4.4 million, or 29.7%, to $10.4 million and commercial aftermarket
revenues decreased $7.6 million, or 18.3%, to $34.0 million in the 26 week
period ended April 27, 2002. Commercial OEM revenues decreased as a result of
lower overall engine requirements from our customers in response to reduced
aircraft build rates. Commercial aftermarket revenues were lower primarily due
to a decrease in demand for spare part sales as a result of the reduced flying
capacity of commercial airlines and a slight decrease in repair and overhaul
services. Military revenues increased primarily due to revenue related to
increased sales of F-15, F-16 and F-22 airframe components, F-18E/F 480 gallon
fuel tank components and higher sales of aftermarket parts and overhaul
services on a variety of aerial refueling and airframe programs. Industrial
revenues increased $2.5 million, primarily due to an increase in ground fueling
and cryogenic pump revenues.

Gross profit for the 26 week period ended April 27, 2002 decreased $2.7
million, or 7.6%, to $32.7 million from $35.4 million in the 26 week period
ended April 28, 2001. Gross margin decreased to 43.9% for the 26 week period
ended April 27, 2002 from 44.3% in the 26 week period ended April 28, 2001.
The decrease in gross profit and gross margin is primarily due to the decrease
in higher margin commercial aerospace aftermarket revenues and lower absorption
of fixed manufacturing overhead offset by an increase in industrial revenues.

Operating expenses for the 26 week period ended April 27, 2002 decreased
$0.4 million, or 2.0%, to $19.6 million from $20.0 million in the 26 week
period ended April 28, 2001. This decrease is primarily attributable to the
cessation of goodwill and workforce in place amortization of $2.0 million as a
result of adopting SFAS No. 142 on October 28, 2001, offset by an increase in
research and development expenses and selling, general and administrative
expenses, which includes a non-cash expense of $0.6 million related to a
salaried employee early retirement program. Operating expenses as a percent of
revenues increased to 26.3% for the 26 week period ended April 27, 2002 as
compared to 25.0% for the 26 week period ended April 28, 2001.

Income from operations for the 26 week period ended April 27, 2002
decreased $2.3 million, or 14.9%, to $13.1 million from $15.4 million in the 26
week period ended April 28, 2001. As a percent of revenues, income from
operations for the 26 week period ended April 27, 2002 decreased to 17.6% from
19.3% for the 26 week period ended April 28, 2001. These decreases were due to
the decrease in higher margin commercial aerospace aftermarket revenues and
lower absorption of fixed manufacturing overhead offset by an increase in
industrial revenues and lower operating expenses.

Interest expense for the 26 week period ended April 27, 2002 decreased
$1.8 million, or 14.3%, to $10.8 million from $12.6 million for the 26 week
period ended April 28, 2001 due to lower outstanding borrowings and lower
interest rates on the term loans.

The income tax provision for the 26 week period ended April 27, 2002
decreased $1.2 million to $0.1 million from $1.3 million in the 26 week period
ended April 28, 2001. This decrease is due to a lower level of

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taxable income for the 26 week period ended April 27, 2002 as compared to the 26 week period
ended April 28, 2001 and a slightly higher tax benefit of the foreign sales
corporation.

Net income for the 26 week period ended April 27, 2002 increased $0.6
million, or 35.3%, to $2.3 million from $1.7 million for the 26 week period
ended April 28, 2001 primarily due to the revenue and expense factors discussed
above.

Fluctuations of Operating Results; Limitation of Quarterly Comparisons

Argo-Techs results of operations are subject to fluctuations from quarter
to quarter due to changes in demand for its products, changes in product mix
and other factors. Demand for its products can vary from quarter to quarter
due to changes in demand for, and timing of deliveries of, OEM, aftermarket and
military products and services. In particular, the timing of Argo-Techs
aftermarket sales tends not to occur on a predictable schedule and,
furthermore, the sales tend to occur in large quantities that can significantly
impact quarterly comparisons. Accordingly, year-to-year and quarter-to-quarter
comparisons of quarterly results may not be meaningful, and quarterly results
during the year are not necessarily indicative of the results that may be
expected for any future period or for the entire year.

Liquidity and Capital Resources

Argo-Tech is a holding company that receives all of its operating income
from its subsidiaries. As a result, Argo-Techs primary source of liquidity
for conducting business activities and servicing its indebtedness has been cash
flows from operating activities.

Cash and cash equivalents for the 26 week period ended April 27, 2002
increased $1.6 million to $9.6 million. This was primarily due to operating
income and a decrease in accounts receivable offset by the scheduled repayment
of the term loans, the purchase of stock from former ESOP participants, an
increase in inventory and a decrease in accounts payable and accrued and other
liabilities.

Capital expenditures for the 26 weeks ended April 27, 2002 totaled $0.7
million compared to $0.8 million for the 26 weeks ended April 28, 2001.
Argo-Tech expects to incur capital expenditures of approximately $1.4 million
for the remainder of fiscal year 2002, related to the continued maintenance of
facilities, equipment and systems to support current operating activities.

Long-term debt at April 27, 2002 consisted of $51.1 million principal
amount of term loans and $193.1 million principal amount of senior subordinated
notes. Scheduled payments of $9.3 million were made on the term loans in the
26 week period ended April 27, 2002. Argo-Tech has available, after $1.1
million in letters of credit, an $18.9 million revolving credit facility. As
of April 27, 2002, there were no outstanding borrowings on the revolving credit
facility. The credit facility contains no restrictions on the ability of
Argo-Techs subsidiaries to make distributions to Argo-Tech.

Certain Factors That May Affect Future Results

From time to time, information provided by Argo-Tech, statements by its
employees or information included in its filings with the Securities and
Exchange Commission (including those portions of the Managements Discussion
and Analysis that refer to the future) may contain forward-looking statements
that are not historical facts. Those statements are forward-looking within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements, and Argo-Techs future performance, operating
results, financial position and liquidity, are subject to a variety of factors
that could materially affect results. Some, but not necessarily all, of these
factors include: Argo-Techs dependence on the aerospace industry; government
regulation and oversight; defense spending; competition; product and
environmental liabilities; and risks associated with its workforce, suppliers,
and future acquisitions.

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ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

In the ordinary course of operations, Argo-Techs major market risk
exposure is to changing interest rates. Argo-Techs exposure to changes in
interest rates relates primarily to its long-term debt obligations. At April
27, 2002, Argo-Tech had fixed rate debt totaling $195 million, including $1.9
million of accretion, at 8.625% and variable rate debt under its existing
credit facility of $51.1 million calculated at Argo-Techs choice using an
alternate base rate (ABR) or LIBOR, plus a supplemental percentage determined
by the ratio of debt to EBITDA. The variable rate is not to exceed ABR plus
1.50% or LIBOR plus 2.50%. Argo-Tech currently has no derivative contracts and
does not enter into derivative contracts for trading or speculative purposes.
A 10% fluctuation in interest rates would not materially affect Argo-Techs
financial condition, results of operations or cash flows.




PART II  OTHER INFORMATION




Item 6  Exhibits and Reports on Form 8-K

|                           | 
|-------------------------- | 
|(a) Exhibits  None       
|                          
|Reports on Form 8-K  None

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SIGNATURE



| |  | 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.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                    |  |                                                                                                                       
|------------------- |  | ----------------------------------------------------------------------------------------------------------------------
|Date: June 10, 2002 |  | ARGO-TECH CORPORATION                                                                                                 
|                   
|                    |  | By: /s/  Frances S. St. ClairFrances S. St. Clair
Vice President and Chief Financial Officer
(Duly Authorized Officer)
|                   
|                    |  | By: /s/  Paul A. SkladPaul A. Sklad
Controller
(Principal Accounting Officer)                                         

15