TABLE OF CONTENTS




|                               |                                                                                                |                                                                                                    |  |  |  |  |  | 
|------------------------------ | ---------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | ITEM 1  CONDENSED FINANCIAL STATEMENTS                                                       
|                               |                                                                                                | CONSOLIDATED BALANCE SHEETS JANUARY 27, 2001 AND OCTOBER 28, 2000                                 
|                               |                                                                                                | CONSOLIDATED STATEMENTS OF NET LOSS FOR THE 13 WEEKS ENDED JANUARY 27, 2001 AND JANUARY 29, 2000  
|                               |                                                                                                | CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE 13 WEEKS ENDED JANUARY 27, 2001 AND JANUARY 29, 2000
|                               |                                                                                                | 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                     



---



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 January 27, 2001, 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                                                       |  | 31-1521125                          
|(State or
other jurisdiction of
incorporation or organization) |  | (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 March 1, 2001, 1 share of the registrants common stock, $.01 par
value, was outstanding.





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##### Table of Contents



INDEX

|                                                                                               |                                                                                                    |          |       |  |  |  |  | 
|---------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | -------- | ----- |  |  |  |  | 
|                                                                                               |                                                                                                    | Page No.
|                                                                                               |                                                                                                    |         
|PART I  FINANCIAL INFORMATION                                                                
|                                                                                              
|Item 1  Condensed Financial Statements                                                       
|                                                                                              
|                                                                                               | Consolidated Balance Sheets as of January 27, 2001 and October 28, 2000                            |          | 3     | 
|                                                                                              
|                                                                                               | Consolidated Statements of Net Loss for the 13 weeks ended
January 27, 2001 and January 29, 2000   |          | 4     | 
|                                                                                              
|                                                                                               | Consolidated Statements of Cash Flows for the 13 weeks ended January 27, 2001
and January 29, 2000 |          | 5     | 
|                                                                                              
|                                                                                               | Notes to Consolidated Financial Statements                                                         |          | 6 - 9 | 
|                                                                                              
|Item 2  Managements Discussion and Analysis of Financial Condition and Results
of Operations |                                                                                                    | 9 - 11   |      
|                                                                                              
|Item 3  Quantitative and Qualitative Disclosure about Market Risk                             |                                                                                                    | 11       |      
|                                                                                              
|PART II  OTHER INFORMATION                                                                   
|                                                                                              
|Item 6  Exhibits and Reports on Form 8-K                                                      |                                                                                                    | 11       |      
|                                                                                              
|Signature                                                                                      |                                                                                                    | 12       |      

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 SHEETS
JANUARY 27, 2001 AND OCTOBER 28, 2000

(In thousands, except share data)

|                                                        |                     |                                                                                       |                                         |        |         |         |         |        |         |         |   |  |  |  | 
|------------------------------------------------------- | ------------------- | ------------------------------------------------------------------------------------- | --------------------------------------- | ------ | ------- | ------- | ------- | ------ | ------- | ------- | - |  |  |  | 
|                                                        |                     |                                                                                       |                                         |        | 2001    |         | 2000   
|                                                        |                     |                                                                                       |                                         |        |         |         |        
|ASSETS                                                  |                     |                                                                                       | (Unaudited                              | )     
|                                                       
|                                                       
|                                                       
|                                                       
|CURRENT ASSETS:                                        
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Cash and cash equivalents                                                             |                                         | $      | 9,998   |         |         | $      | 5,174   |        
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Receivables, net                                                                      |                                         |        | 20,627  |         |         |        | 27,008  |        
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Inventories                                                                           |                                         |        | 31,259  |         |         |        | 30,115  |        
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Deferred income taxes and prepaid expenses                                            |                                         |        | 6,673   |         |         |        | 5,613   |        
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|                                                        |                     |                                                                                       | Total current assets                    |        |         | 68,557  |         |        |         | 67,910  |  
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|PROPERTY AND EQUIPMENT, net of
accumulated depreciation |                     |                                                                                       | 31,471                                  |        |         |         | 32,701  |       
|                                                       
|                                                       
|                                                       
|                                                       
|GOODWILL, net of accumulated amortization               |                     |                                                                                       | 111,549                                 |        |         |         | 112,422 |       
|                                                       
|                                                       
|                                                       
|                                                       
|INTANGIBLE ASSETS, net of accumulated amortization      |                     |                                                                                       | 47,166                                  |        |         |         | 48,173  |       
|                                                       
|                                                       
|                                                       
|                                                       
|DEFERRED FINANCING AND OTHER ASSETS                     |                     |                                                                                       | 15,534                                  |        |         |         | 16,128  |       
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|Total Assets                                            |                     | $                                                                                     | 274,277                                 |        |         | $       | 277,334 |       
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|LIABILITIES                                            
|                                                       
|                                                       
|                                                       
|                                                       
|CURRENT LIABILITIES:                                   
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Current portion of long-term debt                                                     |                                         | $      | 11,631  |         |         | $      | 11,634  |        
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Accounts payable                                                                      |                                         |        | 4,147   |         |         |        | 4,990   |        
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Accrued liabilities                                                                   |                                         |        | 18,794  |         |         |        | 18,009  |        
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|                                                        |                     |                                                                                       | Total current liabilities               |        |         | 34,572  |         |        |         | 34,633  |  
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|LONG-TERM DEBT, net of current maturities               |                     |                                                                                       | 250,863                                 |        |         |         | 253,128 |       
|                                                       
|                                                       
|                                                       
|                                                       
|OTHER NONCURRENT LIABILITIES                            |                     |                                                                                       | 27,027                                  |        |         |         | 27,432  |       
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|                                                        |                     |                                                                                       | Total Liabilities                       |        |         | 312,462 |         |        |         | 315,193 |  
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|REDEEMABLE ESOP STOCK                                   |                     |                                                                                       | 26,863                                  |        |         |         | 26,863  |       
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Unearned ESOP stock |                                                                                       |                                         | (5,460 | )       |         |         | (5,880 | )      
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|                                                        |                     |                                                                                       | 21,403                                  |        |         |         | 20,983  |       
|                                                       
|                                                       
|                                                       
|                                                       
|SHAREHOLDERS EQUITY/(DEFICIENCY):                     
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Common Stock, $.01 par value, authorized 3,000 shares;
1 share issued and outstanding |                                         |        |        |         |         |        |        |        
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Paid-in capital                                                                       |                                         |        |        |         |         |        |        |        
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                     | Accumulated deficit                                                                   |                                         |        | (59,588 | )       |         |        | (58,842 | )      
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|                                                        |                     |                                                                                       | Total shareholders equity/(deficiency) |        |         | (59,588 | )       |        |         | (58,842 | )
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       
|Total Liabilities and Shareholders Equity/(Deficiency) |                     | $                                                                                     | 274,277                                 |        |         | $       | 277,334 |       
|                                                        |                     |                                                                                       |                                         |        |         |         |         |       

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

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 LOSS
FOR THE 13 WEEKS ENDED JANUARY 27, 2001 AND JANUARY 29, 2000

(In thousands)
UNAUDITED

|                                    |                    |   |        |        |      |   |        |        |  |  |  |  | 
|----------------------------------- | ------------------ | - | ------ | ------ | ---- | - | ------ | ------ |  |  |  |  | 
|                                    |                    |   | 2001   |        | 2000
|                                    |                    |   |        |        |     
|Net revenues                        |                    | $ | 35,328 |        |      | $ | 35,830 |       
|                                   
|                                   
|                                   
|                                   
|Cost of revenues                    |                    |   | 20,814 |        |      |   | 22,164 |       
|                                    |                    |   |        |        |      |   |        |       
|                                    | Gross profit       |   |        | 14,514 |      |   |        | 13,666 | 
|                                    |                    |   |        |        |      |   |        |       
|Selling, general and administrative |                    |   | 5,430  |        |      |   | 6,065  |       
|                                   
|                                   
|                                   
|                                   
|Research and development            |                    |   | 2,279  |        |      |   | 2,504  |       
|                                   
|                                   
|                                   
|                                   
|Amortization of intangible assets   |                    |   | 1,879  |        |      |   | 1,879  |       
|                                    |                    |   |        |        |      |   |        |       
|                                    | Operating expenses |   |        | 9,588  |      |   |        | 10,448 | 
|                                    |                    |   |        |        |      |   |        |       
|Income from operations              |                    |   | 4,926  |        |      |   | 3,218  |       
|                                   
|                                   
|                                   
|                                   
|Interest expense                    |                    |   | 6,511  |        |      |   | 6,510  |       
|                                   
|                                   
|                                   
|                                   
|Other, net                          |                    |   | (117   | )      |      |   | (93    | )     
|                                    |                    |   |        |        |      |   |        |       
|Loss before income taxes            |                    |   | (1,468 | )      |      |   | (3,199 | )     
|                                    |                    |   |        |        |      |   |        |       
|Income tax benefit                  |                    |   | (376   | )      |      |   | (1,120 | )     
|                                    |                    |   |        |        |      |   |        |       
|Net loss                            |                    | $ | (1,092 | )      |      | $ | (2,079 | )     
|                                    |                    |   |        |        |      |   |        |       

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

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 13 WEEKS ENDED JANUARY 27, 2001 AND JANUARY 29, 2000

(In thousands)
UNAUDITED

|                                       |                                                                                  |                               |       |        |        |      |       |        |        |   |  |  |  | 
|-------------------------------------- | -------------------------------------------------------------------------------- | ----------------------------- | ----- | ------ | ------ | ---- | ----- | ------ | ------ | - |  |  |  | 
|                                       |                                                                                  |                               |       | 2001   |        | 2000
|                                       |                                                                                  |                               |       |        |        |     
|CASH FLOWS FROM OPERATING ACTIVITIES: 
|                                      
|                                      
|                                      
|                                      
|                                       | Net loss                                                                         |                               | $     | (1,092 | )      |      | $     | (2,079 | )     
|                                      
|                                      
|                                      
|                                      
|                                       | Adjustments to reconcile net loss to net cash
provided by operating activities: 
|                                      
|                                      
|                                      
|                                      
|                                       | Depreciation                                                                     |                               |       | 1,385  |        |      |       | 1,540  |       
|                                      
|                                      
|                                      
|                                      
|                                       | Amortization of intangible assets and deferred financing costs                   |                               |       | 2,413  |        |      |       | 2,401  |       
|                                      
|                                      
|                                      
|                                      
|                                       | Accretion of bond discount                                                       |                               |       | 61     |        |      |       | 56     |       
|                                      
|                                      
|                                      
|                                      
|                                       | Compensation expense recognized in connection with
employee stock ownership plan |                               |       | 840    |        |      |       | 1,009  |       
|                                      
|                                      
|                                      
|                                      
|                                       | Amortization of inventory step-up                                                |                               |       |       |        |      |       | 193    |       
|                                      
|                                      
|                                      
|                                      
|                                       | Deferred income taxes                                                            |                               |       | (199   | )      |      |       | (1,024 | )     
|                                      
|                                      
|                                      
|                                      
|                                       | Changes in operating assets and liabilities:                                    
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                  | Receivables                   |       |        | 6,381  |      |       |        | 7,104  |  
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                  | Inventories                   |       |        | (1,144 | )    |       |        | (2,619 | )
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                  | Prepaid expenses              |       |        | (1,431 | )    |       |        | (762   | )
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                  | Accounts payable              |       |        | (845   | )    |       |        | (2,686 | )
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                  | Accrued and other liabilities |       |        | 988    |      |       |        | 1,663  |  
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                  | Other, net                    |       |        | (52    | )    |       |        | 26     |  
|                                       |                                                                                  |                               |       |        |        |      |       |       
|                                       | Net cash provided by operating activities                                        |                               |       | 7,305  |        |      |       | 4,822  |       
|                                       |                                                                                  |                               |       |        |        |      |       |       
|CASH FLOWS FROM INVESTING ACTIVITIES: 
|                                      
|                                      
|                                      
|                                      
|                                       | Capital expenditures                                                             |                               |       | (155   | )      |      |       | (508   | )     
|                                       |                                                                                  |                               |       |        |        |      |       |       
|                                       | Net cash used in investing activities                                            |                               |       | (155   | )      |      |       | (508   | )     
|                                       |                                                                                  |                               |       |        |        |      |       |       
|CASH FLOWS FROM FINANCING ACTIVITIES: 
|                                      
|                                      
|                                      
|                                      
|                                       | Repayment of long-term debt                                                      |                               |       | (2,329 | )      |      |       | (4,348 | )     
|                                      
|                                      
|                                      
|                                      
|                                       | Repayment of note payable  Durodyne acquisition                                 |                               |       |       |        |      |       | (557   | )     
|                                      
|                                      
|                                      
|                                      
|                                       | Dividend                                                                         |                               |       | 3      |        |      |       | (65    | )     
|                                       |                                                                                  |                               |       |        |        |      |       |       
|                                       | Net cash used in financing activities                                            |                               |       | (2,326 | )      |      |       | (4,970 | )     
|                                       |                                                                                  |                               |       |        |        |      |       |       
|CASH AND CASH EQUIVALENTS:            
|                                      
|                                      
|                                      
|                                      
|Net increase (decrease) for the period |                                                                                  |                               | 4,824 |        |        |      | (656  | )     
|                                      
|                                      
|                                      
|                                      
|Balance, Beginning of period           |                                                                                  |                               | 5,174 |        |        |      | 3,873 |       
|                                       |                                                                                  |                               |       |        |        |      |       |       
|Balance, End of period                 |                                                                                  | $                             | 9,998 |        |        | $    | 3,217 |       
|                                       |                                                                                  |                               |       |        |        |      |       |       

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

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 13 WEEKS ENDED JANUARY 27, 2001 AND JANUARY 29, 2000
(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 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 guarantor subsidiaries. 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 of the guarantor
subsidiaries 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 13 weeks ended January 27, 2001 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):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

|                                          |       |   |             |        |             |   |        |        | 
|----------------------------------------- | ----- | - | ----------- | ------ | ----------- | - | ------ | ------ | 
|                                          |       |   | January 27, |        | October 28,
|                                          |       |   | 2001        |        | 2000       
|                                          |       |   |             |        |            
|Finished goods                            |       | $ | 2,090       |        |             | $ | 2,259  |       
|                                         
|                                         
|                                         
|                                         
|Work-in-process and purchased parts       |       |   | 19,994      |        |             |   | 19,106 |       
|                                         
|                                         
|                                         
|                                         
|Raw materials and supplies                |       |   | 12,324      |        |             |   | 11,866 |       
|                                          |       |   |             |        |             |   |        |       
|                                          | Total |   |             | 34,408 |             |   |        | 33,231 | 
|                                         
|                                         
|                                         
|                                         
|Reserve for excess and obsolete inventory |       |   | (3,149      | )      |             |   | (3,116 | )     
|                                          |       |   |             |        |             |   |        |       
|Inventories  net                         |       | $ | 31,259      |        |             | $ | 30,115 |       
|                                          |       |   |             |        |             |   |        |       

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|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |  | 
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  |  |  | 
|4. |  | CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   |  | Environmental Matters  The soil and groundwater at Argo-Techs Euclid, 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.                                                                                                                    
|  
|5. |  | SEGMENT INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   |  | Argo-Tech operates in two business segments: Aerospace and Industrial.
Aerospace 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 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):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

13 Week Period Ended January 27, 2001

|                                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   |        |   | 
|-------------------------------------------------------------------------------- |  | --------- | ------ | ---------- |  | --------- | ----- | ------------ |  | - | ---- | - |  | - | ------ | - | 
|                                                                                 |  | Aerospace |        | Industrial |  | Corporate |       | Consolidated
|                                                                                 |  |           |        |            |  |           |       |             
|Net revenues                                                                     |  | $         | 29,260 |            |  | $         | 6,068 |              |  | $ |     |   |  | $ | 35,328 |  
|Operating profit (loss)                                                          |  |           | 7,661  |            |  |           | (598  | )            |  |   | (258 | ) |  |   | 6,805  |  
|Amortization of intangible assets                                                |  |           |        |            |  |           |       |              |  |   |      |   |  |   | 1,879  |  
|                                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   |        |  
|Income from operations                                                           |  |           |        |            |  |           |       |              |  |   |      |   |  |   | 4,926 
|Interest expense                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   | 6,511 
|Other, net                                                                       |  |           |        |            |  |           |       |              |  |   |      |   |  |   | (117   | )
|                                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   |        |  
|Loss before income taxes                                                         |  |           |        |            |  |           |       |              |  |   |      |   |  | $ | (1,468 | )
|                                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   |        |  
|Capital expenditures                                                             |  |           | 94     |            |  |           | 61    |              |  |   |      |   |  |   | 155    |  
|Depreciation                                                                     |  |           | 772    |            |  |           | 375   |              |  |   | 238  |   |  |   | 1,385  |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Compensation expense recognized
in connection with employee
stock ownership plan |  |           | 740    |            |  |           | 100   |              |  |   |      |   |  |   | 840    |  

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13 Week Period Ended January 29, 2000

|                                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   |        |   | 
|-------------------------------------------------------------------------------- |  | --------- | ------ | ---------- |  | --------- | ----- | ------------ |  | - | ---- | - |  | - | ------ | - | 
|                                                                                 |  | Aerospace |        | Industrial |  | Corporate |       | Consolidated
|                                                                                 |  |           |        |            |  |           |       |             
|Net revenues                                                                     |  | $         | 28,038 |            |  | $         | 7,792 |              |  | $ |     |   |  | $ | 35,830 |  
|Operating profit (loss)                                                          |  |           | 5,568  |            |  |           | (51   | )            |  |   | (420 | ) |  |   | 5,097  |  
|Amortization of intangible assets                                                |  |           |        |            |  |           |       |              |  |   |      |   |  |   | 1,879  |  
|                                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   |        |  
|Income from operations                                                           |  |           |        |            |  |           |       |              |  |   |      |   |  |   | 3,218 
|Interest expense                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   | 6,510 
|Other, net                                                                       |  |           |        |            |  |           |       |              |  |   |      |   |  |   | (93    | )
|                                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   |        |  
|Loss before income taxes                                                         |  |           |        |            |  |           |       |              |  |   |      |   |  | $ | (3,199 | )
|                                                                                 |  |           |        |            |  |           |       |              |  |   |      |   |  |   |        |  
|Capital expenditures                                                             |  |           | 478    |            |  |           | 30    |              |  |   |      |   |  |   | 508    |  
|Depreciation                                                                     |  |           | 850    |            |  |           | 404   |              |  |   | 286  |   |  |   | 1,540  |  
|Amortization of inventory step-up                                                |  |           |        |            |  |           |       |              |  |   | 193  |   |  |   | 193    |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Compensation expense recognized
in connection with employee
stock ownership plan |  |           | 895    |            |  |           | 114   |              |  |   |      |   |  |   | 1,009  |  

|   |  |                                                                                                                                                       |  |  |  | 
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|6. |  | OTHER COMPREHENSIVE INCOME                                                                                                                           
|  
|   |  | Other comprehensive income includes foreign currency translation
adjustments and changes in the fair value of the interest rate swaps (in thousands).

|                                                         |                                                    |   |                |      |             |   |        |    |  |  |  |  | 
|-------------------------------------------------------- | -------------------------------------------------- | - | -------------- | ---- | ----------- | - | ------ | -- |  |  |  |  | 
|                                                         |                                                    |   | 13 weeks ended
|                                                         |                                                    |   |               
|                                                         |                                                    |   | January 27,    |      | January 29,
|                                                         |                                                    |   | 2001           |      | 2000       
|                                                         |                                                    |   |                |      |            
|Net loss                                                 |                                                    | $ | (1,092         | )    |             | $ | (2,079 | ) 
|                                                        
|                                                        
|                                                        
|                                                        
|Other comprehensive income:                             
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Foreign currency translation adjustment            |   |                | 83   |             |   |        | 69 | 
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Cumulative effect of accounting change             |   |                | 284  |            
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Change in fair market value of interest rate swaps |   |                | (280 | )          
|                                                         |                                                    |   |                |      |             |   |        |   
|Other comprehensive income before tax                    |                                                    |   | 87             |      |             |   | 69     |   
|                                                        
|                                                        
|                                                        
|                                                        
|Income tax expense related to other comprehensive income |                                                    |   | (2             | )   
|                                                         |                                                    |   |                |      |             |   |        |   
|Other comprehensive income, net of tax                   |                                                    |   | 85             |      |             |   | 69     |   
|                                                         |                                                    |   |                |      |             |   |        |   
|Comprehensive loss                                       |                                                    | $ | (1,007         | )    |             | $ | (2,010 | ) 
|                                                         |                                                    |   |                |      |             |   |        |   

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |  |  | 
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|7. |  | NEW ACCOUNTING PRONOUNCEMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   |  | In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities. This pronouncement requires
that all derivative financial instruments, such as interest rate swap
contracts and foreign exchange contracts, be recognized in the financial
statements and measured at fair value regardless of the purpose or intent
for holding them. Changes in the fair value of derivative financial
instruments are either recognized periodically in income or shareholders
equity (as a component of comprehensive income), depending on whether the
derivative is being used to hedge changes in fair value or cash flows.

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| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |  |  | 
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | Argo-Tech adopted this standard effective October 29, 2000 and has
determined that its derivative instruments meet the criteria for cash flow
hedge accounting. In order to reduce variable interest rate exposure on
borrowings under its existing credit facility and to hedge cash flows,
Argo-Tech has two interest rate swap agreements on a portion of the
variable rate debt which each fix the rate on the notional amounts of $10.0 million
at 5.60%. The fair value of Argo-Techs derivative instruments was
a $284 thousand asset at October 29, 2000, which was recorded as a
cumulative effect of accounting change, and a $4 thousand asset at January 27, 2001.
The adjustments to record the cumulative effect of accounting
change and the net change in the fair value during the period ended January 27, 2001, was recorded, net of income taxes, in other comprehensive income.




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.

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
January 27, 2001 Compared With the 13 Week Period Ended January 29, 2000

Net revenues for the 13 week period ended January 27, 2001 decreased
$0.5 million, or 1.4%, to $35.3 million from $35.8 million for the 13 week
period ended January 29, 2000. This decrease was primarily due to a decrease in
industrial revenues of $1.7 million offset by a $1.2 million increase in
aerospace revenues. The decrease in industrial revenues was attributable to
lower ground fueling, industrial marine and industrial gas turbine revenues. The
increase in aerospace revenues was attributable to an increase in commercial
revenues of $3.8 million offset by a decrease of $2.6 million in military
revenues. Commercial OEM revenues increased $0.3 million, or 4.7%, to $6.7
million and commercial aftermarket revenues increased $3.5 million, or 23.6%, to
$18.3 million in the 13 week period ended January 27, 2001. Commercial
aftermarket revenues were higher primarily due to a slight increase in the
demand by airlines for spare pumps used for initial provisioning purposes, an
increase in spare part sales and an increase in repair and overhaul services.
The increase in spare part sales was partially attributable to an increase in
demand for spare parts from our international distributor. Military revenues
decreased primarily due to a lower rate of activity on the KC-135 aerial
refueling components and F-18E/F 480 gallon fuel tank, along with lower
engineering revenues related to the JSF program.

Gross profit for the 13 week period ended January 27, 2001 increased
$0.8 million, or 5.8%, to $14.5 million from $13.7 million in the 13 week period
ended January 29, 2000. Gross margin increased to 41.1% for the 13 week period
ended January 27, 2001 from 38.3% in the 13 week period ended January 29, 2000.
The increase in gross profit and gross margin is primarily due to the favorable
sales mix of aerospace and industrial revenues.

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Operating expenses for the 13 week period ended January 27, 2001
decreased $0.8 million, or 7.7%, to $9.6 million from $10.4 million in the 13
week period ended January 29, 2000. This decrease is primarily due to reduced
general and administrative and research and development expenses related to cost
reduction actions taken in fiscal 2000. Operating expenses as a percent of
revenues were 27.2% for the 13 week period ended January 27, 2001 as compared to
29.1% for the 13 week period ended January 29, 2000.

Income from operations for the 13 week period ended January 27, 2001
increased $1.7 million, or 53.1%, to $4.9 million from $3.2 million in the 13
week period ended January 29, 2000. As a percent of revenues, income from
operations for the 13 week period ended January 27, 2001 increased to 13.9% from
8.9% for the 13 week period ended January 29, 2000. The increase was due to
increased sales of higher margin aerospace products and decreased operating
expenses.

Interest expense was $6.5 million for both of the 13 week periods ended
January 27, 2001 and January 29, 2000 due to lower outstanding borrowings offset
by higher interest rates on the term loans.

The income tax benefit for the 13 week period ended January 27, 2001
decreased $0.7 million, or 63.6%, to $0.4 million from $1.1 million in the 13
week period ended January 29, 2000. This decrease is primarily due to the lower
taxable loss in the 13 week period ended January 27, 2001 as compared to the 13
week period ended January 29, 2000.

Net loss for the 13 week period ended January 27, 2001 decreased $1.0
million, or 47.6%, to $1.1 million from $2.1 million for the 13 week period
ended January 29, 2000 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 period ended January 27, 2001
increased $4.8 million to $10.0 million. This was primarily due to improved
operating income and a decrease in accounts receivable offset by an increase in
inventory and prepaid expenses and a decrease in accounts payable along with the
scheduled repayment of the term loans.

Capital expenditures for the 13 weeks ended January 27, 2001 totaled
$0.2 million compared to $0.5 million for the 13 weeks ended January 29, 2000.
Argo-Tech expects to incur capital expenditures of approximately $4.0 million
for the remainder of fiscal year 2001, related to the continued maintenance of
facilities, equipment and systems to support current operating activities.

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Long-term debt at January 27, 2001 consisted of $69.8 million principal
amount of term loans and $192.7 million principal amount of Senior Subordinated
Notes. A scheduled payment of $2.3 million was made on the term loans. Argo-Tech
has available, after $1.0 million of letters of credit, a $19.0 million
revolving credit facility. As of January 27, 2001, 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 the Company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.




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 January 27,
2001, Argo-Tech had fixed rate debt totaling $195 million, including $2.5 million
of accretion, at 8.625% and variable rate debt under its existing credit
facility of $69.8 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%. In order to reduce variable interest rate exposure on borrowings
under its existing credit facility, Argo-Tech has two interest rate swap
agreements on a portion of the variable rate debt which each fix the rate on the
notional amounts of $10.0 million at 5.60%. Argo-Tech 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:  March 13, 2001 |  |     |     | ARGO-TECH CORPORATION                                                                                         
|                     
|                      |  | By: | /s/ | Frances S. St.
Clair
Frances S. St. Clair
Vice President and Chief Financial Officer
(Duly Authorized Officer)
|                     
|                      |  | By: | /s/ | Paul A. Sklad
Paul A. Sklad
Controller
(Principal Accounting Officer)                                         

12