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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 31, 2004, 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
(Address of principal executive offices) |  | 44117
(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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). [  ] YES [X] NO



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



| |                                                                                                
| | -----------------------------------------------------------------------------------------------
| | As of March 1, 2004, 1 share of the registrants common stock,
$.01 par value, was outstanding.





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TABLE OF CONTENTS



|                               |                                                                                               |                                            |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               |                                                                                               | 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                            
|                               | ITEM 4. CONTROLS AND PROCEDURES                                                              
|PART II - OTHER INFORMATION   
|                               | Item 6 - Exhibits and Reports on Form 8-K                                                    
|SIGNATURE                     
|EX-31.1 302 CEO CERT          
|EX-31.2 302 CFO CERT          
|EX-32 906 CERTIFICATIONS      



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INDEX

|                                                                                               |                                                                                                                                          |  |          |       | 
|---------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | ----- | 
|                                                                                               |                                                                                                                                          |  | Page No.
|PART I - FINANCIAL INFORMATION                                                                 |                                                                                                                                          |  |          |      
|Item 1  Condensed Financial Statements                                                        |                                                                                                                                          |  |          |      
|                                                                                               | Consolidated Balance Sheets as of January 31, 2004 and October 25, 2003                                                                  |  |          | 3     | 
|                                                                                               | Consolidated Statements of Net Income (Loss) for the 14 week period ended
January 31, 2004 and the 13 week period ended January 25, 2003 |  |          | 4     | 
|                                                                                               | Consolidated Statements of Cash Flows for the 14 week period ended
January 31, 2004 and the 13 week period ended January 25, 2003        |  |          | 5     | 
|                                                                                               | Notes to Consolidated Financial Statements                                                                                               |  |          | 6 - 9 | 
|Item 2 - Managements Discussion and Analysis of Financial Condition and Results
of Operations |                                                                                                                                          |  | 9 - 13   |      
|Item 3 - Quantitative and Qualitative Disclosure about Market Risk                             |                                                                                                                                          |  | 14       |      
|Item 4  Controls and Procedures                                                               |                                                                                                                                          |  | 14       |      
|PART II - OTHER INFORMATION                                                                    |                                                                                                                                          |  |          |      
|Item 6 - Exhibits and Reports on Form 8-K                                                      |                                                                                                                                          |  | 14       |      
|Signature                                                                                      |                                                                                                                                          |  | 15       |      
|Certifications                                                                                 |                                                                                                                                          |  | 16-18    |      

2



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PART I - FINANCIAL INFORMATION

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




CONSOLIDATED BALANCE SHEETS
JANUARY 31, 2004 AND OCTOBER 25, 2003
(In thousands, except share data)

|                                                        |                                                                                       |                                         |         |             |         |      |         |         |         |  
|------------------------------------------------------- | ------------------------------------------------------------------------------------- | --------------------------------------- | ------- | ----------- | ------- | ---- | ------- | ------- | ------- | -
|                                                        |                                                                                       |                                         |         | 2004        |         | 2003
|                                                        |                                                                                       |                                         |         |             |         |     
|                                                        |                                                                                       |                                         |         | (Unaudited) |         |      |         |        
|ASSETS                                                  |                                                                                       |                                         |         |             |         |      |         |        
|CURRENT ASSETS:                                         |                                                                                       |                                         |         |             |         |      |         |        
|                                                        | Cash and cash equivalents                                                             |                                         | $       | 17,804      |         |      | $       | 14,057  |        
|                                                        | Receivables, net                                                                      |                                         |         | 24,614      |         |      |         | 28,335  |        
|                                                        | Income tax receivable                                                                 |                                         |         | 3,281       |         |      |         | 3,500   |        
|                                                        | Inventories                                                                           |                                         |         | 25,653      |         |      |         | 25,701  |        
|                                                        | Deferred income taxes and prepaid expenses                                            |                                         |         | 6,340       |         |      |         | 5,352   |        
|                                                        |                                                                                       |                                         |         |             |         |      |         |         |        
|                                                        |                                                                                       | Total current assets                    |         |             | 77,692  |      |         |         | 76,945  |  
|                                                        |                                                                                       |                                         |         |             |         |      |         |         |        
|PROPERTY AND EQUIPMENT, net of
accumulated depreciation |                                                                                       |                                         | 23,386  |             |         |      | 23,956  |        
|GOODWILL                                                |                                                                                       |                                         | 110,059 |             |         |      | 110,059 |        
|INTANGIBLE ASSETS, net of accumulated amortization      |                                                                                       |                                         | 34,062  |             |         |      | 34,916  |        
|DEFERRED FINANCING AND OTHER ASSETS                     |                                                                                       |                                         | 9,334   |             |         |      | 9,921   |        
|                                                        |                                                                                       |                                         |         |             |         |      |         |         |        
|Total Assets                                            |                                                                                       | $                                       | 254,533 |             |         | $    | 255,797 |        
|                                                        |                                                                                       |                                         |         |             |         |      |         |         |        
|LIABILITIES AND SHAREHOLDERS EQUITY/(DEFICIENCY)       |                                                                                       |                                         |         |             |         |      |         |        
|CURRENT LIABILITIES:                                    |                                                                                       |                                         |         |             |         |      |         |        
|                                                        | Current portion of long-term debt                                                     |                                         | $       | 12,500      |         |      | $       | 12,000  |        
|                                                        | Accounts payable                                                                      |                                         |         | 4,471       |         |      |         | 7,254   |        
|                                                        | Accrued liabilities                                                                   |                                         |         | 25,395      |         |      |         | 22,757  |        
|                                                        |                                                                                       |                                         |         |             |         |      |         |         |        
|                                                        |                                                                                       | Total current liabilities               |         |             | 42,366  |      |         |         | 42,011  |  
|                                                        |                                                                                       |                                         |         |             |         |      |         |         |        
|LONG-TERM DEBT, net of current maturities               |                                                                                       |                                         | 203,930 |             |         |      | 207,349 |        
|OTHER NONCURRENT LIABILITIES                            |                                                                                       |                                         | 21,734  |             |         |      | 21,753  |        
|                                                        |                                                                                       |                                         |         |             |         |      |         |         |        
|                                                        |                                                                                       | Total Liabilities                       |         |             | 268,030 |      |         |         | 271,113 |  
|                                                        |                                                                                       |                                         |         |             |         |      |         |         |        
|REDEEMABLE ESOP STOCK                                   |                                                                                       |                                         | 15,303  |             |         |      | 15,452  |        
|Unearned ESOP stock                                     |                                                                                       |                                         | (630    | )           |         |      | (840    | )      
|                                                        |                                                                                       |                                         |         |             |         |      |         |         |        
|                                                        |                                                                                       |                                         | 14,673  |             |         |      | 14,612  |        
|SHAREHOLDERS EQUITY/(DEFICIENCY):                      |                                                                                       |                                         |         |             |         |      |         |        
|                                                        | Common Stock, $.01 par value, authorized 3,000 shares;
1 share issued and outstanding |                                         |         |            |         |      |         |        |        
|                                                        | Paid-in capital                                                                       |                                         |         |            |         |      |         |        |        
|                                                        | Accumulated comprehensive loss                                                        |                                         |         | (2,062      | )       |      |         | (2,143  | )      
|                                                        | Accumulated deficit                                                                   |                                         |         | (26,108     | )       |      |         | (27,785 | )      
|                                                        |                                                                                       |                                         |         |             |         |      |         |         |        
|                                                        |                                                                                       | Total shareholders equity/(deficiency) |         |             | (28,170 | )    |         |         | (29,928 | )
|                                                        |                                                                                       |                                         |         |             |         |      |         |         |        
|Total Liabilities and Shareholders Equity/(Deficiency) |                                                                                       | $                                       | 254,533 |             |         | $    | 255,797 |        
|                                                        |                                                                                       |                                         |         |             |         |      |         |         |        

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

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




CONSOLIDATED STATEMENTS OF NET INCOME (LOSS)
FOR THE 14 WEEK PERIOD ENDED JANUARY 31, 2004 AND 13 WEEK PERIOD ENDED JANUARY 25, 2003

(In thousands)
UNAUDITED

|                                    |                    |   |        |        |      |   |        |        | 
|----------------------------------- | ------------------ | - | ------ | ------ | ---- | - | ------ | ------ | 
|                                    |                    |   | 2004   |        | 2003
|                                    |                    |   |        |        |     
|Net revenues                        |                    | $ | 44,437 |        |      | $ | 34,248 |       
|Cost of revenues                    |                    |   | 26,833 |        |      |   | 19,423 |       
|                                    |                    |   |        |        |      |   |        |       
|                                    | Gross profit       |   |        | 17,604 |      |   |        | 14,825 | 
|                                    |                    |   |        |        |      |   |        |       
|Selling, general and administrative |                    |   | 6,649  |        |      |   | 6,378  |       
|Research and development            |                    |   | 2,383  |        |      |   | 2,508  |       
|Amortization of intangible assets   |                    |   | 854    |        |      |   | 854    |       
|                                    |                    |   |        |        |      |   |        |       
|                                    | Operating expenses |   |        | 9,886  |      |   |        | 9,740  | 
|                                    |                    |   |        |        |      |   |        |       
|Income from operations              |                    |   | 7,718  |        |      |   | 5,085  |       
|Interest expense                    |                    |   | 5,423  |        |      |   | 5,297  |       
|Other, net                          |                    |   | (4     | )      |      |   | (40    | )     
|                                    |                    |   |        |        |      |   |        |       
|Income / (loss) before income taxes |                    |   | 2,299  |        |      |   | (172   | )     
|                                    |                    |   |        |        |      |   |        |       
|Income tax provision / (benefit)    |                    |   | 675    |        |      |   | (57    | )     
|                                    |                    |   |        |        |      |   |        |       
|Net income / (loss)                 |                    | $ | 1,624  |        |      | $ | (115   | )     
|                                    |                    |   |        |        |      |   |        |       

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

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




CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 14 WEEK PERIOD ENDED JANUARY 31, 2004 AND THE 13 WEEK PERIOD ENDED JANUARY 25, 2003

(In thousands)
UNAUDITED

|                                       |                                                                                          |                               |        |        |        |      |        |         |        |  
|-------------------------------------- | ---------------------------------------------------------------------------------------- | ----------------------------- | ------ | ------ | ------ | ---- | ------ | ------- | ------ | -
|                                       |                                                                                          |                               |        | 2004   |        | 2003
|                                       |                                                                                          |                               |        |        |        |     
|CASH FLOWS FROM OPERATING ACTIVITIES:  |                                                                                          |                               |        |        |        |      |        |        
|                                       | Net income (loss)                                                                        |                               | $      | 1,624  |        |      | $      | (115    | )     
|                                       | Adjustments to reconcile net income (loss) to net cash
provided by operating activities: |                               |        |        |        |      |        |         |       
|                                       | Depreciation                                                                             |                               |        | 973    |        |      |        | 1,052   |       
|                                       | Amortization of intangible assets and deferred financing costs                           |                               |        | 1,473  |        |      |        | 1,345   |       
|                                       | Accretion of bond discount                                                               |                               |        | 81     |        |      |        | 74      |       
|                                       | Compensation expense recognized in connection with
employee stock ownership plan         |                               |        | 262    |        |      |        | 630     |       
|                                       | Deferred income taxes                                                                    |                               |        | (229   | )      |      |        | (532    | )     
|                                       | Changes in operating assets and liabilities:                                             |                               |        |        |        |      |        |         |       
|                                       |                                                                                          | Receivables                   |        |        | 3,940  |      |        |         | 3,852  |  
|                                       |                                                                                          | Inventories                   |        |        | 48     |      |        |         | (2,158 | )
|                                       |                                                                                          | Prepaid expenses              |        |        | (1,202 | )    |        |         | (1,146 | )
|                                       |                                                                                          | Accounts payable              |        |        | (2,783 | )    |        |         | (992   | )
|                                       |                                                                                          | Accrued and other liabilities |        |        | 3,032  |      |        |         | 2,482  |  
|                                       |                                                                                          | Other, net                    |        |        | 81     |      |        |         | 75     |  
|                                       |                                                                                          |                               |        |        |        |      |        |         |       
|                                       | Net cash provided by operating activities                                                |                               |        | 7,300  |        |      |        | 4,567   |       
|                                       |                                                                                          |                               |        |        |        |      |        |         |       
|CASH FLOWS FROM INVESTING ACTIVITIES:  |                                                                                          |                               |        |        |        |      |        |        
|                                       | Capital expenditures                                                                     |                               |        | (404   | )      |      |        | (465    | )     
|                                       |                                                                                          |                               |        |        |        |      |        |         |       
|                                       | Net cash used in investing activities                                                    |                               |        | (404   | )      |      |        | (465    | )     
|                                       |                                                                                          |                               |        |        |        |      |        |         |       
|CASH FLOWS FROM FINANCING ACTIVITIES:  |                                                                                          |                               |        |        |        |      |        |        
|                                       | Repayment of long-term debt                                                              |                               |        | (3,000 | )      |      |        | (10,000 | )     
|                                       | Payment of financing related fees                                                        |                               |        |       |        |      |        | (1,178  | )     
|                                       | Purchase of AT Holdings stock from former ESOP participants                              |                               |        | (149   | )      |      |        |        |       
|                                       |                                                                                          |                               |        |        |        |      |        |         |       
|                                       | Net cash used in financing activities                                                    |                               |        | (3,149 | )      |      |        | (11,178 | )     
|                                       |                                                                                          |                               |        |        |        |      |        |         |       
|CASH AND CASH EQUIVALENTS:             |                                                                                          |                               |        |        |        |      |        |        
|Net increase (decrease) for the period |                                                                                          |                               | 3,747  |        |        |      | (7,076 | )      
|Balance, Beginning of period           |                                                                                          |                               | 14,057 |        |        |      | 17,769 |        
|                                       |                                                                                          |                               |        |        |        |      |        |         |       
|Balance, End of period                 |                                                                                          | $                             | 17,804 |        |        | $    | 10,693 |        
|                                       |                                                                                          |                               |        |        |        |      |        |         |       

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

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




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE 14 WEEK PERIOD ENDED JANUARY 31, 2004 AND THE 13 WEEK PERIOD ENDED
JANUARY 25, 2003 (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 years 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.                                                                                                            
|  
|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. These financial statements and
notes should be read in conjunction with the financial statements and related
notes included in Argo-Techs Annual Report on Form 10-K for the year ended
October 25, 2003. The results of operations for the 14 week period ended
January 31, 2004 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 31, |        | October 25,
|                                          |       |   | 2004        |        | 2003       
|                                          |       |   |             |        |            
|Finished goods                            |       | $ | 1,278       |        |             | $ | 1,481  |       
|Work-in-process and purchased parts       |       |   | 18,815      |        |             |   | 16,938 |       
|Raw materials and supplies                |       |   | 10,313      |        |             |   | 12,385 |       
|                                          |       |   |             |        |             |   |        |       
|                                          | Total |   |             | 30,406 |             |   |        | 30,804 | 
|Reserve for excess and obsolete inventory |       |   | (4,753      | )      |             |   | (5,103 | )     
|                                          |       |   |             |        |             |   |        |       
|Inventories - net                         |       | $ | 25,653      |        |             | $ | 25,701 |       
|                                          |       |   |             |        |             |   |        |       

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

|                   |                     |       |   |                  |        |                  |   |        |        |              |   |        |        |  |   |        |        | 
|------------------ | ------------------- | ----- | - | ---------------- | ------ | ---------------- | - | ------ | ------ | ------------ | - | ------ | ------ |  | - | ------ | ------ | 
|                   |                     |       |   | January 31, 2004 |        | October 25, 2003
|                   |                     |       |   |                  |        |                 
|                   |                     |       |   | Gross            |        | Accumulated      |   | Gross  |        | Accumulated 
|                   |                     |       |   | Amount           |        | Amortization     |   | Amount |        | Amortization
|                   |                     |       |   |                  |        |                  |   |        |        |             
|Intangible assets: |                     |       |   |                  |        |                  |   |        |        |              |   |        |        |  |   |       
|                   | Contracts           |       | $ | 17,100           |        |                  | $ | 10,832 |        |              | $ | 17,100 |        |  | $ | 10,404 |       
|                   | Spare parts annuity |       |   | 38,200           |        |                  |   | 10,637 |        |              |   | 38,200 |        |  |   | 10,217 |       
|                   | Patents             |       |   | 387              |        |                  |   | 156    |        |              |   | 387    |        |  |   | 150    |       
|                   |                     |       |   |                  |        |                  |   |        |        |              |   |        |        |  |   |       
|                   |                     | Total |   | $                | 55,687 |                  |   | $      | 21,625 |              |   | $      | 55,687 |  |   | $      | 20,771 | 
|                   |                     |       |   |                  |        |                  |   |        |        |              |   |        |        |  |   |       



|   |  | Amortization expense recorded on the intangible assets for each of the 14
week and 13 week periods ended January 31, 2004 and January 25, 2003 was $0.8
million. The estimated amortization expense for each of the three succeeding
fiscal years 2004 through 2006 is $3.4 million, fiscal year 2007 is $3.2
million and fiscal year 2008 is $1.7 million.                                                                                                                                                                                                                                                                                                    
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|5. |  | PRODUCT WARRANTY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   |  | Argo-Tech accrues for warranty obligations for products sold based on
management estimates of the amount that may be required to settle such
potential obligations. These estimates are prepared with support from our
sales, engineering, quality and legal functions. This accrual, which is
reviewed in detail on a regular basis, is based on several factors: past
experience, current claims, production changes and various other
considerations. The following table presents a reconciliation of changes in
the product warranty liability for the 14 week period ended January 31, 2004
and the 13 week period ended January 25, 2003 (in thousands):

|                                                                     |  |      |       |      |  |   |       |  
|-------------------------------------------------------------------- |  | ---- | ----- | ---- |  | - | ----- | -
|                                                                     |  | 2004 |       | 2003
|                                                                     |  |      |       |     
|Beginning balance                                                    |  | $    | 2,130 |      |  | $ | 2,064 |  
|Accruals for warranties issued                                       |  |      |       |      |  |   | 54    |  
|Accruals for pre-existing warranties
(including changes in estimate) |  |      | 301   |      |  |   | 243   |  
|Warranty claims settled                                              |  |      | (167  | )    |  |   | (160  | )
|                                                                     |  |      |       |      |  |   |       |  
|Ending balance                                                       |  | $    | 2,264 |      |  | $ | 2,201 |  
|                                                                     |  |      |       |      |  |   |       |  



|6. |  | CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | Environmental Matters - The soil and groundwater at Argo-Techs Cleveland,
Ohio facility and 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 matters is not expected to materially affect
Argo-Techs financial condition, results of operations or liquidity.                                                                      

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|7. |  | SEGMENT INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | Argo-Tech operates in two business segments: Aerospace and Industrial. The
Aerospace segment includes the design, manufacture, distribution, repair and
overhaul of aviation products throughout the world, consisting of aircraft
fuel pumps, fuel flow related products found on a planes airframe, and
aerial refueling pumps and related equipment. The Industrial segment
includes the design, manufacture and distribution of industrial pumps, ground
fueling valves and related components, specialty industrial hose, cryogenic
pumps and nozzles 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 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):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

14 Week Period Ended January 31, 2004

|                                                                                 |  |           |        |            |  |           |        |              |  |   |     |   |  |   |        |  
|-------------------------------------------------------------------------------- |  | --------- | ------ | ---------- |  | --------- | ------ | ------------ |  | - | --- | - |  | - | ------ | -
|                                                                                 |  | Aerospace |        | Industrial |  | Corporate |        | Consolidated
|                                                                                 |  |           |        |            |  |           |        |             
|Net revenues                                                                     |  | $         | 30,866 |            |  | $         | 13,571 |              |  | $ |    |   |  | $ | 44,437 |  
|Operating profit (loss)                                                          |  |           | 8,181  |            |  |           | 475    |              |  |   | (84 | ) |  |   | 8,572  |  
|Amortization of intangible assets                                                |  |           |        |            |  |           |        |              |  |   |     |   |  |   | 854    |  
|                                                                                 |  |           |        |            |  |           |        |              |  |   |     |   |  |   |        |  
|Income from operations                                                           |  |           |        |            |  |           |        |              |  |   |     |   |  |   | 7,718  |  
|Interest expense                                                                 |  |           |        |            |  |           |        |              |  |   |     |   |  |   | 5,423  |  
|Other, net                                                                       |  |           |        |            |  |           |        |              |  |   |     |   |  |   | (4     | )
|                                                                                 |  |           |        |            |  |           |        |              |  |   |     |   |  |   |        |  
|Income before income taxes                                                       |  |           |        |            |  |           |        |              |  |   |     |   |  | $ | 2,299  |  
|                                                                                 |  |           |        |            |  |           |        |              |  |   |     |   |  |   |        |  
|Capital expenditures                                                             |  |           | 358    |            |  |           | 46     |              |  |   |     |   |  |   | 404    |  
|Depreciation                                                                     |  |           | 564    |            |  |           | 309    |              |  |   | 100 |   |  |   | 973    |  
|Compensation expense recognized
in connection with employee
stock ownership plan |  |           | 231    |            |  |           | 31     |              |  |   |     |   |  |   | 262    |  

13 Week Period Ended January 25, 2003

|                                                                                 |  |           |        |            |  |           |       |              |  |   |     |   |  |   |        |  
|-------------------------------------------------------------------------------- |  | --------- | ------ | ---------- |  | --------- | ----- | ------------ |  | - | --- | - |  | - | ------ | -
|                                                                                 |  | Aerospace |        | Industrial |  | Corporate |       | Consolidated
|                                                                                 |  |           |        |            |  |           |       |             
|Net revenues                                                                     |  | $         | 26,792 |            |  | $         | 7,456 |              |  | $ |    |   |  | $ | 34,248 |  
|Operating profit (loss)                                                          |  |           | 6,330  |            |  |           | (298  | )            |  |   | (93 | ) |  |   | 5,939  |  
|Amortization of intangible assets                                                |  |           |        |            |  |           |       |              |  |   |     |   |  |   | 854    |  
|                                                                                 |  |           |        |            |  |           |       |              |  |   |     |   |  |   |        |  
|Income from operations                                                           |  |           |        |            |  |           |       |              |  |   |     |   |  |   | 5,085  |  
|Interest expense                                                                 |  |           |        |            |  |           |       |              |  |   |     |   |  |   | 5,297  |  
|Other, net                                                                       |  |           |        |            |  |           |       |              |  |   |     |   |  |   | (40    | )
|                                                                                 |  |           |        |            |  |           |       |              |  |   |     |   |  |   |        |  
|Loss before income taxes                                                         |  |           |        |            |  |           |       |              |  |   |     |   |  | $ | (172   | )
|                                                                                 |  |           |        |            |  |           |       |              |  |   |     |   |  |   |        |  
|Capital expenditures                                                             |  |           | 306    |            |  |           | 159   |              |  |   |     |   |  |   | 465    |  
|Depreciation                                                                     |  |           | 628    |            |  |           | 320   |              |  |   | 104 |   |  |   | 1,052  |  
|Compensation expense recognized
in connection with employee
stock ownership plan |  |           | 561    |            |  |           | 69    |              |  |   |     |   |  |   | 630    |  

8



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|8. |  | OTHER COMPREHENSIVE INCOME                                                                                                      
|-- |  | --------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The following table presents other comprehensive income, which includes
foreign currency translation adjustments (in thousands):

|                                                         |                                         |   |                      |    |                      |   |      |    | 
|-------------------------------------------------------- | --------------------------------------- | - | -------------------- | -- | -------------------- | - | ---- | -- | 
|                                                         |                                         |   | 14 week period ended |    | 13 week period ended
|                                                         |                                         |   | January 31, 2004     |    | January 25, 2003    
|                                                         |                                         |   |                      |    |                     
|Net income (loss)                                        |                                         | $ | 1,624                |    |                      | $ | (115 | ) 
|Other comprehensive income:                              |                                         |   |                      |    |                      |   |      |   
|                                                         | Foreign currency translation adjustment |   |                      | 81 |                      |   |      | 62 | 
|                                                         |                                         |   |                      |    |                      |   |      |   
|                                                         | Other comprehensive income before tax   |   |                      | 81 |                      |   |      | 62 | 
|Income tax benefit related to other
comprehensive income |                                         |   |                     |    |                      |   |     |   
|                                                         |                                         |   |                      |    |                      |   |      |   
|Other comprehensive income, net of tax                   |                                         |   | 81                   |    |                      |   | 62   |   
|                                                         |                                         |   |                      |    |                      |   |      |   
|Comprehensive income (loss)                              |                                         | $ | 1,705                |    |                      | $ | (53  | ) 
|                                                         |                                         |   |                      |    |                      |   |      |   



|9. |  | NEW ACCOUNTING PRONOUNCEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | In December 2003, the Financial Accounting Standards Board (FASB) issued a
revised FASB Interpretation No. (FIN) 46, Consolidation of Variable
Interest Entities. FIN 46 requires existing, unconsolidated variable
interest entities to be consolidated by their primary beneficiaries if the
entities do not effectively disperse risks among the parties involved.
Argo-Tech is not associated with variable interest entities; therefore, the
adoption of this statement did not have any effect on Argo-Techs
consolidated financial position or results of operations.                                                                                                                                                                                                          
|  
|   |  | In December 2003, the Medicare Prescription Drug, Improvement and
Modernization Act was enacted, which introduced a Medicare prescription drug
benefit and a federal subsidy to sponsors of retiree health-care plans that
provide a benefit at least actuarially equivalent to the Medicare benefit.
In accordance with FASB Staff Position (FSP) Statement of Financial
Accounting Standards (SFAS) No. 106-1, Argo-Tech has elected to defer
recognition of the effects of the new Medicare Act. The accumulated
postretirement benefit obligation and net periodic postretirement benefit
cost do not reflect the provisions of the Act. Specific authoritative
guidance on accounting for the federal subsidy is pending and may require
changes to previously reported information.
|  
|   |  | In December 2003, the FASB issued a revision to SFAS No. 132,  Employers
Disclosures about Pensions and Other Postretirement Benefits, which expands
the disclosure requirements regarding plan assets and benefit obligations
for Argo-Techs two noncontributory defined benefit pension plans. The
provisions of this statement are effective for the second quarter of fiscal
2004.                                                                                                                                                                                                                                                                                                                                                                                                   






| |  | ITEM 2.                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.                                                                                                                                                                                                                                                                                                                         
|
| |  | Overview                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | We design, manufacture, sell and service high performance fuel flow devices
and systems for both aerospace and general industrial applications.
Argo-Tech operates in two business segments, Aerospace and Industrial. The
Aerospace segment includes the design, manufacture, distribution, repair and
overhaul of aviation products throughout the world, consisting of aircraft
engine fuel pumps, fuel flow

9



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| |  | related products and systems found on a planes
airframe, and aerial refueling pumps and related equipment. Argo-Tech
provides these 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. The Industrial segment
includes the design, manufacture and distribution of industrial pumps,
ground fueling valves and related components, specialty industrial hose,
cryogenic pumps and nozzles 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | Critical Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | Our consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America.
The preparation of these financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue and expenses, and related disclosure of contingent
assets and liabilities. Management bases its estimates on historical
experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which enable the fair
presentation of our financial position and results of operations. Actual
results may differ from these estimates under different assumptions or
conditions. Management believes the following critical accounting policies
reflect its more significant estimates and assumptions used in the
preparation of its consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | Revenue Recognition- Revenues are generally recognized when goods are
shipped or services provided, at which time title and risk of loss passes to
the customer. Substantially all sales are made pursuant to firm,
fixed-price purchase orders received from customers. We have executed
long-term supply agreements with certain of our original equipment
manufacturers. These agreements require Argo-Tech to supply all the amounts
ordered by the customers during the term (generally three to five years) of
the agreements at specified prices. Under certain of these agreements, we
expect to incur losses. Provisions for estimating losses on these contracts
are made in the period in which such losses are identified based on cost and
pricing information and estimated future shipment quantities provided by the
customer. The cumulative effect of revisions to estimated losses on
contracts is recorded in the accounting period in which the amounts become
known and can be reasonably estimated. Such revisions could occur at any
time there are changes to estimated future revenues or costs. Revenue from
certain fixed price engineering contracts for which costs can be reliably
estimated are recognized based on milestone billings. Variations in actual
labor performance, changes to estimated profitability and final contract
settlements may result in revisions to the cost estimates. Revisions in
cost estimates as contracts progress have the effect of increasing or
decreasing profits in the period of revision. We record estimated reductions
to revenue for volume-based incentives based on expected customer activity
for the applicable period. Revisions for volume-based incentives are
recorded in the accounting period in which such estimates can be reasonably
determined.
|
| |  | Valuation of Accounts Receivable and Allowance for Doubtful Accounts- We
evaluate the collectibility of our trade receivables based on a combination
of factors. We regularly analyze our customer accounts, and when we become
aware of a specific customers inability to meet its financial obligation to
us, such as in the case of bankruptcy filings, we immediately record a bad
debt expense and reduce the related receivable to the amount we reasonably
believe is collectible. We estimate the allowance for doubtful accounts
based on the aging of the accounts receivable, customer creditworthiness and
historical experience. Our estimate of the allowance amounts includes
amounts for specifically identified losses and a general amount for
estimated losses. If circumstances change or economic conditions
deteriorate, our estimates of the recoverability of receivables could be
further adjusted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

10



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| |  | Valuation of Inventories- Our inventory purchases and commitments are made
in order to build inventory to meet future shipment schedules based on
forecasted demand for our products. Inventories are stated at the lower of
cost or market, with cost being determined on the first-in, first-out, or
FIFO, method. Periodically, we perform a detailed assessment of inventory,
which includes a review of, among other factors, historical sales activity,
future demand requirements, product life cycle and development plans and
quality issues. Based on this analysis, we record provisions for
potentially obsolete or slow-moving inventory to reflect inventory at net
realizable value. These provisions could vary significantly, either
favorably or unfavorably, from actual requirements based upon future
economic conditions, customer inventory levels or competitive factors that
were not foreseen, or did not exist, when the valuation allowances were
established.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Valuation of Goodwill and Intangible Assets- Goodwill and identified
intangible assets are recorded at fair value on the date of acquisition.
Intangible assets other than goodwill are recognized if the benefit
of the intangible asset is obtained through contractual or other legal
rights, or if the intangible asset can be sold, transferred, licensed or
exchanged, regardless of our intent to do so. Intangible assets, such as
goodwill, that have an indefinite useful life are not amortized. All other
intangible assets are amortized over their estimated useful lives. We
review goodwill and purchased intangible assets for impairment annually, or
whenever events or changes in circumstances indicate the carrying value of
an asset may not be recoverable. Our asset impairment review assesses the
fair value of the assets based on the future cash flows the assets are
expected to generate. This approach uses our estimates of future market
growth, forecasted revenue and costs and appropriate discount rates. When
impairment is identified, the carrying amount of the asset is reduced to its
estimated fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | Results of Operations for the 14 Week Period Ended January 31, 2004 Compared
With the 13 Week Period Ended January 25, 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | Net revenues for the 14 week period ended January 31, 2004 increased $10.2
million, or 29.8%, to $44.4 million from $34.2 million for the 13 week
period ended January 25, 2003. This increase was due to an increase of $4.1
million in aerospace revenues and a $6.1 million increase in industrial
revenues. Military revenues increased $4.3 million and were offset by a
decrease of $0.2 million in commercial aerospace revenues. Commercial OEM
revenues increased $0.5 million, or 11.9% to $4.6 million and commercial
aftermarket revenues decreased $0.7 million, or 5.1%, to $12.9 million in
the 14 week period ended January 31, 2004. Commercial OEM revenues
increased primarily as a result of an increase in engine requirements from
our customers. Commercial aftermarket revenues were lower primarily due to
a decrease in the demand for spare part sales which was slightly offset by
an increase in repair and overhaul activities. The lower demand for
aftermarket spare part sales is a result of the reduced flying by commercial
airlines, the availability of spare parts taken from parked aircraft and
deferral of maintenance. Military revenues increased primarily due to
revenue related to increased sales on a variety of OEM and aftermarket main
engine pump and airframe components as well as an increase in revenues
related to airframe components on various OEM development programs. The
$6.1 million increase in industrial revenues was primarily attributable to
an increase of $2.9 million in ground fueling revenues and an increase of
$3.3 million in cryogenic pump revenues.

11



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| |  | Aerospace gross profit for the 14 week period ended January 31, 2004
increased $1.2 million, or 9.4%, to $13.9 million from $12.7 million in the
13 week period ended January 25, 2003. Gross margin decreased to 45.0% for
the 14 week period ended January 31, 2004 from 47.4% in the 13 week period
ended January 25, 2003. The increase in gross profit and the decrease in
gross margin are primarily attributable to the increase in military revenue
offset by the decrease in higher margin commercial aerospace aftermarket
revenues. Industrial gross profit for the 14 week period ended January 31,
2004 increased $1.5 million, or 65.2%, to $3.8 million from $2.3 million in
the 13 week period ended January 25, 2003. Gross margin decreased to 28.0%
in the 14 week period ended January 31, 2004 from 31.1% in the 13 week
period ended January 25, 2003. The increase in gross profit was primarily
attributable to an increase in ground fueling revenues. The decrease in
gross margin results from the increase in lower margin cryogenic pump
revenues.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Operating expenses for the 14 week period ended January 31, 2004 increased
$0.2 million, or 2.1%, to $9.9 million from $9.7 million in the 13 week
period ended January 25, 2003. This increase is primarily attributable to
an increase of $0.3 million in selling, general and administrative expenses
related to increased marketing costs, including commissions, offset by a
slight decrease of $0.1 million in research and development expenses.
Operating expenses as a percent of revenues decreased to 22.3% for the 14
week period ended January 31, 2004 as compared to 28.4% for the 13 week
period ended January 25, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | Income from operations for the 14 week period ended January 31, 2004
increased $2.6 million, or 51.0%, to $7.7 million from $5.1 million in the
13 week period ended January 25, 2003. As a percent of revenues, income
from operations for the 14 week period ended January 31, 2004 increased to
17.3% from 14.9% for the 13 week period ended January 25, 2003. These
increases were primarily due to increased military aerospace and industrial
revenues slightly offset by the decrease in higher margin commercial
aerospace aftermarket revenues and a slight increase in operating expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | Interest expense for the 14 week period ended January 31, 2004 increased
$0.1 million, or 1.9%, to $5.4 million from $5.3 million in the 13 week
period ended January 31, 2003 due to an increase in interest rates on the
term loan and increased amortization of deferred financing fees resulting
from the amendment to our credit agreement in January 2003 which were
partially offset by lower outstanding borrowings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | The income tax provision was $0.7 million for the 14 week period ended
January 31, 2004 as compared to a benefit of $0.1 million for the 13 week
period ended January 25, 2003. This increase is primarily due to an
increase in pre-tax income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | Net income for the 14 week period ended January 31, 2004 increased $1.7
million to $1.6 million from a loss of $0.1 million for the 13 week period
ended January 25, 2003, primarily due to the revenue and expense factors
discussed above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | 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 14 week period ended January 31, 2004
increased $3.7 million to $17.8 million. This was primarily due to an
increase in net income and a decrease in accounts receivable offset by an
increase in prepaid expenses, the scheduled repayment of term loans and
capital expenditures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

12



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| |  | Capital expenditures for the 14 week period ended January 31, 2004 totaled
$0.4 million compared to $0.5 million for the 13 week period ended January
25, 2003. Argo-Tech expects to incur capital expenditures of approximately
$2.6 million for the remainder of fiscal year 2004, related to the continued
maintenance of facilities, equipment and systems to support current
operating activities.                                                                                                                                                                                                                                 
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Long-term debt at January 31, 2004 consisted of $22.8 million principal
amount of term loans and $193.6 million principal amount of senior
subordinated notes. Scheduled payments of $3.0 million were made on the
term loans in the 14 week period ended January 31, 2004. At January 31,
2004, Argo-Tech has available, after $2.5 million in letters of credit, a
$17.5 million revolving credit facility. As of January 31, 2004, 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.
|
| |  | Our expected future contractual cash obligations and other commercial
commitments for the next five years are as follows (in millions):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

|                                   |  |         |      |      |  |      |      |      |  |      |      |  |  |   |       |  |  |   |     |  |  |  |  | 
|---------------------------------- |  | ------- | ---- | ---- |  | ---- | ---- | ---- |  | ---- | ---- |  |  | - | ----- |  |  | - | --- |  |  |  |  | 
|                                   |  | 2004(1) |      | 2005 |  | 2006 |      | 2007 |  | 2008 |      |  |  |  
|                                   |  |         |      |      |  |      |      |      |  |      |      |  |  |  
|Contractual Obligations:           |  |         |      |      |  |      |      |      |  |      |      |  |  |   |       |  |  |   |     |  |  |  |  | 
|Term Loan Facility                 |  | $       | 12.0 |      |  | $    | 13.8 |      |  | $    |     |  |  | $ |      |  |  | $ |    |  |  |  |  | 
|8.625% Senior Subordinated Notes   |  |         |     |      |  |      |     |      |  |      |     |  |  |   | 195.0 |  |  |   |    |  |  |  |  | 
|Operating Leases                   |  |         | 0.9  |      |  |      | 0.7  |      |  |      | 0.4  |  |  |   | 0.1   |  |  |   | 0.1 |  |  |  |  | 
|Other Long-Term Obligations (2)    |  |         | 16.8 |      |  |      | 16.8 |      |  |      | 16.8 |  |  |   | 16.8  |  |  |   |    |  |  |  |  | 
|                                   |  |         |      |      |  |      |      |      |  |      |      |  |  |   |       |  |  |   |     |  |  |  |  | 
|Total Contractual Cash Obligations |  | $       | 29.7 |      |  | $    | 31.3 |      |  | $    | 17.2 |  |  | $ | 211.9 |  |  | $ | 0.1 |  |  |  |  | 
|                                   |  |         |      |      |  |      |      |      |  |      |      |  |  |   |       |  |  |   |     |  |  |  |  | 



| |  | (1)  Of the $29.7 million of total contractual cash obligations, $3.2
million has been paid to date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | (2)  Represents interest payments on the senior subordinated notes.
Interest on the term loan facility is excluded as it is not fixed and
determinable. Funding for retirement and other post-employment benefits has
not been determined.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | We believe that cash flow from operations will provide adequate funds for
our working capital needs, planned capital expenditures and near term debt
service obligations. Our ability to fund our operations, make planned
capital expenditures, and to make scheduled payments on our indebtedness
depends on our future operating performance and cash flow. We may need to
refinance all or a portion of our indebtedness on or before maturity. There
can be no assurance that Argo-Tech will be able to refinance any of its
indebtedness on commercially reasonable terms or at all. These items are
subject to prevailing conditions and to financial, business, and other
factors, some of which are beyond our control.                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | 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, especially as the industry is affected by commercial
airlines operating schedules, terrorism alert and health warnings and losses
in the airline industry; government regulation and oversight; defense
spending; competition; product and environmental liabilities; and risks
associated with its workforce, suppliers, and indebtedness.

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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, primarily with respect to its long-term debt
obligations. At January 31, 2004, Argo-Tech had fixed rate debt totaling
$195 million, including $1.5 million of accretion, at 8.625% and variable
rate debt under its existing credit facility of $22.8 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 2.50% or LIBOR plus 3.50%. 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.




ITEM 4.

CONTROLS AND PROCEDURES

(a)     Evaluation of disclosure controls and procedures. The term
disclosure controls and procedures is defined in Rules 13a-14(c) and
15d-14(c) of the Securities Exchange Act of 1934 (the Exchange Act).
These rules refer to the controls and other procedures of a company
that are designed to ensure that information required to be disclosed
by the company in the reports that it files under the Exchange Act is
recorded, processed, summarized and reported within the required time
periods. Argo-Techs Chief Executive Officer and Chief Financial
Officer have evaluated the design, operation and effectiveness of
Argo-Techs disclosure controls and procedures and have concluded,
based on such evaluation, that such controls and procedures were
effective at ensuring that required information will be disclosed in
Argo-Techs reports filed under the Exchange Act as of January 31,
2004.

(b)     Changes in internal controls. There were no changes in Argo-Techs
internal controls or in other factors during the quarter ended January
31, 2004 that have, or are reasonably likely to, materially affect
Argo-Techs control over financial reporting.




PART II - OTHER INFORMATION




Item 6 - Exhibits and Reports on Form 8-K



| | (a)                        |  | Exhibit 31  Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.                                               
| | -------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------
|
| | (b)                        |  | Exhibit 32  Certification Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
|
| | 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 12, 2004 |  | 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)            

15