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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549



FORM 10-K



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



FOR THE FISCAL YEAR ENDED OCTOBER 2, 2004



Commission file number 0-5971



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
|- | --------------------------------------------------------------------------------------------



WOODHEAD INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)



|                                              |  |                                        
|--------------------------------------------- |  | ---------------------------------------
|Delaware                                      |  | 36-1982580                             
|(State of other jurisdiction of               |  | (I.R.S. Employer Identification Number)
|incorporation or organization)                |  |                                        
|                                              | 
|Three Parkway North, Suite 550, Deerfield, IL |  | 60015                                  
|(Address of principal executive offices)      |  | (Zip Code)                             



(847) 236-9300

Registrants Telephone Number, including area code



SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT



|                                |  |                               
|------------------------------- |  | ------------------------------
|Common Stock, Par Value $1.00   |  | NASDAQ                        
|Preferred Stock Purchase Rights |  | NASDAQ                        
|(Title of Class)                |  | (Exchange on which registered)



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.    Yes  x.    No ̈.



Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. ̈



Indicate by a check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the act).    Yes  x.    No ̈.



The aggregate market value of the voting stock held by non-affiliates of the Registrant as of March 27, 2004 was $185,915,317. The number of
common shares outstanding as of December 1, 2004 was 12,207,274.



DOCUMENTS INCORPORATED BY REFERENCE



Certain
information contained in the Proxy Statement for the Annual Meeting of Stockholders of

registrant to be held February 3, 2005 is
incorporated by reference into Part III hereof.



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TABLE OF CONTENTS



|         |  |                                                                                       |  |   
|-------- |  | ------------------------------------------------------------------------------------- |  | --
|PART I   |  |                                                                                       |  |   
|ITEM 1.  |  | BUSINESS                                                                              |  | 2 
|ITEM 2.  |  | PROPERTIES                                                                            |  | 5 
|ITEM 3.  |  | LEGAL PROCEEDINGS                                                                     |  | 5 
|ITEM 4.  |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                   |  | 6 
|         |  |                                                                                      
|PART II  |  |                                                                                       |  |   
|ITEM 5.  |  | MARKET FOR THE COMPANYS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                |  | 7 
|ITEM 6.  |  | SELECTED FINANCIAL DATA                                                               |  | 8 
|ITEM 7.  |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |  | 9 
|ITEM 7A. |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            |  | 15
|ITEM 8.  |  | CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                              |  | 16
|ITEM 9.  |  | CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE   |  | 45
|ITEM 9A. |  | CONTROLS AND PROCEDURES                                                               |  | 45
|         |  |                                                                                      
|PART III |  |                                                                                       |  |   
|ITEM 10. |  | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                    |  | 46
|ITEM 11. |  | EXECUTIVE COMPENSATION                                                                |  | 46
|ITEM 12. |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                        |  | 46
|ITEM 13. |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                        |  | 47
|ITEM 14. |  | PRINCIPAL ACCOUNTING FEES AND SERVICES                                                |  | 47
|         |  |                                                                                      
|PART IV  |  |                                                                                       |  |   
|ITEM 15. |  | EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                       |  | 48



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PART I



|ITEM 1. | BUSINESS
|------- | --------



GENERAL



Woodhead Industries, Inc. (the
Company, which may be referred to as we, us, or our) is engaged in two business segments serving a diverse group of customers and industries worldwide. We develop, manufacture and market network and electrical
infrastructure products engineered for performance in harsh, demanding and hazardous industrial environments.



Where reference is made in any Item of this Annual Report on Form 10-K to information in the Proxy Statement for the Annual Meeting of Stockholders of the Company to be held on February 3, 2005, such information shall
be deemed to be incorporated therein by such reference.



BUSINESS SEGMENTS



Our operating segments are based on the organization of business groups
comprised of similar products and services. Revenues in our Industrial Communications and Connectivity Products Segment (Connectivity Segment) are primarily derived from sales of system components for devices in open networks for
automated manufacturing and distribution applications. Revenues in our Electrical Safety & Industrial Products Segment (Electrical Segment) are primarily derived from sales of specialized products to support enhanced safety and
productivity on the factory floor.



Selected financial information by business
segment for each of the last three fiscal years is contained in Note 13 of the Notes to Consolidated Financial Statements.



PRODUCTS



Woodhead Industries develops, manufactures and markets network and electrical infrastructure products engineered for performance in harsh, demanding and hazardous industrial environments. We are known in the global
industrial market by our recognized brands that include Brad Harrison®, SST, Daniel
Woodhead®, mPm®, applicom®, Aero-Motive® and RJ-Lnxx®. Our expertise ranges from mechanical, electrical and electronics to communication software products and technologies.



Woodhead operates from 21 locations in 10 countries spanning North America, Europe and Asia/Pacific.



DISTRIBUTION



We sell our products to stocking distributors, original equipment manufacturers (OEM) and system integrators. Our direct sales force, as
well as manufacturers agencies, service our customers and promote our products to end-customers.



RAW MATERIALS



Parts and materials for
our products are readily available from a variety of suppliers. It has been our practice to develop more than one source of supply for critical items.



PATENTS AND INTELLECTUAL PROPERTY RIGHTS



We hold patents, trademarks and licensing agreements on certain of our products. We believe these trademarks and patents are valuable but not essential to the future
growth of our businesses.



CUSTOMERS



We sell our products to a broad customer base. No single customer accounts for ten percent
or more of our sales revenue.



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BACKLOG



The backlog of unfilled orders was $15.5 million, $16.0 million and $14.3 million at the end of fiscal years 2004, 2003 and 2002, respectively. The 2004 Connectivity
segment backlog as compared to the prior year was up 5.7%. The Electrical segment recorded a 29.4% decrease in backlog when compared to fiscal 2003. This decrease was mainly due to the divestiture of an Aero-Motive product line in the first quarter
of fiscal 2004.



COMPETITION



Similar products of the type sold by us are also available from competitors. We believe
delivery time, as well as quality and customer service are important to our success. Our ability to manufacture high-quality products that serve specialized needs, as well as our multiple channels of distribution, differentiate us from the
competition.



INTERNATIONAL OPERATIONS



A significant portion of our business is from outside the United States and fluctuations in
foreign currency exchange rates can impact our results of operations and financial condition. Since most of our international manufacturing costs and operating expenses are incurred in local currencies, the impact of changes in exchange rates on
reported net income is partially mitigated. Selected financial information by major geographical region for each of the last three fiscal years is contained in Note 13 of the Notes to Consolidated Financial Statements.



RESEARCH & DEVELOPMENT



Selected financial information related to research and development is contained in Note 12
of the Notes to Consolidated Financial Statements.



ENVIRONMENTAL
MATTERS



Our operations are subject to international, federal, state and
local environmental laws and regulations. We are party to an environmental matter, which obligates us to investigate, remediate, or mitigate the effects on the environment of the release of certain substances at one of our manufacturing facilities.
It is possible that this matter could affect cash flows and results of operations. Additional details on the environmental exposure can be found in Note 16 of the Notes to Consolidated Financial Statements.



EMPLOYEES



At the end of fiscal year 2004 we had 1,558 full-time employees.



AVAILABILITY OF REPORTS



Our Internet Web site address is www.woodhead.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and
amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934 are available free of charge through our Web site as soon as reasonably practicable after they are electronically filed
with, or furnished to, the Securities and Exchange Commission.



FORWARD-LOOKING STATEMENTS



The Securities and Exchange
Commission encourages companies to disclose forward-looking information, so that investors can better understand a companys future prospects, and make informed investment decisions. This report, and other written and oral statements that we
make from time to time, contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements set out anticipated results based on managements plans and assumptions. We have tried,
wherever possible, to identify such statements by using words such as anticipate, estimate, expect, plan, believe, and words and terms of similar substance, in connection with any
discussion of future operating or financial performance.



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We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our
plans and assumptions. Achievement of future results is subject to risks, uncertainties, and inaccurate assumptions.



In particular, such risks include statements relating to future actions, prospective products, future performance or results of current or anticipated products, sales
efforts, expenses, the outcome of contingencies such as legal proceedings, general economic and business conditions, currency fluctuations, and competition.



International-based revenues and substantial international assets result in our exposure to currency exchange rate fluctuations. We continue to evaluate the economic and
operational impact of all foreign currencies, including its impact on competition, pricing, and foreign currency exchange risks. There is no guarantee, however, that all problems have been foreseen and corrected, or that no material disruption will
occur in our businesses.



Growth in costs and expenses, changes in product mix,
and the impact of acquisitions, restructuring, divestitures and other unusual items that could result from evolving business strategies could affect future results. Changes in the U.S. tax code and the tax laws in other countries can affect our net
earnings. Claims have been brought against us and our subsidiaries for various legal, environmental, and tax matters, and additional claims arise from time to time. It is possible that our cash flows and results of operations could be affected by
the resolution of these matters.



Should known or unknown risks or
uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Investors should bear this in mind as they consider forward-looking statements.



This discussion of potential risks and uncertainties is by no means complete
but is designed to highlight important factors that may impact our outlook. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events, or otherwise.



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|ITEM 2. | PROPERTIES
|------- | ----------



We own facilities in the following
locations:



|                            |  |            |  |                 |  |                            
|--------------------------- |  | ---------- |  | --------------- |  | ---------------------------
|Location                    |  | Land owned |  | Floor Area      |  | Business Segment           
|Juarez, Mexico              |  | 16.5 acres |  | 229,000 sq. ft. |  | Connectivity and Electrical
|Northbrook, Illinois        |  | 4.7 acres  |  | 125,000 sq. ft. |  | Connectivity and Electrical
|Kalamazoo, Michigan         |  | 39.1 acres |  | 116,000 sq. ft. |  | Electrical                 
|Franklin, Massachusetts     |  | 6.6 acres  |  | 60,000 sq. ft.  |  | Connectivity               
|El Paso, Texas              |  | 5.0 acres  |  | 50,000 sq. ft.  |  | Connectivity and Electrical
|Ebbw Vale, UK               |  | 4.5 acres  |  | 43,000 sq. ft.  |  | Connectivity               
|Belvidere, Illinois         |  | 3.5 acres  |  | 36,000 sq. ft.  |  | Electrical                 
|Bretten, Germany            |  | 1.4 acres  |  | 32,000 sq. ft.  |  | Connectivity               
|Cusano Milanino, Italy      |  | 0.1 acres  |  | 16,000 sq. ft.  |  | Connectivity               
|Caudebec-lès-Elbeuf, France |  | 0.2 acres  |  | 6,000 sq. ft.   |  | Connectivity               



We own all of the above properties in
fee, except the land in Ebbw Vale, UK, which is held under a lease expiring in 2105, and the land in Bretten, Germany, which is held under a lease expiring in 2046.



We lease the following properties for use in our operations. In addition to rent, the leases require us to pay directly for taxes,
insurance, maintenance and other operating expenses or to pay higher rent when operating expenses increase.



|                            |  |                |  |                       
|--------------------------- |  | -------------- |  | ----------------------
|Location                    |  | Floor Area     |  | Business Segment      
|Waterloo, Canada            |  | 60,000 sq. ft. |  | Connectivity          
|Paderno, Italy              |  | 23,000 sq. ft. |  | Connectivity          
|Mississauga, Canada         |  | 20,000 sq. ft. |  | Connectivity          
|Deerfield, Illinois         |  | 11,600 sq. ft. |  | Corporate Headquarters
|Lagny-Sur-Marne, France     |  | 6,500 sq. ft.  |  | Connectivity          
|Cusano Milanino, Italy      |  | 6,500 sq. ft.  |  | Connectivity          
|Genoa, Italy                |  | 3,300 sq. ft.  |  | Connectivity          
|Toh Tuck, Singapore         |  | 3,000 sq. ft.  |  | Connectivity          
|Caudebec-lès-Elbeuf, France |  | 2,000 sq. ft.  |  | Connectivity          
|Leinfelden, Germany         |  | 4,500 sq. ft.  |  | Connectivity          
|Tokyo, Japan                |  | 1,500 sq. ft.  |  | Connectivity          
|Shanghai, China             |  | 1,500 sq. ft.  |  | Connectivity          
|Kalamazoo, Michigan         |  | 1,200 sq. ft.  |  | Electrical            
|Nagoya, Japan               |  | 1,100 sq. ft.  |  | Connectivity          
|Livonia, Michigan           |  | 1,000 sq. ft.  |  | Electrical            



We believe we have sufficient capacity
available to meet our needs in fiscal year 2005.



|ITEM 3. | LEGAL PROCEEDINGS
|------- | -----------------



Selected financial information
related to current legal proceedings is contained in Note 16 of the Notes to Consolidated Financial Statements.



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|ITEM 
4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|-------- | ---------------------------------------------------



During the fourth quarter of fiscal year 2004, which ended on October 2, 2004, there were no matters submitted to a vote of security holders either through solicitation
of proxies or otherwise.



Executive Officers of the Registrant



All officers are elected each year at the Annual Meeting of the Board of
Directors, which is held immediately following the Annual Meeting of Stockholders. The next Annual Meeting of Stockholders will be held on February 3, 2005. The name, age, executive office, position held since and principal occupation and employment
during at least the past five years for each of our executive officers as of October 2, 2004, are as follows:



|                     |  |     |  |                                                              |  |                    
|-------------------- |  | --- |  | ------------------------------------------------------------ |  | -------------------
|Name                 |  | Age |  | Position                                                     |  | Position held since
|                     |  |     | 
|Philippe Lemaitre    |  | 55  |  | Chairman, President and Chief Executive Officer              |  | August 2003        
|                     |  |     | 
|Robert H. Fisher     |  | 56  |  | Vice President of Finance, Chief Financial Officer           |  | December 2000      
|                     |  |     | 
|Michael H. Gies      |  | 45  |  | Vice President, Corporate Development and Strategy           |  | August 2003        
|                     |  |     | 
|Robert A. Moulton    |  | 55  |  | Vice President, Human Resources                              |  | May 1987           
|                     |  |     | 
|Joseph P. Nogal      |  | 49  |  | Vice President, Treasurer/Controller and Assistant Secretary |  | January 1999       
|                     |  |     | 
|Robert J. Tortorello |  | 55  |  | Vice President, General Counsel and Secretary                |  | January 1991       
|                     |  |     | 
|Duane E. Wiedor      |  | 46  |  | Vice President, E.V.P. Woodhead North
America                |  | January 2003       



Mr. Philippe Lemaitre joined the
Company in October 1999 as its President and Chief Operating Officer. On January 1, 2001, Mr. Lemaitre became the Companys President and Chief Executive Officer and on August 1, 2003 he was appointed Chairman of the Board. Prior to joining the
Company, he had served as Corporate Vice President, Chief Technology Officer at Amp, Inc. since 1997.



Mr. Robert H. Fisher joined Woodhead in December 2000 as Vice President, Finance and Chief Financial Officer. He previously served as Executive Vice President of Finance for Rockwell Internationals Electronic
Commerce group from 1998 to 2000. Before that he was Vice President of Finance for US Robotics/3 Coms Personal Communication business, and Vice President/Controller for Zenith Electronics Corporation.



Mr. Michael H. Gies joined Woodhead in January 2000 as Vice President, Marketing and Product
Development, Daniel Woodhead Company. He was appointed President, Aero-Motive Company in February 2002. In January 2003 he was elected a Corporate Vice President and Executive Vice President, Global Marketing, Connectivity. In August 2003 he was
appointed Vice President, Corporate Development and Strategy. He previously served as Manager, Transportation Industry Cinch, North American Group, Labinal Inc. from 1995 to 2000.



Mr. Robert A. Moulton joined Woodhead in October 1986 as Manager, Human Resources and was elected Vice President in May 1987. He previously
served as Director, Personnel at G.D. Searle and Company from 1981 to 1986.



Mr. Joseph P. Nogal became Woodheads Treasurer/Controller in January 1991. He was elected Assistant Secretary in July 1993, and was elected Vice President, Treasurer/Controller in January 1999. He previously served as Controller at
Woodhead Canada Limited.



Mr. Robert J. Tortorello became our General Counsel
and Secretary in June 1987. He was elected Corporate Vice President in January 1991. He previously served as Assistant Vice President and Assistant to the Chairman at Beatrice Companies, Inc. from 1986 to 1987.



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Mr. Duane E. Wiedor joined Woodhead in April 2001 as President, Aero-Motive Company. In February 2002 he was appointed
President, Woodhead Connectivity, N. A. and North American Operations. In January 2003 he was elected a Corporate Vice President and Executive Vice President, Woodhead Connectivity, N. A. In October 2004 he became Executive Vice President, Woodhead
North America. He previously served as Business Development Manager/Production Manager at Tessy Plastics Incorporated from 1998 to 2001.



PART II



|ITEM 
5. | MARKET FOR THE COMPANYS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
|-------- | ----------------------------------------------------------------------



Selected information regarding the companys common equity and related stockholder matters is contained in Note 19 of the Notes to
Consolidated Financial Statements.



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|ITEM 
6. | SELECTED FINANCIAL DATA
|-------- | -----------------------

The following Financial Profile sets forth
selected consolidated financial data for our operations. The data should be read in conjunction with the Management Discussion and Analysis of Financial Condition and Results of Operations and the Financial Statements. The consolidated statement of
operations data for each of the last five fiscal years, the related consolidated balance sheet data and other data have been derived from our audited consolidated financial statements.



Financial Profile

(Amounts in thousands; except per share data, employees and stockholders)

|                                                          |  |                    |          |   |       |   |          |       |  |   |          |   |  |      |         |   |  |   |         |  
|--------------------------------------------------------- |  | ------------------ | -------- | - | ----- | - | -------- | ----- |  | - | -------- | - |  | ---- | ------- | - |  | - | ------- | -
|                                                          |  | Fiscal Years Ended |         
|                                                          |  | 20041              |          |   | 20031 |   |          | 20021 |  |   | 2001     |   |  | 2000 |        
|OPERATIONS                                                |  |                    |          |   |       |   |          |       |  |   |          |   |  |      |         |   |  |   |         |  
|Net sales                                                 |  | $                  | 201,735  |   |       | $ | 179,038  |       |  | $ | 170,179  |   |  | $    | 190,186 |   |  | $ | 196,932 |  
|Cost of sales                                             |  |                    | 125,665  |   |       |   | 112,991  |       |  |   | 107,770  |   |  |      | 114,493 |   |  |   | 115,195 |  
|Gross profit                                              |  |                    | 76,070   |   |       |   | 66,047   |       |  |   | 62,409   |   |  |      | 75,693  |   |  |   | 81,737  |  
|% of net sales                                            |  |                    | 37.7     | % |       |   | 36.9     | %     |  |   | 36.7     | % |  |      | 39.8    | % |  |   | 41.5    | %
|Operating expenses                                        |  |                    | 66,181   |   |       |   | 56,855   |       |  |   | 54,466   |   |  |      | 56,978  |   |  |   | 57,322  |  
|% of net sales                                            |  |                    | 32.8     | % |       |   | 31.8     | %     |  |   | 32.0     | % |  |      | 30.0    | % |  |   | 29.1    | %
|Interest and other expenses                               |  |                    | 33       |   |       |   | (39      | )     |  |   | 2,820    |   |  |      | 5,159   |   |  |   | 3,567   |  
|Income before income taxes                                |  |                    | 9,856    |   |       |   | 9,231    |       |  |   | 5,123    |   |  |      | 13,556  |   |  |   | 20,848  |  
|% of net sales                                            |  |                    | 4.9      | % |       |   | 5.2      | %     |  |   | 3.0      | % |  |      | 7.1     | % |  |   | 10.6    | %
|Provision for income taxes                                |  |                    | 1,818    |   |       |   | 3,392    |       |  |   | 2,578    |   |  |      | 5,722   |   |  |   | 7,716   |  
|Income from continuing operations                         |  |                    | 8,038    |   |       |   | 5,839    |       |  |   | 2,545    |   |  |      | 7,834   |   |  |   | 13,132  |  
|% of net sales                                            |  |                    | 4.0      | % |       |   | 3.3      | %     |  |   | 1.5      | % |  |      | 4.1     | % |  |   | 6.7     | %
|Income from discontinued operations                       |  |                    |         |   |       |   | 730      |       |  |   |         |   |  |      |        |   |  |   |        |  
|% of net sales                                            |  |                    | 0.0      | % |       |   | 0.4      | %     |  |   | 0.0      | % |  |      | 0.0     | % |  |   | 0.0     | %
|Net income                                                |  | $                  | 8,038    |   |       | $ | 6,569    |       |  | $ | 2,545    |   |  | $    | 7,834   |   |  | $ | 13,132  |  
|% of net sales                                            |  |                    | 4.0      | % |       |   | 3.7      | %     |  |   | 1.5      | % |  |      | 4.1     | % |  |   | 6.7     | %
|                                                          |  |                    |          |   |       |   |          |       |  |   |          |   |  |      |         |   |  |   |         |  
|Earnings per share, basic:                                |  |                    |          |   |       |   |          |       |  |   |          |   |  |      |         |   |  |   |         |  
|From continuing operations                                |  | $                  | 0.67     |   |       | $ | 0.50     |       |  | $ | 0.22     |   |  | $    | 0.68    |   |  | $ | 1.16    |  
|From discontinued operations                              |  |                    |         |   |       |   | 0.06     |       |  |   |         |   |  |      |        |   |  |   |        |  
|Net income                                                |  | $                  | 0.67     |   |       | $ | 0.56     |       |  | $ | 0.22     |   |  | $    | 0.68    |   |  | $ | 1.16    |  
|Earnings per share, diluted:                              |  |                    |          |   |       |   |          |       |  |   |          |   |  |      |         |   |  |   |         |  
|From continuing operations                                |  | $                  | 0.66     |   |       | $ | 0.49     |       |  | $ | 0.22     |   |  | $    | 0.66    |   |  | $ | 1.12    |  
|From discontinued operations                              |  |                    |         |   |       |   | 0.06     |       |  |   |         |   |  |      |        |   |  |   |        |  
|Net income                                                |  | $                  | 0.66     |   |       | $ | 0.55     |       |  | $ | 0.22     |   |  | $    | 0.66    |   |  | $ | 1.12    |  
|Dividends per share                                       |  | $                  | 0.40     |   |       | $ | 0.36     |       |  | $ | 0.36     |   |  | $    | 0.36    |   |  | $ | 0.36    |  
|Weighted average common shares outstanding, diluted       |  |                    | 12,202   |   |       |   | 11,930   |       |  |   | 11,829   |   |  |      | 11,810  |   |  |   | 11,680  |  
|                                                          |  |                    |          |   |       |   |          |       |  |   |          |   |  |      |         |   |  |   |         |  
|OTHER DATA                                                |  |                    |          |   |       |   |          |       |  |   |          |   |  |      |         |   |  |   |         |  
|Net cash flows provided by operating activities           |  |                    | 12,350   |   |       |   | 17,479   |       |  |   | 24,524   |   |  |      | 23,435  |   |  |   | 21,917  |  
|Net cash (used for) provided by investing activities      |  |                    | (6,991   | ) |       |   | 21       |       |  |   | (7,011   | ) |  |      | (24,601 | ) |  |   | (9,313  | )
|Net cash used for financing activities                    |  |                    | (8,524   | ) |       |   | (6,827   | )     |  |   | (6,370   | ) |  |      | (3,519  | ) |  |   | (6,035  | )
|Interest expense, net                                     |  |                    | 2,337    |   |       |   | 2,862    |       |  |   | 2,895    |   |  |      | 3,125   |   |  |   | 2,932   |  
|Depreciation and amortization                             |  |                    | 11,048   |   |       |   | 11,115   |       |  |   | 10,366   |   |  |      | 11,221  |   |  |   | 10,285  |  
|Engineering and product development                       |  |                    | 11,430   |   |       |   | 8,918    |       |  |   | 8,261    |   |  |      | 7,822   |   |  |   | 7,000   |  
|                                                          |  |                    |          |   |       |   |          |       |  |   |          |   |  |      |         |   |  |   |         |  
|YEAR-END POSITIONS                                        |  |                    |          |   |       |   |          |       |  |   |          |   |  |      |         |   |  |   |         |  
|Total assets                                              |  | $                  | 181,064  |   |       | $ | 173,856  |       |  | $ | 166,651  |   |  | $    | 166,868 |   |  | $ | 162,459 |  
|Total liabilities                                         |  |                    | 63,630   |   |       |   | 65,406   |       |  |   | 69,306   |   |  |      | 74,149  |   |  |   | 74,499  |  
|Working capital (Current assets less current liabilities) |  |                    | 52,788   |   |       |   | 48,247   |       |  |   | 38,963   |   |  |      | 41,438  |   |  |   | 46,310  |  
|Current ratio                                             |  |                    | 2.8 to 1 |   |       |   | 2.7 to 1 |       |  |   | 2.4 to 1 |   |  |      | 2.7 to1 |   |  |   | 2.8 to1 |  
|Stockholders investment                                  |  |                    | 117,434  |   |       |   | 108,450  |       |  |   | 97,345   |   |  |      | 92,719  |   |  |   | 87,960  |  
|Long-term debt                                            |  |                    | 25,200   |   |       |   | 30,900   |       |  |   | 36,600   |   |  |      | 45,400  |   |  |   | 45,000  |  
|Book value per share                                      |  | $                  | 9.67     |   |       | $ | 9.03     |       |  | $ | 8.24     |   |  | $    | 8.02    |   |  | $ | 7.70    |  
|Number of employees                                       |  |                    | 1,558    |   |       |   | 1,506    |       |  |   | 1,490    |   |  |      | 1,534   |   |  |   | 1,679   |  
|Number of stockholders                                    |  |                    | 386      |   |       |   | 395      |       |  |   | 402      |   |  |      | 407     |   |  |   | 434     |  
|                                                          |  |                    |          |   |       |   |          |       |  |   |          |   |  |      |         |   |  |   |         |  

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|1. | The company adopted SFAS No. 142 in 2002. Goodwill amortization was $1.5 million in fiscal years 2001 and 2002.
|-- | ---------------------------------------------------------------------------------------------------------------



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|ITEM 
7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|-------- | -------------------------------------------------------------------------------------



Results of Operations 2004, 2003 and 2002



Woodhead Industries develops, manufactures and markets network and electrical infrastructure products engineered for performance in
demanding, harsh or hazardous environments. We are known in the global industrial market by our recognized brands which include Brad Harrison®, SST, Daniel Woodhead®, mPm®, applicom®, Aero-Motive® and RJ-Lnxx®. Our expertise extends from mechanical, electrical and electronics products to communication software products and
technologies.



Woodhead operates from twenty-one locations in ten countries
spanning North America, Europe and Asia/Pacific.



Sales



Our sales increased 12.7% in fiscal 2004 when compared to 2003. Sales
increased year-over-year 5.2% in fiscal year 2003 but declined 10.5% in fiscal year 2002.



Total revenue for fiscal year 2004 was $201.7 million compared to $179.0 million in fiscal 2003, a 12.7% increase. Sales increased mainly due to the implementation of several sales, marketing and engineering
initiatives that we initiated in early 2004 and the strengthening business climate in both the U.S. and international manufacturing markets. Also contributing to the increase were the positive effects from changes in exchange rates, which accounted
for $8.9 million or 5.0 points of the increase, and an additional week of operations this fiscal year due to our statistical calendar. Partially offsetting these increases were $4.4 million of lost revenue from the divestiture of two Aero-Motive
product lines and $8.5 million of lost revenue from a North American OEM account in the data communication industry. We recorded sales improvements in all regions of the world. In constant dollars, sales increased in North America, Europe and Asia
by 3.8%, 12.6% and 46.3%, respectively.



Connectivity segment sales were $147.0
million in fiscal 2004 compared to $126.3 million in fiscal 2003, a 16.4% increase. Favorable exchange rates accounted for $8.9 million of the increase and we experienced solid growth in Germany, Italy, Japan and France. This growth was partially
offset by the lost revenue of a North American OEM account. Connectivity sales represented 72.9% of our total sales in fiscal 2004 compared to 70.6% in fiscal 2003.



Electrical segment sales were $54.7 million in fiscal 2004 compared to $52.7 million in fiscal 2003, a 3.7% increase. This increase was
mainly due to the strong performance of our U.S. Electrical business, which was partially offset by the $4.4 million of lost revenue from the divestiture of two Aero-Motive product lines. Electrical sales represented 27.1% of our total sales in
fiscal 2004 compared to 29.4% in fiscal 2003.



Sales volume in 2004 compared to
2003 was also negatively impacted by slightly lower selling prices (less than 1%), which resulted from reduced prices in the United States.



Sales activity in 2003 started to show improvement from the economic conditions that affected the U.S. and international manufacturing environments beginning in 2001.
Total revenues for fiscal 2003 were $179.0 million compared to $170.2 million in fiscal 2002. This increase was all in our Connectivity segment, which had sales of $126.3 million in 2003, a 12.6% increase from fiscal 2002. The increase was mainly
due to favorable exchange rates (a $9.0 million gain when compared to 2002) and improved performance in our European operations, primarily in the Physical Media and DIN product lines. Connectivity sales accounted for 70.6% of total revenue in 2003
and 65.9% in 2002.



Electrical segment sales were $52.7 million in 2003, a 9.1%
decrease from fiscal 2002. This decrease was mainly due to the sale of our AKAPP operation, which accounted for $5.7 million of revenue in 2002. Electrical sales accounted for 29.4% of total sales in 2003 and 34.1% in 2002.



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Sales volume in 2003 compared to 2002 was also negatively impacted by slightly lower selling prices (less than 1%), which
resulted from competitive market pressures.



Sales by Region



Sales to customers in the United States were $111.4 million, $107.3
million and $106.4 million in 2004, 2003 and 2002, respectively. Sales to customers outside the U.S. were $90.4 million in 2004, $71.7 million in 2003 and $63.8 million in 2002. European sales increased 26.1% in fiscal 2004 mainly due to the
positive effects from changes in exchange rates and strong performance in Germany, Italy and France. Sales in 2004 to customers in Canada and the Far East increased by 14.0% and 56.9%, respectively. The increase in Canada was mainly due to the
positive effects from changes in the Canadian dollar and the increase in our SST product line sales. In 2003 European sales increased 11% mainly due to the changes in the Euro exchange rate. In 2003 sales in Canada and the Far East also increased by
8% and 60%, respectively when compared to 2002.



We collected 45%, 40% and 38%
of our revenue in foreign currencies during 2004, 2003 and 2002, respectively.



Backlog



The backlog of unfilled orders was $15.5
million, $16.0 million and $14.3 million at the end of 2004, 2003 and 2002, respectively. The 2004 Connectivity segment backlog as compared to the prior year was up 5.7% from $12.0 million in fiscal 2003 to $12.7 million in fiscal 2004. The
Electrical segment backlog decreased from $4.0 million in fiscal 2003 to $2.8 million in fiscal 2004, a 29.4% decrease. This decrease was due to the divestiture of the Aero-Motive product line during 2004.



Gross Profit



In 2004 gross profit as a percent of sales increased to 37.7% from 36.9% in 2003. We are starting to show improvements in our gross margins
as our operating efficiencies improve due to the increase in sales volume. Margin rates will continue to increase as our sourcing programs progress and our product mix improves. Partially offsetting these favorable improvements to gross margins were
increases in commodity prices, reductions in selling prices (mainly in our North American operations), start-up costs associated with the Aero-Motive production move to Mexico and lower margins in the telecommunications market.



In 2003 gross profit as a percent of sales increased to 36.9% from 36.7% in 2002. This
increase was mainly due to improved efficiencies and productivity improvements, particularly from the migration of production to our Juarez, Mexico facility. Also contributing to this increase in the gross profit level was a $0.7 million decrease in
obsolescence expense. Partially offsetting these improvements were lower pricing, the shift in sales mix by location and lower margins in the telecommunications market.



Operating Expenses



Operating expenses as a percent of sales were 32.8% in 2004, 31.8% in 2003 and 32.0% in 2002. Operating expenses increased to $66.2 million in fiscal 2004 from $56.9
million in fiscal 2003, a 16.4% increase. Operating expenses, excluding the Aero-Motive restructuring charge, were $65.1 million in fiscal 2004 compared to $54.8 million in fiscal 2003, an 18.8% increase. The increase in operating expenses was
driven by the planned growth initiatives in sales, marketing and engineering. Included in these growth initiatives was the hiring of additional experienced sales professionals in North America, a branding study to maximize the value of our brand
names, the development of a new E-Catalog, the improvement of our marketing tools and programs to increase our customer awareness. Changes in exchange rates had a negative impact of $2.7 million on fiscal 2004 operating expenses and an additional
week of operations due to our statistical calendar also contributed to the increase. Also contributing to the year-over-year increase was the modification of our retiree medical program. In fiscal 2004 this change resulted in a credit of $0.8
million compared to the credit of $1.5 million in fiscal 2003. The Aero-Motive restructuring program is now complete with charges in fiscal 2004 of $1.1 million compared to $2.1 million in fiscal 2003. Included in the 2004 restructuring charge was
$0.4 million of pension settlement expense triggered by reduced employment levels that required us to recognize past gains and losses in our pension plan accounts.



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While operating expenses as a percent of sales decreased in 2003, the actual expenses increased to $56.9 million in 2003
from $54.5 million in 2002. The dollar increase was mainly due to the $2.1 million restructuring charge for the migration of our operations from our Aero-Motive subsidiary to Juarez, Mexico. Also contributing to the increase in operating expenses in
2003 was the $2.6 million negative impact from foreign exchange rate changes and the upgrading in the sales, marketing and engineering areas. Partially offsetting these increases were the $1.5 million credit to operating expense due to the
modification of our retiree medical program, the non-recurrence of a restructuring charge for $1.0 million to account for severance and related costs to eliminate approximately 10% of our salaried positions worldwide in 2002 and the elimination of
AKAPP operating expenses, which were $1.8 million.



Segment Operating
Income



Income from operations in our Connectivity segment decreased
to $4.6 million, or 3.1% of sales, in fiscal 2004 from $5.1 million, or 4.0% of sales, in fiscal 2003. This decrease was mainly due to a shift in product mix and the increase in operating costs from our growth initiatives. Income from operations in
our Electrical segment increased to $6.6 million, or 12.0% of sales, in fiscal 2004 from $4.8 million, or 9.1% of sales, in fiscal 2003. The increase in the Electrical segment operating income was the result of our efforts to improve cost
efficiencies and the decrease in the Aero-Motive restructuring charge to $1.1 million in fiscal 2004 from $2.1 million in fiscal 2003. Partially offsetting this increase was the $4.4 million of lost revenue from the divestiture of two Aero-Motive
product lines.



Income from operations in our Connectivity segment increased to
$5.1 million, or 4.0% of sales, in 2003 from $2.9 million, or 2.6% of sales, in 2002. This increase was mainly due to higher sales and lower obsolescence expense. A shift in sales mix and the weak telecommunications market partially offset these
improvements. Income from operations in our Electrical segment declined to $4.8 million, or 9.1% of sales, from $5.8 million, or 9.9% of sales, in 2002. The decrease in our Electrical segment was mainly due to the $2.1 million restructuring charge
for the Aero-Motive actions in 2003 and the $0.4 million from the AKAPP divestiture.



Interest (Income) / Expense



Interest expense was $2.5
million in 2004, $3.1 million in 2003 and $3.0 million in 2002 primarily for interest paid on our long-term debt incurred in connection with the mPm and SST acquisitions in 1998. The decrease in interest expense during fiscal 2004 was due to a $4.2
million reduction in our senior guaranteed notes, which occurred on September 30, 2003. The increase in interest expense in 2003 compared to 2002 was due to $0.3 million of interest paid on a value added tax ruling in Mexico.



Other (Income) / Expense



Other (income)/expense in 2004 was ($2.3) million compared to ($2.9) million in 2003. The
2004 income consisted mainly of a $1.2 million gain on the sale of the Aero-Motive government hose reel product line and a $1.0 million gain realized from exchange rate changes, due primarily to a U.S. Dollar denominated loan that our Canadian
subsidiary used to acquire the assets of SST in early 1998.



Other
(income)/expense in 2003 was ($2.9) million compared to ($0.1) million in 2002. The 2003 income consisted mainly of a $2.4 million gain realized from exchange rate changes on the U.S. Dollar denominated loan, a $0.8 million gain from the sale of the
Aero-Motive workstation product line and $0.2 million of expense related to an adverse value added tax ruling in Mexico.



Income from Continuing Operations



Income from continuing operations was $8.0 million, or 4.0% of net sales, in 2004, $5.8 million, or 3.3% of net sales, in 2003 and $2.5 million, or 1.5% of net sales, in
2002. The 2004 increase in income from continuing operations was mainly due to increased revenue and improved margins, which was the result of improved operating efficiencies in both our Connectivity and Electrical segments and a lower Aero-Motive
restructuring charge. Also contributing to the increase was the lower effective tax rate in fiscal 2004, which was 18.4%, compared to 34.1% in fiscal 2003.



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The 2003 increase in income from continuing operations when compared to 2002 was mainly due to the gain from exchange
rate changes on the U.S. dollar loan that our Canadian subsidiary has outstanding, improved operating efficiencies, and the sale of the Aero-Motive workstation product line. Also contributing to the increase was the lower effective tax rate in
fiscal 2003, which was 34.1%, compared to 50.3% in fiscal 2003. The increases were partially offset by the Aero-Motive restructuring charges.



Discontinued Operations



In the first fiscal quarter of 2003 we sold our AKAPP operations for $4.9 million in cash. This sale resulted in a gain of $0.7 million and was recorded as Income from
Discontinued Operations. The results of operations related to AKAPP for fiscal 2003 were also recorded as Income from Discontinued Operations.



Net Income



Net income was $8.0 million, or 4.0% of net sales, in 2004, $6.6 million, or 3.7% of net sales, in 2003 and $2.5 million, or 1.5% of net sales, in 2002. The 2004 increase in net income was due to the increase in
income from continuing operations, the reduced interest expense and the lower effective tax rate.



The 2003 increase in net income when compared to 2002 was due to the increase in income from continuing operations, specifically the positive exchange rate changes, improved efficiencies, the Aero-Motive product line
sale and income generated from the AKAPP sale.



Our effective tax rate was
18.4% in 2004, 34.1% in 2003 and 50.3% in 2002. In 2004 the low tax rate was due to improved international operations, a change in the valuation allowance related to our French operations, higher tax credits and the utilization of capital loss
carryforwards created in 2001. The 2003 income tax rate was close to the U.S. federal statutory rate. In 2002 the low level of profitability combined with certain items not deductible in Europe resulted in the high effective tax rate.



Financial Condition, Liquidity and Capital Resources



Assets



At fiscal year-end 2004 we had $16.7 million in cash and short-term investments, down from $22.5 million at the end of 2003. The decrease in
our cash balance was mainly due to operating cash flow of $12.4 million, which was more than offset by $7.4 million for the purchase of property, plant and equipment, the long-term debt payment of $5.7 million and dividend payments of $4.8 million.
Operating cash flow was negatively impacted by increases in our accounts receivable and inventory levels during fiscal 2004. Both accounts increased due to revenue increases and inventories were also up due to the temporary build up in inventory to
facilitate the migration of Aero-Motive products to Juarez, Mexico. The change in exchange rates also increased our asset values.



Working capital in 2004 increased to $52.8 million from $48.2 million in 2003. This increase in working capital was mainly due to increased inventory and accounts
receivable levels and the exchange rate effects on our foreign assets.



We
continued to invest in property, plant and equipment, including new machinery, computer systems and facility improvements. Purchases of property, plant and equipment were a more normal $7.4 million in 2004 compared to $4.5 million in 2003. In 2004
we started the process of upgrading and standardizing our ERP and financial reporting systems. The project will be completed worldwide in 2006.



Our cash and short-term investments are available for strategic investments, acquisitions and other potential cash needs that may arise. We believe that existing cash and
short-term investments, together with funds generated from operations, will be sufficient to meet our operating requirements in 2005.



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Liabilities



At fiscal year-end 2004 we had $30.9 million of long-term debt outstanding ($5.7 million shown as current debt) and we had unused credit facilities that provide for
additional borrowings of up to $25.0 million. On April 28, 2004 we entered into a new three-year revolving credit agreement with our existing bank that will continue to provide for borrowings up to $25.0 million at the banks prime or offered
rate. This agreement will expire on April 28, 2007. This new revolving credit agreement states that the maximum ratio of debt to EBITDA, as defined, shall be no greater than 2.5 to 1.0 and the minimum interest coverage ratio, as defined, shall be no
less than 2.5 to 1.0. Additional information on debt covenants can be found in Note 2 A of the Notes to Consolidated Financial Statements.



Contractual Obligations



A summary of our contractual obligations as of October 2, 2004 is as follows:



|                                   |  |                        |        |      |   |            |  |            |        |            |   |       |  |   |      
|---------------------------------- |  | ---------------------- | ------ | ---- | - | ---------- |  | ---------- | ------ | ---------- | - | ----- |  | - | -----
|                                   |  | Payments due by period
|                                   |  | Total                  |        | 2005 |   | 2006- 2007 |  | 2008- 2009 |        | After 2009
|Contractual obligation             |  |                        |        |      |  
|Long-term debt                     |  | $                      | 30,900 |      | $ | 5,700      |  | $          | 11,400 |            | $ | 7,800 |  | $ | 6,000
|Operating leases                   |  |                        | 5,471  |      |   | 1,465      |  |            | 2,473  |            |   | 892   |  |   | 641  
|Unconditional purchase obligations |  |                        | 11,306 |      |   | 11,306     |  |            |       |            |   |      |  |   |     
|Other long-term liabilities        |  |                        | 677    |      |   | 406        |  |            | 271    |            |   |      |  |   |     
|                                   |  |                        |        |      |   |            |  |            |        |            |   |       |  |   |      
|Total contractual obligations      |  | $                      | 48,354 |      | $ | 18,877     |  | $          | 14,144 |            | $ | 8,692 |  | $ | 6,641
|                                   |  |                        |        |      |   |            |  |            |        |            |   |       |  |   |      



Unconditional purchase obligations
include amounts committed under legally enforceable contracts or purchase orders for goods and services with defined terms as to price, quantity and delivery. Other long-term liabilities represent the cost to terminate the agreement on the fair
value of our cross-currency swap. The fair value of the swap is valued at the balance sheet date, October 2, 2004.



Cash Flows



Net cash flow provided by operating activities was $12.4 million in 2004, down from $17.5 million in 2003 and $24.5 million in 2002. The decrease in 2004 operating cash flow was primarily due to the increase in
accounts receivable and inventory levels compared to reductions in fiscal 2003. The increase in accounts receivable was due mainly to the sales results in the fourth quarter of 2004 and the higher percentage of sales coming from Europe. The increase
in inventory was due to the temporary build up in inventory to facilitate the migration of Aero-Motive products to Mexico and the impact of exchange rates on our foreign balances. Partially offsetting these increases was an increase to both accounts
payable and other liabilities. The decrease in 2003 operating cash flows was due to a smaller reduction in inventory and an increase in prepaid expenses when compared to fiscal 2002. The increase in prepaid expense was due to a $2.0 million
contribution to the pension plan.



In fiscal 2004 cash flows from investing
activities included $7.4 million of capital additions. In fiscal 2003 cash flows from investing activities included $4.5 million of capital additions and cash received of $4.2 million from the sale of AKAPP operations.



Net cash used for financing activities in 2004, 2003 and 2002 includes the repayment of debt
in the amounts of $5.7 million, $4.2 million and $4.9 million, respectively, and dividend payments to our shareholders of $4.8 million, $4.3 million and $4.2 million, respectively. In fiscal 2004 we increased our dividend per share to $0.40 from
$0.36, which explains the increase in dividend payments during the fiscal year.



Financial Instruments



In our global operating
activities, and in the normal course of our business, we are exposed to changes in foreign currency exchange rates that may adversely affect our results of operations and financial condition. We seek to minimize those risks through our regular
operating activities and, when deemed appropriate, through the use of



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financial instruments. We use financial instruments to selectively hedge our foreign currency risk and do not use financial instruments for speculative
purposes. Additional details on our foreign exchange exposures can be found in Note 2 B and C of the Notes to Consolidated Financial Statements.



Contingent Liabilities and Environmental Matters



Our operations are subject to international, federal, state and local environmental laws and regulations. We are party to an environmental matter, which obligates us to
investigate, remediate or mitigate the effects on the environment of the release of certain substances at one of our manufacturing facilities. It is possible that this matter could affect cash flows and results of operations. Additional details on
the environmental exposure can be found in Note 16 of the Notes to Consolidated Financial Statements.



Critical Accounting Policies



Our financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States. Preparing financial
statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. These estimates and assumptions are affected by managements application of accounting policies.
Critical accounting policies for the business include revenue recognition, valuation of long-lived assets, accounting for contingent liabilities and environmental matters and accounting for income taxes. There were no material changes made to
critical accounting estimates compared to prior years.



REVENUE
RECOGNITIONWe recognize revenue upon transfer of title at the time of shipment or services provided, when all significant contractual obligations have been satisfied, the price is fixed or determinable and collection is reasonably assured. At
the end of 2004 we had $1.5 million accrued for warranty costs, sales returns, sales incentives, price adjustments and other allowances based on prior claims experience and other quantitative and qualitative factors. No single customer accounted for
more than 10% of revenue.



VALUATION OF LONG-LIVED ASSETSOur
longlived assets include land, buildings, equipment, molds and dies, purchased software, goodwill and other intangible assets. Long-lived assets, other than goodwill, are depreciated over their estimated useful lives. We review long-lived
assets other than goodwill for impairment to assess recoverability from future operations using undiscounted cash flows. Goodwill and indefinite-lived intangible assets are reviewed annually for impairment under the provisions of Statement of
Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets. Fair values are estimated based upon forecasted cash flows discounted to present value. The fair value of our long-lived assets is dependent on the
future performance of individual operations as well as volatility inherent in their external markets. If estimated forecasts are not met and actual cash flows or discount rate estimates change, we may have to record an impairment charge not
previously recognized. We currently have $36.8 million of goodwill on our consolidated balance sheet. No impairment charges were recorded in 2004, 2003 or 2002.



ACCOUNTING FOR CONTINGENT LIABILITIES AND ENVIRONMENTAL MATTERSWe have incurred and expect to incur assessment, remediation and related costs at one of our
facilities for the costs of cleaning up contamination resulting from past spills, disposal or other releases of hazardous substances. We have been conducting an investigation of soil and groundwater at the site with oversight by the Michigan
Department of Environmental Quality (DEQ). We estimate that $1.7 million of investigation and remediation expense remain to be incurred over the next 14 years. We have a reserve for such purpose. Our cost estimates are subject to
uncertainty because of the extent of the contamination area, changes in remediation technology and ongoing DEQ feedback. We may incur significant additional assessment, remediation and related costs at the site and such costs could materially and
adversely affect our consolidated net income for the period in which such costs are incurred.



ACCOUNTING FOR INCOME TAXESSFAS No. 109, Accounting for Income Taxes, establishes financial accounting and reporting standards for the effect of income taxes. The objectives of accounting for income
taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for future tax consequences of events that have been recognized in our financial statements or tax returns.



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We have on our balance sheet net deferred tax assets of $1.0 million. Judgment is required in assessing the future tax consequences of events that have been
recognized in our financial statements or tax returns. Fluctuations in the actual outcome of these tax consequences could impact our financial position or the results of operations.



FORWARD-LOOKING STATEMENTS



The Securities and Exchange Commission encourages companies to disclose forward-looking information, so that investors can better understand a companys future
prospects, and make informed investment decisions. This report, and other written and oral statements that we make from time to time, contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements set out anticipated results based on managements plans and assumptions. We have tried, wherever possible, to identify such statements by using words such as anticipate, estimate, expect,
plan, believe, and words and terms of similar substance, in connection with any discussion of future operating or financial performance.



We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans and assumptions. Achievement of future
results is subject to risks, uncertainties, and inaccurate assumptions.



In
particular, such risks include statements relating to future actions, prospective products, future performance or results of current or anticipated products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, general
economic and business conditions, currency fluctuations, and competition.



International-based revenues and substantial international assets result in our exposure to currency exchange rate fluctuations. We continue to evaluate the economic and operational impact of all foreign currencies, including its impact on
competition, pricing, and foreign currency exchange risks. There is no guarantee, however, that all problems have been foreseen and corrected, or that no material disruption will occur in our businesses.



Growth in costs and expenses, changes in product mix, and the impact of acquisitions,
restructuring, divestitures and other unusual items that could result from evolving business strategies could affect future results. Changes in the U.S. tax code and the tax laws in other countries can affect our net earnings. Claims have been
brought against us and our subsidiaries for various legal, environmental, and tax matters, and additional claims arise from time to time. It is possible that our cash flows and results of operations could be affected by the resolution of these
matters.



Should known or unknown risks or uncertainties materialize, or should
underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Investors should bear this in mind as they consider forward-looking statements.



This discussion of potential risks and uncertainties is by no means complete but is designed
to highlight important factors that may impact our outlook. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events, or otherwise.



|ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|-------- | ----------------------------------------------------------



Selected financial information
related to quantitative and qualitative market risk is contained in Note 2 of the Notes to Consolidated Financial Statements.



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|ITEM 8. | CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|------- | --------------------------------------------------------



Report of Management



Woodhead Industries, Inc. management is responsible for the integrity of the information presented in this Annual Report on Form 10-K, including the Companys financial statements. These statements have been
prepared in conformity with accounting principles generally accepted in the United States and include, where necessary, estimates and judgments by management.



We maintain systems of accounting and internal controls designed to provide assurance that assets are properly accounted for as well as to insure that the financial
records are reliable for preparing financial statements. The systems are augmented by qualified personnel and are reviewed on a periodic basis.



Our independent registered public accounting firm, Ernst & Young LLP, conducts annual audits of our financial statements in accordance with auditing standards
generally accepted in the United States, which include the review of internal controls for the purpose of establishing audit scope, and issue an opinion on the fairness of such financial statements.



The Audit Committee, which is composed solely of independent directors, meets periodically
with management and the independent registered public accounting firm to review the manner in which they are performing their responsibilities and to discuss auditing, internal accounting controls, and financial reporting matters. The independent
public accountants periodically meet alone with the Audit Committee and have free access to the Audit Committee at any time.



|                                                   
|---------------------------------------------------
|                                                   
|/S/    PHILIPPE
LEMAITRE                           
|Philippe Lemaitre                                  
|Chairman, President and Chief Executive Officer    
|                                                   
|/S/    ROBERT H.
FISHER                            
|Robert H. Fisher                                   
|Vice President, Finance and Chief Financial Officer



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Report of Independent Registered Public Accounting Firm



To The Board of Directors and Shareholders of Woodhead Industries, Inc.:



We have audited the accompanying consolidated balance sheets of Woodhead Industries, Inc. (a Delaware corporation) and subsidiaries as of October 2, 2004 and September 27, 2003, and the related consolidated statements of income,
stockholders investment, comprehensive income and cash flows for each of the three years in the period ended October 2, 2004. These consolidated financial statements are the responsibility of the Companys management. Our responsibility
is to express an opinion on these consolidated financial statements based on our audits.



We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In our opinion, the consolidated financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Woodhead Industries, Inc. and subsidiaries at October 2, 2004 and September 27, 2003, and the consolidated results of their operations and their cash flows for each of the three years in
the period ended October 2, 2004, in conformity with U.S. generally accepted accounting principles.



|                     
|---------------------
|                     
|/s/ Ernst & Young LLP
|Chicago, Illinois    
|November 12, 2004    



17



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##### Table of Contents

Woodhead Industries, Inc.

Consolidated Balance Sheets

As of October 2, 2004 and September 27, 2003

(Amounts in thousands)



|                                                                       |  |      |         |   |      |   |         |  
|---------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | -
|                                                                       |  | 2004 |         |   | 2003 |  
|ASSETS                                                                 |  |      |         |   |      |   |         |  
|Current assets:                                                        |  |      |         |   |      |   |         |  
|Cash and short-term investments                                        |  | $    | 16,709  |   |      | $ | 22,547  |  
|Accounts receivable                                                    |  |      | 35,759  |   |      |   | 31,017  |  
|Inventories                                                            |  |      | 19,106  |   |      |   | 13,020  |  
|Prepaid expenses                                                       |  |      | 4,948   |   |      |   | 4,816   |  
|Refundable income taxes                                                |  |      | 2,863   |   |      |   | 2,479   |  
|Deferred income taxes                                                  |  |      | 3,043   |   |      |   | 3,390   |  
|                                                                       |  |      |         |   |      |   |         |  
|TOTAL CURRENT ASSETS                                                   |  |      | 82,428  |   |      |   | 77,269  |  
|Property, plant and equipment, net                                     |  |      | 58,289  |   |      |   | 60,391  |  
|Other intangible assets, net                                           |  |      | 643     |   |      |   | 706     |  
|Goodwill                                                               |  |      | 36,769  |   |      |   | 32,290  |  
|Deferred income taxes                                                  |  |      | 2,427   |   |      |   | 2,584   |  
|Other assets                                                           |  |      | 508     |   |      |   | 616     |  
|                                                                       |  |      |         |   |      |   |         |  
|TOTAL ASSETS                                                           |  | $    | 181,064 |   |      | $ | 173,856 |  
|                                                                       |  |      |         |   |      |   |         |  
|LIABILITIES AND STOCKHOLDERS INVESTMENT                               |  |      |         |   |      |   |         |  
|Current liabilities:                                                   |  |      |         |   |      |   |         |  
|Accounts payable                                                       |  | $    | 9,423   |   |      | $ | 8,343   |  
|Accrued expenses                                                       |  |      | 13,245  |   |      |   | 13,586  |  
|Income taxes payable                                                   |  |      | 1,272   |   |      |   | 1,393   |  
|Current portion of long-term debt                                      |  |      | 5,700   |   |      |   | 5,700   |  
|                                                                       |  |      |         |   |      |   |         |  
|TOTAL CURRENT LIABILITIES                                              |  |      | 29,640  |   |      |   | 29,022  |  
|Long-term debt                                                         |  |      | 25,200  |   |      |   | 30,900  |  
|Deferred income taxes                                                  |  |      | 4,451   |   |      |   | 3,049   |  
|Other liabilities                                                      |  |      | 4,339   |   |      |   | 2,435   |  
|                                                                       |  |      |         |   |      |   |         |  
|TOTAL LIABILITIES                                                      |  |      | 63,630  |   |      |   | 65,406  |  
|                                                                       |  |      |         |   |      |   |         |  
|STOCKHOLDERS INVESTMENT                                               |  |      |         |   |      |   |         |  
|Common stock at par (shares issued: 12,147 in 2004 and 12,011 in 2003) |  |      | 12,147  |   |      |   | 12,011  |  
|Additional paid-in capital                                             |  |      | 20,236  |   |      |   | 18,578  |  
|Deferred stock compensation                                            |  |      | (552    | ) |      |   | (773    | )
|Accumulated other comprehensive income                                 |  |      | 6,602   |   |      |   | 2,832   |  
|Retained earnings                                                      |  |      | 79,001  |   |      |   | 75,802  |  
|                                                                       |  |      |         |   |      |   |         |  
|TOTAL STOCKHOLDERS INVESTMENT                                         |  |      | 117,434 |   |      |   | 108,450 |  
|                                                                       |  |      |         |   |      |   |         |  
|TOTAL LIABILITIES AND STOCKHOLDERS INVESTMENT                         |  | $    | 181,064 |   |      | $ | 173,856 |  
|                                                                       |  |      |         |   |      |   |         |  



The accompanying notes
are an integral part of these statements.



18



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##### Table of Contents

Woodhead Industries, Inc.

Consolidated Statements of Income

For the years ended October 2, 2004, September 27, 2003, and September 28, 2002

(Amounts in thousands, except per share data)



|                                                                            |  |      |         |   |      |   |         |      |  |   |         |  
|--------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                                            |  | 2004 |         |   | 2003 |   |         | 2002 | 
|Net sales                                                                   |  | $    | 201,735 |   |      | $ | 179,038 |      |  | $ | 170,179 |  
|Cost of sales                                                               |  |      | 125,665 |   |      |   | 112,991 |      |  |   | 107,770 |  
|                                                                            |  |      |         |   |      |   |         |      |  |   |         |  
|Gross profit                                                                |  |      | 76,070  |   |      |   | 66,047  |      |  |   | 62,409  |  
|Operating expenses:                                                         |  |      |         |   |      |   |         |      |  |   |         |  
|Engineering and product development                                         |  |      | 11,430  |   |      |   | 8,918   |      |  |   | 8,261   |  
|Marketing and sales                                                         |  |      | 30,003  |   |      |   | 25,528  |      |  |   | 25,695  |  
|General and administrative                                                  |  |      | 23,655  |   |      |   | 20,344  |      |  |   | 19,495  |  
|Restructuring and other charges                                             |  |      | 1,093   |   |      |   | 2,065   |      |  |   | 1,015   |  
|                                                                            |  |      |         |   |      |   |         |      |  |   |         |  
|Income from operations                                                      |  |      | 9,889   |   |      |   | 9,192   |      |  |   | 7,943   |  
|Interest expense                                                            |  |      | 2,519   |   |      |   | 3,084   |      |  |   | 3,036   |  
|Interest income                                                             |  |      | (182    | ) |      |   | (222    | )    |  |   | (141    | )
|Other (income) expense, net                                                 |  |      | (2,304  | ) |      |   | (2,901  | )    |  |   | (75     | )
|                                                                            |  |      |         |   |      |   |         |      |  |   |         |  
|Income before income taxes                                                  |  |      | 9,856   |   |      |   | 9,231   |      |  |   | 5,123   |  
|Provision for income taxes                                                  |  |      | 1,818   |   |      |   | 3,392   |      |  |   | 2,578   |  
|                                                                            |  |      |         |   |      |   |         |      |  |   |         |  
|Income from continuing operations                                           |  | $    | 8,038   |   |      | $ | 5,839   |      |  | $ | 2,545   |  
|                                                                            |  |      |         |   |      |   |         |      |  |   |         |  
|Discontinued Operations                                                     |  |      |         |   |      |   |         |      |  |   |         |  
|Income from discontinued AKAPP operations (Including gain on disposal $725) |  |      |        |   |      |   | 733     |      |  |   |        |  
|Income tax expense                                                          |  |      |        |   |      |   | 3       |      |  |   |        |  
|                                                                            |  |      |         |   |      |   |         |      |  |   |         |  
|Income from discontinued operations                                         |  |      |        |   |      |   | 730     |      |  |   |        |  
|                                                                            |  |      |         |   |      |   |         |      |  |   |         |  
|Net Income                                                                  |  | $    | 8,038   |   |      | $ | 6,569   |      |  | $ | 2,545   |  
|                                                                            |  |      |         |   |      |   |         |      |  |   |         |  
|Earnings per share, basic                                                   |  |      |         |   |      |   |         |      |  |   |         |  
|From continuing operations                                                  |  | $    | 0.67    |   |      | $ | 0.50    |      |  | $ | 0.22    |  
|From discontinued operations                                                |  | $    |        |   |      | $ | 0.06    |      |  | $ |        |  
|                                                                            |  |      |         |   |      |   |         |      |  |   |         |  
|Net income                                                                  |  | $    | 0.67    |   |      | $ | 0.56    |      |  | $ | 0.22    |  
|                                                                            |  |      |         |   |      |   |         |      |  |   |         |  
|Earnings per share, diluted                                                 |  |      |         |   |      |   |         |      |  |   |         |  
|From continuing operations                                                  |  | $    | 0.66    |   |      | $ | 0.49    |      |  | $ | 0.22    |  
|From discontinued operations                                                |  | $    |        |   |      | $ | 0.06    |      |  | $ |        |  
|                                                                            |  |      |         |   |      |   |         |      |  |   |         |  
|Net income                                                                  |  | $    | 0.66    |   |      | $ | 0.55    |      |  | $ | 0.22    |  
|                                                                            |  |      |         |   |      |   |         |      |  |   |         |  
|Weighted average number of shares outstanding                               |  |      |         |   |      |   |         |      |  |   |         |  
|Basic                                                                       |  |      | 11,989  |   |      |   | 11,812  |      |  |   | 11,668  |  
|Diluted                                                                     |  |      | 12,202  |   |      |   | 11,930  |      |  |   | 11,829  |  
|                                                                            |  |      |         |   |      |   |         |      |  |   |         |  



The accompanying notes
are an integral part of these statements.



19



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##### Table of Contents

Woodhead Industries, Inc.

Consolidated Statements of Cash Flows

For the years ended October 2, 2004, September 27, 2003, and September 28, 2002

(Amounts in thousands)



|                                                                                 |  |      |        |   |      |   |        |      |  |   |        |  
|-------------------------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                                                 |  | 2004 |        |   | 2003 |   |        | 2002 | 
|CASH FLOWS FROM OPERATING ACTIVITIES:                                            |  |      |        |   |      |   |        |      |  |   |        |  
|Net income for the year                                                          |  | $    | 8,038  |   |      | $ | 6,569  |      |  | $ | 2,545  |  
|Adjustments to reconcile net income to net cash flows from operating activities: |  |      |        |   |      |   |        |      |  |   |        |  
|Depreciation and amortization                                                    |  |      | 11,048 |   |      |   | 11,115 |      |  |   | 10,366 |  
|Pension adjustment to other comprehensive income                                 |  |      | (230   | ) |      |   |       |      |  |   |       |  
|Income from discontinued operations                                              |  |      |       |   |      |   | (730   | )    |  |   |       |  
|Tax benefit from employee stock options                                          |  |      | 239    |   |      |   | 200    |      |  |   | 218    |  
|Deferred tax expense                                                             |  |      | 589    |   |      |   | 1,432  |      |  |   | 1,631  |  
|(Increase) Decrease in:                                                          |  |      |        |   |      |   |        |      |  |   |        |  
|Accounts receivable                                                              |  |      | (3,392 | ) |      |   | 583    |      |  |   | 1,230  |  
|Inventories                                                                      |  |      | (5,623 | ) |      |   | 2,347  |      |  |   | 9,394  |  
|Prepaid expenses                                                                 |  |      | 74     |   |      |   | (1,970 | )    |  |   | (87    | )
|Other assets                                                                     |  |      | 24     |   |      |   | (200   | )    |  |   | 586    |  
|(Decrease) Increase in:                                                          |  |      |        |   |      |   |        |      |  |   |        |  
|Accounts payable                                                                 |  |      | 847    |   |      |   | (1,043 | )    |  |   | (738   | )
|Accrued expenses                                                                 |  |      | (746   | ) |      |   | 488    |      |  |   | (1,105 | )
|Income taxes payable                                                             |  |      | (277   | ) |      |   | (511   | )    |  |   | (255   | )
|Other liabilities                                                                |  |      | 1,759  |   |      |   | (801   | )    |  |   | 739    |  
|                                                                                 |  |      |        |   |      |   |        |      |  |   |        |  
|Net cash flows provided by operating activities                                  |  |      | 12,350 |   |      |   | 17,479 |      |  |   | 24,524 |  
|                                                                                 |  |      |        |   |      |   |        |      |  |   |        |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                            |  |      |        |   |      |   |        |      |  |   |        |  
|Purchases of property, plant and equipment                                       |  |      | (7,423 | ) |      |   | (4,506 | )    |  |   | (7,167 | )
|Dispositions of property, plant and equipment                                    |  |      | 432    |   |      |   | 340    |      |  |   | 156    |  
|Cash from sale of AKAPP operations (less cash sold)                              |  |      |       |   |      |   | 4,187  |      |  |   |       |  
|                                                                                 |  |      |        |   |      |   |        |      |  |   |        |  
|Net cash (used) provided for investing activities                                |  |      | (6,991 | ) |      |   | 21     |      |  |   | (7,011 | )
|                                                                                 |  |      |        |   |      |   |        |      |  |   |        |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                            |  |      |        |   |      |   |        |      |  |   |        |  
|Decrease in long-term debt                                                       |  |      | (5,700 | ) |      |   | (4,200 | )    |  |   | (4,879 | )
|Sales of stock                                                                   |  |      | 2,015  |   |      |   | 1,652  |      |  |   | 2,711  |  
|Dividend payments                                                                |  |      | (4,839 | ) |      |   | (4,279 | )    |  |   | (4,202 | )
|                                                                                 |  |      |        |   |      |   |        |      |  |   |        |  
|Net cash used for financing activities                                           |  |      | (8,524 | ) |      |   | (6,827 | )    |  |   | (6,370 | )
|                                                                                 |  |      |        |   |      |   |        |      |  |   |        |  
|EFFECT OF EXCHANGE RATES                                                         |  |      | (2,673 | ) |      |   | (1,278 | )    |  |   | (2,147 | )
|                                                                                 |  |      |        |   |      |   |        |      |  |   |        |  
|NET (DECREASE) INCREASE IN CASH AND SHORT-TERM INVESTMENTS                       |  |      | (5,838 | ) |      |   | 9,395  |      |  |   | 8,996  |  
|Cash and short-term investments at beginning of year                             |  |      | 22,547 |   |      |   | 13,152 |      |  |   | 4,156  |  
|                                                                                 |  |      |        |   |      |   |        |      |  |   |        |  
|Cash and short-term investments at end of year                                   |  | $    | 16,709 |   |      | $ | 22,547 |      |  | $ | 13,152 |  
|                                                                                 |  |      |        |   |      |   |        |      |  |   |        |  
|SUPPLEMENTAL CASH FLOW DATA                                                      |  |      |        |   |      |   |        |      |  |   |        |  
|Cash paid during the year for:                                                   |  |      |        |   |      |   |        |      |  |   |        |  
|Interest                                                                         |  | $    | 2,456  |   |      | $ | 2,735  |      |  | $ | 3,117  |  
|Income taxes                                                                     |  | $    | 1,849  |   |      | $ | 2,415  |      |  | $ | 1,434  |  
|                                                                                 |  |      |        |   |      |   |        |      |  |   |        |  



The accompanying notes
are an integral part of these statements.



20



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##### Table of Contents

Woodhead Industries, Inc.

Consolidated Statements of Comprehensive Income

For the years ended October 2, 2004, September 27, 2003, and September 28, 2002

(Amounts in thousands)



|                                                         |  |      |        |   |      |   |        |      |  |   |        |  
|-------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                         |  | 2004 |        |   | 2003 |   |        | 2002 | 
|Net Income                                               |  | $    | 8,038  |   |      | $ | 6,569  |      |  | $ | 2,545  |  
|Other comprehensive income:                              |  |      |        |   |      |   |        |      |  |   |        |  
|Accumulated foreign currency translation adjustment      |  |      | 4,058  |   |      |   | 7,069  |      |  |   | 3,937  |  
|Unrealized (loss) gain on cash flow hedging instrument   |  |      | (58    | ) |      |   | (687   | )    |  |   | 68     |  
|Minimum pension liability adjustment                     |  |      | (354   | ) |      |   | 1,178  |      |  |   | (1,088 | )
|Income tax benefit related to other comprehensive income |  |      | 124    |   |      |   | (436   | )    |  |   | 436    |  
|                                                         |  |      |        |   |      |   |        |      |  |   |        |  
|Comprehensive income, net of tax                         |  | $    | 11,808 |   |      | $ | 13,693 |      |  | $ | 5,898  |  
|                                                         |  |      |        |   |      |   |        |      |  |   |        |  









The accompanying notes are an integral part of these statements.



21



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##### Table of Contents

Woodhead Industries, Inc.

Consolidated Statements of Stockholders Investment

For the years ended October 2, 2004, September 27, 2003, and September 28, 2002

(Amounts in thousands, except per share data)



|                                                 |  |             |        |                          |   |                           |  |   |                                            |   |  |                  |        |   |                              |   |        |   |  |   |         |  
|------------------------------------------------ |  | ----------- | ------ | ------------------------ | - | ------------------------- |  | - | ------------------------------------------ | - |  | ---------------- | ------ | - | ---------------------------- | - | ------ | - |  | - | ------- | -
|                                                 |  | CommonStock |        | AdditionalPaid-inCapital |   | DeferredStockCompensation |  |   | AccumulatedOtherComprehensiveIncome (Loss) |   |  | RetainedEarnings |        |   | TotalStockholdersInvestment |  
|Balance September 29, 2001                       |  |             | 11,568 |                          |   | 13,979                    |  |   | (352                                       | ) |  |                  | (7,645 | ) |                              |   | 75,169 |   |  |   | 92,719  |  
|                                                 |  |             |        |                          |   |                          
|Net income for the year                          |  |             |       |                          |   |                          |  |   |                                           |   |  |                  |       |   |                              |   | 2,545  |   |  |   | 2,545   |  
|Translation adjustment                           |  |             |       |                          |   |                          |  |   |                                           |   |  |                  | 3,937  |   |                              |   |       |   |  |   | 3,937   |  
|Unrealized gain on cash flow hedging instrument  |  |             |       |                          |   |                          |  |   |                                           |   |  |                  | 68     |   |                              |   |       |   |  |   | 68      |  
|Minimum pension liability adjustment, net of tax |  |             |       |                          |   |                          |  |   |                                           |   |  |                  | (652   | ) |                              |   |       |   |  |   | (652    | )
|Cash dividends, $0.36 per share                  |  |             |       |                          |   |                          |  |   |                                           |   |  |                  |       |   |                              |   | (4,202 | ) |  |   | (4,202  | )
|Stock option plans                               |  |             | 249    |                          |   | 2,547                     |  |   | 134                                        |   |  |                  |       |   |                              |   |       |   |  |   | 2,930   |  
|                                                 |  |             |        |                          |   |                           |  |   |                                            |   |  |                  |        |   |                              |   |        |   |  |   |         |  
|Balance September 28, 2002                       |  | $           | 11,817 |                          | $ | 16,526                    |  | $ | (218                                       | ) |  | $                | (4,292 | ) |                              | $ | 73,512 |   |  | $ | 97,345  |  
|                                                 |  |             |        |                          |   |                          
|Net income for the year                          |  |             |       |                          |   |                          |  |   |                                           |   |  |                  |       |   |                              |   | 6,569  |   |  |   | 6,569   |  
|Translation adjustment                           |  |             |       |                          |   |                          |  |   |                                           |   |  |                  | 7,069  |   |                              |   |       |   |  |   | 7,069   |  
|Unrealized loss on cash flow hedging instrument  |  |             |       |                          |   |                          |  |   |                                           |   |  |                  | (687   | ) |                              |   |       |   |  |   | (687    | )
|Minimum pension liability adjustment, net of tax |  |             |       |                          |   |                          |  |   |                                           |   |  |                  | 742    |   |                              |   |       |   |  |   | 742     |  
|Cash dividends, $0.36 per share                  |  |             |       |                          |   |                          |  |   |                                           |   |  |                  |       |   |                              |   | (4,279 | ) |  |   | (4,279  | )
|Stock option plans                               |  |             | 194    |                          |   | 2,052                     |  |   | (555                                       | ) |  |                  |       |   |                              |   |       |   |  |   | 1,691   |  
|                                                 |  |             |        |                          |   |                           |  |   |                                            |   |  |                  |        |   |                              |   |        |   |  |   |         |  
|Balance September 27, 2003                       |  | $           | 12,011 |                          | $ | 18,578                    |  | $ | (773                                       | ) |  | $                | 2,832  |   |                              | $ | 75,802 |   |  | $ | 108,450 |  
|                                                 |  |             |        |                          |   |                          
|Net income for the year                          |  |             |       |                          |   |                          |  |   |                                           |   |  |                  |       |   |                              |   | 8,038  |   |  |   | 8,038   |  
|Translation adjustment                           |  |             |       |                          |   |                          |  |   |                                           |   |  |                  | 4,058  |   |                              |   |       |   |  |   | 4,058   |  
|Unrealized loss on cash flow hedging instrument  |  |             |       |                          |   |                          |  |   |                                           |   |  |                  | (58    | ) |                              |   |       |   |  |   | (58     | )
|Minimum pension liability adjustment, net of tax |  |             |       |                          |   |                          |  |   |                                           |   |  |                  | (230   | ) |                              |   |       |   |  |   | (230    | )
|Cash dividends, $0.40 per share                  |  |             |       |                          |   |                          |  |   |                                           |   |  |                  |       |   |                              |   | (4,839 | ) |  |   | (4,839  | )
|Stock option plans                               |  |             | 136    |                          |   | 1,658                     |  |   | 221                                        |   |  |                  |       |   |                              |   |       |   |  |   | 2,015   |  
|                                                 |  |             |        |                          |   |                           |  |   |                                            |   |  |                  |        |   |                              |   |        |   |  |   |         |  
|Balance October 2, 2004                          |  | $           | 12,147 |                          | $ | 20,236                    |  | $ | (552                                       | ) |  | $                | 6,602  |   |                              | $ | 79,001 |   |  | $ | 117,434 |  



The accompanying notes
are an integral part of these statements.



22



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##### Table of Contents

Woodhead Industries, Inc.

Notes to Consolidated Financial Statements

(Currency amounts in tables are in thousands, except per share data)



|1. | SUMMARY OF ACCOUNTING POLICIES
|-- | ------------------------------



|A. | CONSOLIDATION AND BASIS PRESENTATION
|-- | ------------------------------------



Our consolidated financial statements include the accounts of all our subsidiaries, including those operating outside the United States, each of which is wholly owned.
All material intercompany transactions have been eliminated in consolidation. We prepare our financial statements in conformity with United States Generally Accepted Accounting Principles. In preparing the financial statements, we must use some
estimates and assumptions that may affect reported amounts and disclosures. Among others, we use estimates when accounting for depreciation, amortization, employee benefits, asset valuation allowances and loss contingencies. We are also subject to
risks and uncertainties that may cause actual results to differ from those estimates.



We follow the practice of ending our fiscal year on the Saturday closest to September 30, which resulted in a 53-week period in the year 2004 and 52-week periods in years 2003 and 2002.



Certain amounts in the prior period financial statements have been reclassified to conform to
the current period presentation.



|B. | CASH AND SHORT-TERM INVESTMENTS
|-- | -------------------------------



Cash and short-term investments include cash and items almost as liquid as cash, such as certificates of deposit and time deposits, with maturity periods of three months
or less when purchased.



|C. | ACCOUNTS RECEIVABLE
|-- | -------------------



We make judgments as to collectibility of accounts receivable based on historical trends and future expectations. Management estimates an allowance for sales returns and doubtful accounts, which represents the
collectibility of trade accounts receivable. These allowances adjust gross trade accounts receivable down to net realizable value. To determine the allowance for sales returns, management uses historical trends to estimate future period product
returns. To determine the allowance for doubtful accounts, management reviews specific customers and our accounts receivable aging report. Accounts receivable balances are determined to be delinquent when the amount is past due based on payment
terms with the customer.



|D. | INVENTORIES
|-- | -----------



We value our inventories at the lower of cost or market value, and adjust their values for reserves. Cost is determined using the first-in first-out (FIFO) method, or the last-in first-out (LIFO) method. The LIFO
method of inventory valuation is used by two of our three U.S. subsidiaries and this method was chosen to better match current cost and revenue.



|E. | LONG-LIVED ASSETS
|-- | -----------------



Long-lived assets include:



Property, plant
and equipment  These assets are recorded at original cost and increased by the cost of significant improvements after purchase. We depreciate the cost evenly over the assets estimated useful lives, using the straight-line method.



Maintenance and repairs are charged to expense as incurred. We remove the cost
of property retired or otherwise disposed of from the property accounts, accumulated depreciation from the related reserves, and reflect the net gain or loss in income.



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Other intangible assets  When accounting for acquisitions under the purchase method of accounting, we allocate the
purchase price to the fair values of tangible and intangible assets. Intangible assets include trade names and non-compete agreements. Intangible assets are amortized over periods ranging from 3 to 15 years.



Goodwill  Goodwill represents the difference between the purchase price of an acquired
business and the fair value of the assets, when accounted for under the purchase method of accounting. Goodwill is not amortized as part of operating expense, but instead is reviewed for impairment. If impairment exists the goodwill is written down
and charged to operating expenses only in any period in which the recorded value of goodwill and certain intangibles exceeds this fair value.



We have completed comprehensive studies of the fair value of goodwill. We found that the fair values of our reporting units net assets exceed their carrying values.
Consequently, we concluded that there was no impairment of goodwill. We will continue to assess the fair values of our reporting units. If in the future the carrying values of our reporting unit net assets exceed their fair values, we will charge
goodwill impairment to operating expense in the period in which the goodwill impairment becomes evident.



We review long-lived assets, other than goodwill, to assess the recoverability from future operations using undiscounted cash flows. If necessary, we record the charges for impairment of long-lived assets for the
amount by which the carrying value of these assets exceeds the present value of future cash flows. We continually evaluate the periods of amortization and depreciation assigned to our assets to determine whether events or circumstances warrant
revised estimates of useful lives.



|F. | FOREIGN CURRENCY TRANSLATION
|-- | ----------------------------



Most of our international operations maintain their records in their local currencies, which are also their functional currencies. We translate assets and liabilities to
their U.S. Dollar equivalents at rates in effect at the balance sheet date and record translation adjustments in Other Comprehensive Income included in Stockholders Investment. We translate Statement of Income accounts at average rates for the
period. We translate the financial statements of our Mexican operation, whose functional currency is the U.S. Dollar, using both the current and historic exchange rates and record translation adjustments in Other Expenses.



|G. | STOCK-BASED COMPENSATION
|-- | ------------------------



We grant options to our directors, officers and key employees. The exercise price of the stock options granted equals the market price on the date of grant. In accordance with SFAS No. 123, Accounting for
Stock-Based Compensation, we elected to account for our stock-based compensation under Accounting Principles Board Opinion (APB) No. 25: Accounting for Stock Issued to Employees. We do not record expenses related to stock option grants.



We adopted the disclosure-only provisions of SFAS No. 123: Accounting for
Stock-Based Compensation. The following table summarizes results as if we had recorded compensation expense for the 2004, 2003 and 2002 option grants:



|                           |  |      |       |      |   |       |  |   |      
|-------------------------- |  | ---- | ----- | ---- | - | ----- |  | - | -----
|                           |  | 2004 |       | 2003 |   | 2002 
|Net Income:                |  |      |       |      |   |       |  |   |      
|As reported                |  | $    | 8,038 |      | $ | 6,569 |  | $ | 2,545
|Pro forma                  |  |      | 6,157 |      |   | 5,430 |  |   | 1,943
|Basic earnings per share   |  |      |       |      |   |       |  |   |      
|As reported                |  | $    | 0.67  |      | $ | 0.56  |  | $ | 0.22 
|Pro forma                  |  |      | 0.51  |      |   | 0.46  |  |   | 0.17 
|Diluted earnings per share |  |      |       |      |   |       |  |   |      
|As reported                |  | $    | 0.66  |      | $ | 0.55  |  | $ | 0.22 
|Pro forma                  |  |      | 0.51  |      |   | 0.45  |  |   | 0.17 
|                           |  |      |       |      |   |       |  |   |      



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The pro forma effect of stock option grants on results of operations may not be representative of the pro forma effect on
results of operations for future years.



|H. | REVENUE RECOGNITION
|-- | -------------------



We recognize revenue upon transfer of title at the time of shipment (F.O.B. shipping point), when all significant contractual obligations have been satisfied, the price is fixed or determinable, and collectibility is
reasonably assured. We sell our products to stocking distributors, system integrators, as well as directly to OEM customers. We provide for warranty costs, sales returns, sales incentives, price adjustments and other allowances at the time of
shipment, based on prior claims experience and other quantitative and qualitative factors.



We have no post shipment obligations such as installation, training or customer acceptance. Most products are shipped F.O.B. shipping point; the risks and rewards of ownership pass to the buyer at that time. Our
return policies allow only for catalog items to be returned based on factory approval and our financial statements include a return reserve (estimates are based on historic performance), which reduces period net sales.



We require receipt of a firm purchase order including quantities, shipping date and price.
Any pricing discounts are reflected on the invoice. For certain customers, we offer volume rebates and these rebates are accrued monthly based on our estimates of the customer earning the amount of the rebate.



|I. | SHIPPING AND HANDLING COSTS
|-- | ---------------------------



All shipping and handling costs charged to customers are recorded as Net Sales and all related expenses are included in Cost of Sales.



|J. | ADVERTISING
|-- | -----------



We expense advertising and promotional costs in the period incurred. Advertising expenses were $2.2 million in 2004, $1.8 million in 2003 and $1.9 million in 2002.



|K. | RESEARCH AND DEVELOPMENT
|-- | ------------------------



We expense research and development costs in the period incurred.



|L. | RECENTLY ISSUED ACCOUNTING STANDARDS
|-- | ------------------------------------



On September 29, 2002 we adopted SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No. 144 states that the results of operations
of a component of an entity that has either been disposed of or is classified as held for sale shall be reported in discontinued operations if both the following conditions are met: (a) the operations and cash flows of the component have been (or
will be) eliminated from the ongoing operations of the entity as a result of the disposal transaction and (b) the entity will not have any significant continuing involvement in the operations of the component after the disposal transaction.



In November 2002 the FASB issued FASB Interpretation No. (FIN) 45,
Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. FIN 45 provides guidance on the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued and also clarifies that the guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the
guarantee. We have adopted the requirements of FIN 45 and made the appropriate disclosures in the Financial Statements and Notes included in this Form 10-K. We believe that the amount of our warranty settlements and reserve are not material and are
not therefore included as a disclosure to these financial statements.



In
December 2002 the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation  Transition and Disclosure, which amends SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 148 provides alternative methods of
transition for companies that voluntarily change to the fair value-based method of accounting for stock-based employee compensation, and also requires expanded disclosures in both interim and annual financial statements. We have adopted the expanded
disclosure requirements of SFAS No. 148.



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In January 2003 we adopted SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities,which
generally requires that a liability for costs associated with an exit or disposal activity be expensed as incurred. Exit costs primarily consist of future minimum lease payments on vacated facilities, facility closure costs and facility
consolidation costs. Employee separation costs consist primarily of severance costs. At each reporting date, we evaluate our accruals for exit costs and employee separation costs to ensure that the accruals are still appropriate. In certain
circumstances, accruals are no longer required because of efficiencies in carrying out the plans or because employees previously identified for separation resigned unexpectedly and did not receive severance or were redeployed due to circumstances
not foreseen when the original plans were initiated.



In January 2003 the FASB
issued FIN 46, Consolidation of Variable Interest Entities,which requires certain variable interest entities to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of
a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. FIN 46 was effective immediately for all new variable interest
entities created or acquired after January 31, 2003. We do not have any variable interest entities that require consolidation under FIN 46.



In December 2003 the FASB issued revised SFAS No. 132. This statement revises employers disclosures about pension plans and other post retirement benefit plans.
Revised SFAS No. 132 generally does not change the measurement or recognition standards for how employers account for pension and other post retirement benefits under SFAS No. 87, Employers Accounting for Pensions and SFAS No. 106,
Employers Accounting for Postretirement Benefits Other Than Pensions. Revised SFAS No. 132 retains the disclosure requirements contained in original SFAS No. 132, Employers Disclosures about Pensions and Other Postretirement
Benefits, which it replaces. Revised SFAS No. 132 now requires additional disclosures to those in the original SFAS No. 132 about assets, obligations, cash flows and net periodic benefit cost of defined benefit pension plans and other defined
benefit postretirement plans.



|2. | FINANCIAL INSTRUMENTS
|-- | ---------------------



|A. | LONG-TERM DEBT
|-- | --------------



In September 1998 we issued $45.0 million of Senior Guaranteed Notes to refinance bank borrowings related to the acquisitions of SST and mPm. Long-term debt at the balance sheet dates consisted of the following:



|                                                       |  |      |        |      |   |       
|------------------------------------------------------ |  | ---- | ------ | ---- | - | ------
|                                                       |  | 2004 |        | 2003
|6.64% Notes, Due September 30th, annually, 2002  2008 |  | $    | 13,200 |      | $ | 17,400
|6.81% Notes, Due September 30th, annually, 2004  2013 |  |      | 12,000 |      |   | 13,500
|                                                       |  |      |        |      |   |       
|Total long-term debt                                   |  | $    | 25,200 |      | $ | 30,900
|                                                       |  |      |        |      |   |       
|Current portion not included above                     |  | $    | 5,700  |      | $ | 5,700 
|                                                       |  |      |        |      |   |       



Long-term debt outstanding, including
the current portion, at October 2, 2004 matures as follows:



|            |  |                  |      
|----------- |  | ---------------- | -----
|Fiscal Year |  | Amounts Maturing
|2005        |  | $                | 5,700
|2006        |  |                  | 5,700
|2007        |  |                  | 5,700
|2008        |  |                  | 6,300
|2009        |  |                  | 1,500
|After 2009  |  | $                | 6,000
|            |  |                  |      



On April 28, 2004 we entered into a
new three-year revolving credit agreement with our existing bank that will continue to provide for borrowings up to $25.0 million at the banks prime or offered rate. This agreement will expire on April 28, 2007. This new revolving credit
agreement states that the maximum ratio of debt to EBITDA, as defined, shall be no greater than 2.5 to 1.0 and the minimum interest coverage ratio, as defined, shall be no less than 2.5 to 1.0.



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Included in our financial statements is a 6.64% senior guaranteed note, which is held by a subsidiary and has a parental
guarantee. In addition, there is a 6.81% senior guaranteed note held by the parent company, which is guaranteed by our U.S. subsidiaries. We are in compliance with all provisions of our credit agreement. At October 2, 2004 and September 27, 2003 we
had no short-term borrowings.



|B. | DERIVATIVE FINANCIAL INSTRUMENTS
|-- | --------------------------------



In our global operating activities and in the normal course of our business, we are exposed to changes in foreign currency exchange rates, which may adversely affect our
results of operations and financial condition. We seek to minimize those risks through our regular operating activities and, when deemed appropriate, through the use of derivatives.



In 1998 we entered into a foreign currency swap agreement with an AA- rated counterparty to hedge a portion of our cash flows from our
Italian subsidiary. Under the terms of the agreement, we agreed to swap 35.52 billion Lire for 20.0 million U.S. Dollars over a period of 8 years. In addition, the contract provides for us to make annual interest payments of 6.50% on the outstanding
Lire balance, and to receive 7.43% annual interest on the outstanding U.S. Dollar balance. While the hedge was denominated in Italian Lire we re-denominated the transaction in Euros in 2002. The re-denomination was done at an exchange rate of
1,936.27 Italian Lire to the Euro.



The following table describes the values to
be exchanged over the next two years relating to the Euro swap:



|         |  |                  |       |                            |   |      
|-------- |  | ---------------- | ----- | -------------------------- | - | -----
|         |  | U.S. Dollars    
|Maturity |  | AmortizingAmount |       | OutstandingNotional Amount
|09/30/05 |  | $                | 3,000 |                            | $ | 5,000
|09/30/06 |  | $                | 2,000 |                            | $ | 0    
|         |  |                  |       |                            |   |      
|         | 
|         |  | Euros           
|Maturity |  | AmortizingAmount |       | OutstandingNotional Amount
|09/30/05 |  |                 | 2,752 |                            |  | 4,586
|09/30/06 |  |                 | 1,834 |                            |  | 0    
|         |  |                  |       |                            |   |      



We base the fair value for our
cross-currency swap on the cost estimate to terminate the agreement. The fair value of the swap at October 2, 2004 and September 27, 2003 was recorded as a $0.7 million and $0.3 million liability, respectively.



|C. | FAIR VALUE
|-- | ----------



Our long-term debt is denominated in U.S. Dollars and carries fixed interest. We base the fair value of our long-term debt on market or dealer quotes. The difference between fair and carrying values of our financial
instruments, other than the swap, were not material at the balance sheet dates.



|3. | ACCOUNTS RECEIVABLE
|-- | -------------------



We reduce our accounts receivable balance to account for reserves for doubtful accounts, sales returns, warranties and allowances. The table below shows the activity in our accounts receivable reserves during the
fiscal years:



|                                       |  |      |       |   |      |   |       |      |  |   |       |  
|-------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                       |  | 2004 |       |   | 2003 |   |       | 2002 | 
|Beginning balance                      |  | $    | 1,287 |   |      | $ | 1,250 |      |  | $ | 1,844 |  
|Charged to costs and expenses          |  |      | 382   |   |      |   | 189   |      |  |   | 20    |  
|Write-offs                             |  |      | (191  | ) |      |   | (240  | )    |  |   | (180  | )
|Price adjustments charged to net sales |  |      | 53    |   |      |   | 88    |      |  |   | (434  | )
|                                       |  |      |       |   |      |   |       |      |  |   |       |  
|Ending balance                         |  | $    | 1,531 |   |      | $ | 1,287 |      |  | $ | 1,250 |  
|                                       |  |      |       |   |      |   |       |      |  |   |       |  



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|4. | INVENTORIES
|-- | -----------



Inventories at the balance sheet dates were comprised of the following:



|                                   |  |      |        |   |      |   |        |  
|---------------------------------- |  | ---- | ------ | - | ---- | - | ------ | -
|                                   |  | 2004 |        |   | 2003 |  
|Inventories valued using FIFO      |  | $    | 10,969 |   |      | $ | 8,463  |  
|                                   |  |      |        |   |      |   |        |  
|Inventories valued using LIFO:     |  |      |        |   |      |   |        |  
|At FIFO cost                       |  |      | 10,678 |   |      |   | 7,636  |  
|Less: Reserve to reduce to LIFO    |  |      | (2,541 | ) |      |   | (3,079 | )
|                                   |  |      |        |   |      |   |        |  
|LIFO Inventories                   |  |      | 8,137  |   |      |   | 4,557  |  
|                                   |  |      |        |   |      |   |        |  
|Total Inventories                  |  | $    | 19,106 |   |      | $ | 13,020 |  
|                                   |  |      |        |   |      |   |        |  
|                                   |  |     
|Inventory composition using FIFO   |  |      |        |   |      |   |        |  
|Raw Materials                      |  | $    | 12,066 |   |      | $ | 8,978  |  
|Work-in-process and finished goods |  |      | 9,581  |   |      |   | 7,121  |  
|                                   |  |      |        |   |      |   |        |  
|Total Inventories at FIFO          |  | $    | 21,647 |   |      | $ | 16,099 |  
|                                   |  |      |        |   |      |   |        |  



The use of LIFO for inventory
valuation was chosen in 1979 to better match current cost and revenue. The LIFO method of inventory valuation is used by two of our three U.S. subsidiaries. The one U.S. subsidiary not utilizing LIFO was acquired in 1990 and is a higher technology
business in which the inventory (approximately 6% of total inventory) declines in value over time. LIFO is not utilized in our foreign operations as this method is not accepted by foreign countries for tax purposes and the cost of maintaining two
inventory systems is cost prohibitive to us.



In 2004 inventory levels
increased compared to fiscal 2003. This increase was mainly due to high sales volumes and the temporary build up of inventory to facilitate the integration of the Aero-Motive production in our Juarez, Mexico facility.



In 2003 inventory levels continued to reduce. This reduction resulted in a liquidation of
LIFO inventory quantities carried at lower costs prevailing in prior years as compared with the cost of 2003 purchases. The effect of this liquidation was to increase net income by $0.4 million.



Had we used the FIFO method for all inventories, net income would have been $0.4 million
lower in fiscal years 2004 and 2003 and $0.6 million lower in 2002.



|5. | PROPERTY, PLANT AND EQUIPMENT
|-- | -----------------------------



Net property (PP&E) at the balance sheet dates was as follows:



|                               |  |      |         |   |      |   |         |  
|------------------------------ |  | ---- | ------- | - | ---- | - | ------- | -
|Asset Description              |  | 2004 |         |   | 2003 |  
|Land                           |  | $    | 4,228   |   |      | $ | 4,228   |  
|Buildings and improvements     |  |      | 27,901  |   |      |   | 27,102  |  
|Machinery and equipment        |  |      | 39,929  |   |      |   | 38,289  |  
|Dies and molds                 |  |      | 24,691  |   |      |   | 23,901  |  
|Software technology            |  |      | 38,084  |   |      |   | 35,756  |  
|Furniture and office equipment |  |      | 18,595  |   |      |   | 18,175  |  
|                               |  |      |         |   |      |   |         |  
|Total PP&E, at cost            |  |      | 153,428 |   |      |   | 147,451 |  
|Less: Accumulated depreciation |  |      | (95,139 | ) |      |   | (87,060 | )
|                               |  |      |         |   |      |   |         |  
|PP&E, net                      |  | $    | 58,289  |   |      | $ | 60,391  |  
|                               |  |      |         |   |      |   |         |  



Depreciation expense was $10.9
million, $11.1 million and $10.2 million for fiscal years 2004, 2003 and 2002, respectively.



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The carrying values of fixed assets are impacted by fluctuations in foreign exchange rates. We depreciate fixed assets
using the straight-line method over the following periods:



|                               |  |               
|------------------------------ |  | --------------
|Asset Description              |  | Asset Life    
|Buildings and improvements     |  | 20 to 40 years
|Machinery and equipment        |  | 3 to 12 years 
|Dies and molds                 |  | 4 to 5 years  
|Software technology            |  | 9 years       
|Furniture and office equipment |  | 3 to 10 years 



In the fourth quarter of fiscal year
1998 we acquired the business and certain assets of SST, including software technology, and in the second quarter of fiscal year 2001 we acquired the business and certain assets of applicom International, including software technology. We depreciate
the capitalized software over a period of nine years, which we believe is appropriate for these types of industrial software. Net software at the balance sheet dates was as follows:



|                         |  |      |         |   |      |   |         |  
|------------------------ |  | ---- | ------- | - | ---- | - | ------- | -
|                         |  | 2004 |         |   | 2003 |  
|Software technology      |  | $    | 38,084  |   |      | $ | 35,756  |  
|Accumulated depreciation |  |      | (24,355 | ) |      |   | (18,719 | )
|                         |  |      |         |   |      |   |         |  
|Net software technology  |  | $    | 13,729  |   |      | $ | 17,037  |  
|                         |  |      |         |   |      |   |         |  



|6. | GOODWILL AND OTHER INTANGIBLE ASSETS
|-- | ------------------------------------



Our goodwill relates to our Connectivity Segment. Goodwill at the balance sheet dates was:



|                         |  |      |        |   |      |   |        |  
|------------------------ |  | ---- | ------ | - | ---- | - | ------ | -
|                         |  | 2004 |        |   | 2003 |  
|Goodwill                 |  | $    | 43,901 |   |      | $ | 38,490 |  
|Accumulated amortization |  |      | (7,132 | ) |      |   | (6,200 | )
|                         |  |      |        |   |      |   |        |  
|Goodwill, net            |  | $    | 36,769 |   |      | $ | 32,290 |  
|                         |  |      |        |   |      |   |        |  



The following is a summary of changes
in the carrying value of goodwill at the balance sheet dates:



|                                    |  |      |        |      |   |        |  
|----------------------------------- |  | ---- | ------ | ---- | - | ------ | -
|                                    |  | 2004 |        | 2003 |  
|Beginning balance                   |  | $    | 32,290 |      | $ | 28,757 |  
|Sale of AKAPP operations            |  |      |       |      |   | (890   | )
|Effect of changes in exchange rates |  |      | 2,465  |      |   | 4,423  |  
|Purchase accounting adjustment      |  |      | 2,014  |      |   |       |  
|                                    |  |      |        |      |   |        |  
|Ending balance                      |  | $    | 36,769 |      | $ | 32,290 |  
|                                    |  |      |        |      |   |        |  



Other intangible assets at the balance
sheet dates were:



|                             |  |      |       |   |      |   |       |  
|---------------------------- |  | ---- | ----- | - | ---- | - | ----- | -
|                             |  | 2004 |       |   | 2003 |  
|Other intangible assets      |  | $    | 1,419 |   |      | $ | 1,313 |  
|Accumulated amortization     |  |      | (776  | ) |      |   | (607  | )
|                             |  |      |       |   |      |   |       |  
|Other intangible assets, net |  | $    | 643   |   |      | $ | 706   |  
|                             |  |      |       |   |      |   |       |  



The following table shows the future
amortization expense for intangible assets as of October 2, 2004:



|            |  |                       |    
|----------- |  | --------------------- | ---
|Fiscal Year |  | EstimatedAmortization
|2005        |  | $                     | 57 
|2006        |  |                       | 57 
|2007        |  |                       | 57 
|2008        |  |                       | 57 
|2009        |  |                       | 57 
|after 2009  |  | $                     | 358



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|7. | ACCRUED EXPENSES
|-- | ----------------



Accrued expenses at the balance sheet dates were as follows:



|                           |  |      |        |      |   |       
|-------------------------- |  | ---- | ------ | ---- | - | ------
|                           |  | 2004 |        | 2003
|Payroll                    |  | $    | 3,971  |      | $ | 4,341 
|Commissions                |  |      | 1,412  |      |   | 875   
|Taxes                      |  |      | 1,290  |      |   | 837   
|Pension and profit sharing |  |      | 971    |      |   | 2,633 
|Environmental              |  |      | 452    |      |   | 452   
|Insurance                  |  |      | 814    |      |   | 402   
|All other                  |  |      | 4,335  |      |   | 4,046 
|                           |  |      |        |      |   |       
|Total accrued expenses     |  | $    | 13,245 |      | $ | 13,586
|                           |  |      |        |      |   |       



|8. | LEASE COMMITMENTS
|-- | -----------------



We lease properties for use in our operations. In addition to rent, the leases require us to pay directly for taxes, insurance, maintenance and other operating expenses, or to pay higher rent when operating expenses
increase. Total lease expenses were $1.4 million for fiscal 2004 and $1.0 million for both fiscal 2003 and fiscal 2002. The following table shows future minimum lease commitments under non-cancelable lease-terms in excess of one year as of October
2, 2004:



|            |  |                  |      
|----------- |  | ---------------- | -----
|Fiscal Year |  | LeaseCommitments
|2005        |  | $                | 1,465
|2006        |  |                  | 1,304
|2007        |  |                  | 1,169
|2008        |  |                  | 584  
|2009        |  |                  | 308  
|after 2009  |  |                  | 641  
|            |  |                  |      



|9. | CAPITAL STOCK
|-- | -------------



|A. | COMMON AND PREFERRED STOCK
|-- | --------------------------



Our total authorized stock is 40.0 million shares, consisting of 10.0 million shares of preferred stock, par value $0.01 per share, and 30.0 million shares of common stock, par value $1.00 per share. No shares of
preferred stock have been issued to date. Common stock issued was 12.1 million and 12.0 million on October 2, 2004 and September 27, 2003, respectively.



In May 1996 we adopted a new shareholder rights plan, effective upon termination of the previous rights plan, and declared a dividend distribution of one preferred stock
purchase right (Right) for each share of common stock outstanding. Each Right represents the right to purchase, if and when the Rights are exercisable, a unit consisting of one one-thousandth of a share (Unit) of Series A
Junior Participating Preferred Stock at a purchase price of $65 per unit, subject to adjustment. The exercise price and the number of shares issuable upon the exercise of the Rights are subject to adjustment in certain cases to prevent dilution. The
Rights are evidenced by the common stock certificates and are not exercisable or transferable apart from the common stock, until ten days after a person (i) acquires 15% or more of the common stock, or (ii) commences a tender offer, which would
result in the ownership of 15% or more of the common stock, or the Board of Directors determines that any person has become an Adverse Person, as that term is defined in the plan. In the event any person becomes the beneficial owner of 15% or more
of common stock or the Board of Directors declares a person an Adverse Person, each of the Rights (other than Rights held by the party triggering the Rights and certain transferees which are voided) becomes a discount right, entitling the holder to
acquire common stock having a value equal to twice



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the Rights exercise price. In the event the Company is acquired in a merger or other business combination transaction (including one in which the
Company is the surviving corporation), each Right will entitle its holder to purchase, at the then current exercise price of the Right, that number of shares of common stock of the surviving company which at the time of such transaction would have a
market value of two times the exercise price of the Right. The Rights do not have any voting rights and are redeemable, at the option of the Company, at a price of $0.01 per Right at any time until ten days after a person acquires beneficial
ownership of at least 15% of the common stock. The Rights expire on May 29, 2006. So long as the Rights are not separately transferable, the Company will issue one Right with each new share of common stock issued.



|B. | STOCK OPTION PLANS
|-- | ------------------



We may grant stock options to directors, officers and key employees, under our stock option plans, at a price not less than the market value at the date of grant. Options issued to directors are exercisable 6 months
after the grant date, and expire 10 years (5 years for pre-2002 grants) after the grant date.



Options granted to employees in October 2003 were originally to vest in equal increments over the first three anniversary dates of the grant and expire 10 years after the grant date. In September 2004 we accelerated
the vesting of the 2003 option awards. As these option awards were out of the money, no compensation expense was recorded. As a result of the acceleration, all of these options vested on the first anniversary date of the grant. Additionally, in
September 2004 we granted options to employees that normally would have been granted six weeks later during fiscal 2005. These options are exercisable one year after the grant date and expire 10 years after the grant date. Consequently, there will
be no regular grant of stock options for employees in fiscal 2005. All of these actions were taken to reduce, or eliminate to the extent permitted, the transition expenses related to outstanding stock option awards under SFAS No. 123R, as then
proposed. Portions of options issued to employees in fiscal years 2003 and 2002 are exercisable one, two and three years after the grant date and expire 10 years after the grant date. Options issued to employees before fiscal year 2001 were
exercisable one year after the grant date and expire 10 years after the grant date. All granted options are subject to continuous employment and certain other conditions.



|                         |  |                               |  |                                                   |  |                                         |      
|------------------------ |  | ----------------------------- |  | ------------------------------------------------- |  | --------------------------------------- | -----
|Options Outstanding     
|                         |  |                               | 
|Range of Exercise Prices |  | NumberOutstandingat 10/2/2004 |  | WeightedAverageRemainingContractualLife, in years |  | WeightedAverageExercisePrice           
|$5  $10                 |  | 5                             |  | 0.1                                               |  | $                                       | 9.33 
|10  15                  |  | 1,185                         |  | 7.2                                               |  |                                         | 12.45
|15  20                  |  | 615                           |  | 7.4                                               |  |                                         | 16.28
|over $20                 |  | 265                           |  | 4.3                                               |  |                                         | 20.50
|                         |  |                               |  |                                                   |  |                                         |      
|                         |  | 2,070                         |  | 6.9                                               |  | $                                       | 14.61
|                        
|Options Exercisable     
|                         |  |                               | 
|Range of Exercise Prices |  | NumberOutstandingat 10/2/04   |  | WeightedAverageRemainingContractualLife, in years |  | AccumulatedWeightedAverageExercisePrice
|$5  $10                 |  | 5                             |  | 0.1                                               |  | $                                       | 9.33 
|10  15                  |  | 500                           |  | 7.2                                               |  |                                         | 12.77
|15  20                  |  | 249                           |  | 7.4                                               |  |                                         | 16.07
|Over $20                 |  | 265                           |  | 4.3                                               |  |                                         | 20.50
|                         |  |                               |  |                                                   |  |                                         |      
|                         |  | 1,019                         |  | 6.9                                               |  | $                                       | 15.57



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The following table summarizes the activity for the plans:



|                           |  |                          |   |  |                              |   |  |   |      
|-------------------------- |  | ------------------------ | - |  | ---------------------------- | - |  | - | -----
|                           |  | SharesAvailablefor Grant |   |  | Under Option                
|                           |  | Numberof Shares          |   |  | WeightedAverageExercisePrice
|Balance September 29, 2001 |  | 260                      |   |  | 1,268                        |   |  | $ | 14.23
|                           |  |                          |   |  |                              |   |  |   |      
|Authorized                 |  | 1,500                    |   |  |                             |   |  |   |     
|Grant                      |  | (394                     | ) |  | 394                          |   |  |   | 15.18
|Exercised                  |  |                         |   |  | (276                         | ) |  |   | 9.37 
|Forfeited                  |  | 119                      |   |  | (119                         | ) |  |   | 17.52
|                           |  |                          |   |  |                              |   |  |   |      
|Balance September 28, 2002 |  | 1,485                    |   |  | 1,267                        |   |  |   | 15.29
|                           |  |                          |   |  |                              |   |  |   |      
|Grant                      |  | (572                     | ) |  | 572                          |   |  |   | 10.74
|Exercised                  |  | 130                      |   |  | (130                         | ) |  |   | 10.53
|Expired                    |  | 14                       |   |  | (14                          | ) |  |   | 20.38
|Forfeited                  |  | 37                       |   |  | (37                          | ) |  |   | 13.17
|                           |  |                          |   |  |                              |   |  |   |      
|Balance September 27, 2003 |  | 1,094                    |   |  | 1,658                        |   |  |   | 14.07
|                           |  |                          |   |  |                              |   |  |   |      
|Grant                      |  | (689                     | ) |  | 689                          |   |  |   | 15.25
|Exercised                  |  | 139                      |   |  | (139                         | ) |  |   | 11.11
|Forfeited                  |  | 138                      |   |  | (138                         | ) |  |   | 14.77
|                           |  |                          |   |  |                              |   |  |   |      
|Balance October 2, 2004    |  | 682                      |   |  | 2,070                        |   |  | $ | 14.61
|                           |  |                          |   |  |                              |   |  |   |      



We estimated the fair values using the
Black-Scholes option-pricing model, modified for dividends, and used the following assumptions:



|                                       |  |      |       |   |      |   |       |      |  |   |       |  
|-------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                       |  | 2004 |       |   | 2003 |   |       | 2002 | 
|Expected dividend yield                |  |      | 2.6   | % |      |   | 3.5   | %    |  |   | 2.4   | %
|Risk-free interest rate                |  |      | 4.1   | % |      |   | 4.0   | %    |  |   | 3.7   | %
|Expected stock price volatility        |  |      | 50.2  | % |      |   | 47.7  | %    |  |   | 40.7  | %
|Expected term until exercise, in years |  |      | 8.0   |   |      |   | 8.0   |      |  |   | 7.9   |  
|                                       |  |      |       |   |      |   |       |      |  |   |       |  
|                                       |  |      |      
|Weighted fair value per share          |  | $    | 6.79  |   |      | $ | 4.13  |      |  | $ | 5.73  |  
|Total value of options granted         |  | $    | 4,675 |   |      | $ | 2,360 |      |  | $ | 1,916 |  
|                                       |  |      |       |   |      |   |       |      |  |   |       |  



|10. | COMPREHENSIVE INCOME
|--- | --------------------



Accumulated other comprehensive income (loss) consists of the following components:



|                           |  |                                      |        |   |                                              |      |   |                                     |      |   |                           |   |        |  
|-------------------------- |  | ------------------------------------ | ------ | - | -------------------------------------------- | ---- | - | ----------------------------------- | ---- | - | ------------------------- | - | ------ | -
|                           |  | ForeignCurrencyTranslationAdjustment |        |   | UnrealizedGains onCash FlowHedgingInstrument |      |   | MinimumPensionLiability,Net ofTaxes |      |   | Comprehensive(Income)Loss |  
|Balance September 29, 2001 |  | $                                    | (8,099 | ) |                                              | 544  |   |                                     | (90  | ) |                           | $ | (7,645 | )
|Other Comprehensive Income |  |                                      | 3,937  |   |                                              | 68   |   |                                     | (652 | ) |                           |   | 3,353  |  
|                           |  |                                      |        |   |                                              |      |   |                                     |      |   |                           |   |        |  
|Balance September 28, 2002 |  |                                      | (4,162 | ) |                                              | 612  |   |                                     | (742 | ) |                           |   | (4,292 | )
|Other Comprehensive Income |  |                                      | 7,069  |   |                                              | (687 | ) |                                     | 742  |   |                           |   | 7,124  |  
|                           |  |                                      |        |   |                                              |      |   |                                     |      |   |                           |   |        |  
|Balance September 27, 2003 |  |                                      | 2,907  |   |                                              | (75  | ) |                                     |     |   |                           |   | 2,832  |  
|Other Comprehensive Income |  |                                      | 4,058  |   |                                              | (58  | ) |                                     | (230 | ) |                           |   | 3,770  |  
|                           |  |                                      |        |   |                                              |      |   |                                     |      |   |                           |   |        |  
|Balance October 2, 2004    |  | $                                    | 6,965  |   |                                              | (133 | ) |                                     | (230 | ) |                           | $ | 6,602  |  
|                           |  |                                      |        |   |                                              |      |   |                                     |      |   |                           |   |        |  



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|11. | EARNINGS PER SHARE
|--- | ------------------



The reconciliation between basic and diluted earnings per share is as follows:



|                                                                                 |  |      |        |      |   |        |  |   |       
|-------------------------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------ |  | - | ------
|                                                                                 |  | 2004 |        | 2003 |   | 2002  
|Income from continuing operations                                                |  | $    | 8,038  |      | $ | 5,839  |  | $ | 2,545 
|Income from discontinued operations                                              |  |      |       |      |   | 730    |  |   |      
|                                                                                 |  |      |        |      |   |        |  |   |       
|Net income                                                                       |  | $    | 8,038  |      | $ | 6,569  |  | $ | 2,545 
|Earnings per share, basic                                                        |  |      |        |      |   |        |  |   |       
|From continuing operations                                                       |  | $    | 0.67   |      | $ | 0.50   |  | $ | 0.22  
|From discontinued operations                                                     |  |      |       |      |   | 0.06   |  |   |      
|                                                                                 |  |      |        |      |   |        |  |   |       
|As reported                                                                      |  | $    | 0.67   |      | $ | 0.56   |  | $ | 0.22  
|                                                                                 |  |      |        |      |   |        |  |   |       
|Earnings per share, diluted                                                      |  |      |        |      |   |        |  |   |       
|From continuing operations                                                       |  | $    | 0.66   |      | $ | 0.49   |  | $ | 0.22  
|From discontinued operations                                                     |  |      |       |      |   | 0.06   |  |   |      
|                                                                                 |  |      |        |      |   |        |  |   |       
|As reported                                                                      |  | $    | 0.66   |      | $ | 0.55   |  | $ | 0.22  
|                                                                                 |  |      |        |      |   |        |  |   |       
|Weighted-average number of shares outstanding                                    |  |      | 11,989 |      |   | 11,812 |  |   | 11,668
|Dilutive common stock options                                                    |  |      | 213    |      |   | 118    |  |   | 161   
|                                                                                 |  |      |        |      |   |        |  |   |       
|Weighted-average number of shares outstanding plus dilutive common stock options |  |      | 12,202 |      |   | 11,930 |  |   | 11,829
|                                                                                 |  |      |        |      |   |        |  |   |       
|Outstanding common stock options having no dilutive effect                       |  |      | 773    |      |   | 937    |  |   | 336   
|                                                                                 |  |      |        |      |   |        |  |   |       



|12. | RESEARCH AND DEVELOPMENT
|--- | ------------------------



Innovation by our research and development operations is very important to the growth of our businesses. Our goal is to discover, develop and bring to market innovative
products that address new needs. In addition to Research and Development, our Statement of Income caption Engineering and Product Development includes expenses for engineers, designers and drafters to enhance existing products.



Research and development expenses were $6.3 million in 2004, $5.5 million in 2003 and $4.2
million in 2002.



|13. | SEGMENT INFORMATION AND GEOGRAPHIC DATA
|--- | ---------------------------------------



Our operating segments are based on the organization of business groups comprised of similar products and services. Revenues in our Industrial Communications and
Connectivity Products Segment (Connectivity Segment) are primarily derived from sales of system components to devices in open networks for automated manufacturing and distribution applications. Revenues in our Electrical Safety &
Industrial Segment (Electrical Segment) are primarily derived from sales of specialized products to support enhanced safety and productivity on the factory floor.



Sales between segments were not significant. Sales in geographic areas were determined by customer location. No single customer accounted
for 10 percent or more of our total revenue. Sales in foreign countries did not meet minimum disclosure requirements. We did not allocate certain corporate expenses, primarily those related to the overall management of the corporation, to the
segments or geographic areas. Both segments share certain production facilities and equipment (PP&E). These assets, and related additions and depreciation, were allocated based on unit production. Geographic data on assets is based on the
physical location of those assets. Corporate assets were primarily investments in subsidiaries and cash.



|A. | SEGMENT INFORMATION
|-- | -------------------



|             |  |           |         |      |   |         |  |   |        
|------------ |  | --------- | ------- | ---- | - | ------- |  | - | -------
|             |  | Net Sales
|             |  | 2004      |         | 2003 |   | 2002   
|Connectivity |  | $         | 147,036 |      | $ | 126,315 |  | $ | 112,171
|Electrical   |  |           | 54,699  |      |   | 52,723  |  |   | 58,008 
|             |  |           |         |      |   |         |  |   |        
|Consolidated |  | $         | 201,735 |      | $ | 179,038 |  | $ | 170,179
|             |  |           |         |      |   |         |  |   |        



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|                  |  |                        |        |   |      |   |       |      |  |   |       |  
|----------------- |  | ---------------------- | ------ | - | ---- | - | ----- | ---- |  | - | ----- | -
|                  |  | Income from Operations |       
|                  |  | 2004                   |        |   | 2003 |   |       | 2002 | 
|Connectivity      |  | $                      | 4,575  |   |      | $ | 5,098 |      |  | $ | 2,901 |  
|Electrical        |  |                        | 6,551  |   |      |   | 4,772 |      |  |   | 5,769 |  
|Corporate & other |  |                        | (1,237 | ) |      |   | (678  | )    |  |   | (727  | )
|                  |  |                        |        |   |      |   |       |      |  |   |       |  
|Consolidated      |  | $                      | 9,889  |   |      | $ | 9,192 |      |  | $ | 7,943 |  
|                  |  |                        |        |   |      |   |       |      |  |   |       |  



Reconciliation of
Income from Operations to Net Income



|                                                                         |  |      |        |   |      |   |        |      |  |   |        |  
|------------------------------------------------------------------------ |  | ---- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                                         |  | 2004 |        |   | 2003 |   |        | 2002 | 
|Income from operations                                                   |  | $    | 9,889  |   |      | $ | 9,192  |      |  | $ | 7,943  |  
|Interest expense, net                                                    |  |      | (2,337 | ) |      |   | (2,862 | )    |  |   | (2,895 | )
|Other income, net                                                        |  |      | 2,304  |   |      |   | 2,901  |      |  |   | 75     |  
|Income taxes                                                             |  |      | (1,818 | ) |      |   | (3,392 | )    |  |   | (2,578 | )
|                                                                         |  |      |        |   |      |   |        |      |  |   |        |  
|Income from continuing operations                                        |  |      | 8,038  |   |      |   | 5,839  |      |  |   | 2,545  |  
|                                                                         |  |      |        |   |      |   |        |      |  |   |        |  
|Discontinued operations                                                  |  |      |        |   |      |   |        |      |  |   |        |  
|Income from discontinued operations (including gain on disposal of $725) |  |      |       |   |      |   | 733    |      |  |   |       |  
|Income tax expense                                                       |  |      |       |   |      |   | (3     | )    |  |   |       |  
|                                                                         |  |      |        |   |      |   |        |      |  |   |        |  
|Income from discontinued operations                                      |  |      |       |   |      |   | 730    |      |  |   |       |  
|                                                                         |  |      |        |   |      |   |        |      |  |   |        |  
|Consolidated net income                                                  |  | $    | 8,038  |   |      | $ | 6,569  |      |  | $ | 2,545  |  
|                                                                         |  |      |        |   |      |   |        |      |  |   |        |  



|                  |  |              |         |      |   |        
|----------------- |  | ------------ | ------- | ---- | - | -------
|                  |  | Total Assets
|                  |  | 2004         |         | 2003
|Connectivity      |  | $            | 138,571 |      | $ | 125,167
|Electrical        |  |              | 29,967  |      |   | 24,590 
|Corporate & other |  |              | 12,526  |      |   | 24,099 
|                  |  |              |         |      |   |        
|Consolidated      |  | $            | 181,064 |      | $ | 173,856
|                  |  |              |         |      |   |        



|                  |  |                               |        |      |   |        |  |   |       
|----------------- |  | ----------------------------- | ------ | ---- | - | ------ |  | - | ------
|                  |  | Depreciation and Amortization
|                  |  | 2004                          |        | 2003 |   | 2002  
|Connectivity      |  | $                             | 9,431  |      | $ | 8,163  |  | $ | 7,671 
|Electrical        |  |                               | 1,476  |      |   | 2,782  |  |   | 2,465 
|Corporate & other |  |                               | 141    |      |   | 170    |  |   | 230   
|                  |  |                               |        |      |   |        |  |   |       
|Consolidated      |  | $                             | 11,048 |      | $ | 11,115 |  | $ | 10,366
|                  |  |                               |        |      |   |        |  |   |       



|                  |  |                               |       |      |   |      
|----------------- |  | ----------------------------- | ----- | ---- | - | -----
|                  |  | Additions to Long-livedAssets
|                  |  | 2004                          |       | 2003
|Connectivity      |  | $                             | 4,322 |      | $ | 3,029
|Electrical        |  |                               | 2,905 |      |   | 1,425
|Corporate & other |  |                               | 196   |      |   | 52   
|                  |  |                               |       |      |   |      
|Consolidated      |  | $                             | 7,423 |      | $ | 4,506
|                  |  |                               |       |      |   |      



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|B. | GEOGRAPHIC DATA
|-- | ---------------



|                    |  |           |         |      |   |         |  |   |        
|------------------- |  | --------- | ------- | ---- | - | ------- |  | - | -------
|                    |  | Net Sales
|                    |  | 2004      |         | 2003 |   | 2002   
|United States       |  | $         | 111,354 |      | $ | 107,309 |  | $ | 106,355
|All other countries |  |           | 90,381  |      |   | 71,729  |  |   | 63,824 
|                    |  |           |         |      |   |         |  |   |        
|Consolidated        |  | $         | 201,735 |      | $ | 179,038 |  | $ | 170,179
|                    |  |           |         |      |   |         |  |   |        



|                    |  |              |         |      |   |        
|------------------- |  | ------------ | ------- | ---- | - | -------
|                    |  | Total Assets
|                    |  | 2004         |         | 2003
|United States       |  | $            | 48,312  |      | $ | 56,693 
|Italy               |  |              | 35,703  |      |   | 32,739 
|France              |  |              | 24,112  |      |   | 20,633 
|Mexico              |  |              | 22,444  |      |   | 19,275 
|Canada              |  |              | 22,203  |      |   | 24,182 
|All other countries |  |              | 28,290  |      |   | 20,334 
|                    |  |              |         |      |   |        
|Consolidated        |  | $            | 181,064 |      | $ | 173,856
|                    |  |              |         |      |   |        



|14. | TAXES
|--- | -----



Income before income taxes consisted of the following:



|                          |  |      |       |      |   |       |  |   |      
|------------------------- |  | ---- | ----- | ---- | - | ----- |  | - | -----
|                          |  | 2004 |       | 2003 |   | 2002 
|United States             |  | $    | 2,324 |      | $ | 6,434 |  | $ | 4,712
|International             |  |      | 7,532 |      |   | 3,530 |  |   | 411  
|                          |  |      |       |      |   |       |  |   |      
|Total income before taxes |  | $    | 9,856 |      | $ | 9,964 |  | $ | 5,123
|                          |  |      |       |      |   |       |  |   |      



The provision for income taxes
consisted of the following:



|                                    |  |      |       |      |   |       |  |   |      
|----------------------------------- |  | ---- | ----- | ---- | - | ----- |  | - | -----
|                                    |  | 2004 |       | 2003 |   | 2002 
|U.S. federal income tax             |  | $    | 456   |      | $ | 1,471 |  | $ | 732  
|State income taxes                  |  |      | 108   |      |   | 75    |  |   | 198  
|International income taxes          |  |      | 1,254 |      |   | 1,849 |  |   | 1,648
|                                    |  |      |       |      |   |       |  |   |      
|Total provision for taxes on income |  |      | 1,818 |      |   | 3,395 |  | $ | 2,578
|                                    |  |      |       |      |   |       |  |   |      
|                                    |  |      |      
|Current provision                   |  |      | 1,229 |      |   | 1,963 |  |   | 947  
|Deferred provision                  |  |      | 589   |      |   | 1,432 |  |   | 1,631
|                                    |  |      |       |      |   |       |  |   |      
|Total provision for taxes on income |  | $    | 1,818 |      | $ | 3,395 |  | $ | 2,578
|                                    |  |      |       |      |   |       |  |   |      



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Deferred taxes arise because of different treatment within financial statement accounting and tax accounting, known as
temporary differences. We record the tax effect of these temporary differences as deferred tax assets (generally items that can be used as a tax deduction or credit in future periods), and deferred tax liabilities (generally items for which we
received a tax deduction, but have not yet recorded in the Statement of Income). The tax effects of the major items recorded as deferred tax assets and liabilities are:



|                                                |  |      |        |   |      |   |        |  
|----------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | -
|                                                |  | 2004 |        |   | 2003 |  
|Deferred tax assets:                            |  |      |        |   |      |   |        |  
|Accounts receivable reserves                    |  | $    | 382    |   |      | $ | 306    |  
|Inventory reserves                              |  |      | 1,129  |   |      |   | 879    |  
|Employee benefit reserves                       |  |      | 1,291  |   |      |   | 1,360  |  
|Environmental reserves                          |  |      | 428    |   |      |   | 459    |  
|Other reserves                                  |  |      | 1,082  |   |      |   | 1,319  |  
|Write-off of purchased research and development |  |      | 1,700  |   |      |   | 1,395  |  
|Software amortization                           |  |      | 1,229  |   |      |   | 1,008  |  
|Write-off of impaired long-lived assets         |  |      | 510    |   |      |   | 635    |  
|Investment impairment loss                      |  |      | 30     |   |      |   | 439    |  
|Loss carryforwards                              |  |      | 4,571  |   |      |   | 3,658  |  
|Other, net                                      |  |      | 418    |   |      |   | 316    |  
|Less: Valuation allowance                       |  |      | (929   | ) |      |   | (1,389 | )
|                                                |  |      |        |   |      |   |        |  
|Total deferred tax assets                       |  |      | 11,841 |   |      |   | 10,385 |  
|                                                |  |      |        |   |      |   |        |  
|Less: Deferred tax liabilities                  |  |      |        |   |      |   |        |  
|Accelerated depreciation and amortization       |  |      | 9,486  |   |      |   | 6,590  |  
|Prepaid pension                                 |  |      | 631    |   |      |   | 659    |  
|Other, net                                      |  |      | 705    |   |      |   | 211    |  
|                                                |  |      |        |   |      |   |        |  
|Total deferred tax liabilities                  |  |      | 10,822 |   |      |   | 7,460  |  
|                                                |  |      |        |   |      |   |        |  
|Net deferred tax assets                         |  | $    | 1,019  |   |      | $ | 2,925  |  
|                                                |  |      |        |   |      |   |        |  



At October 2, 2004 we have federal,
state and foreign net operating loss carryforwards of $22.0 million for income tax purposes that expire in fiscal years 2006 through 2009. In addition, we have foreign net operating loss carryforwards of $1.8 million with an indefinite carryforward
period. For financial reporting purposes, we recorded a valuation allowance of $0.8 million to offset some of the deferred tax assets related to those carryforwards that may expire unused.



In performing our updated analysis of the reasonability of our deferred tax assets, we
considered current and forecasted operating results and available tax planning strategies. During the year ended October 2, 2004, legislation was enacted in France, which extended the net operating loss carryforward period from five years to an
indefinite period. In light of this new information, and after considering all available evidence, both positive and negative, we concluded a valuation allowance was no longer required for our net operating loss carryforward deferred tax asset in
France, resulting in $0.5 million of tax benefit being recognized during the year ended October 4, 2004.



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A reconciliation of the federal statutory rate to the effective tax rate is as follows:



|                                                         |  |      |    |  |      |    |  |      |   
|-------------------------------------------------------- |  | ---- | -- |  | ---- | -- |  | ---- | --
|                                                         |  | 2004 |    |  | 2003 |    |  | 2002 |   
|Federal statutory rate                                   |  | 35.0 | %  |  | 35.0 | %  |  | 35.0 | % 
|State income tax, net of federal benefit                 |  | 0.7  | %  |  | 0.5  | %  |  | 2.6  | % 
|Effect of international operations                       |  | (2.8 | )% |  | 3.7  | %  |  | 0.5  | % 
|Tax effect of capital gain not recorded                  |  | (4.1 | )% |  | (2.4 | )% |  |     |   
|Benefit of partial exclusion of capital gain income      |  | (2.8 | )% |  | (5.0 | )% |  |     |   
|Research credits                                         |  | (2.4 | )% |  | (2.6 | )% |  | (1.6 | )%
|Effect of tax rate changes on existing deferred balances |  | (1.9 | )% |  | (0.6 | )% |  |     |   
|Change in valuation allowance                            |  | (3.2 | )% |  | 2.8  | %  |  | 9.8  | % 
|Other, net                                               |  | (0.1 | )% |  | 2.7  | %  |  | 4.0  | % 
|                                                         |  |      |    |  |      |    |  |      |   
|Effective tax rate                                       |  | 18.4 | %  |  | 34.1 | %  |  | 50.3 | % 
|                                                         |  |      |    |  |      |    |  |      |   



Undistributed earnings of our foreign
subsidiaries amounted to approximately $19.2 million at October 2, 2004. Those earnings are considered to be indefinitely reinvested and, accordingly, no provision for U.S. federal and state income tax has been provided thereon. Upon distribution of
those earnings in the form of dividends or otherwise, we would be subject to both U.S. income tax (subject to an adjustment for foreign tax credits) and withholding taxes payable to various foreign countries. Determination of the amount of
unrecognized deferred U.S. income tax liability is not practicable because of the complexities associated with its hypothetical calculation. Withholding taxes of approximately $1.0 million would be payable upon remittance of all previously
unremitted earnings at October 2, 2004.



|15. | BENEFIT PLANS
|--- | -------------



We have defined contribution, defined benefit and government mandated plans covering eligible non-bargaining unit employees.



The annual profit-sharing contributions, which are the lesser of (i) a percentage of income defined in the plans, or (ii) 15% of the aggregate compensation paid to
participants during the year, were $0.6 million, $0.6 million and $0.7 million in 2004, 2003 and 2002, respectively.



We make matching contributions of 50% of employees contributions, up to 4% of compensation, to a 401(k) plan. Matching contributions were $0.3 million in 2004, 2003
and 2002.



Pension benefits are fully vested after five years and are based
upon years of service and highest five-year average compensation. It has been our policy to fund our pension costs by making annual contributions based upon minimum funding provisions of the Employee Retirement Income Security Act of 1974. We
contributed an additional $0.9 million and $2.0 million in 2004 and 2003, respectively, to improve the funded status of our plan. Our total pension expense for company-sponsored qualified plans was $1.0 million, $0.4 million, and $0.4 million in
2004, 2003 and 2002, respectively. The 2004 pension expense of $1.0 million included $0.4 million of pension settlement expense triggered by reduced employment levels that required us to recognize past gains and losses in our pension accounts. This
$0.4 million settlement expense is included in the Aero-Motive restructuring charge.



In 1990 we adopted a supplemental retirement benefit plan for certain key executive officers which will provide supplemental payments upon retirement, disability or death. The obligations are not funded apart from our general assets. We
charged $0.2 million in 2004, 2003 and 2002 to expense under the plan.



The
projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the plans with accumulated benefit obligations in excess of plan assets were $1.8 million, $1.6 million and $0, respectively in 2004; $1.1 million, $1.0
million and $0, respectively in 2003; and $8.0 million, $6.5 million and $4.8, respectively, in 2002.



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The components of net periodic pension cost for the non-union plans were:



|                                              |  |      |       |   |      |   |      |      |  |   |      |  
|--------------------------------------------- |  | ---- | ----- | - | ---- | - | ---- | ---- |  | - | ---- | -
|                                              |  | 2004 |       |   | 2003 |   |      | 2002 | 
|Service cost-benefits earned during the year  |  | $    | 600   |   |      | $ | 496  |      |  | $ | 486  |  
|Interest cost on projected benefit obligation |  |      | 595   |   |      |   | 508  |      |  |   | 572  |  
|Expected return on plan assets                |  |      | (610  | ) |      |   | (486 | )    |  |   | (551 | )
|Amortization of prior service cost            |  |      | 27    |   |      |   | 27   |      |  |   | 31   |  
|Amortization of transitional asset            |  |      | 1     |   |      |   | 1    |      |  |   | 1    |  
|Recognized actuarial loss                     |  |      | 196   |   |      |   | 50   |      |  |   | 3    |  
|Additional loss recognized due to settlement  |  |      | 430   |   |      |   |     |      |  |   |     |  
|                                              |  |      |       |   |      |   |      |      |  |   |      |  
|Periodic pension cost, net                    |  | $    | 1,239 |   |      | $ | 596  |      |  | $ | 542  |  
|                                              |  |      |       |   |      |   |      |      |  |   |      |  



The measurement date used to determine
pension and other postretirement benefits was September 30, 2004. We used the following assumptions in accounting for the pension plans:



|                                                 |  |      |   |  |      |   |  |      |  
|------------------------------------------------ |  | ---- | - |  | ---- | - |  | ---- | -
|                                                 |  | 2004 |   |  | 2003 |   |  | 2002 |  
|Discount rate                                    |  | 5.8  | % |  | 6.3  | % |  | 6.8  | %
|Rate of increase in compensation levels          |  | 4.5  | % |  | 4.5  | % |  | 4.5  | %
|Expected long-term rate of return on plan assets |  | 8.0  | % |  | 8.0  | % |  | 8.0  | %
|                                                 |  |      |   |  |      |   |  |      |  



The following table reconciles the
plans funded status and the amount recorded on our consolidated balance sheets for our non-union plans:



|                                                                 |  |      |        |   |      |   |        |  
|---------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | -
|                                                                 |  | 2004 |        |   | 2003 |  
|Change in benefit obligation:                                    |  |      |        |   |      |   |        |  
|Benefit obligation at beginning of year                          |  | $    | 9,048  |   |      | $ | 7,962  |  
|Service cost                                                     |  |      | 600    |   |      |   | 496    |  
|Interest cost                                                    |  |      | 595    |   |      |   | 508    |  
|Benefits paid                                                    |  |      | (1,559 | ) |      |   | (684   | )
|Settlement payments                                              |  |      | 1,304  |   |      |   |       |  
|Actuarial loss                                                   |  |      | 425    |   |      |   | 766    |  
|                                                                 |  |      |        |   |      |   |        |  
|Benefit obligation at end of year                                |  |      | 10,413 |   |      |   | 9,048  |  
|                                                                 |  |      |        |   |      |   |        |  
|Change in plan assets:                                           |  |      |        |   |      |   |        |  
|Fair value of plan assets at beginning of year                   |  |      | 7,059  |   |      |   | 4,841  |  
|Actual return on plan assets                                     |  |      | (493   | ) |      |   | 703    |  
|Employer contributions                                           |  |      | 945    |   |      |   | 2,199  |  
|Benefits paid                                                    |  |      | (1,559 | ) |      |   | (684   | )
|Settlement payments                                              |  |      | 1,304  |   |      |   |       |  
|                                                                 |  |      |        |   |      |   |        |  
|Fair value of plan assets at end of year                         |  |      | 7,256  |   |      |   | 7,059  |  
|                                                                 |  |      |        |   |      |   |        |  
|Reconciliation of funded status:                                 |  |      |        |   |      |   |        |  
|Underfunded status                                               |  |      | 3,157  |   |      |   | 1,989  |  
|Unrecognized actuarial loss                                      |  |      | (3,590 | ) |      |   | (2,689 | )
|Unrecognized transition obligation                               |  |      | (3     | ) |      |   | (4     | )
|Unrecognized prior service cost                                  |  |      | (165   | ) |      |   | (191   | )
|                                                                 |  |      |        |   |      |   |        |  
|Prepaid pension cost included in the consolidated balance sheets |  | $    | (601   | ) |      | $ | (895   | )
|                                                                 |  |      |        |   |      |   |        |  



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Amounts recorded on the consolidated balance sheets were:



|                                                                 |  |      |        |   |      |   |      |  
|---------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ---- | -
|                                                                 |  | 2004 |        |   | 2003 |  
|Prepaid benefit cost                                             |  | $    | (1,783 | ) |      | $ | (895 | )
|Accrued benefit liability                                        |  |      | 1,646  |   |      |   |     |  
|Intangible asset                                                 |  |      | (110   | ) |      |   |     |  
|Accumulated other comprehensive income                           |  |      | (354   | ) |      |   |     |  
|                                                                 |  |      |        |   |      |   |      |  
|Prepaid pension cost included in the consolidated balance sheets |  | $    | (601   | ) |      | $ | (895 | )
|                                                                 |  |      |        |   |      |   |      |  



Our investment policies employ an
approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. The investment portfolio contains a diversified blend of equity and fixed income investments.
Equity investments are diversified across domestic and international stocks, as well as growth, value and small to large capitalizations. Fixed income investments have an average duration of three to seven years. Investment and market risks are
measured and monitored on an ongoing basis through regular portfolio reviews, annual liability measurements and periodic asset/liability studies. We rebalance asset allocations as appropriate in order to stay within a targeted range of allocation
for each asset category. Investment in certain derivatives is permitted.



The
plan asset targeted and actual allocations by category were:



|                       |  |               |  |      |   |  |      |  
|---------------------- |  | ------------- |  | ---- | - |  | ---- | -
|                       |  | Targeted 2004 |  | 2004 |   |  | 2003 |  
|Domestic equities      |  | 30%  75%     |  | 41   | % |  | 27   | %
|International equities |  | 5%  25%      |  | 17   | % |  | 18   | %
|Fixed income           |  | 10%  65%     |  | 30   | % |  | 44   | %
|Cash                   |  |               |  | 12   | % |  | 11   | %
|                       |  |               |  |      |   |  |      |  
|Total                  |  |               |  | 100  | % |  | 100  | %
|                       |  |               |  |      |   |  |      |  



The expected return on plan assets is
based on our expectation of the long-term average rate of return of the capital markets in which the plan invests. The expected return reflects the investment policy target asset mix and considers the historical returns earned for each asset
category.



We expect to contribute $0.4 million to the non-union plans in 2005.



The following benefit payments, which reflect expected future service, as
appropriate, are expected to be paid:



|            |  |         |      
|----------- |  | ------- | -----
|Fiscal Year |  | Payment
|2005        |  | $       | 670  
|2006        |  |         | 329  
|2007        |  |         | 346  
|2008        |  |         | 392  
|2009        |  |         | 428  
|2010  2014 |  | $       | 2,659
|            |  |         |      



Although we have the right to improve,
change or terminate the plans, they are intended to be permanent.



Most of our
union employees are covered by union-sponsored, collectively-bargained, multi-employer pension plans. For such plans, we contributed and charged to expense $0.2 million in 2004, 2003 and 2002. These contributions are determined in accordance with
the provisions of negotiated labor contracts and generally are based on the number of man-hours worked. Information from the union plans administrators is not available to permit us to determine our share of unfunded vested benefits.



We provide an optional retiree medical program to a majority of our U.S.
salaried and non-union retirees. Beginning in April 2003, the plan was modified to require participants to fund the total cost of the retiree medical



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program. At September 28, 2002 we had an accrued postretirement benefit cost, which was included in our consolidated balance sheet in the amount of $2.3
million. At December 27, 2003 we had no liability for any of these postretirement benefit costs and the reduction of the $2.3 million liability was amortized over the period from April 1, 2003 to December 27, 2003.



These postretirement benefits are unfunded. Cost components of these postretirement benefits,
principally health care, were:



|                                      |  |      |        |   |      |   |        |      |  |   |    
|------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | ---- |  | - | ---
|                                      |  | 2004 |        |   | 2003 |   |        | 2002
|Service cost                          |  | $    | (1,497 | ) |      | $ | 67     |      |  | $ | 121
|Interest cost                         |  |      |       |   |      |   | 166    |      |  |   | 256
|Amortization of transition obligation |  |      |       |   |      |   | (2,895 | )    |  |   | 38 
|Recognized actuarial loss             |  |      | 719    |   |      |   | 1,493  |      |  |   | 77 
|                                      |  |      |        |   |      |   |        |      |  |   |    
|Total Cost                            |  | $    | (778   | ) |      | $ | (1,169 | )    |  | $ | 492
|                                      |  |      |        |   |      |   |        |      |  |   |    



The funded status of these benefits on
the balance sheet dates was as follows:



|                                                                                |  |      |   |      |   |       |  
|------------------------------------------------------------------------------- |  | ---- | - | ---- | - | ----- | -
|                                                                                |  | 2004 |   | 2003 |  
|Actuarial present value of benefit obligation:                                  |  |      |   |      |   |       |  
|Retirees                                                                        |  | $    |  |      | $ | 40    |  
|Eligible active employees                                                       |  |      |  |      |   |      |  
|Other active employees                                                          |  |      |  |      |   |      |  
|                                                                                |  |      |   |      |   |       |  
|Accumulated postretirement benefit obligation                                   |  |      |  |      |   | 40    |  
|                                                                                |  |      |   |      |   |       |  
|Fair value of plan assets at end of year                                        |  |      |  |      |   |      |  
|                                                                                |  |      |   |      |   |       |  
|Underfunded status                                                              |  |      |  |      |   | 40    |  
|Unrecognized transition obligation                                              |  |      |  |      |   |      |  
|Unrecognized prior service cost                                                 |  |      |  |      |   | 1,457 |  
|Unrecognized actuarial loss                                                     |  |      |  |      |   | (719  | )
|                                                                                |  |      |   |      |   |       |  
|Accrued postretirement benefit cost included in the consolidated balance sheets |  | $    |  |      | $ | 778   |  
|                                                                                |  |      |   |      |   |       |  



We used the following assumptions in
accounting for these plans:



Participants aged under 65:



|                                       |  |      |  |      |   |  |      |  
|-------------------------------------- |  | ---- |  | ---- | - |  | ---- | -
|                                       |  | 2004 |  | 2003 |   |  | 2002 |  
|Discount rate                          |  | N/A  |  | 6.3  | % |  | 6.8  | %
|Health care trend rate in first year   |  | N/A  |  | N/A  |   |  | 10.0 | %
|Gradually declining to a trend rate of |  | N/A  |  | N/A  |   |  | 6.0  | %
|in the year                            |  | N/A  |  | N/A  |   |  | 2006 |  



Participants aged 65 and over:



|                                       |  |      |  |      |   |  |      |  
|-------------------------------------- |  | ---- |  | ---- | - |  | ---- | -
|                                       |  | 2004 |  | 2003 |   |  | 2002 |  
|Discount rate                          |  | N/A  |  | 6.3  | % |  | 6.8  | %
|Health care trend rate in first year   |  | N/A  |  | N/A  |   |  | 10.0 | %
|Gradually declining to a trend rate of |  | N/A  |  | N/A  |   |  | 6.0  | %
|in the year                            |  | N/A  |  | N/A  |   |  | 2006 |  



A one-percentage point increase in the
assumed health care trend would have the following effects on:



|                                       |  |      |  |      |    |      |   |      
|-------------------------------------- |  | ---- |  | ---- | -- | ---- | - | -----
|                                       |  | 2004 |  | 2003 |    | 2002
|Aggregate of service and interest cost |  |     |  | $    | 38 |      | $ | 90   
|Accumulated postretirement obligation  |  |     |  |      |   |      | $ | 1,016
|                                       |  |      |  |      |    |      |   |      



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We provide certain post-employment benefits to former or inactive employees before retirement. The costs associated with
those benefits are immaterial.



|16. | CONTINGENT LIABILITIES
|--- | ----------------------



We are subject to federal and state hazardous substance cleanup laws that impose liability for the costs of cleaning up contamination resulting from past spills, disposal
or other releases of hazardous substances. In this regard, we have incurred, and expect to incur, assessment, remediation and related costs at one of our facilities. In 1991, we reported to state regulators a release at that site from an underground
storage tank (UST). The UST and certain contaminated soil subsequently were removed and disposed of at an off-site disposal facility.



We have been conducting an investigation of soil and groundwater at the site with oversight by the state Department of Environmental Quality (DEQ). The
investigation indicates that, unrelated to the UST release, additional soil and groundwater at the site have been impaired by chlorinated solvents, including tetrachloroethane and trichloroethylene, and other compounds. Also, our investigation
revealed that the previous owners of the site had used a portion of the site as a disposal area. We have remediated the soils in this area but we believe that it is a source of contamination of groundwater, both on-site and off-site. Our
investigation indicates that there were releases by the previous owners in areas over which additions were subsequently built. These releases have impacted groundwater that has migrated off-site. We have implemented a groundwater remediation system
for the on-site contamination. We continue to monitor and analyze conditions to determine the continued efficacy of the system. We also have implemented a groundwater remediation system for the off-site contamination. We continue to analyze other
remedial alternatives for the off-site groundwater contamination and are reviewing these alternatives with the DEQ.



We previously filed a complaint in federal district court seeking contribution from the previous owners of the site for the cost of the investigation and remediation of
the site. We settled that litigation through a consent judgment against the former owners. Also, we asserted claims against insurers of the former owners for the amounts specified in the consent judgment. The insurers denied coverage and three of
them filed a declaratory judgment action to that effect against us in federal district court. In July 2004 the federal district court entered an Order and Judgment on cross motions for summary disposition resolving the claims in favor of the
insurers. We have filed an appeal to the U.S. Court of Appeals for the Sixth Circuit.



We have a reserve for the $1.7 million of investigation and remediation expenses we have estimated to be incurred over the next 14 years to address the environmental issue at our site in Michigan. We based our estimate on the future costs
expected to be incurred to investigate, monitor and remediate the site. Our cost estimate continues to be subject to substantial uncertainty because of the extent of the contamination area, the variety and nature of geological conditions throughout
the contamination area, changes in remediation technology and the states Department of Environmental Quality feedback. Funding this activity will come from operating cash flows and only changes to the reserve estimate will affect the results
of operations.



We indemnify certain customers with regard to product
liability. We have insurance policies to cover this exposure, which includes a minimal deductible to be paid by us.



|17. | RESTRUCTURING CHARGES
|--- | ---------------------



During the second quarter of 2002 we recorded a restructuring charge in the amount of $1.0 million to primarily account for severance and related costs of eliminating
about 10% of our salaried positions worldwide. Additionally we identified 31 positions in our manufacturing plant in Northbrook, Illinois, which were eliminated with the continued migration of product to our new manufacturing plant in Juarez,
Mexico. This workforce reduction represented an acceleration of initiatives that we started over the previous six months to improve our efficiencies and reduce expenses. The restructuring resulted in the layoffs of 93 people, of which 70 people were



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severed as of March 30, 2002. The restructuring was completed during fiscal 2002 and there is currently no reserve left for any of these restructuring
charges. The restructuring accrual account had the following balances at September 28, 2002 and September 27, 2003:



|                              |  |                       |      
|----------------------------- |  | --------------------- | -----
|                              |  | Restructuring Reserve
|Balance at 9/29/2001          |  |                       |     
|Charged to expense in Q2 2002 |  | $                     | 1,015
|Cash paid in 2002             |  |                       | 984  
|                              |  |                       |      
|Remaining balance at 9/28/02  |  |                       | 31   
|Cash paid in 2003             |  |                       | 31   
|                              |  |                       |      
|Balance 9/27/2003             |  |                       |     
|                              |  |                       |      



In January 2003 we adopted SFAS No.
146, Accounting for Costs Associated with Exit or Disposal Activities, which generally requires that a liability for costs associated with an exit or disposal activity be expensed as incurred. Exit costs primarily consist of future minimum
lease payments on vacated facilities, facility closure costs and facility consolidation costs. Employee separation costs consist primarily of severance costs. At each reporting date, we will evaluate our accruals for exit costs and employee
separation to ensure that the accruals are still appropriate.



In the quarter
ending June 28, 2003 we announced the closing of our Aero-Motive facility in Kalamazoo, Michigan. In addition to selling two small product lines (workstations in the fourth quarter of fiscal 2003 and the hose reels in the first quarter of 2004) that
did not align strategically with our current operations, we consolidated and integrated the remaining manufacturing operations into our facility in Juarez, Mexico, which will improve our overall operating efficiencies. The office operations have
been integrated with our Northbrook, Illinois facility. The closing of this facility terminated the employment of 111 total employees, which included 64 plant employees and 47 office employees. At the end of fiscal year 2004 the facility was closed
and all employees terminated.



In fiscal year 2004 we recorded restructuring
and other related charges of $1.1 million, which related to the closing of our Aero-Motive facility. The Aero-Motive restructuring program is now complete and we recorded $3.2 million of total restructuring charges. Included in the restructuring
charges were pension settlement costs of $0.4 million in fiscal 2004. The pension settlement charges were triggered by the reduction in employment levels that required us to recognize past gains and losses in our pension plan accounts. This
restructuring charge, including the pension settlement charge, is composed of the following:



|                                      |  |                                   |       |                                 |   |                       |  |   |      
|------------------------------------- |  | --------------------------------- | ----- | ------------------------------- | - | --------------------- |  | - | -----
|                                      |  | Costs expensedFiscal Year10/02/04 |       | Cumulativecosts through10/02/04 |   | Totalanticipatedcosts
|One-Time Termination Benefit          |  | $                                 | 269   |                                 | $ | 1,203                 |  | $ | 1,203
|Other Associated Costs                |  |                                   | 824   |                                 |   | 1,955                 |  |   | 1,955
|                                      |  |                                   |       |                                 |   |                       |  |   |      
|Total Restructuring and Other Charges |  | $                                 | 1,093 |                                 | $ | 3,158                 |  | $ | 3,158
|                                      |  |                                   |       |                                 |   |                       |  |   |      



The costs included as a one-time
termination benefit are the payment of severance benefits that have been expensed. Included in other associated costs are the pension settlement charges of $0.4 million. Accelerated depreciation, legal fees, system conversion costs, incidental
salaries and travel expense represent the balance of other associated costs.



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The Aero-Motive restructuring accrual accounts had the following balance at September 27, 2003 and October 2, 2004:



|                                    |  |                       |       |  
|----------------------------------- |  | --------------------- | ----- | -
|                                    |  | Restructuring Reserve |      
|Balance at 9/27/2003                |  | $                     | 859   |  
|                                    |  |                       |       |  
|Charged to expense in fiscal 2004   |  |                       | 1,093 |  
|Less: depreciation non-cash expense |  |                       | (15   | )
|Cash paid in 2004                   |  |                       | 1,967 |  
|                                    |  |                       |       |  
|Remaining balance at 10/2/2004      |  |                       |      |  
|                                    |  |                       |       |  



|18. | SALE OF AKAPP OPERATIONS
|--- | ------------------------



On September 29, 2002 we adopted SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No. 144 states that the results of operations
of a component of an entity that has either been disposed of or is classified as held for sale shall be reported in discontinued operations if both the following conditions are met: (a) the operations and cash flows of the component have been (or
will be) eliminated from the ongoing operations of the entity as a result of the disposal transaction and (b) the entity will not have any significant continuing involvement in the operations of the component after the disposal transaction.



In November 2002 we sold our Dutch subsidiary, AKAPP, to a third party. We
sold the AKAPP operation for $4.9 million in cash, which included the payment of a $2.6 million inter-company loan and the receipt of $2.3 million in cash. As a result of this transaction we recorded a $0.7 million gain on disposal, which in
accordance with SFAS No. 144 has been reported as Income from Discontinued Operations. The results of operations related to AKAPP for fiscal 2003 were also recorded as Income from Discontinued Operations. The results of operations for AKAPP in
fiscal 2002 were not reclassified to discontinued operations because (as shown below) they are not material.



|                    |  |                             |      
|------------------- |  | --------------------------- | -----
|                    |  | Twelve Months Ended 9/28/02
|Sales               |  | $                           | 5,732
|Income Before Taxes |  |                             | 26   
|Net Income          |  | $                           | 17   
|                    |  |                             |      



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|19. | SUMMARY OF QUARTERLY DATA (UNAUDITED)
|--- | -------------------------------------



Our common stock trades on the NASDAQ Stock Market under the symbol WDHD. The daily quotations are published in the Wall Street Journal and other leading publications. At
October 2, 2004 we had 386 shareholders of record.



The following table sets
forth selected financial data along with the high and low sales price of our common stock on the NASDAQ Stock Market during the last three fiscal years.



|                             |  |         |        |        |   |        |  |        |        |           |   |        |  |   |        
|---------------------------- |  | ------- | ------ | ------ | - | ------ |  | ------ | ------ | --------- | - | ------ |  | - | -------
|                             |  | Quarter |        |       
|2004                         |  | First   |        | Second |   | Third  |  | Fourth |        | Full year
|Net sales                    |  | $       | 45,144 |        | $ | 50,841 |  | $      | 52,653 |           | $ | 53,097 |  | $ | 201,735
|Gross profit                 |  |         | 16,521 |        |   | 19,328 |  |        | 20,201 |           |   | 20,020 |  |   | 76,070 
|Income from operations       |  |         | 959    |        |   | 2,481  |  |        | 3,592  |           |   | 2,857  |  |   | 9,889  
|Net income                   |  |         | 2,059  |        |   | 955    |  |        | 1,610  |           |   | 3,414  |  |   | 8,038  
|                             |  |         |        |        |   |        |  |        |        |           |   |        |  |   |        
|Earnings per share - basic   |  |         | 0.17   |        |   | 0.08   |  |        | 0.13   |           |   | 0.28   |  |   | 0.67   
|Earnings per share - diluted |  |         | 0.17   |        |   | 0.08   |  |        | 0.13   |           |   | 0.28   |  |   | 0.66   
|                             |  |         |        |        |   |        |  |        |        |           |   |        |  |   |        
|Dividends per common share   |  | $       | 0.10   |        | $ | 0.10   |  | $      | 0.10   |           | $ | 0.10   |  | $ | 0.40   
|                             |  |         |        |        |   |        |  |        |        |           |   |        |  |   |        
|Stock Prices:                |  |         |        |        |   |        |  |        |        |           |   |        |  |   |        
|High                         |  | $       | 17.36  |        | $ | 18.88  |  | $      | 16.22  |           | $ | 15.50  |  | $ | 18.88  
|Low                          |  | $       | 14.81  |        | $ | 14.58  |  | $      | 13.50  |           | $ | 13.21  |  | $ | 13.21  
|                             |  |         |        |        |   |        |  |        |        |           |   |        |  |   |        
|                             |  |         |        |        |  
|2003                         |  | First   |        | Second |   | Third  |  | Fourth |        | Full year
|Net sales                    |  | $       | 42,232 |        | $ | 45,810 |  | $      | 46,694 |           | $ | 44,302 |  | $ | 179,038
|Gross profit                 |  |         | 15,728 |        |   | 16,910 |  |        | 16,629 |           |   | 16,780 |  |   | 66,047 
|Income from operations       |  |         | 1,960  |        |   | 2,576  |  |        | 2,322  |           |   | 2,334  |  |   | 9,192  
|Net income                   |  |         | 2,156  |        |   | 1,531  |  |        | 2,044  |           |   | 838    |  |   | 6,569  
|                             |  |         |        |        |   |        |  |        |        |           |   |        |  |   |        
|Earnings per share - basic   |  |         | 0.18   |        |   | 0.13   |  |        | 0.17   |           |   | 0.08   |  |   | 0.56   
|Earnings per share - diluted |  |         | 0.18   |        |   | 0.13   |  |        | 0.17   |           |   | 0.07   |  |   | 0.55   
|                             |  |         |        |        |   |        |  |        |        |           |   |        |  |   |        
|Dividends per common share   |  | $       | 0.09   |        | $ | 0.09   |  | $      | 0.09   |           | $ | 0.09   |  | $ | 0.36   
|                             |  |         |        |        |   |        |  |        |        |           |   |        |  |   |        
|Stock Prices:                |  |         |        |        |   |        |  |        |        |           |   |        |  |   |        
|High                         |  | $       | 12.74  |        | $ | 13.90  |  | $      | 12.85  |           | $ | 17.37  |  | $ | 17.37  
|Low                          |  | $       | 8.81   |        | $ | 10.93  |  | $      | 11.10  |           | $ | 11.83  |  | $ | 8.81   
|                             |  |         |        |        |   |        |  |        |        |           |   |        |  |   |        
|                             |  |         |        |        |  
|2002                         |  |         |        |        |   |        |  |        |        |          
|Net sales                    |  | $       | 38,621 |        | $ | 42,579 |  | $      | 45,603 |           | $ | 43,376 |  | $ | 170,179
|Gross profit                 |  |         | 14,485 |        |   | 15,593 |  |        | 17,429 |           |   | 14,902 |  |   | 62,409 
|Income from operations       |  |         | 1,295  |        |   | 1,230  |  |        | 3,277  |           |   | 2,141  |  |   | 7,943  
|Net income                   |  |         | 136    |        |   | 164    |  |        | 1,526  |           |   | 719    |  |   | 2,545  
|                             |  |         |        |        |   |        |  |        |        |           |   |        |  |   |        
|Earnings per share - basic   |  |         | 0.01   |        |   | 0.01   |  |        | 0.13   |           |   | 0.06   |  |   | 0.22   
|Earnings per share - diluted |  |         | 0.01   |        |   | 0.01   |  |        | 0.13   |           |   | 0.06   |  |   | 0.22   
|                             |  |         |        |        |   |        |  |        |        |           |   |        |  |   |        
|Dividends per common share   |  | $       | 0.09   |        | $ | 0.09   |  | $      | 0.09   |           | $ | 0.09   |  | $ | 0.36   
|                             |  |         |        |        |   |        |  |        |        |           |   |        |  |   |        
|Stock Prices:                |  |         |        |        |   |        |  |        |        |           |   |        |  |   |        
|High                         |  | $       | 18.15  |        | $ | 17.80  |  | $      | 19.23  |           | $ | 17.30  |  | $ | 19.23  
|Low                          |  | $       | 13.80  |        | $ | 14.73  |  | $      | 15.90  |           | $ | 11.38  |  | $ | 11.38  
|                             |  |         |        |        |   |        |  |        |        |           |   |        |  |   |        



44



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##### Table of Contents

|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|------- | ------------------------------------------------------------------------------------



Information required by this item is incorporated by reference to our current report on Form 8-K, which we filed on May 8, 2002, confirming
the dismissal of Arthur Andersen LLP as our independent auditor and confirming the engagement of Ernst & Young LLP as our independent auditor.



|ITEM 9A. | CONTROLS AND PROCEDURES
|-------- | -----------------------



We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our filings under the Securities Exchange Act of
1934 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. This information is accumulated and communicated to our management, including our principal executive
officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. Our management, including our principal executive officer and our principal financial officer, recognizes that any set of controls and
procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.



Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation
of our disclosure controls and procedures within 90 days of the filing date of this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective
in alerting them on a timely basis to material information required to be disclosed in our periodic filings.



There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation referenced in the foregoing paragraph.



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##### Table of Contents

PART III



Information for Items 10 through 12 of this report is incorporated by reference to our definitive proxy statement for the Annual Meeting of Stockholders to be held on
February 3, 2005, which will be filed with the Securities and Exchange Commission (SEC) pursuant to Regulation 14A on or about December 22, 2004.



|ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
|-------- | --------------------------------------------------



Information required by this Item related to our directors is incorporated by reference to our proxy statement for the Annual Meeting of Stockholders, which will be filed
on or about December 22, 2004. The information required by this Item related to our executive officers has been furnished in this report in Part I, after Item 4, under the caption Executive Officers of the Registrant.



Information required by this Item as to compliance with Section 16(a) of the Securities
Exchange Act of 1934 is incorporated by reference to our proxy statement under the caption Section 16(a) Beneficial Ownership Reporting Compliance, which will be filed on or about December 22, 2004.



Information required by this Item related to the Audit Committee and Financial Experts is
incorporated by reference to our proxy statement for the Annual Meeting of Stockholders, which will be filed on or about December 22, 2004.



We have adopted a Code of Ethics for Senior Officers that applies to all of our officers including the Chief Executive Officer, Chief Financial Officer and Chief
Accounting Officer. The Code of Ethics for Senior Officers is included as Exhibit 14 to this Annual Report on Form 10-K. We have made the Code of Ethics available on our Web Site at www.woodhead.com, which is updated as any amendments
or waivers are made.



The information required by this Item regarding material
changes to the procedures by which our stockholders may recommend nominees to our Board of Directors is incorporated herein by reference to our proxy statement under the caption Committees of the Board, which will be filed on or about
December 22, 2004.



|ITEM 11. | EXECUTIVE COMPENSATION
|-------- | ----------------------



Information required by this Item is incorporated by reference to our proxy statement for the Annual Meeting of Stockholders, which will be filed with the SEC on or about
December 22, 2004.



|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|-------- | --------------------------------------------------------------



Information required by this Item is incorporated by reference to our proxy statement for the Annual Meeting of Stockholders, which will be filed with the SEC on or about
December 22, 2004.



We may grant stock options to directors, officers and key
employees, under our stock option plans at a price not less than the market value at the date of grant. Detailed information regarding stock option plans can be found in Note 9 of the Notes to Consolidated Financial Statements. The following
table summarizes the availability of options in total and available options to be exercised:



|                                                           |  |                                                                                         |  |                                                                         |       |                                                                                                                                      |        
|---------------------------------------------------------- |  | --------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------- | ----- | ------------------------------------------------------------------------------------------------------------------------------------ | -------
|                                                           |  | (a)                                                                                     |  | (b)                                                                     |       | (c)                                                                                                                                 
|                                                           |  | Number of securitiesto be issued uponexercise ofoutstanding options,warrants and rights |  | Weighted-averageexercise price ofoutstandingoptions, warrantsand rights |       | Number of securitiesremaining availablefor futureissuance underequity compensationplans
(excludingsecurities reflectedin column (a))
|Equity compensation plans approved by security holders     |  | 2,070,025                                                                               |  | $                                                                       | 14.61 |                                                                                                                                      | 681,542
|Equity compensation plans not approved by security holders |  |                                                                                        |  |                                                                         |      |                                                                                                                                      |       
|                                                           |  |                                                                                         |  |                                                                         |       |                                                                                                                                      |        
|Total                                                      |  | 2,070,025                                                                               |  | $                                                                       | 14.61 |                                                                                                                                      | 681,542
|                                                           |  |                                                                                         |  |                                                                         |       |                                                                                                                                      |        



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##### Table of Contents

|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|-------- | ----------------------------------------------



The registrant does not have any information relating to certain relationships or related transactions that is required to be reported by Item 404 of Regulation S-K.



|ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES
|-------- | --------------------------------------



The aggregate fees for professional services provided by our independent registered public accounting firm for the fiscal years ended October 2, 2004 and September 27,
2003 are as follows:



|                   |  |                   |      |                   |   |     
|------------------ |  | ----------------- | ---- | ----------------- | - | ----
|                   |  | 2004              |      | 2003             
|                   |  | Ernst & Young LLP |      | Ernst & Young LLP
|Audit Fees         |  | $                 | 411  |                   | $ | 372 
|Audit Related Fees |  |                   | 421  |                   |   | 242 
|Tax Fees           |  |                   | 1373 |                   |   | 3114
|All Other Fees     |  |                   |     |                   |   |    
|                   |  |                   |      |                   |   |     
|Total              |  | $                 | 590  |                   | $ | 707 
|                   |  |                   |      |                   |   |     

---

|1. | Amounts are for Sarbanes - Oxley Section 404 consultation, SFAS No. 132 review for Italy and review of the Aero-Motive restructuring charge.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------



|2. | Amounts are for benefit plan audits and accounting and internal control consultation.
|-- | -------------------------------------------------------------------------------------



|3. | Includes $125 for tax compliance and $12 for other tax work programs.
|-- | ---------------------------------------------------------------------



|4. | Includes $267 for tax compliance and $44 for tax planning and tax advice.
|-- | -------------------------------------------------------------------------



The Audit Committee of our Board of Directors pre-approves on an annual basis the audit, audit related, tax and other non-audit services to
be rendered by our accountants based on historical information and anticipated requirements for the following fiscal year. The Audit Committee pre-approves specific types or categories of engagements constituting audit, audit related, tax and other
non-audit services as well as the range of fee amounts corresponding to each such engagement. To the extent that our management believes that a new service or the expansion of a current service provided by our accountants is necessary or desirable,
such new or expanded services are presented to the Audit Committee for its review and approval prior to the engagement of our accountants to render such services. The Audit Committee may delegate pre-approval authority to a member of the Audit
Committee, who must present such members decisions to the full Audit Committee at its next scheduled meeting. No audit related, tax or other non-audit services were approved by the Audit Committee pursuant to Rule 2-01, paragraph (c)(7)(i)(C)
of SEC Regulation S-X during the fiscal year ended October 2, 2004.



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##### Table of Contents

PART IV



|ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
|-------- | ---------------------------------------------------------------



15 (a) (1) FINANCIAL STATEMENTS



All financial statements listed below are those of the company and its consolidated subsidiaries:



|                                                         |  |                             
|-------------------------------------------------------- |  | ----------------------------
|                                                         |  | Page(s) in our2004 Form 10-K
|Reports of Independent Registered Public Accounting Firm |  | 17                          
|Segment Information                                      |  | 33-34                       
|Geographic Data                                          |  | 35                          
|Consolidated Balance Sheets                              |  | 18                          
|Consolidated Statements of Income                        |  | 19                          
|Consolidated Statements of Cash Flows                    |  | 20                          
|Consolidated Statements of Comprehensive Income          |  | 21                          
|Consolidated Statements of Stockholders Investment      |  | 22                          
|Notes to Financial Statements                            |  | 23-44                       



15 (a) (2) FINANCIAL STATEMENT
SCHEDULES



Schedules are omitted because they are not required or the
information is given elsewhere in the financial statements or related notes.



15 (a) (3) EXHIBITS



These exhibits are available upon
request. Requests should be directed to Mr. Robert J. Tortorello, Secretary, Woodhead Industries, Inc., Three Parkway North, Suite 550, Deerfield, Illinois, 60015.



| | 3  (i) | Articles of Incorporation
| | ------ | -------------------------



Our Certificate of Incorporation including amendments through January 22, 1993 is incorporated by reference to Exhibit (4) a of our Form S-8
report filed on April 22, 1994, as Registration #33-77968.



| | 3  (ii) | By-laws
| | ------- | -------



Our By-laws, as amended, are incorporated by reference to Exhibit (3) b of our Form 10-K report for the year ended September 27, 1997.



| | 4 | Instruments defining the rights of security holders, including indentures.
| | - | --------------------------------------------------------------------------



| | a | Our Preferred Stock Purchase Rights Plan adopted April 24, 1996, is incorporated by reference to Exhibit 4 of our Form 10-Q report for the period ended March 30, 1996.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b | A Credit Agreement between the Registrant and Harris Trust and Savings Bank dated April 28, 2004 is incorporated by reference to Exhibit 4(A) of our Quarterly Report on Form 10-Q
for the quarter ended June 26, 2004.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c | Form of the 6.64% Note Purchase Agreement between the Registrants consolidated subsidiary, Woodhead Finance Company, and private investors dated September 28, 1998 is
incorporated by reference to Exhibit 4(c) of our Annual Report on Form 10-K for the fiscal year ended September 28, 2002.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | d | The 6.81% Note Purchase Agreement between the Registrant and private investors dated September 28, 1998 in the amount of $15,000,000, maturing in 2013.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------



The document described in paragraph 4(d) above is not filed herewith by
Registrant, but Registrant undertakes to furnish copies thereof to the Securities and Exchange Commission upon request.



48



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##### Table of Contents

|10. | Material Contracts
|--- | ------------------



| | a | The 1990 Stock Awards Plan, as amended, is incorporated by reference to Exhibit (10) (c) of our Form 10-K report for the year ended October 2, 1999.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------



| | b | The 1993 Stock Awards Plan, as amended, is incorporated by reference to Exhibit (10) (d) of our Form 10-K report for the year ended October 2, 1999.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------



| | c | The 1996 Stock Awards Plan, as amended, is incorporated by reference to Exhibit (10) (e) of our Form 10-K report for the year ended October 2, 1999.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------



| | d | The 1999 Stock Awards Plan is incorporated by reference to Exhibit A of our Proxy Statement for the 2000 Annual Meeting of Stockholders.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------



| | e | The 2001 Stock Awards Plan is incorporated by reference to Exhibit A of our Proxy Statement for the 2002 Annual Meeting of Stockholders.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------



| | f | The Management Incentive Plan effective for fiscal 2005, is incorporated by reference to our Form 8-K filed on November 17, 2004.
| | - | ---------------------------------------------------------------------------------------------------------------------------------



| | g | The Plan of Compensation for Outside Directors, is incorporated by reference to Exhibit (10) of our Form 10-K report for the year ended September 28, 1985.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| | h | The 1990 Supplemental Executive Retirement Plan is incorporated by reference to our proxy statement for the Annual Meeting of Stockholders, which will be filed with the SEC on or
about December 22, 2004.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | i | The Severance Agreement between Mr. Philippe Lemaitre and Woodhead is incorporated by reference to Exhibit 10(i) of our 10-K report for the year ended September 29, 2001. Messrs.
Fisher, Gies, Moulton, Nogal, Tortorello, Wiedor and two other key employees have substantially identical contracts.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | j | The key employee non-compete agreement with Robert H. Fisher in connection with the grant to Mr. Fisher of a long-term incentive award is incorporated by reference to our Form 8-K
filed on November 24, 2004. Messrs. Lemaitre, Gies, Wiedor and one other key employee have substantially identical non-compete agreements.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Exhibit 14 Code of Ethics for Senior Officers



Exhibit 21 Subsidiaries of the Company



Exhibit 23.1 Consent of Ernst & Young LLP



Exhibit 31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed by Philippe Lemaitre  President and C.E.O.



Exhibit 31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed
by Robert H. Fisher  Vice President, Finance and Chief Financial Officer.



Exhibit 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



Exhibit 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



15 (b) REPORTS ON FORM 8-K



During the quarter ended October 2, 2004 we filed an 8-K on July 23, 2004 releasing our
third quarter 2004 earnings.



49



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##### Table of Contents

SIGNATURES



Under the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, this report was signed on behalf of the Registrant by the authorized persons
below.



|                          |  |                                                    
|------------------------- |  | ---------------------------------------------------
|WOODHEAD INDUSTRIES, INC.
|                          | 
|By:                       |  | /s/    ROBERT H. FISHER                            
|                          |  | Robert H. Fisher Vice President, Finance and C.F.O.



Date: December 15, 2004



Under the requirements of the Securities and Exchange Act of 1934, this report was signed by
the following persons on behalf of the Registrant and in the capacities and on the dates indicated:



|                                          |  |                                                                     |  |         
|----------------------------------------- |  | ------------------------------------------------------------------- |  | --------
|Signature                                 |  | Title                                                               |  | Date    
|                                          |  |                                                                    
|/S/    PHILIPPE
LEMAITREPhilippe
Lemaitre |  | Chairman, President and C.E.O. (Principal Executive
Officer)        |  | 12-15-04
|                                          |  |                                                                    
|/S/    ROBERT H.
FISHERRobert H.
Fisher   |  | Vice President, Finance and C.F.O. (Principal Financial
Officer)    |  | 12-15-04
|                                          |  |                                                                    
|/S/    JOSEPH P.
NOGALJoseph P.
Nogal     |  | Vice President, Treasurer/Controller (Principal
Accounting Officer) |  | 12-15-04
|                                          |  |                                                                    
|/S/    CHARLES W.
DENNYCharles W.
Denny   |  | Director                                                            |  | 12-15-04
|                                          |  |                                                                    
|/S/    WILLIAM K.
HALLWilliam K.
Hall     |  | Director                                                            |  | 12-15-04
|                                          |  |                                                                    
|/S/    THOMAS
MCKANEThomas
McKane         |  | Director                                                            |  | 12-15-04
|                                          |  |                                                                    
|/S/    EUGENE P.
NESBEDAEugene P.
Nesbeda |  | Director                                                            |  | 12-15-04
|                                          |  |                                                                    
|/S/    SARILEE K. NORTONSarilee K. Norton |  | Director                                                            |  | 12-15-04



50