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FORM 10-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


(Mark One)

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the fiscal year ended March 30, 2002 or

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

Commission File Number: 333-33085


ROLLER BEARING COMPANY OF AMERICA, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 13-3426227
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation)

60 ROUND HILL ROAD, FAIRFIELD, CT 06430
(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code: (203) 255-1511

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

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. /X/

As of August 9, 2002, there were 100 shares of the registrant's
Common Stock outstanding, all of which were held by Roller Bearing Holding
Company, Inc., a Delaware corporation. There is no public market for the
registrant's Common Stock.

Documents Incorporated by Reference: None



THIS ANNUAL REPORT OF ROLLER BEARING COMPANY OF AMERICA, INC. (THE
"COMPANY") ON FORM 10-K CONTAINS VARIOUS FORWARD-LOOKING STATEMENTS, AS
CONTEMPLATED BY THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING
TERMINOLOGY SUCH AS "MAY," "WILL," "SHOULD," "EXPECT," "INTEND," "ESTIMATE" OR
"CONTINUE" OR THE NEGATIVE THEREOF OR COMPARABLE TERMINOLOGY AND FORWARD-LOOKING
STATEMENTS MAY ADDRESS, AMONG OTHER THINGS, EXPECTED GROWTH, BUSINESS
STRATEGIES, FUTURE REVENUES, FUTURE SALES, FUTURE OPERATING PERFORMANCE, PLANS,
OBJECTIVES, GOALS AND STRATEGIES OF THE COMPANY. SUCH FORWARD-LOOKING STATEMENTS
ARE BASED UPON INFORMATION CURRENTLY AVAILABLE IN WHICH THE COMPANY'S MANAGEMENT
SHARES ITS KNOWLEDGE AND JUDGMENT ABOUT FACTORS THAT IT BELIEVES MAY MATERIALLY
AFFECT THE COMPANY'S PERFORMANCE. THE FORWARD-LOOKING STATEMENTS ARE MADE IN
GOOD FAITH BY THE COMPANY AND ARE BELIEVED BY THE COMPANY TO HAVE A REASONABLE
BASIS. HOWEVER, SUCH STATEMENTS ARE SPECULATIVE, SPEAK ONLY AS OF THE DATE MADE
AND ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES AND ASSUMPTIONS. SHOULD ONE OR
MORE OF THESE RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD UNDERLYING
ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE
ANTICIPATED, ESTIMATED OR EXPECTED. FACTORS THAT MIGHT CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE IN SUCH FORWARD-LOOKING STATEMENTS INCLUDE, BUT ARE
NOT LIMITED TO, THE EFFECT OF ECONOMIC AND MARKET CONDITIONS AND COMPETITION,
THE CYCLICAL NATURE OF THE COMPANY'S TARGET MARKETS, PARTICULARLY, THE AEROSPACE
INDUSTRY, THE COST OF RAW MATERIALS AND THE COMPANY'S ABILITY TO PASS COST
INCREASES TO ITS CUSTOMERS, THE ABILITY OF THE COMPANY TO EXPAND INTO NEW
MARKETS, THE ABILITY OF THE COMPANY TO INTEGRATE ACQUISITIONS, AND OTHER FACTORS
DISCUSSED IN "ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS", AS WELL AS OTHER FACTORS DISCUSSED FROM
TIME TO TIME IN THE REPORTS FILED BY THE COMPANY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

READERS ARE URGED TO REVIEW CAREFULLY AND CONSIDER DISCLOSURES MADE BY
THE COMPANY IN THIS AND OTHER REPORTS THAT DISCUSS FACTORS GERMANE TO THE
COMPANY'S BUSINESS.

PART I

ITEM 1. BUSINESS

OVERVIEW

The Company is an international manufacturer of highly engineered
precision roller, ball and plain bearings. Bearings, which are integral to the
manufacture and operation of most machines and mechanical systems, reduce wear
to moving parts, facilitate proper power transmission and reduce damage and
energy loss caused by friction. While the Company manufactures products in all
major bearing categories, the Company focuses primarily on highly technical or
regulated bearing products for niche markets. The Company targets the higher end
of the domestic bearing market where it believes its value added manufacturing
and engineering capabilities enable it to differentiate itself from its
competitors and to enhance profitability. The Company believes that it is the
leading supplier to many of its targeted markets and maintains secondary
positions in other product niches where it believes market share gains can be
achieved.

The Company conducts and operates its business through four divisions
and eight wholly owned subsidiaries: the RBC division; the Heim Bearings
("Heim") division; the Transport Dynamics Corporation ("TDC") division; the
Engineered Components Division ("ECD"); and RBC Nice Bearings, Inc. ("Nice");
RBC Linear Precision Products, Inc. ("LPP"); Bremen Bearings, Inc. ("Bremen");
Industrial Tectonics Bearings Corporation ("ITB"); Miller Bearing Company, Inc.
("Miller"), Tyson Bearing Company, Inc. ("Tyson"), RBC Schaublin S.A.
("Schaublin") and RBC Oklahoma, Inc. ("RBC Oklahoma"). The Company also produces
component parts for further manufacture at other RBC plants at its Engineered
Components Division ("ECD") and its RBC de Mexico subsidiary ("Mexico").

2


HISTORY AND RECENT DEVELOPMENTS

The Company was incorporated in Delaware in 1987. In July 1991, the
Company's Chairman, President and Chief Executive Officer,
Dr. Michael J. Hartnett, teamed up with affiliates of Aurora Capital Partners,
L.P. ("Aurora") to implement a plan to acquire a series of small to medium size
domestic companies in the roller and ball bearing industry. In March 1992, the
Company's capital stock was acquired for $52 million by RBC Acquisition Company
(which was incorporated in March 1992 as a Delaware corporation), which was
subsequently merged into the Company and the Company became a wholly-owned
subsidiary of Roller Bearing Holding Company, Inc. ("Holdings"). The Company has
acquired complementary bearing companies and integrated them effectively into
its existing operations. Following an acquisition, management typically
rationalizes operations, reduces overhead costs, develops additional
cross-selling opportunities and establishes new customer relationships.

From 1992 to 1999, the Company has acquired TDC, a manufacturer of
plain bearings, for $5.8 million; Heim, a leading producer of rod end and ball
bearings, for $6.8 million; LPP, a pioneer in grinding techniques for precision
ball bearing screws, for $5.5 million; Nice, the oldest active brand name in the
domestic bearing industry, for $7.5 million; and the assets of Bremen and
Miller, manufacturers of rollers and needle bearings, for approximately $5.3
million and $11.1 million, respectively. In fiscal 2000, the Company acquired
through its subsidiary, Tyson, assets used in the manufacturing of tapered
roller bearings, and through its subsidiary, Schaublin, assets used in the
manufacturing of collets and bearings, for $10.2 million and $8.3 million,
respectively. In fiscal 2002, the Company acquired through its subsidiary, RBC
Oklahoma, assets used in the manufacturing of tapered thrust bearing, universal
joints, synchronizing rings and GTRAG bearings, for $2.4 million.

The Company believes that there will continue to be consolidation
opportunities within the bearing industry. The Company is currently in
discussion with several companies that meet its strategic goals. Priority will
be given to acquiring bearing companies with sales of between $15 million and
$50 million. Additionally, the Company will seek smaller "fold-in" acquisitions,
businesses whose products can be manufactured at the Company's existing
facilities.

While the Company believes that it has greatly benefited from the
consolidation opportunities in the bearing industry and the acquisitions that
the Company has pursued, there can be no assurance that such opportunities will
continue to materialize or that the Company will be able to successfully
capitalize on any such opportunities in the future.

WHITNEY INVESTMENT

During fiscal 2001, Whitney Acquisition II, Corp. ("Whitney"), an
affiliate of the private equity firm Whitney & Co., purchased 23,682.65 shares
(the "Whitney Shares") of Holdings Class A Common Stock (as defined below) at a
price of $3,018.33 per share. The Whitney Shares were acquired from various
stockholders of Holdings, but none were purchased directly from Holdings. The
Whitney Shares represented, in the aggregate, 65.25% of the outstanding capital
stock of Holdings on a fully diluted basis on March 30, 2002. As discussed
below, Dr. Michael J. Hartnett, Chairman, President and Chief Executive Officer
of the Company, however, controls 51% of the voting interest of Holdings.

3


Whitney acquired the Whitney Shares pursuant to the following
agreements: (a) a Stock Purchase Agreement, dated November 20, 2000, by and
among Holdings, Whitney, Michael J. Hartnett and Hartnett Family Investments,
L.P., (b) a Stock Purchase Agreement, dated November 20, 2000 by and among
Whitney, Merban Equity, OCM Principal Opportunities Fund, L.P. and various of
their respective past or present affiliates, (c) a letter agreement, dated
December 18, 2000, by and between Whitney and Credit Suisse First Boston
Corporation, and (d) a Stock Purchase Agreement, dated January 5, 2001, by and
among Whitney and the stockholders of Holdings a party thereto. As an inducement
to Whitney to acquire the Whitney Shares, Holdings provided certain
representations, warranties and indemnities pursuant to the Stock Purchase
Agreement referenced in clause (a) above.

In connection with the acquisition of the Whitney Shares, the
Certificate of Incorporation of Holdings was amended to authorize the Series A
Preferred Stock and modify certain characteristics of the Class B Supervoting
Common Stock and Holdings, Dr. Hartnett, Hartnett Family Investments, L.P. and
Whitney entered into a Stockholders' Agreement concerning their ownership of
equity securities of Holdings and granting Whitney, Dr. Hartnett and Hartnett
Family Investments, L.P. certain rights, including granting Whitney the right to
appoint a member of the Board of Directors of Holdings and the Company.

The Company has entered into a Management Services Agreement with
Whitney, pursuant to which Whitney will provide RBCA with certain financial
consulting and management advisory services, in exchange for the payment of
certain management fees and the reimbursement of certain expenses.

During July 2002, Whitney purchased an aggregate of 230,000 shares
of Holdings Class B Exchangaeable Convertible Participating Prefered Stock
and Dr. Michael J. Hartnett, the Company's President, Chief Executive Officer
and Chairman of the Board, purchased 10,000 shares of such issue in exchange
for aggregate gross proceeds of approximately $24.0 million. Please see
"Certain Relationships and Related Transactions" below. The rights and
priviliges of the Class B Preferred Stock are described in note 14 to the
Company's financial statements. Following the closing of the sale, Holdings
utilized the proceeds of the sale and certain of the Company's cash on hand
to repurchase approximately $30.4 million in principal amount at maturity of
the Discount Debentures. This repurchase satisfied Holdings' obligation to
make a scheduled redemption payment relating to the Discount Debentures in
December 2002.

Dr. Hartnett currently owns approximately 0.004% (approximately 23.39%
on a fully diluted basis) of the outstanding capital stock of Holdings, and,
through the operation of provisions of Holdings' certificate of incorporation,
he has the power to control a majority of the voting rights of all capital stock
of Holdings. See "Item 12. Security Ownership of Certain Beneficial Owners and
Management".

NEW CREDIT FACILITY

On May 30, 2002 the Company and its domestic subsidiaries entered into
a $94 million senior secured credit facility, dated May 30, 2002, with General
Electric Capital Corporation as agent and lender, Congress Financial Corporation
(Western) as lender, GECC Capital Markets Group as lead arranger and other
lenders signatory thereto from time to time, consisting of a $40 million term
loan and a $54 million revolving credit facility. In connection with the new
credit facility the Company and its domestic subsidiaries granted liens and
mortgages on substantially all of their existing and after-acquired personal and
real property. In addition, the Company pledged all of its capital stock in its
domestic subsidiaries and a portion of its capital stock in its directly owned
foreign subsidiaries.

The proceeds of the term loan were used to pay off the Company's
senior credit facility, dated June 23, 1997, by and between the Company, Credit
Suisse First Boston, as administrative agent and the lenders thereto, to pay
fees and expenses with respect to the new credit facility and for other
corporate purposes. In addition, the Company has secured the letters of credit
issued in connection with its existing senior credit facility pursuant to its
new credit facility. The revolving credit facility is available for issuances of
letters of credit and for loans in connection with acquisitions, working capital
needs or other general corporate purposes.

RECAPITALIZATION

On June 23, 1997, pursuant to a Redemption and Warrant Purchase
Agreement (the "Recapitalization Agreement") dated May 20, 1997, Holdings
effected a recapitalization of its outstanding capital stock, including the
financing and other transactions consummated by Holdings, the Company and its
subsidiaries in connection therewith (the "Recapitalization"). In connection
with the Recapitalization, all of the outstanding preferred stock of Holdings
("Preferred Stock") was redeemed by Holdings and substantially all of the
outstanding common stock of Holdings ("Holdings Common Stock") and warrants to
purchase Holdings Common Stock ("Holdings Warrants") held by non-management
stockholders of Holdings were redeemed or purchased by Holdings, or certain
current stockholders or warrantholders of Holdings, including certain affiliates
of Credit Suisse First Boston ("CSFB") and one of the purchasers of the Discount
Debentures (as defined herein).

The Recapitalization was financed with the proceeds from the issuance
by the Company of $110 million of 9 5/8% Senior Subordinated Notes due 2007 (the
"Notes"), the incurrence by the Company of $16 million of term loans, the
issuance by Holdings of approximately $74.8 million in Senior Secured Discount
Debentures (the "Discount Debentures") and warrants (the "Discount Warrants") to
purchase 6,731 shares of Class A Common Stock, par value $.01 per share, of
Holdings ("Class A Common Stock") for an aggregate gross consideration of $40
million. The term loans were a part of the senior credit facilities of the
Company with a group of lenders, which was replaced by a new senior credit
facility on May 30, 2002 (as discussed below).

On January 22, 1998, the Company consummated an exchange of all of the
outstanding Notes for substantially identical Notes that were registered under
the Securities Act of 1933, as amended. Such exchange was undertaken pursuant to
obligations of the Company under the indenture governing the Notes (the
"Indenture") and certain other agreements entered into by the Company in
connection with the Recapitalization.

4


Additionally, in connection with the Recapitalization, (i) the Company
paid a dividend to Holdings in the amount of approximately $56.9 million (the
"Dividend") to finance the Recapitalization, (ii) Holdings used the proceeds of
the Dividend and the proceeds from the sale of the Discount Debentures and the
Discount Warrants, to redeem Holdings Common Stock and Preferred Stock and to
purchase Holdings Warrants for aggregate consideration of approximately $92.2
million, (iii) Holdings assigned its rights to purchase certain shares of
Holdings Common Stock and Holdings Warrants under the Recapitalization Agreement
to Dr. Michael J. Hartnett, certain affiliates of CSFB, OCM Principal
Opportunities Fund, L.P. (the "Oaktree Fund"), Kirk Morrison, The Sommers Family
Trust and Mitchell Quain, (iv) Holdings repurchased (the "Hartnett Repurchase")
1,250 Holdings Warrants from Dr. Hartnett for an amount per share of Holdings
Common Stock underlying such Holdings Warrants equal to $514 less the
approximately $77 exercise price of such warrants (an aggregate of approximately
$550,000), (v) Holdings issued warrants exercisable for 1,250 shares of Class B
Supervoting Common Stock, par value $.01 per share, of Holdings ("Class B Common
Stock") at an exercise price of $514 per share to Dr. Hartnett, (vi) Holdings
loaned $500,000 to Dr. Hartnett (the "Hartnett Loan") to finance a portion of
his purchase of Holdings Common Stock and Holdings Warrants referred to in
clause (iii) above, (vii) Holdings paid to Dr. Hartnett a fee of $1 million (the
"Hartnett Fee"), (viii) Holdings converted all of Dr. Hartnett's shares of
Holdings Common Stock into shares of Class B Common Stock, and amended all
Holdings Warrants held by Dr. Hartnett to provide that they be exercisable for
shares of Class B Common Stock, (ix) the Company repaid outstanding indebtedness
of approximately $52.1 million on its then existing revolving credit facility
and its then existing term loan both with Heller Financial, Inc., ("Heller") and
(x) the Company and Holdings paid certain other fees and expenses, in the
approximate aggregate amount of $10.4 million, payable in connection with the
foregoing.

As discussed herein, the Company incurred indebtedness in connection
with the Recapitalization and is leveraged. The degree to which the Company is
leveraged could have important consequences for the Company, including but not
limited to, (i) impairing the ability of the Company to obtain additional
financing for working capital, capital expenditures, acquisitions, debt service
requirements or other purposes, (ii) impacting the portion of cash flow from
operations available for general corporate needs (the "obligations"), (iii)
impacting the Company's ability to compete against its less leveraged
competitors and (iv) increasing the Company's vulnerability in the event of a
downturn in any industry to which the Company markets its products or a downturn
in the economy in general. Although the Company believes it will be able to pay
its obligations as they come due, there can be no assurance that it will
generate earnings in any future period sufficient to cover its fixed charges.

TYSON ACQUISITION

On June 11, 1999, Tyson, a wholly-owned subsidiary of the Company,
completed the acquisition of certain assets of SKF USA, Inc.'s taper roller
bearing operations whose principal operations are located in Glasgow, Kentucky.
The aggregate purchase price for the acquisition, which was effective as of
April 1, 1999, was $10.2 million plus the assumption of certain liabilities. The
acquisition was accounted for under the purchase method of accounting. The
purchase price was allocated to the fair value of the net assets of the
business.

5


SCHAUBLIN ACQUISITION

Effective October 1, 1999, Schaublin Holding SA ("Schaublin"), a
wholly owned subsidiary of the Company, completed an asset and stock purchase of
Schaublin SA, a manufacturer of collets and bearings whose principal operations
are located in Delemont, Switzerland. The acquisition was accounted for under
the purchase method of accounting. The aggregate purchase price for the
acquisition was 14.0 million Swiss Francs, or approximately $8.8 million. In
fiscal 2001, an adjustment to the purchase price of Schaublin was made for
$520,000, which resulted from a revaluation of the net working capital purchased
from the former owners, and a corresponding reduction in the loan payable to the
sellers. The purchase price was allocated to the fair value of the net assets of
the business.

RBC OKLAHOMA ACQUISITION

In a transaction effective as of August 20, 2001, the Company, through
its wholly owned subsidiary, RBC Oklahoma, Inc. ("RBC Oklahoma"), purchased
certain assets used in the design, development, manufacture, assembly and sale
of tapered thrust bearings, universal joints, synchronizing rings and GTRAG
bearings, previously owned by Driveline Technologies, Inc., from Prime Financial
Corporation and Congress Financial Corporation (Southwest), for an aggregate
purchase price of $2.4 million.

PART I

GENERAL

The Company targets the higher end of the domestic bearing market
because it believes the Company's value added manufacturing and engineering
capabilities enable it to differentiate itself from its competitors and this
sector is more profitable than other sectors in the bearings market. The Company
believes that it is the leading supplier to many of its targeted markets and
maintains secondary positions in other product markets where it believes market
share gains can be achieved. In fiscal 2002 (which commenced on April 1, 2001
and ended on March 30, 2002), the Company had sales to more than 3,000 customers
with no single customer amounting to more than 6% of net sales. The Company
believes its rapid turnaround on orders, custom designed engineering and strict
adherence to quality and reliability provide it with significant competitive
advantages.

6


The Company sells primarily to domestic Original Equipment
Manufacturers ("OEMs") and distributors in three markets: industrial, aerospace
and government. Many of the Company's product offerings are in markets (market
sizes between $30 million and $150 million) which require high service levels,
extensive technical engineering support, short lead times and small production
runs. In an effort to generate more stable revenues, the Company has increased
sales to the replacement market. Management estimates that currently over 60% of
the Company's products are sold directly or indirectly for use in the
replacement market.

Although the Company operates as one manufacturing and operational
segment, it sells products to various customer markets. During fiscal year 2000,
the Company acquired Schaublin S.A. located in Delemont, Switzerland, and the
Company's aggregate foreign sales in fiscal 2002 were $29.1 million or 17% of
the Company's total sales.

Approximately 65% of the Company's fiscal 2002 net sales were to the
industrial market. The Company believes opportunities exist to increase sales in
this market as a result of (i) increasing demand for industrial machinery in
both the domestic and international markets, which is expected to expand
existing OEM selling opportunities, (ii) growth in aftermarket demand as the
installed base continues to expand and (iii) the increased emphasis being placed
on maintenance and repair of capital goods given the increasing cost of such
items.

Approximately 35% of the Company's fiscal 2002 net sales were to the
aerospace market for applications in commercial and military aviation. The
Company provides bearings for virtually every model of commercial aircraft in
production, as well as many military applications, and its customers include all
major aerospace manufacturers.

Approximately 10% of the Company's fiscal 2002 aerospace net sales
were to the U.S. government. The Company expects sales to this market to remain
stable in the foreseeable future due to (i) increased emphasis on repair and
maintenance of existing military platforms, (ii) sole source supplier
relationships and replacement part sales for existing programs and (iii) long
product lives of existing programs, which should ensure steady sales relating to
such programs for several years.

BUSINESS STRATEGY

The Company has developed a business strategy that focuses on
maintaining profitability while growing, both internally and through
acquisitions.

Management believes that the Company's business strategy makes it well
positioned to achieve continued growth and market share gains through (i)
increasing sales to the aftermarket, (ii) continuing its focus on high margin
niche markets where the Company believes it has a sustainable competitive
advantage, (iii) penetrating new markets with innovative products, (iv)
expanding international OEM and distributor sales and (v) acquiring other
manufacturers which have complementary products, similar distribution channels
or provide significant potential for margin enhancement.

COMPETITIVE STRENGTHS

The Company believes that it has significant competitive strengths,
including a strong management team with extensive managerial experience in the
bearing industry, excellent design and manufacturing capabilities, long-term
customer relationships, a focus on high-end niches of the bearing market,
proprietary manufacturing processes, low cost operations and the Company's
commitment to service.

7


BEARING INDUSTRY

Bearings are integral to the manufacture and operation of machines and
mechanical systems. Bearings serve to reduce the wear to moving parts, ensure
proper power transmission and reduce damage and energy loss caused by friction.
Demand for bearings generally follows the market for products in which bearings
are incorporated and the general economy as a whole. Purchasers of bearings
include (i) automotive manufacturers, (ii) industrial equipment and machinery
manufacturers, (iii) producers of commercial and military aerospace equipment,
(iv) agricultural machinery manufacturers and (v) construction and specialized
equipment manufacturers. The Company estimates that approximately one-third of
all bearings manufactured are for use in the automobile industry, a market in
which the Company has recently begun to participate in strategic areas.

The domestic bearing market is comprised of three primary product
categories: ball bearings, roller bearings and plain bearings. Ball bearings are
used for high-speed applications; roller bearings for lower speed, heavily
loaded applications and plain bearings for sliding action and misalignment
applications.

The domestic market for standard bearings is dominated by three major
international competitors: The Timken Company ("Timken"), Torrington Company
("Torrington") and SKF USA, Inc. ("SKF"). The balance of the domestic market,
consisting primarily of specialty and custom engineered bearings, is more
fragmented. Due to the shorter production runs and significant post-sale
technical support associated with these products, the Company believes they are
not the primary focus of the larger bearing manufacturers. A group of smaller
companies (including the Company) frequently establish leading positions, in
market share and reputation, in certain of these niche product lines.
Furthermore, competition in these niche markets is based on lead times and
reliability of product and service, and these markets are generally not as price
sensitive as the markets for standard bearings.

CUSTOMERS AND MARKETS

The Company supplies bearings to OEMs and distributors in the
industrial, aerospace and government markets. The industrial OEM market
continues to be the largest market for the Company, accounting for 49% of the
Company's fiscal 2002 net sales. While the Company's sales in its target markets
have historically been concentrated on OEMs, the Company has recently shifted
its focus in the aerospace and industrial markets towards replacement part
sales. The Company believes this generates more stable revenues. The Company's
top ten customers were responsible for generating 41% of the Company's fiscal
2002 net sales and no single customer was responsible for generating more than
6% of fiscal 2002 net sales. Four of the Company's top ten customers are
distributors and the remaining six are OEMs.

The Company does not believe that it is dependent upon a single
customer or a few customers. However, the loss of the Company's major customers
or a substantial decrease in such customers' purchases from the Company could
have a material adverse effect on the financial condition and results of
operations of the Company.

The aerospace, heavy equipment and other industries to which the
Company sells its products are, to varying degrees, cyclical and have
experienced periodic downturns, which have often had a negative effect on demand
for the Company's products. Although the Company believes that by concentrating
on products with a strong aftermarket demand it has reduced its exposure to such
business downturns, any future material weakness in demand in any of these
industries could have a material adverse effect on the financial condition and
results of operations of the Company.

8


INDUSTRIAL

Industrial bearings are used in a wide range of industries such as
heavy equipment, machine tools, agricultural equipment, pumps and packaging.
Nearly all mechanical devices and machinery require bearings to relieve friction
where one part moves relative to another. The Company's products target existing
market applications in which the Company's engineering and manufacturing
capabilities provide it with a competitive advantage in the marketplace.

The Company manufactures a wide range of roller, ball and plain
bearings for industrial uses by customers including Caterpillar, John Deere,
Parker Hannifin, Motion Industries, Applied Industrial Technologies, and Kaman.
See "Products." Sales to the industrial market accounted for 65% of the
Company's fiscal 2002 net sales. Approximately 75% of such sales were to OEMs
while 25% were to distributors. Within the industrial market, the Company sells
to the construction and mining equipment, material handling, machine tools,
semiconductor manufacturing equipment and energy and natural resources markets.
The Company believes that the diversification of its sales among the various
markets of the industrial bearings market reduces its exposure to downturns in
any individual market.

AEROSPACE

Bearings are used in numerous applications within airplanes,
helicopters and aircraft engines. The aerospace market utilizes spherical plain
bearings, rod ends, journal bearings and thin section ball bearings. Bearings
are regularly replaced on aircraft in conjunction with routine maintenance
procedures and include such items as high precision ball and roller bearings and
metal-to-metal and self-lubricating plain bearings. Commercial aerospace
customers generally require precision products, often of special materials, made
to unique designs and specifications.

The Company's penetration of the commercial aerospace market expanded
through the acquisitions of TDC and Heim. Sales to the aerospace market
accounted for 35% of the Company's fiscal 2002 net sales. Of this total, 48%
reflected sales to OEMs, 24% were to distributors and the balance of 28% to the
U.S. Government. Management estimates that over 75% of commercial aerospace net
sales are actually used as replacement parts since a portion of OEM sales also
are ultimately intended for replacement market use. The Company supplies
bearings for commercial aircraft, commercial aircraft engines and private
aircraft manufacturers, as well as to various military contractors for
airplanes, helicopters and missile systems.

Essential to servicing the aerospace market is the ability to obtain
product approvals. The Company has in excess of 20,000 product approvals, which
enable it to provide products used in virtually all domestic aircraft platforms
presently in production or operation. Product approvals are typically issued by
the Federal Aviation Administration ("FAA") designated OEMs who are Production
Approval Holders ("PAHs") of FAA approved aircraft. These PAHs provide quality
control oversight and generally limit the number of suppliers directly servicing
the commercial aerospace aftermarket. Recent regulatory changes enacted by the
FAA provide for an independent process (the Parts Manufacturer Approval ("PMA")
process), which enables suppliers who currently sell their products to the PAH,
to sell products to the aftermarket. PMAs are obtained through the process
described in Title 14, FAR Part 21. The Company has submitted over 6,100 PMA
applications and has received over 1,800 approvals to date. There is no
assurance that the Company will receive approvals on all or any of its
submissions. To the extent that such approvals do not materialize, the Company's
ability to service the aerospace market could be adversely affected.

9


GOVERNMENT

The Company manufactures high precision ball and roller bearings,
commercial ball bearings and metal-to-metal and self-lubricating plain bearings
for all branches of the United States military, and certain foreign military
forces. In addition to products that meet military specifications, these
customers often require precision products made of specialized materials to
custom designs and specifications. The Company manufactures an extensive line of
standard products that conform to many domestic military application
requirements, as well as customized products designed for unique applications.
Product approval for use on military equipment is often a lengthy process
ranging from six months to three years, and represents a significant barrier to
new entrants.

Government sales are included in aerospace sales described above and
accounted for approximately 10% of the Company's fiscal 2002 net sales,
consisting primarily of replacement bearings on programs for which the Company
is the sole source supplier. Despite cutbacks in the overall defense budget
during the 1990s, appropriations for maintenance and repairs for product
platforms serviced by the Company have remained stable. Military programs for
which the Company supplies component products include airplanes, helicopters,
turbine engines and armored vehicles.

While a significant portion of the Company's sales are directly or
indirectly to the U.S. government, related military or other government
projects, no significant portion of such sales are subject to renegotiation of
profits or termination of contracts at the election of the government. However,
compliance with various government regulations may be required. Violations of
such regulations could result in termination of the Company's contracts, which
may have material adverse effects on the Company's operations. In addition, the
consolidation and combination of defense manufacturers may eliminate customers
from the industry and/or put downward pricing pressures on sales of component
parts sold by the Company. Such factors could result in a material adverse
effect on the Company.

PRODUCTS

The Company's products and services include six broad categories:
plain bearings, roller bearings, ball bearings, linear precision products,
machine tool collets and refurbishment, each of which includes both standard and
highly specialized and customized products. Within the five major categories
that encompass the Company's product offerings, its major bearing products
include heavy duty needle roller bearings, cam follower bearings,
metal-to-metal, ball bearing and self-lubricating rod ends and spherical
bearings, high precision ball and roller bearings, precision ball screws and
semi-precision unground ball bearings. Bearings are employed to fulfill several
functions including reduction of friction, transfer of motion and carriage of
loads.

PLAIN BEARINGS

Plain bearings accounted for 33% of the Company's fiscal 2002 net
sales. In general, plain bearings are produced with either self-lubricating or
metal-to-metal designs and consist of several sub-classes, including rod end
bearings, spherical plain bearings and journal bearings. Unlike ball bearings,
which are used in high-speed rotational applications, plain bearings are
primarily used to rectify inevitable misalignments in various mechanical
components. Such misalignments are either due to machining inaccuracies or
result when components change position relative to each other. Spherical plain
bearings are designed for heavy equipment applications. Spherical plain bearings
and rod end bearings are used in the aerospace market in the same applications
as airframe control ball bearings. Heim and TDC produce Teflon(R) fabric lined
sleeves for the aerospace market.

10


ROLLER BEARINGS

Roller bearings are anti-friction bearings that use rollers instead of
balls. The Company manufactures four basic types of roller bearings: heavy duty
needle roller bearings with inner rings, tapered roller bearings, track rollers
and aircraft roller bearings. The sale of roller bearings accounted for 42% of
the Company's fiscal 2002 net sales. Track rollers have widespread use in heavy
industrial machinery applications. The Company is a leading producer of roller
bearings for use in helicopters. The Company produces medium sized tapered
roller bearings used primarily in heavy truck axle applications. A significant
portion of the sales of this product are to the aftermarket. The Company offers
several needle roller bearing designs produced at the Bremen and Miller
facilities. Needle bearings are used in various industrial applications and in
certain U.S. military aircraft platform bearing applications that require high
load carrying capability in a confined space. The product is also used as a
shaft for another type of bearing or to support rotating components in
mechanical or electromechanical devices. The Company produces this product in
bearing quality steel but also has the capability to produce this product from
various grades of low carbon, stainless or tool steel.

BALL BEARINGS

The Company manufactures four basic types of ball bearings: high
precision aerospace, airframe control, thin section and commercial ball
bearings. Ball bearings accounted for 19% of the Company's fiscal 2002 net
sales. High precision aerospace bearings are primarily sold to customers in
government or the defense industry that require more technically sophisticated
bearing products providing higher degrees of fault tolerance given the
criticality of the applications in which they are used. Airframe control ball
bearings are precision ball bearings that are plated to resist corrosion and are
qualified under a military specification. Thin section ball bearings are
specialized bearings that use extremely thin cross sections and give specialized
machinery manufacturers many advantages. The Company is also involved in two
niche markets: unground ball bearings and specialty inch and metric ball
bearings.

LINEAR PRECISION PRODUCTS

LPP produces precision ground ball bearing screws that offer
repeatable positioning accuracy in machine tools, transfer lines, robotic
handling and semiconductor equipment. Linear precision products accounted for
approximately 1% of the Company's fiscal 2002 net sales. LPP's products are
primarily used in the machine tool industry where the Company believes
significant opportunities to cross-sell the Company's other products, such as
collets, exist. LPP supplies products to new, replacement and repair markets.

LPP has upgraded its precision ball screw repair facility to allow it
to focus on this growing market. Management estimates this to be a $60 million
market that has been fragmented in the past among many small companies. The
Company believes that LPP, as an OEM manufacturer of precision ball screws, it
is well positioned to service this industry. As this is a service-oriented
business, the opportunity exists for higher margins. The Company does not
currently expect this program to have a material impact upon its results of
operations or liquidity for at least the next three to five years.

MACHINE TOOL COLLETS

Schaublin produces precision machine tool collets that provide
effective part holding and accurate part location during machining operations.
The machine tool collets accounted for approximately 5% of the Company's fiscal
2002 net sales. The Company believes that significant opportunities to expand
sales of this product outside of Europe exist.

11


ISO CERTIFICATION

The Company is in the process of achieving ISO Certification
throughout its locations and has currently attained the following approvals:

RBC division ISO 9001
TDC division ISO 9002 and AS 9100
Heim division ISO 9002 and AS 9000
Bremen subsidiary ISO 9002 and QS 9000
Miller subsidiary ISO 9002 and QS 9000
Tyson subsidiary ISO 9001
Schaublin subsidiary ISO 9001

MANUFACTURING AND OPERATIONS

Using its operating strategy, the Company endeavors to design its
manufacturing process so that machine and labor utilization are optimized and
total costs are reduced. Cost savings are generated through management of
monthly product line profit and loss. On a monthly basis, gross margins of every
product line within each product group are reviewed. The Company monitors the
progress of its efficiency efforts on an ongoing basis and reacts quickly to
resolve problems or capitalize on unanticipated opportunities.

Custom products are sold at a premium based on factors such as lot
size and availability. Management believes it has a thorough understanding of
the products and customers in the markets it serves, allowing the Company to
utilize aggressive and competitive pricing practices.

CAPACITY

The Company's plants currently run on a single shift and light second
and third shifts at selected locations to meet the demands of its customers.
Management believes that current capacity levels, with annual capital
expenditures equal to approximately 4% of sales in turning and grinding
equipment in the future, will permit the Company to effectively meet demand
levels through at least 2003. Management also believes that as it continues to
invest in bearing professionals, the ability to increase capacity and move to
full second shifts, if required, could be accomplished without compromising
product quality or involving significant additional capital expenditures.

INVENTORY MANAGEMENT

The Company's increasing emphasis on the distributor/aftermarket
sector has required it to maintain greater inventories of a broader range of
products than the OEM market historically demanded. As a result, the Company has
implemented an inventory management program designed to balance customer
delivery requirements with economically optimal inventory levels. In this
program, each product is categorized based on characteristics including order
frequency, number of customers and sales volume. Using this classification
system, management's primary goal is to maintain a sufficient supply of standard
items while minimizing warehousing costs. In addition, production cost savings
are achieved by optimizing plant scheduling around inventory levels and customer
delivery requirements. This leads to more efficient utilization of manufacturing
facilities and minimized plant production changes while maintaining sufficient
inventories to service customer needs.

12


INTEGRATION OF ACQUISITIONS

The Company has demonstrated an ability to institute programs that
improve the performance of acquired companies. The process involves applying the
Company's operating strategy, rationalizing the product offerings and
appropriately capitalizing the acquisition.

MARKETING

The Company's marketing strategy is aimed at increasing sales within
its three primary market sectors and targeting specific profitable niche
products. To affect this strategy, the Company seeks to expand into geographic
areas not previously served by it and continues to capitalize on new markets and
industries for existing and new products. The Company employs a technically
proficient sales force and also utilizes marketing managers, product managers,
customer service representatives and product application engineers in its
selling efforts.

Despite the difficulties inherent in the development of a quality,
technically astute, sales force in the bearing industry, the Company has been
able to accelerate the growth of its sales force through the hiring of sales
personnel with prior bearing industry experience, complemented by an in-house
training program, implemented in 1995, which has graduated 22 professionals. The
Company will continue to hire and develop expert sales professionals and
strategically locate them to implement its expansion strategy. Today, the
Company employs strategically located sales professionals in North America,
Europe and Latin America in its sales and marketing effort.

The Company has placed an emphasis on increasing sales to distributors
serving the spare parts aftermarket in the Company's key industry markets. Sales
to this market tend to be less cyclical as they arise out of end users' needs
for replacement bearings on existing equipment. See "Customers and Markets."
Management estimates that sales to the replacement market exceeded 60% of the
Company's fiscal 2002 sales. Management intends to continue to focus on building
distributor sales volume.

With regard to its OEM customers, the Company has and continues to
focus on establishing and maintaining relationships with OEMs that produce
products with strong aftermarket demand characteristics for the Company's
products. The Company's OEM relationships also provide it with extensive
cross-selling opportunities, as many OEM products utilize several types of
bearings manufactured by the Company.

COMPETITION

Competition in the bearing industry is based on a number of factors,
including price, product line offering, technical service and timeliness of
supply. The Company believes that it is well positioned to compete with regard
to each of these factors in each of the markets in which it operates.

For large run bearing products, price is a very important factor.
Larger manufacturers generally are relative low cost producers in the more
standard bearing product lines and are thus able to attain extensive market
shares. However, with niche product lines, when the production runs are smaller,
larger manufacturers are often unable to achieve the economies of scale needed
to maintain their low-cost producer status. As a result, while the Company
competes with the larger bearing manufacturers in some of the more standard
bearing product markets, its primary competition includes smaller niche
companies such as Kaydon Corporation, New Hampshire Ball Bearings and McGill
Manufacturing Company, Inc a Division of Emerson Power Transmission. Competitors
to the Company's ballscrew product line are 20th Century and Thompson
Industries.

13


Bearings manufacturers operating in the more specialized market
compete by maintaining a broad product line and adequate inventories to service
the aftermarket. This enables such manufacturers to exploit the trend of OEMs
towards sourcing a broader range of products from a small number of suppliers.
Additionally, in certain industries and groups, purchasers require product
approval on an industry or company specific level for their component parts.

Other factors in the more specialized bearing market include strong
distribution channels, quality product, strong technical product service,
customer support and long-term customer relationships.

While the Company believes that it has significant strengths over
several of its competitors, many of its competitors are more diversified than
the Company, have greater resources than the Company and possess greater market
share in certain markets of the bearing industry. In addition, the Company
relies on certain of its competitors for its own raw materials and in certain
circumstances, produces products for and sells products to its competitors for
resale under such competitors' names. See "Suppliers and Raw Materials."

BACKLOG

As of March 30, 2002, the Company had a backlog of $82.0 million as
compared to a backlog of $78.7 million as of March 31, 2001. The Company
continues to maintain a strong backlog of orders. The Company sells many of its
products pursuant to contractual agreements, single source relationships or
long-term purchase orders, each of which may permit early termination by the
customer. However, due to the nature of many of the products supplied by the
Company and the lack of availability of alternative suppliers to meet the
demands of such customers' orders in a timely manner, the Company believes that
it is not practical or prudent for most customers, including many of the
Company's largest customers, to shift their bearing business to other suppliers.

EMPLOYEES

The Company had approximately 1,415 employees at March 30, 2002.

Currently, collective bargaining agreements with the United Auto
Workers (UAW) cover substantially all of the hourly employees at the Company's
West Trenton, New Jersey, Fairfield, Connecticut, and Bremen, Indiana plants,
and collective bargaining agreements with the United Steelworkers (USWA) covers
substantially all the hourly employees at the Company's Kulpsville, Pennsylvania
and Glasgow, Kentucky plants. A collective bargaining agreement with the
Association of Swiss Engineering Employers (ASM) covers substantially all of the
hourly employees at the Company's Delemont, Switzerland plant. The West Trenton
agreement expires on June 30, 2004; the Fairfield agreement expires on January
31, 2005; the Bremen agreement expires on [June 30, 2002]; the Kulpsville
agreement expires on October 25, 2002; the Glasgow agreement expires on March
25, 2005; and the Delemont agreement expires on June 30, 2003. All other hourly
employees are non-unionized.

The Company considers its relations with its employees to be
satisfactory and has not experienced a significant work stoppage in over
fourteen years. However, there can be no assurance that additional employees who
are not represented by unions will not elect to be so represented in the future
or that any of the collective bargaining agreements will be renewed when they
expire or that the Company will not experience strikes, work stoppages or other
situations.

In addition, the Company's business is managed by a small number of
key executive officers. Accordingly, the loss of services of certain of these
executives, including Dr. Hartnett, could have a material adverse impact on the
financial condition and results of operations of the Company. There can be no
assurance that the services of such personnel will continue to be available.

14


SUPPLIERS AND RAW MATERIALS

The Company obtains raw materials, component parts and supplies from a
variety of sources and generally from more than one supplier. The Company's
principal raw material is steel. The Company's suppliers and sources of raw
materials are based in the United States. The Company believes that its sources
are adequate for its needs in the foreseeable future, that there exist
alternative suppliers for its raw materials and that in most cases readily
available alternative materials can be used for most of its raw materials. The
Company does not believe that the loss of any one supplier would have a material
adverse effect on the financial condition or results of operations of the
Company.

Notwithstanding the foregoing, the Company relies on certain of its
competitors for its own raw materials. There is no assurance that such
competitors will continue to supply raw materials to the Company in the future.

INTELLECTUAL PROPERTY

The Company's policy is to file patent applications to protect its
technology, inventions and improvements that are important to the development of
its business, and to seek trademark protection with respect to its product
titles that have achieved brand name recognition. The Company also relies upon
trade secrets, know-how and continuing technological innovation to develop and
maintain its competitive position. The Company and its subsidiaries hold
approximately 116 United States and 49 foreign patents (including those covering
the RBC Roller(TM) cam follower and Quadlube(TM) spherical plain bearing) and
has additional United States patent applications pending. The Company and its
subsidiaries also has approximately 72 United States and 117 foreign registered
trademarks and 6 United States copyrights. There can be no assurance that such
rights will not be infringed upon, that additional patents will be issued as a
result of the Company's applications and that the Company's trade secrets will
not otherwise become known to or independently developed by competitors. The
Company believes that it would have adequate remedies for any such infringement
or use or that claims allowed under such patents or any existing patents will
not be challenged or invalidated or would be of adequate scope to protect the
Company's technology. The Company does not believe that any individual item of
intellectual property is material to its business.

ENVIRONMENTAL COMPLIANCE

The Company is subject to various federal, state and local
environmental laws, ordinances and regulations, including those governing
discharges of pollutants into the air and water, the storage, handling and
disposal of solid wastes, hazardous wastes and hazardous substances and the
health and safety of employees ("Environmental Laws"). Agencies responsible for
enforcing Environmental Laws have authority to impose significant civil or
criminal penalties for non-compliance. The Company believes it is currently in
material compliance with all applicable requirements of Environmental Laws, but
there can be no assurance that some future non-compliance will not result in the
imposition of significant liabilities.

The Company also may be liable under Environmental Laws, including the
Comprehensive Environmental Response, Compensation, and Liability Act
("CERCLA"), state analogs to CERCLA and certain state property transfer laws,
for the costs of investigation and remediation of contamination at facilities
currently or formerly owned or operated by the Company, or at other facilities
at which the Company has disposed of hazardous substances. In connection with
such contamination, the Company may also be liable for natural resource damages,
government penalties and claims by third parties for personal injury and
property damage.

15


State agencies are currently overseeing investigation, remediation
and/or monitoring activities at the Company's facilities in Fairfield,
Connecticut, West Trenton, New Jersey, Santa Ana, California and Hartsville,
South Carolina. The local regulatory agency recently issued a determination that
no further action is required with respect to groundwater at the Rancho
Dominguez, California facility. The prior property owners have conducted limited
remediation at the Company's Kulpsville, Pennsylvania and Bremen, Indiana
facilities.

The former owners of the above facilities agreed to indemnify the
Company for liabilities arising from environmental conditions that existed prior
to the date of purchase of such facilities by the Company. Such indemnifications
have covered most of the costs of ongoing activities to date, although the
Company has relinquished the indemnity for the Fairfield, Connecticut facility.
Moreover, there can be no assurance that the indemnities relating to the other
facilities, all of which contain negotiated dollar limits, will be adequate to
resolve any remaining cleanup liabilities or that the indemnifying parties will
perform or continue to perform their indemnification obligations.

At the Company's two facilities located in California and its facility
in New Jersey, the previous owners of the assets purchased by the Company
indemnified the Company for liabilities arising from environmental conditions
that existed prior to the date of the Company's purchase of such assets, subject
to certain thresholds, limitations and caps. Such owners have undertaken or are
undertaking cleanup in fulfillment of those indemnification obligations. With
respect to the Rancho Dominguez, California facility, the acquisition agreement
provides that the previous facility owner is responsible for all further costs
to cleanup conditions existing at the time of the transfer of the facility, up
to a maximum of the full purchase price. Although some residual contamination
remained in groundwater, the local environmental regulatory agency issued a
determination in December 2001 that no further remedial action is required at
this facility. To the Company's knowledge, any further cleanup costs, if any,
are not expected to approach the indemnification cap limit.

Cleanup has been completed at the Company's Santa Ana, California
facility, although groundwater monitoring continues as required by the regional
regulatory authority. Currently, the previous owner is working with this
regulatory authority to obtain final approval and closure of the now-concluded
cleanup activities at this facility. The Company did not contribute toward the
costs of cleanup and has not contributed toward the ongoing monitoring costs. To
the Company's knowledge, cleanup and monitoring costs have not approached the
$4.5 million limit on the previous owner's liability under the acquisition
agreement for this facility.

At the West Trenton, New Jersey facility, the previous facility owner
has been investigating and remediating the land where the facility is located
since the mid-1980s. The previous owner both indemnified the Company with
respect to its cleanup obligations and is performing the cleanup pursuant to a
consent order with the New Jersey Department of Environmental Protection. The
Company has not contributed to the costs of remediation at this facility and
does not expect to do so with respect to conditions existing at the time the
Company acquired the facility.

16


Each of the Company's Bremen, Indiana facilities formerly had on-site
lagoons used for settling process wastewater. In each case, the former owner of
the facility discontinued use of the lagoon and removed residual sludge for
disposal off-site years before RBC began operations at the facility. With regard
to the former SKF facility located at 1342 West Plymouth Street in Bremen, some
material from the lagoon was disposed of on-site. Testing of this material
revealed that it was not hazardous under the United States Environmental
Protection Agency's EP toxicity protocol and some of this material remains
on-site. Sampling conducted prior to the Company's acquisition of the business
at the site revealed the presence of certain contaminants in soil in another
area of the property. The former owner of this facility has indemnified RBC for
pre-existing environmental liabilities at this site. At the former Miller
Bearings facility located at 225 Industrial Boulevard in Bremen, the former
owner removed residual sludge for off-site disposal, and a Phase II
environmental sampling investigation at this facility did not reveal the
existence of regulated substances in excess of applicable regulatory standards.
The former owner of this facility has indemnified RBC for pre-existing
environmental liabilities at this site. Neither of the Bremen facilities has
been the subject of any regulatory interest in connection with the cleanup of
the former lagoons. Although there can be no assurance, the Company does not
expect to incur material costs with respect to these former lagoons.

At the Company's Kulpsville, Pennsylvania facility, the Company is
operating an oil water separator installed by a previous owner to remove
petroleum from groundwater impacted by releases from an underground storage tank
that was removed from the site by the previous owner in the early 1990's.
Operation and maintenance costs for this system to date have been minimal. The
Company has paid for such costs and has been reimbursed by the prior owner. If
the state regulatory agency were to require additional cleanup activities in the
future with respect to that area, the Company believes that the cost of that
cleanup would be covered by an indemnity from the prior owner. There can be no
assurance that the cost of such a cleanup, if required, would not exceed the
limits of the prior owner's indemnification obligations to the Company or that
the prior owner would honor its indemnity obligations.

The Company is monitoring groundwater contamination at its Hartsville,
South Carolina facility pursuant to a groundwater assessment plan approved by
the state in February 2002. This contamination appears to have resulted from an
underground storage tank removed from the site prior to the Company's
acquisition of the facility. In addition, in the early 1990's, the Company
submitted to the state environmental regulatory agency a closure plan for a
former wastewater lagoon at the facility. To date, the state agency has not
required that the Company take any action with respect to the lagoon. If the
agency were to require cleanup activities in the future regarding either the
former lagoon or the former tank, the Company believes that the cost of such
cleanups would be covered by an indemnity from the prior owner of the facility.
There can be no assurance that the cost of such a cleanup, if required, would
not exceed the limits of the prior owner's indemnification obligations to the
Company or that the prior owner would honor its indemnity obligations.

Certain types of property transactions in Connecticut and New Jersey
may trigger investigation and cleanup obligations under the Connecticut Transfer
Act (the "CTA") or the New Jersey Industrial Site Recovery Act (the "ISRA"),
respectively. In connection with the purchase of its Fairfield, Connecticut
facility in 1996, the company was required by the CTA to submit an investigation
and remediation plan for known environmental contamination at that facility.
Although this known contamination had been the result of operations conducted by
the facility's prior owner, the Company agreed to assume responsibility for
completing cleanup efforts previously initiated by that owner. In 1996, the
Company submitted and obtained regulatory approval for its investigation and
remediation plan as required by the CTA. The results of this investigation
revealed the continued presence of certain low level soil and groundwater
contamination, the remediation of which had been commenced by the previous owner
of the facility. In March 1998, the Company submitted these findings to
Connecticut Department of Environmental Protection ("CTDEP"). In April 1999,
CTDEP responded to this submission and requested that the Company develop a
workplan for additional investigation, analysis and possible remediation to
address the isolated, low level residual contamination at this facility. Since
then, the Company has been working with CTDEP in an effort to develop data
showing that no further remedial action is necessary. The Company submitted data
to CTDEP

17


in November and December 2001 intended to show that contamination has not
migrated off the property. CTDEP has requested additional information, which the
Company is in the process of developing. While the Company believes that its
total investigation and cleanup costs will not exceed $200,000, Connecticut
regulators may require additional cleanup or monitoring of the residual
contamination at this facility. If such activities are required, there can be no
assurance that the Company's total investigation and remediation costs will not
exceed its $200,000 estimate.

The Company's Recapitalization in 1997 also triggered ISRA obligations
at its West Trenton facility, obligating the Company to investigate all possible
past hazardous substances releases, and to cleanup any resulting contamination,
at that facility. Under ISRA, investigation requirements for facilities that are
currently being remediated pursuant to an earlier ISRA-triggering transaction
may be merged into that ongoing ISRA investigation. In this case, the West
Trenton facility has been the subject of an ongoing ISRA (and its predecessor
statute) groundwater investigation and remediation by the facility's prior owner
since the Company's acquisition of the facility in 1987. Accordingly, the New
Jersey regulatory authorities have informed the Company that its ISRA
obligations triggered by the 1997 Recapitalization are being satisfied by the
prior owner's ongoing ISRA investigation and remediation. That investigation has
not found any additional contamination that would require remediation beyond
that which continues to be performed by the facility's prior owner.

Prior to, and in connection with, the acquisition of a facility or
business, the Company endeavors to obtain indemnification from parties whom the
Company believes to be able to support such indemnities. Further, the Company
takes such actions as it deems warranted to establish the scope of any
environmental issues that exist as of such purchase, as well as to assess what
potential environmental liabilities exist. Such actions include investigations
by members of management of the Company of the records and facilities relating
to the plant or business to be acquired, analysis of existing investigations,
analyses and compliance work done by the sellers and commissioning its own
studies, investigations or analyses.

The Company monitors its various facilities and operations for
compliance with Environmental Laws and exposure to environmental claims,
including, where deemed necessary, the hiring of outside consultants to conduct
surveys and tests. When presented with a potential violation or claim, the
manager of the facility in question will, in coordination and consultation with
management of the Company, endeavor to establish the scope and nature of the
issue, and, if possible, resolve the issue without resort to litigation or
formal proceedings. The Company also undertakes an analysis of the various
indemnification obligations owed to it to ascertain which, if any, would apply,
and the procedures to be followed to perfect its rights with respect to
potential recoveries. Several members of management of the Company have
experience in dealing with such issues and take a leading role in resolving
issues that arise.

Future events, such as new releases of hazardous substances, new
information concerning past releases of hazardous substances, changes in
existing Environmental Laws or their interpretation, and more rigorous
enforcement by regulatory authorities, may give rise to additional expenditures,
compliance requirements or liabilities that could have a material adverse effect
on the financial condition and results of the operations of the Company. See
"Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations."

18


ITEM 2. PROPERTIES

The principal executive offices of the Company are comprised of 13,728
square feet of office space located at the Heim division in Fairfield,
Connecticut which it owns. The Company conducts manufacturing in approximately
80,000 square feet at such facility where it manufactures plain bearing product,
both Teflon(R) lined and metal to metal and commercial ball bearings. The
Company also owns: (i) a facility in Hartsville, South Carolina, consisting of
approximately 100,000 square feet of manufacturing space, occupied by the RBC
division, at which facility the Company manufacturers the smaller end of all of
the RBC division's product lines, and performs the initial machining operations
for a large percentage of the product manufactured in the West Trenton, New
Jersey facility; (ii) a facility in Kulpsville, Pennsylvania, consisting of
approximately 140,000 square feet of manufacturing space, occupied by Nice, at
which facility the Company manufactures commercial ground and unground ball
bearings; (iii) a facility in Rancho Dominguez, California, consisting of
approximately 70,000 square feet of manufacturing space, occupied by ITB, at
which facility the Company manufactures high precision ball and roller bearings
for the aerospace industry, thin section ball bearings and large diameter cam
followers; (iv) a facility in Santa Ana, California consisting of approximately
70,000 square feet of manufacturing space, occupied by the TDC division, at
which facility the Company manufactures journal bearings and spherical plain
bearings; (v) a facility in Walterboro, South Carolina, consisting of
approximately 40,000 square feet of manufacturing space, occupied by LPP, at
which facility the Company manufactures ball screws, ball spline and ball screw
actuator product lines and (vi) 50,000 square feet of manufacturing space in
Bremen, Indiana, occupied by Miller, at which facility the Company produces
needle bearings. Additionally the Company leases: (i) 88,000 square feet of
manufacturing space in West Trenton, New Jersey, occupied by the RBC division,
at which facility the Company manufactures heavy duty needle roller bearings for
the aerospace industry as well as the RBC division's larger diameter heavy duty
needle roller bearings and single fracture spherical plain bearings; (ii) 20,000
square feet of space in Waterbury, Connecticut, at which facility the Company
manufactures thin section bearings, primarily for use by ITB; (iii) a facility
in Bremen, Indiana consisting of approximately 64,000 square feet of
manufacturing space, occupied by Bremen, at which facility the Company
manufacturers needle roller bearings; (iv) approximately 240,000 square feet of
manufacturing space in Glasgow, Kentucky, at which facility the Company
manufacturers tapered roller bearings; (v) a facility in Delemont, Switzerland,
occupied by Schaublin consisting of approximately 131,000 square feet, at which
facility the Company manufactures spherical bearings, rod ends, collets and tool
holders; (vi) a facility in Reynosa, Tamaulipas, Mexico occupied by RBC de
Mexico consisting of approximately 20,000 square feet, at which facility the
Company manufactures thin section bearings, primarily for use by ITB; and (vii)
a facility in Oklahoma City, Oklahoma, occupied by RBC Oklahoma.

The lease for the West Trenton, New Jersey facility expires on
February 10, 2009, the lease for the Waterbury, Connecticut facility expires on
February 28, 2003, a portion of the lease for the Bremen, Indiana facility
expires on September 16, 2002, the lease for the Glasgow, Kentucky facility
expires on June 30, 2005, the lease for the Delemont, Switzerland facility
expires on December 31, 2009 and the lease for the Reynosa, Mexico facility
expires on August 1, 2005.

19


ITEM 3. LEGAL PROCEEDINGS

There are various claims and legal proceedings against the Company
relating to its operations in the normal course of business, none of which the
Company believes to be material. The Company currently maintains insurance
coverage for product liability claims. There can be no assurance that
indemnification from its customers and coverage under insurance policies will be
adequate to cover any future product liability claims against the Company.

20


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

None.

21


PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

As of March 30, 2002, there were 100 shares of common stock, par value
$.01 per share, of the Company ("Company Common Stock") outstanding, all of
which were held by Holdings. There is no established public trading market for
the Company Common Stock.

As of March 30, 2002, there were 2,475,460.8 shares of Holdings Class
A Common Stock outstanding held by 7 holders and 100 shares of Holdings Class B
Common Stock outstanding held by Michael J. Hartnett. In addition, as of March
30, 2002, there were outstanding warrants and options to purchase up to an
additional 604,777 shares of Holdings Class A Common Stock and 549,146 shares of
Holdings Class B Common Stock.

All historical and current shares have been adjusted for a 100 for 1
split approved by the Board of Directors and the stockholders of Holdings in
July 2001.

DIVIDENDS

The Company, as a wholly owned subsidiary of Holdings, from time to
time will pay dividends (and has paid the Dividend in connection with the
Recapitalization) to Holdings from funds legally available therefore to fund
Holdings' operations. No cash dividends have been declared by Holdings on the
Common Stock in the last three years. Holdings intends to retain earnings to
finance the development and growth of its business. Accordingly, Holdings does
not anticipate that any dividends will be declared on the Holdings Common Stock
for the foreseeable future. Future payments of cash dividends, if any, will
depend on the financial condition, results of operations, business conditions,
capital requirements, restrictions contained in agreements, future prospects and
other factors deemed relevant by the Board of Directors of the Company and
Holdings. Further, the Company's ability to declare and pay dividends on the
Company Common Stock is restricted by certain covenants in the credit agreement
relating to the Senior Credit Facilities (the "Credit Agreement") and the
Indenture. Holdings' ability to pay and declare dividends is restricted by
certain covenants in the indenture related to the Discount Debentures (the
"Discount Indenture").

UNREGISTERED SALES OF STOCK

In connection with the Recapitalization, Holdings assigned its right
under the Recapitalization Agreement to purchase certain shares of Holding's
Common Stock and Holdings Warrants to Dr. Hartnett, certain affiliates of CSFB,
the Oaktree Fund, Kirk Morrison, The Sommers Family Trust and Mitchell Quain. In
addition, in connection with the Recapitalization, Holdings issued warrants to
purchase 1,250 shares of Class B Common Stock to Dr. Hartnett and issued the
Discount Warrants to the Oaktree Fund and Northstar (as defined herein). See
"Item 1. Business - History and Recent Developments--Recapitalization."

See "Item 13. Certain Relationships and Related Transactions" for
a description of the July 2002 sale of Class B Exchangeable Convertible
Participating Preferred Stock.

22


ITEM 6. SELECTED FINANCIAL DATA

The selected financial data for the fiscal year ended March 30, 2002 has been
derived from the consolidated financial statements of the Company which have
been audited by Ernst & Young LLP. The selected financial data presented below
for the four-year period ended March 31, 2001 has been derived from the
Consolidated Financial Statements of the Company which have been audited by
Arthur Andersen LLP. The information presented below should be read in
conjunction with "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Consolidated Financial Statements
and Notes to Consolidated Financial Statements contained elsewhere in this Form
10-K.



FISCAL YEAR ENDED
-------------------------------------------------------------------------
March 28 April 3 April 1 March 31 March 30
1998(a) 1999(b) 2000(c) 2001 2002(d)
(unaudited)
-------------------------------------------------------------------------
(dollars in thousands)

Statement of Operations Data:

Net Sales $ 136,009 $ 147,932 $ 177,148 $ 176,435 $ 168,331
Operating Income $ 10,600 $ 21,073 $ 31,439 $ 32,403 $ 27,213
Extraordinary Charge, Net $ 625 $ - $ - $ - $ -
Net Income (Loss) $ (1,917) $ 3,895 $ 10,018 $ 7,894 $ 6,863

Balance Sheet Data:

Total Assets $ 156,405 $ 164,819 $ 192,093 $ 207,189 $ 218,021
Total Debt $ 136,200 $ 145,075 $ 157,582 $ 161,416 $ 161,729
Cash Dividends $ 56,977 $ - $ - $ 3,571 $ -
Stockholder's Equity (Deficit) $ (14,922) $ (11,027) $ (1,159) $ 6,434 $ 13,373
- -----------------------------------------------------------------------------------------------------------------

(a) Includes the results of operations for Bremen following the effective date
of its acquisition in July 1997.
(b) Includes the results of operations for Miller for the full fiscal year
(c) Includes the results of operations for Tyson for the full fiscal year, and
the results of Schaublin following the effective date of acquisition of
October 1, 1999.
(d) Includes the results of operations for RBC Oklahoma following the effective
date of its acquisition in August 2001.

23


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

RESULTS OF OPERATIONS

FISCAL 2002 COMPARED TO FISCAL 2001

NET SALES

The Company's net sales were $168.3 million in fiscal 2002 and $176.4
million in fiscal 2001, a decrease of $8.1 million, or 4.6%. Net sales related
to the RBC Oklahoma acquisition, which was effective August 20, 2001, were $3.7
million in fiscal 2002. Net sales for the Company excluding the RBC Oklahoma
acquisition decreased $11.8 million or 6.7% from fiscal 2001, primarily due to
softness in the OEM heavy truck market, the industrial aftermarkets and the
aerospace MRO market after September 11, 2001.

GROSS MARGIN

Gross margin decreased by approximately 10.6% or $6.4 million, to
$53.8 million for fiscal 2002 from $60.2 million for fiscal 2001. Gross margin
as a percentage of net sales decreased from 34.1% to 31.9%. These decreases are
primarily product mix and volume related.

OPERATING EXPENSES

Selling, general and administrative ("SG&A") expenses decreased by
approximately 5.2%, or $1.4 million, to $25.6 million in fiscal 2002 from $27.0
million in fiscal 2001 primarily due to cost conservation efforts in
compensation and marketing expenditures. Other operating expenses increased by
$0.1 million in fiscal 2002 to $0.9 million.

OPERATING INCOME

Operating income decreased by approximately 16.0%, or $5.2 million, to
$27.2 million for fiscal 2002 versus $32.4 million for fiscal 2001. This
decrease is primarily attributable to the lower gross margin and was partially
offset by lower SG&A expenses.

NON-OPERATING EXPENSES

Non-operating expenses of $3.6 million in fiscal 2001 represents
certain fees and expenses associated with an investment in Holdings by
J.H. Whitney. There were no comparable expense in fiscal 2002.

INTEREST EXPENSE

Interest expense for fiscal 2002 was $15.2 million as compared to
$15.7 million for fiscal 2001, the decrease in interest expense is primarily due
to lower interest rates in effect on the term loan and revolving credit
facility.

INCOME BEFORE TAXES

Income before taxes decreased by $1.1 million to $12.0 million in
fiscal 2002 from $13.1 million in fiscal 2001. This decrease is primarily due to
lower operating income of $5.2 million and was offset somewhat by lower interest
of $0.5 million and lower non-operating expenses of $3.6 million.

NET INCOME

Net income for both fiscal 2002 and fiscal 2001 reflects a tax
provision of $5.2 million. Net income decreased by $1.0 million to $6.9 million
for fiscal 2002 compared to $7.9 million for fiscal 2001, as a result of the
items mentioned above.

24


FISCAL 2001 COMPARED TO FISCAL 2000

NET SALES

The Company's net sales were $176.4 million in fiscal 2001 and $177.1
million in fiscal 2000. Net sales related to the Schaublin acquisition, which
was effective October 1, 1999, were $16.0 million in fiscal 2001 and $8.7
million in fiscal 2000. Net sales for the Company excluding the Schaublin
acquisition decreased $8.0 million or 4.8% from fiscal 2000, primarily due in
part to a softness in the manufacturing sectors, runoff of contracts in Tyson
products and delayed shipments of aircraft products.

GROSS MARGIN

Gross margin increased by approximately 5.1% or $2.9 million, to $60.2
million for fiscal 2001 from $57.3 million for fiscal 2000. Gross margin as a
percentage of net sales increased from 32.3% to 34.1%. These increases are
primarily the result of strategic pricing increases, better operational
performance through Kaizen management techniques and machine tool capital
enhancements.

OPERATING EXPENSES

Selling, general and administrative ("SG&A") expenses increased by
approximately 7.5%, or $1.9 million, to $27.0 million in fiscal 2001 from $25.1
million in fiscal 2000 primarily due to expenses relating to acquisitions. Other
operating expenses increased by $0.1 million in fiscal 2001 to $0.8 million.

OPERATING INCOME

Operating income increased by approximately 3.0%, or $1.0 million, to
$32.4 million for fiscal 2001 versus $31.4 million for fiscal 2000 primarily due
to the higher gross margin and was partially offset by higher SG&A expenses.

NON-OPERATING EXPENSES

Non-operating expenses of $3.6 million in fiscal 2001 represents
certain fees and expenses associated with an investment in Holdings by
J.H. Whitney. No comparable expenses were incurred in fiscal 2000.

INTEREST EXPENSE

Interest expense for fiscal 2001 was $15.7 million as compared to
$15.0 million for fiscal 2000.

INCOME BEFORE TAXES

Income before taxes decreased by $3.3 million to $13.1 million in
fiscal 2001 from $16.4 million in fiscal 2000, primarily due to the
non-operating expenses, which were somewhat offset by increased operating
income.

NET INCOME

Net income for fiscal 2001 reflects a tax provision of $5.2 million
compared to a tax provision of $6.4 million for fiscal 2000. Net income
decreased by $2.1 million to $7.9 million for fiscal 2001 compared to $10.0
million for fiscal 2000, primarily due to the non-operating expenses, and was
offset somewhat by the decreased income tax provision.

25


LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities was approximately $9.1
million for fiscal 2002, versus $8.7 million in fiscal 2001. The increase of
$0.4 million is primarily the result of the net income decrease of $1.0 million
combined with an increase in depreciation of $0.5 million, the non-cash tax
effect in fiscal 2001 of an exercise of stock options and warrants of $3.1
million, an decrease in the net deferred income tax asset of $0.4 million and
working capital changes of $4.4 million.

Cash used in investing activities increased by $0.3 million to $6.5
million in fiscal 2002 from $6.2 million in fiscal 2001. Acquisition costs
increased $2.1 million in fiscal 2002, due to the acquisition of assets by RBC
Oklahoma. This investment utilization was somewhat offset by lower capital
expenditures in fiscal 2002 compared to fiscal 2001 of $0.7 million and proceeds
from the sale of land of $0.6 million and net increase in restricted marketable
securities of $0.5 million.

The Company had net cash inflows from financing activities of $1.1
million primarily due to draw downs on our revolving credit facility of $9.0
million, principal payments on bank loans and capital lease obligations of $7.9
million.

The Company terminated its previous senior credit facility and the
Company and its domestic subsidiaries entered into a $94 million senior secured
credit facility (the "New Credit Facility"), dated May 30, 2002, with General
Electric Capital Corporation as agent and lender, Congress Financial Corporation
(Western) as lender, GECC Capital Markets Group as lead arranger and other
lenders signatory thereto from time to time, consisting of a $40 million term
loan (the "Term Loan") and a $54 million revolving credit facility (the
"Revolving Credit Facility"). In connection with the New Credit Facility the
Company and its domestic subsidiaries granted liens and mortgages on
substantially all of their existing and after-acquired personal and real
property. In addition, the Company pledged all of its capital stock in its
domestic subsidiaries and a portion of its capital stock in its directly owned
foreign subsidiaries.

The proceeds of the Term Loan were used to pay off the Company's
senior credit facility, dated June 23, 1997, by and between the Company,
Credit Suisse First Boston, as administrative agent and the lenders thereto,
to pay fees and expenses with respect to the new credit facility and for
other corporate purposes. In addition, the Company has secured the letters of
credit issued in connection with its previous senior credit facility pursuant
to the New Credit Facility. The Revolving Credit Facility is available for
issuances of letters of credit and for loans in connection with acquisitions,
working capital needs or other general corporate purposes. As of August 13,
2002 letters of credit in a total amount of $19.1 million were issued under
the Revolving Credit Facility. No additional amounts have been drawn under
the Revolving Credit Facility.

Principal and interest payments under the New Credit Facility,
interest payments on the Notes, and the funding of acquisitions, represent
significant liquidity requirements for the Company. With respect to the Term
Loan, the Company will begin to make its required quarterly scheduled principal
payments on September 30, 2002. The Term Loan bears interest at a floating rate
based upon an interest rate option elected by the Company.

The Company's ability to incur indebtedness is limited by the terms of
the Credit Agreement, the Indenture and the Discount Debentures.

During July 2002, Whitney and Dr. Michael J. Hartnett, the Company's
President and Chief Executive Officer, purchased an aggregate of 240,000 shares
of Class B Exchangaeable Convertible Participating Prefered Stock of Holdings in
exchange for gross proceeds of $24.0 million. The rights and priviliges of the
Class B Preferred Stock are described in note 14 to the Company's financial
statements. Following the closing of the sale, Holdings utilized the proceeds of
the sale and certain of the Company's cash on hand to repurchase approximately
$30.4 million in principal amount at maturity of the Discount Debentures. This
repuchase satisfied Holdings' obligation to make a scheduled redemption payment
relating to the Discount Debentures in December 2002.

The Company believes that borrowings available under the Revolving
Credit Facility, cash flow from operations and cash on hand will provide
adequate funds for its ongoing operations and planned capital expenditures.

26


ENVIRONMENTAL COMPLIANCE


The Company is subject to various federal, state and local
environmental laws, ordinances and regulations, including those governing
discharges of pollutants into the air and water, the storage, handling and
disposal of solid wastes, hazardous wastes and hazardous substances and the
health and safety of employees. Agencies responsible for enforcing Environmental
Laws have authority to impose significant civil or criminal penalties for
non-compliance. The Company believes it is currently in material compliance with
all applicable requirements of Environmental Laws, but there can be no assurance
that some future non-compliance will not result in the imposition of significant
liabilities.

Additionally, capital expenditures and operating costs associated with
the Company's compliance with Environmental Laws may increase in the future if
environmental laws become more stringent, are enforced more rigorously, or if
the Company's operations were to change.

Prior to, and in connection with, the acquisition of a facility or
business, the Company endeavors to obtain indemnification from parties whom the
Company believes to be able to support such indemnities. Further, the Company
takes such actions as it deems warranted to establish the scope of any
environmental issues that exist as of such purchase, as well as to project what
potential environmental liabilities exist. Such actions include investigations
by members of management of the Company of the records and facilities relating
to the facility or business to be acquired, analysis of existing investigations,
analyses and compliance work done by the sellers and commissioning its own
studies, investigations or analyses.

The Company monitors its various facilities and operations for
compliance with Environmental Laws and exposure to environmental claims,
including, where deemed necessary, the hiring of outside consultants to conduct
surveys and tests. When presented with a potential violation or claim, the
manager of the facility in question will, in coordination and consultation with
management of the Company, endeavor to establish the scope and nature of the
issue, and, if possible, resolve the issue without resort to litigation or
formal proceedings. The Company also undertakes an analysis of the various
indemnification obligations owed to it to ascertain which, if any, would apply,
and the procedures to be followed to perfect its rights with respect to
potential recoveries. Several members of management of the Company have
experience in dealing with such issues and take a leading role in resolving
issues that arise.

CRITICAL ACCOUNTING POLICIES

The Company's discussion and analysis of its financial condition and
results of operations are based upon the Company's consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these financial
statements requires the Company to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent assets and liabilities. On an on-going basis, the
Company evaluates its estimates, including those related to customer programs
and incentives, product returns, bad debts, inventories, investments, intangible
assets, income taxes, financing operations, warranty obligations, long-term
service contracts, pensions and other post-retirement benefits, and
contingencies and litigation. The Company bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

The Company believes the following critical accounting policies affect
its more significant judgments and estimates used in the preparation of its
consolidated financial statements.

REVENUE RECOGNITION

For revenues not recognized under the contract method of accounting,
the Company recognizes revenues from the sale of products at the point of
passage of title, which is at the time of shipment. Revenues earned from
providing refurbishing service are recognized when the service is complete.

27


The Company also has sales under long-term, fixed-priced contracts,
many of which contain escalation clauses, requiring delivery of products over
several years and frequently providing the buyer with option pricing on
follow-on orders. Sales and profits on each contract are recognized in
accordance with the percentage-of-completion method of accounting, using the
units-of-delivery method. The Company follows the guidelines of Statement of
Position 81-1 ("SOP 81-1"), "Accounting for Performance of Construction-Type and
Certain Production-Type Contracts" (the contract method of accounting).

INVENTORY

Inventories are stated at the lower of cost or market value. Cost is
principally determined by the first-in, first-out method. The Company records
adjustments to the value of inventory based upon past sales history and its
forecasted plans to sell its inventories. The physical condition (e.g., age and
quality) of the inventories is also considered in establishing its valuation.
These adjustments are estimates, which could vary significantly, either
favorably or unfavorably, from actual requirements if future economic
conditions, customer inventory levels or competitive conditions differ from our
expectations

Inventoried costs on long-term contracts include certain preproduction
costs, consisting primarily of tooling and design costs and production costs,
including applicable overhead. The costs attributed to units delivered under
long-term commercial contracts are based on the estimated average cost of all
units expected to be produced and are determined under the learning curve
concept, which anticipates a predictable decrease in unit costs as tasks and
production techniques become more efficient through repetition. This usually
results in an increase in inventory (referred to as "excess-over average")
during the early years of a contract.

If in-process inventory plus estimated costs to complete a specific
contract exceeds the anticipated remaining sales value of such contract, such
excess is charged to current earnings, thus reducing inventory to estimated
realizable value.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In August 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". Statement No. 144 supersedes
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of". The provisions of this
statement are effective for financial statements issued for fiscal years
beginning after December 13, 2001. The Company has not yet determined the
impact, if any, this new standard will have on its reported results of
operations, financial position and cash flows.

In June 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 141, "Business Combinations" and
Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets." Statement No. 141 requires that all business combinations
initiated after June 30, 2001 be accounted for using the purchase method, thus
eliminating the use of the pooling-of-interests accounting for business
combinations. Statement No. 142 changes the accounting for goodwill from an
amortization method to an impairment-only approach, whereby goodwill
amortization will no longer be permitted after March 30, 2002. The statement
will require an annual assessment of goodwill for impairment and more frequent
assessments if circumstances indicate a possible impairment. Additionally,
Statement No. 141 will require all acquired intangible assets be separately
recognized if the benefit of the intangible asset is obtained through
contractual or other legal rights, or if the intangible asset can be sold,
transferred, licensed, rented, or exchanged, regardless of the acquirer's intent
to do so. Whereas, Statement No. 141 is effective for all business combinations
initiated after June 30, 2001, Statement No. 142 requires the Company to
continue to amortize goodwill existing at June 30, 2001 through the end of
fiscal 2002, ceasing goodwill amortization on March 31, 2002 (the start of
fiscal year 2003).

Amortization charges for the year ended March 30, 2002 were $0.8
million. The Company is currently evaluating other impacts of adopting Statement
No. 142, but has not yet quantified the impact on its

28


consolidated financial position.

The Company adopted Statement of Financial Accounting Standards No.
133 "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133")
on April 1, 2001. SFAS 133, as amended by SFAS No. 138, establishes accounting
and reporting standards that require every derivative instrument (including
certain derivative instruments embedded in other contracts) to be recorded in
the balance sheet as either an asset or liability measured at its fair value.
SFAS 133 also requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses to
offset related results on the hedged item included in comprehensive income and
requires companies to formally document, designate, and assess the effectiveness
of transactions that receive hedge accounting. As the Company does not use any
derivative financial instruments, the adoption of SFAS 133 did not have a
material impact on the Company's consolidated results of operations and
financial position.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

The Company's Swiss operations utilize the Swiss franc as the
functional currency. Foreign currency transaction gains and losses are included
in earnings. Foreign currency transaction exposure arises primarily from the
transfer of foreign currency from one subsidiary to another within the group,
and to foreign currency denominated trade receivables. Currency transaction and
translation exposures are not hedged as the Company does not use any derivative
financial instruments, and transaction gains and losses have not been
significant. Unrealized currency translation gains and losses are recognized
upon translation of the foreign subsidiaries' balance sheets to U.S. dollars.

Borrowings of the Company are denominated in U.S. dollars. Management
believes that the carrying amount of the Company's borrowings approximates fair
value because the interest rates are variable and reset frequently or are
reasonable to the quoted market prices of similar debt instruments.

29


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ROLLER BEARING COMPANY OF AMERICA, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 30, 2002 AND MARCH 31, 2001 AND
FOR EACH OF THE THREE FISCAL YEARS IN THE PERIOD ENDED MARCH 30, 2002




Report of Independent Public Accountants - Ernst & Young LLP F - 2

Report of Independent Public Accountants - Arthur Andersen LLP F - 3

Consolidated Balance Sheets F - 4

Consolidated Statements of Operations F - 5

Consolidated Statements of Cash Flows F - 6

Consolidated Statements of Stockholder's Equity (Deficit)
and Comprehensive Income F - 7

Notes to Consolidated Financial Statements F - 8 to F - 31

Schedule II - Valuation and Qualifying Accounts 52


F-1


ERNST & YOUNG

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Stockholder
of Roller Bearing Company of America, Inc.:

We have audited the accompanying consolidated balance sheet of Roller Bearing
Company of America, Inc, (a Delaware corporation and a wholly owned subsidiary
of Roller Bearing Holding Company, Inc.) and subsidiaries as of March 30, 2002,
and the related consolidated statements of operations, stockholder's equity
(deficit) and comprehensive income and cash flows for the year ended March 30,
2002. Our audit also included the information as of March 30, 2002, and for the
year then ended, included in the financial statement schedule listed in the
Index at Item 14. These financial statements and schedule are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and the schedule based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the 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 audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Roller Bearing
Company of America, Inc. and subsidiaries as of March 30, 2002, and the results
of its operations and its cash flow for the year ended March 30, 2002 in
conformity with accounting principles generally accepted in the United States.
Also, in our opinion, the related financial statement schedule, when considered
in relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.


/s/ ERNST & YOUNG LLP


Stamford, Connecticut
June 21, 2002,
except for Note 14, as to which the date is
August 6, 2002

F-2



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholder
of Roller Bearing Company of America, Inc.:

We have audited the accompanying consolidated balance sheet of Roller Bearing
Company of America, Inc. (a Delaware corporation and a wholly owned subsidiary
of Roller Bearing Holding Company, Inc.) and subsidiaries as of March 31, 2001,
and the related consolidated statements of operations, stockholder's equity
(deficit) and comprehensive income and cash flows for each of the two years in
the period ended March 31, 2001. These financial statements and schedule
referred to below are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and the
schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the 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 financial statements and schedule referred to above present
fairly, in all material respects, the financial position of Roller Bearing
Company of America, Inc. and subsidiaries as of March 31, 2001, and the results
of their operations and their cash flows for each of the two years in the period
ended March 31, 2001 in conformity with accounting principles generally accepted
in the United States.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the accompanying
index is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audits of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.

/s/ ARTHUR ANDERSEN LLP

Stamford, Connecticut
June 21, 2001

F-3


ROLLER BEARING COMPANY OF AMERICA, INC.
CONSOLIDATED BALANCE SHEETS

(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)



MARCH 30, MARCH 31,
2002 2001
-------------- -------------

ASSETS

Current assets:
Cash $ 7,178 $ 3,126
Accounts receivable, net of allowance for doubtful accounts of
$621 at March 30, 2002 and $257 at March 31, 2001 38,415 37,019
Inventories 76,605 67,629
Prepaid expenses and other current assets 5,127 3,531

-------------- -------------
Total current assets 127,325 111,305
-------------- -------------

Property, plant and equipment, net 59,536 60,001
Restricted marketable securities 1,255 4,041
Excess of cost over net assets acquired, net of accumulated amortization
of $6,624 at March 30, 2002 and $5,823 at March 31, 2001 25,150 25,951
Deferred financing costs, net of accumulated amortization of $4,776 at
March 30, 2002 and $3,759 at March 31, 2001 3,413 4,501
Other assets 1,342 1,390

-------------- -------------
Total assets $ 218,021 $ 207,189
============== =============

LIABILITIES AND STOCKHOLDER'S EQUITY

Current liabilities:
Accounts payable $ 13,880 $ 14,428
Accrued expenses and other current liabilities 12,312 13,349
Current portion of long-term debt 31,594 26,631
Obligations under capital leases, current portion 533 726

-------------- -------------
Total current liabilities 58,319 55,134
-------------- -------------

Long-term debt 130,135 134,785

Capital lease obligations, less current portion 148 727

Other noncurrent liabilities 16,046 10,109

-------------- -------------
Total liabilities 204,648 200,755
-------------- -------------

Commitments and contingencies - -

Stockholder's equity:
Common stock - $.01 par value; 1,000 shares
authorized; 100 shares issued and outstanding
at March 30, 2002 and March 31, 2001 - -
Additional paid in capital 9,708 9,708
Currency translation adjustment 88 12
Retained earnings (deficit) 3,577 (3,286)
-------------- -------------
Total stockholder's equity 13,373 6,434
-------------- -------------

Total liabilities and stockholder's equity $ 218,021 $ 207,189
============== =============


See notes to consolidated financial statements.

F-4


ROLLER BEARING COMPANY OF AMERICA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)



FISCAL YEAR ENDED
----------------------------------------------
MARCH 30, MARCH 31, APRIL 1,
2002 2001 2000
----------------------------------------------

Net sales $ 168,331 $ 176,435 $ 177,148

Cost of sales 114,575 116,245 119,888
----------------------------------------------
Gross margin 53,756 60,190 57,260

Operating expenses:
Selling, general and administrative 25,606 27,011 25,112
Other expense, net of other income 937 776 709
----------------------------------------------
26,543 27,787 25,821

Operating income 27,213 32,403 31,439

Non-operating expense - 3,600 -
Interest expense, net 15,183 15,660 15,037
Minority interest 17 16 7
----------------------------------------------

Income before taxes 12,013 13,127 16,395

Income tax expense 5,150 5,233 6,377
----------------------------------------------

Net income $ 6,863 $ 7,894 $ 10,018
==============================================


See notes to consolidated financial statements.

F-5


ROLLER BEARING COMPANY OF AMERICA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)



FISCAL YEAR ENDED
-------------------------------------
MARCH 30, MARCH 31, APRIL 1,
2002 2001 2000
-------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 6,863 $ 7,894 $ 10,018
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 8,304 7,840 8,098
Deferred income taxes 747 1,155 2,715
Tax benefit on exercise of stock options/warrants - 3,108 -
Amortization of excess of cost over net assets acquired 801 801 801
Amortization of deferred financing costs 1,028 1,039 985
Loss from sale of land 22 - -
Changes in working capital, net of acquisitions:
(Increase) decrease in accounts receivable (1,566) (5,475) (1,089)
(Increase) decrease in inventories (8,586) (9,541) (3,401)
(Increase) decrease in prepaid expenses & other current assets (1,131) (2,714) 454
(Increase) decrease in other non-current assets 108 (9) (952)
Increase (decrease) in accounts payable (548) 4,015 (2,517)
Increase (decrease) in accrued expenses & other current liabilities (1,674) 165 (3,372)
Increase (decrease) in other non-current liabilities 4,724 438 2,716
--------- -------- --------

Net cash provided by operating activities 9,092 8,716 14,456

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of subsidiaries, net of cash acquired (2,128) - (19,030)
Purchase of property, plant & equipment, net (5,941) (6,619) (6,582)
Proceeds from sale of land 627 - -
Sale (purchase) of restricted marketable securities, net 940 460 617
--------- -------- --------

Net cash used in investing activities (6,502) (6,159) (24,995)

CASH FLOWS FROM FINANCING ACTIVITIES:

Net increase in revolving credit facility 9,000 9,000 3,000
Retirement of Industrial Revenue Bond (1,845) - 4,800
Proceeds from Industrial Revenue Bond trust account 1,845 - 7,707
Payments of term loans (7,139) (4,885) (3,000)
Principal payments on capital lease obligations (773) (906) (1,058)
Dividend paid to parent company - (3,571) -
--------- -------- --------

Net cash provided by financing activities 1,088 (362) 11,449

CASH AND CASH EQUIVALENTS:

Effect of exchange rate changes 374 (120) (150)
--------- -------- --------

Increase during the year 4,052 2,075 760
Cash, at beginning of year 3,126 1,051 291
--------- -------- --------
Cash, at end of year $ 7,178 $ 3,126 $ 1,051
========= ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 14,127 $ 14,454 $ 14,489
========= ======== ========
Income taxes $ 255 $ 1,131 $ 1,916
========= ======== ========


See notes to consolidated financial statements.

F-6


ROLLER BEARING COMPANY OF AMERICA, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT) AND
COMPREHENSIVE INCOME
(DOLLARS IN THOUSANDS)



RETAINED ACCUMULATED
ADDITIONAL EARNINGS/ OTHER TOTAL
PAID-IN ACCUMULATED COMPREHENSIVE STOCKHOLDER'S COMPREHENSIVE
CAPITAL (DEFICIT) INCOME (LOSS) EQUITY/(DEFICIT) INCOME/(LOSS)
--------------------------------------------------------------------------

Balance at April 3, 1999 $ 6,600 $ (17,627) $ - $ (11,027)
Net income - 10,018 - 10,018 $ 10,018
Currency translation adjustment - - (150) (150) (150)
-------------------------------------------------------------------------
Comprehensive income 9,868

Balance at April 1, 2000 6,600 (7,609) (150) (1,159)

Net income - 7,894 - 7,894 7,894
Currency translation adjustment - - 162 162 162
Tax benefit of warrant redemption 3,108 - - 3,108 -
Dividend paid to parent - (3,571) - (3,571) -
-------------------------------------------------------------------------
Comprehensive income 8,056

Balance at March 31, 2001 9,708 (3,286) 12 6,434

Net income - 6,863 - 6,863 6,863
Currency translation adjustment - - 76 76 76
-------------------------------------------------------------------------
Comprehensive income $ 6,939

Balance at March 30, 2002 $ 9,708 $ 3,577 $ 88 $ 13,373
=========================================================================


F-7


ROLLER BEARING COMPANY OF AMERICA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(ALL CURRENCIES IN THOUSANDS)

1. ORGANIZATION AND BUSINESS

Roller Bearing Company of America, Inc., ("RBC" or the "Company"), a Delaware
corporation, is a wholly owned subsidiary of Roller Bearing Holding Company,
Inc. ("Holdings"). On March 31, 1992, Holdings acquired all of the outstanding
shares of RBC pursuant to an Agreement and Plan of Reorganization. The
acquisition was accounted for under the purchase method of accounting. The
excess of the purchase price ($20,100) over the fair market value of the
tangible net assets acquired by Holdings has been pushed down and recorded as
excess of cost over net assets acquired by the Company.

The Company operates in one business segment in which it manufactures roller
bearing components and assembled parts and designs and manufactures
high-precision roller and ball bearings. The Company sells to a wide variety of
Original Equipment Manufacturers ("OEMs") and distributors who are primarily
domestic but widely dispersed geographically.

On June 23, 1997, pursuant to a Redemption and Warrant Purchase Agreement dated
May 20, 1997, Holdings effected a recapitalization of its outstanding capital
stock (including the financing and other transactions consummated by Holdings,
the Company and its subsidiaries in connection therewith, the
"Recapitalization"). In connection with the Recapitalization, the Company issued
the Senior Subordinated Notes and incurred the Term Loans described in Note 5.
The proceeds therefrom were utilized to pay a dividend to Holdings to finance
the redemption of a substantial portion of its common stock, all of its
preferred stock and certain outstanding warrants to purchase common stock, and
to pay certain Recapitalization fees and expenses. This transaction was further
financed from the proceeds of certain debt issued directly by Holdings. In
addition, a new group of investors (who were not previously stockholders of
Holdings) purchased shares of common stock and warrants to purchase common stock
of Holdings, directly from certain stockholders of Holdings. The redemption of
shares and warrants was treated by Holdings as a recapitalization transaction.

Stockholders of Holdings owning approximately 7% of the outstanding voting
shares prior to the effective date of the Recapitalization, owned approximately
71% of the outstanding voting shares immediately following the Recapitalization.
The new group of investors referred to above owned the remaining 29% of the
voting shares at such time and thus were not controlling stockholders of either
Holdings or the Company. As a result, the transaction did not result in the
establishment of new bases in Holdings' or the Company's assets and liabilities.
Funds disbursed by Holdings and the Company were charged against their capital
accounts to the extent permitted by law.

During fiscal 2001, Whitney Acquisition II, Corp. ("Whitney"), an affiliate of
the private equity firm Whitney & Co., purchased 23,682.65 shares of Holdings
Class A common Stock (the "Whitney Shares") at a price of $3,018.33 per share.
The Whitney Shares were acquired from various stockholders of Holdings, but none
were purchased from Holdings itself. As Whitney wished to acquire only issued
and outstanding shares, many stockholders exercised options and warrants and
sold the underlying shares to Whitney upon exercise. The Whitney Shares
represented, in the aggregate, 65.25% of the outstanding capital stock of
Holdings on a fully diluted basis on March 30, 2002.

During July 2002, Whitney made an additional investment in Holdings. See Note 14
"Subsequent Event".

2. ACQUISITIONS BY WHOLLY OWNED SUBSIDIARIES

On June 11, 1999, Tyson Bearings Inc. ("Tyson"), a wholly owned subsidiary of
the Company, completed the acquisition of certain assets of SKF USA, Inc.'s
taper roller bearing operations whose principal operations are located in
Glasgow, Kentucky. The aggregate purchase price for the acquisition, which was
effective as of April 1, 1999, was $10,200 plus the assumption of certain
liabilities. The acquisition was accounted for under the purchase method of
accounting. The purchase price was allocated to the fair value of the net assets
of the business.

F-8


Effective October 1, 1999, Schaublin Holding SA ("Schaublin"), a wholly owned
subsidiary of the Company, completed an asset and stock purchase of Schaublin
SA, a manufacturer of collets and bearings whose principal operations are
located in Delemont, Switzerland. The acquisition was accounted for under the
purchase method of accounting. The aggregate purchase price for the acquisition
was 14,000 Swiss Francs, or approximately $8,830. In fiscal 2001, an adjustment
to the purchase price of Schaublin was made for $520, which resulted from a
reevaluation of the net working capital purchased from the former owners, and a
corresponding reduction in the loan payable. The purchase price was allocated to
the fair value of the net assets of the business.

In a transaction effective as of August 20, 2001, the Company, through its
wholly owned subsidiary, RBC Oklahoma, Inc. ("RBC Oklahoma"), purchased certain
assets used in the design, development, manufacture, assembly and sale of
tapered thrust bearings, universal joints, synchronizing rings and GTRAG
bearings, previously owned by Driveline Technologies, Inc., from Prime Financial
Corporation and Congress Financial Corporation (Southwest), for an aggregate
purchase price of $2,400.

The results of operations subsequent to the effective dates of acquisition are
included in the results of operations of the Company. Pro forma consolidated
results of operations of the Company, based upon pre-acquisition unaudited
historical information provided by the former owners for the years ended March
31, 2001, and includes pro forma adjustments, as if the acquisitions took place
on April 4, 1999 are as follows (unaudited):



APRIL 1, 2000
-------------

Net sales $ 185,835

Net income $ 10,961


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL

The consolidated financial statements include the accounts of RBC and its wholly
owned subsidiaries, Industrial Tectonics Bearings Corporation ("ITB"), RBC
Linear Precision Products, Inc. ("LPP"), RBC Nice Bearings, Inc. ("Nice"),
Bremen Bearings, Inc. ("Bremen"), Miller, Tyson, Schaublin, RBC de Mexico
("Mexico"), RBC Oklahoma, Inc. ("RBC Oklahoma") and Roller Bearing Company FSC,
Inc. ("FSC"), as well as its Transport Dynamics ("TDC"), Heim ("Heim") and
Engineered Components ("ECD") divisions. All material intercompany balances and
transactions have been eliminated in consolidation.

The Company has a fiscal year consisting of 52 or 53 weeks, ending on the
Saturday closest to March 31. Based on this policy, fiscal years 2002, 2001 and
2000 contained 52 weeks.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.

INVENTORY

Inventories are stated at the lower of cost or market, using the first-in,
first-out method, and are summarized as follows:



MARCH 30, 2002 MARCH 31, 2001
-------------- --------------

Raw material $ 3,185 $ 2,778

Work in process 18,576 16,800

Finished goods 54,844 48,051
----------- ----------

Total inventories $ 76,605 $ 67,629
=========== ==========


F-9


Inventoried costs on long-term contracts include certain preproduction costs,
consisting primarily of tooling and design costs and production costs, including
applicable overhead. The costs attributed to units delivered under long-term
commercial contracts are based on the estimated average cost of all units
expected to be produced and are determined under the learning curve concept,
which anticipates a predictable decrease in unit costs as tasks and production
techniques become more efficient through repetition. This usually results in an
increase in inventory (referred to as "excess-over average") during the early
years of a contract.

SHIPPING AND HANDLING

The sales price billed to customers generally includes the cost associated with
shipping and handling. The costs to the Company for shipping and handling are
included in cost of sales.

PROPERTY, PLANT, AND EQUIPMENT AND DEPRECIATION

Property, plant, and equipment are recorded at cost. Depreciation of plant and
equipment, including equipment under capital leases, is provided for by the
straight-line method over the estimated useful lives (3 to 39 years) of the
respective assets or the lease term, if shorter. Amortization of assets under
capital leases is reported with depreciation. The cost of equipment under
capital leases is equal to the lower of the net present value of the minimum
lease payments or the fair market value of the leased equipment at the inception
of the lease. Expenditures for normal maintenance and repairs are charged to
expense as incurred.

Property, plant and equipment are summarized as follows:



MARCH 30, 2002 MARCH 31, 2001
-------------- --------------

Land $ 6,983 $ 7,630

Buildings 13,257 12,878

Machinery & equipment 94,667 87,102
---------- ---------

Total property, plant & equipment 114,907 107,610

Less: accumulated depreciation (55,371) (47,609)
---------- ---------

Property, plant and equipment, net $ 59,536 $ 60,001
========== =========


REVENUE RECOGNITION AND CONCENTRATION OF CREDIT RISK

Revenue is recognized upon the passage of title on the sales of manufactured
goods and percentage of completion in certain aerospace long-term projects at
ITB. The Company sells to a large number of OEMs and distributors who service
the aftermarket. The Company's credit risk associated with accounts receivable
is minimized due to its customer base and wide geographic dispersion. The
Company performs ongoing credit evaluations of its customers' financial
condition, and calculates its allowance for doubtful accounts accordingly and
generally does not require collateral.

INTANGIBLE ASSETS

The excess of purchase price over the fair market value of tangible net assets
acquired is being amortized by the straight-line method over a 40-year period.

Deferred financing costs and related expenses are amortized by the effective
interest method over the lives of the related credit agreements (5 to 23 years).

INCOME TAXES

The Company is included in the consolidated tax return of Holdings and
calculates its provision for income taxes on a separate entity basis pursuant to
a tax sharing agreement. Included in other noncurrent liabilities is $11,951 and
$7,221, respectively at fiscal 2002 and 2001 due to Holdings for income taxes.

F-10


Income taxes are recognized during the year in which transactions occur and
enter into the determination of financial statement income, with deferred taxes
being provided for temporary differences between amounts of assets and
liabilities for financial reporting purposes and such amounts for tax purposes.
The differences relate primarily to the timing of deductions for depreciation,
goodwill amortization relating to the acquisition of operating divisions, basis
differences arising from acquisition accounting, pension and retirement
benefits, and various accrued and prepaid expenses. Deferred tax assets and
liabilities are recorded at the rates expected to be in effect when the
temporary differences are expected to reverse.

USE OF ESTIMATES

The preparation of the consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in
the consolidated financial statements and accompanying notes. Actual results
could differ from those estimates.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company periodically assesses the net realizable value of its long-lived
assets and evaluates such assets for impairment whenever events or changes in
circumstances indicate the carrying amount of an asset may not be recoverable.

For assets to be held, impairment is determined to exist if estimated
undiscounted future cash flows are less than the carrying amount. The Company
assesses the recoverability of intangible assets by determining whether the
amortization of the asset balance over its remaining life can be recovered
through undiscounted future operating cash flows of the acquired operation. The
amount of asset impairment, if any, is measured based on projected discounted
future operating cash flows using a discount rate reflecting the Company's
average cost of funds.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In August 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets". Statement No. 144 supersedes Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of". The provisions of this statement are
effective for financial statements issued for fiscal years beginning after
December 13, 2001. The Company has not yet determined the impact, if any, this
new standard will have on its reported results of operations, financial position
and cash flows.

In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141, "Business Combinations" and Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets."
Statement No. 141 requires that all business combinations initiated after June
30, 2001 be accounted for using the purchase method, thus eliminating the use of
the pooling-of-interests accounting for business combinations. Statement No. 142
changes the accounting for goodwill from an amortization method to an
impairment-only approach, whereby goodwill amortization will no longer be
permitted after March 30, 2002. The statement will require an annual assessment
of goodwill for impairment and more frequent assessments if circumstances
indicate a possible impairment. Additionally, Statement No. 141 will require all
acquired intangible assets be separately recognized if the benefit of the
intangible asset is obtained through contractual or other legal rights, or if
the intangible asset can be sold, transferred, licensed, rented, or exchanged,
regardless of the acquirer's intent to do so. Whereas, Statement No. 141 is
effective for all business combinations initiated after June 30, 2001, Statement
No. 142 requires the Company to continue to amortize goodwill existing at June
30, 2001 through the end of fiscal 2002, ceasing goodwill amortization on March
31, 2002 (the start of fiscal year 2003).

Amortization charges for the year ended March 30, 2002 were $801. The Company is
currently evaluating other impacts of adopting Statement No. 142, but has not
yet quantified the impact on its consolidated financial position.

F-11


The Company adopted Statement of Financial Accounting Standards No. 133
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") on
April 1, 2001. SFAS 133, as amended by SFAS No. 138, establishes accounting and
reporting standards that require every derivative instrument (including certain
derivative instruments embedded in other contracts) to be recorded in the
balance sheet as either an asset or liability measured at its fair value. SFAS
133 also requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses to
offset related results on the hedged item included in comprehensive income and
requires companies to formally document, designate, and assess the effectiveness
of transactions that receive hedge accounting. As the Company does not use any
derivative financial instruments, the adoption of SFAS 133 did not have a
material impact on the Company's consolidated results of operations and
financial position.

FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS

Assets and liabilities of the Company's foreign operations (Schaublin) are
translated into U.S. dollars using the exchange rate in effect at the balance
sheet date. Results of operations are translated using the average exchange rate
prevailing throughout the period. The effects of exchange rate fluctuations on
translating foreign currency assets and liabilities into U.S. dollars are
included in the foreign currency translation adjustment component of
stockholder's equity, while gains and losses resulting from foreign currency
transactions are included in net income.

RESEARCH AND DEVELOPMENT/ENGINEERING EXPENSES

The company is continually conducting research and developing new products and
enhanced techniques utilizing a team approach that involves its engineering
resources. The majority if its research and development efforts have
historically been directed towards machine building and improvement, for
ultimate use at its various operating facilities. Company research and
development expenses were $0, $254 and $277 in fiscal 2002, 2001 and 2000,
respectively.

FAIR VALUE

The carrying amounts reported in the balance sheet for cash, accounts
receivable, prepaids and other current assets and accounts payable and accruals
approximate their fair value.

The carrying amounts of the Company's Senior Subordinated notes payable and
Industrial Development Revenue Bonds approximate fair value and are estimated
based on the quoted market price of similar debt instruments. The carrying
amounts of the Company's borrowing under its Revolving Credit Facility
approximate fair value, as these obligations have interest rates which vary in
conjunction with current market conditions.

RECLASSIFICATIONS

Certain amounts in the prior years' consolidated financials statements have been
reclassified to conform with the current year presentation.

4. RESTRICTED MARKETABLE SECURITIES

Restricted marketable securities, which are classified as available for sale,
consist of short-term investments of $1,255 and $4,041 at March 30, 2002 and
March 31, 2001, respectively, which were purchased with proceeds from industrial
development revenue bonds issued by the Company during fiscal 2000, 1999 and
1995. The use of these investments is restricted primarily for capital
expenditure requirements in accordance with the applicable loan agreement and,
accordingly, are classified as long-term. These investments consist of highly
liquid investments with insignificant interest rate risk and original maturities
of three months or less, and are carried at market value, which approximates
cost. Fixed maturities consist of U.S. Treasury Notes and are stated at
amortized cost, which approximates market value.

F-12


5. DEBT

In connection with the financing of the Recapitalization disclosed in Note 1,
the Company issued $110,000 aggregate principal amount of 9 5/8% Senior
Subordinated Notes due 2007 (the "Notes"). The Notes pay interest semi-annually
and mature on June 15, 2007 but may be redeemed at the Company's option earlier
under certain conditions specified in the indenture (the "Indenture") pursuant
to which the Notes were issued. The Notes are unsecured and subordinate to all
existing and future Senior Indebtedness (as defined in the Indenture) of the
Company. The Notes are fully, unconditionally and irrevocably guaranteed jointly
and severally, on a senior subordinated basis by each of the domestic wholly
owned subsidiaries of the Company.

Consolidated financial information regarding the Company, guarantor subsidiaries
and non-guarantor subsidiaries as of and for each of the fiscal years ended
March 30, 2002, March 31, 2001 and April 1, 2000 is presented below for purposes
of complying with the reporting requirements of the guarantor subsidiaries.

CONSOLIDATING BALANCE SHEETS



SUBTOTAL NON CORPORATE
AS OF 3/30/02: SUBSIDIARY GUARANTOR AND TOTAL
GUARANTORS SUBSIDIARIES DIVISIONS COMPANY
------------- ------------ ----------- ----------

Cash $ (240) $ 1,134 $ 6,284 $ 7,178
Accounts receivable, net 8,175 3,084 27,156 38,415

Raw material 870 718 1,597 3,185
Work in process 8,884 2,582 7,110 18,576
Finished goods 24,287 4,477 26,080 54,844
------------------------------------------------------
Inventories 34,041 7,777 34,787 76,605
Prepaid expense other current assets 343 474 4,310 5,127
------------------------------------------------------
Total current assets 42,319 12,469 72,537 127,325

Property, plant and equipment, net 32,622 3,903 23,011 59,536

Restricted marketable securities 38 - 1,217 1,255
Excess of cost over net assets acquired, net 8,054 - 17,096 25,150
Deferred financing costs, net - - 3,413 3,413
Other assets (2,128) 180 3,290 1,342
------------------------------------------------------
Total assets $ 80,905 $ 16,552 $ 120,564 $ 218,021
======================================================

Accounts payable $ 6,113 $ 1,665 $ 6,102 $ 13,880
Interco payable (receivable) 52,245 3,989 (56,234) -
Current portion of long-term debt 203 1,515 29,876 31,594
Obligations under capital leases 151 29 353 533
Accrued expenses and other current liabilities 8,501 1,019 2,792 12,312
------------------------------------------------------
Total current liabilities 67,213 8,217 (17,111) 58,319

Long term debt 1,680 2,955 125,500 130,135
Capital lease obligations, less current portion 51 25 72 148
Other noncurrent liabilities 1,158 132 14,756 16,046
------------------------------------------------------
Total liabilities 70,102 11,329 123,217 204,648

Stockholder's equity (deficit):
Common stock - 63 (63) -
Additional paid in capital - - 9,708 9,708
Currency translation adjustment - 88 - 88


F-13




Total retained earnings 10,803 5,072 (12,298) 3,577
-------------------------------------------------------
Total stockholder's equity 10,803 5,223 (2,653) 13,373

Total liabilities & stockholder's equity $ 80,905 $ 16,552 $ 120,564 $ 218,021
=======================================================


SUBTOTAL NON CORPORATE
AS OF 3/31/01: SUBSIDIARY GUARANTOR AND TOTAL
GUARANTORS SUBSIDIARIES DIVISIONS COMPANY
------------- ------------ ----------- ----------

Cash $ (504) $ 2,317 $ 1,313 $ 3,126
Accounts receivable, net 12,118 3,705 21,196 37,019

Raw material 1,379 431 968 2,778
Work in process 9,891 1,336 5,573 16,800
Finished goods 21,486 2,762 23,803 48,051
-------------------------------------------------------
Inventories 32,756 4,529 30,344 67,629
Prepaid expense other current assets 351 438 2,742 3,531
-------------------------------------------------------
Total current assets 44,721 10,989 55,595 111,305

Property, plant and equipment, net 32,871 3,274 23,856 60,001

Restricted marketable securities 2,463 - 1,578 4,041
Excess of cost over net assets acquired, net 6,111 - 19,840 25,951
Deferred financing costs, net - - 4,501 4,501
Other assets - 221 1,169 1,390
-------------------------------------------------------
Total assets $ 86,166 $ 14,484 $ 106,539 $ 207,189
=======================================================

Accounts payable $ 6,913 $ 1,253 $ 6,262 $ 14,428
Interco payable (receivables) 63,579 749 (64,328) -
Interco loans - 1,740 (1,740) -
Current portion of long-term debt 194 1,687 24,750 26,631
Obligations under capital leases 273 - 453 726
Accrued expenses and other current liabilities 4,600 805 7,944 13,349
-------------------------------------------------------
Total current liabilities 75,559 6,234 (26,659) 55,134

Long term debt 3,681 4,229 126,875 134,785
Capital lease obligations, less current portion 203 - 524 727
Other noncurrent liabilities 1,020 166 8,923 10,109
-------------------------------------------------------
Total liabilities 80,463 10,629 109,663 200,755

Stockholder's equity (deficit):
Common stock - 63 (63) -
Additional paid in capital - - 9,708 9,708
Currency translation adjustment - - 12 12
Total retained earnings 5,703 3,792 (12,781) (3,286)
-------------------------------------------------------
Total stockholder's equity 5,703 3,855 (3,124) 6,434

Total liabilities & stockholder's equity $ 86,166 $ 14,484 $ 106,539 $ 207,189
=======================================================


F-14


CONSOLIDATING STATEMENTS OF OPERATIONS



SUBTOTAL NON-
SUBSIDIARY GUARANTOR CORPORATE COMPANY
GUARANTORS SUBSIDIARIES AND DIVISIONS TOTAL
--------------- --------------- ---------------- --------------

FISCAL YEAR 2002

Net Sales $ 78,490 $ 16,129 $ 73,712 $ 168,331

Total Cost of Sales 61,914 10,758 41,903 114,575
------------------------------------------------------------------------

Gross Margin 16,576 5,371 31,809 53,756

Selling, general and administrative 5,527 2,868 17,211 25,606
Other expense, net of other income 211 (31) 757 937
------------------------------------------------------------------------

Operating Income 10,838 2,534 13,841 27,213

Interest expense, net 37 348 14,798 15,183
Minority interest - 17 - 17
------------------------------------------------------------------------

Income before taxes 10,801 2,169 (957) 12,013

Provision for income taxes 4,630 889 (369) 5,150
------------------------------------------------------------------------

Net Income before extraordinary item 6,171 1,280 (588) 6,863
========================================================================




SUBTOTAL NON-
SUBSIDIARY GUARANTOR CORPORATE COMPANY
GUARANTORS SUBSIDIARIES AND DIVISIONS TOTAL
--------------- --------------- ---------------- --------------

FISCAL YEAR 2001

Net Sales $ 79,940 $ 16,017 $ 80,478 $ 176,435

Total Cost of Sales 57,905 10,715 47,625 116,245
------------------------------------------------------------------------

Gross Margin 22,035 5,302 32,853 60,190

Selling, general and administrative 5,712 3,131 18,168 27,011
Other expense, net of other income 225 - 551 776

------------------------------------------------------------------------
Operating Income 16,098 2,171 14,134 32,403

Nonrecurring charge - - 3,600 3,600
Interest expense, net (16) 500 15,176 15,660
Minority interest - 16 - 16
------------------------------------------------------------------------
Income before taxes 16,114 1,655 (4,642) 13,127

Provision for income taxes 6,423 659 (1,849) 5,233
------------------------------------------------------------------------

Net Income $ 9,691 $ 996 $ (2,793) $ 7,894
========================================================================


F-15




SUBTOTAL NON-
SUBSIDIARY GUARANTOR CORPORATE COMPANY
GUARANTORS SUBSIDIARIES AND DIVISIONS TOTAL
--------------- --------------- ---------------- --------------

FISCAL YEAR 2001

Net Sales $ 88,244 $ 8,687 $ 80,217 $ 177,148

Total Cost of Sales 65,878 5,585 48,425 119,888
------------------------------------------------------------------------

Gross Margin 22,366 3,102 31,792 57,260

Selling, general and administrative 5,718 1,162 18,232 25,112
Other expense, net of other income 225 - 484 709
------------------------------------------------------------------------

Operating Income 16,423 1,940 13,076 31,439

Interest expense, net 21 161 14,855 15,037
Minority interest - 7 - 7
------------------------------------------------------------------------

Income before taxes 16,402 1,772 (1,779) 16,395

Provision for income taxes 6,380 689 (692) 6,377
------------------------------------------------------------------------

Net Income $ 10,022 $ 1,083 $ (1,087) $ 10,018
========================================================================


CONSOLIDATING STATEMENTS OF CASH FLOWS



NON- CORPORATE
SUBSIDIARY GUARANTOR AND COMPANY
GUARANTORS SUBSIDIARIES DIVISIONS TOTAL
------------ ------------ ------------ ------------

FISCAL YEAR 2002
Cash flows from operating activities:
Net income $ 6,171 $ 1,280 $ (588) $ 6,863
Loss from sale of land 22 - - 22
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 4,773 533 2,998 8,304
Deferred Taxes - - 747 747
Amortization of excess of cost over net assets acquired 224 577 801
Amortization of deferred financing costs - - 1,028 1,028
Changes in working capital, net of acquisitions:
(Increase) decrease in current assets (4,221) (2,663) (4,399) (11,283)
(Increase) decrease in non-current assets (482) 2,018 (1,428) 108
Increase (decrease) in current liabilities (3,101) (149) 1,028 (2,222)
Increase (decrease) in non-current liabilities 138 - 4,586 4,724
---------------------------------------------------------

Net cash provided by operating activities
3,524 1,019 4,549 9,092


F-16




Cash flows from investing activities:
Acquisition of subsidiaries - - (2,128) (2,128)
Purchase of property, plant & equipment, net (4,128) (756) (1,057) (5,941)
Proceeds from sale of land 627 - - 627
Sale (purchase) of restricted marketable securities, net 661 - 279 940
---------------------------------------------------------

Net cash used in investing activities (2,840) (756) (2,906) (6,502)

Cash flows from financing activities:
Net increase in revolving credit facility - - 9,000 9,000
Retirement of Industrial Revenue Bond (1,845) - - (1,845)
Proceeds of Industrial Revenue Bond trust account 1,845 - - 1,845
Payments on bank term loan (147) (1,446) (5,546) (7,139)
Principal payments on capital lease obligations (273) - (500) (773)
---------------------------------------------------------

Net cash provided by financing activities (420) (1,446) 2,954 1,088

Cash and Cash Equivalents:
Effect of exchange rate changes - - 374 374

Increase (decrease) during the year 264 (1,183) 4,971 4,052

Cash, at beginning of year (504) 2,317 1,313 3,126
---------------------------------------------------------
Cash, at end of year $ (240) $ 1,134 $ 6,284 $ 7,178
=========================================================




NON- CORPORATE
SUBSIDIARY GUARANTOR AND COMPANY
GUARANTORS SUBSIDIARIES DIVISIONS TOTAL
------------ ------------ ------------ ------------

FISCAL YEAR 2001
Cash flows from operating activities:
Net income $ 9,826 $ 995 $ (2,927) $ 7,894
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 3,540 481 3,819 7,840
Deferred Taxes - - 1,155 1,155
Tax benefit on exercise of stock options - - 3,108 3,108
Amortization of excess of cost over net assets acquired 224 577 801
Amortization of deferred financing costs - - 1,039 1,039
Changes in working capital, net of acquisitions:
(Increase) decrease in current assets (9,579) 1,856 (10,007) (17,730)
(Increase) decrease in non-current assets - - (9) (9)
Increase (decrease) in current liabilities (1,952) (994) 7,126 4,180
Increase (decrease) in non-current liabilities 286 (114) 266 438
---------------------------------------------------------

Net cash provided by operating activities 2,345 2,224 4,147 8,716

Cash flows from investing activities:
Purchase of property, plant & equipment, net (2,704) (152) (3,763) (6,619)
Sale of restricted marketable securities, net 460 - - 460
---------------------------------------------------------


F-17




Net cash used in investing activities (2,244) (152) (3,763) (6,159)

Cash flows from financing activities:
Net increase in revolving credit facility - - 9,000 9,000
Payments on bank term loan (348) (287) (4,250) (4,885)
Principal payments on capital lease obligations (254) -- (652) (906)
Dividend paid to parent company - - (3,571) (3,571)
---------------------------------------------------------

Net cash provided by financing activities (602) (287) 527 (362)

Cash and Cash Equivalents:
Effect of exchange rate changes - - (120) (120)

Increase (decrease) during the year (501) 1,785 791 2,075

Cash, at beginning of year (3) 532 522 1,051
---------------------------------------------------------
Cash, at end of year $ (504) $ 2,317 $ 1,313 $ 3,126
=========================================================




NON- CORPORATE
SUBSIDIARY GUARANTOR AND COMPANY
GUARANTORS SUBSIDIARIES DIVISIONS TOTAL
------------ ------------ ------------ ------------

FISCAL YEAR 2000
Cash flows from operating activities:
Net income $ 10,023 $ 1,083 $ (1,088) $ 10,018
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 3,523 260 4,315 8,098
Deferred Taxes - - 2,715 2,715
Amortization of excess of cost over net assets acquired 224 577 801
Amortization of deferred financing costs - - 985 985
Changes in working capital, net of acquisitions:
(Increase) decrease in current assets (7,881) - 3,845 (4,036)
(Increase) decrease in non-current assets - - (952) (952)
Increase (decrease) in current liabilities (2,333) (712) (2,844) (5,889)
Increase (decrease) in non-current liabilities - - 2,716 2,716
---------------------------------------------------------

Net cash provided by operating activities 3,556 631 10,269 14,456

Cash flows from investing activities:
Acquisition of subsidiaries - - (19,030) (19,030)
Purchase of property, plant & equipment, net (3,427) (106) (3,049) (6,582)
Sale of restricted marketable securities, net - - 617 617
---------------------------------------------------------

Net cash used in investing activities (3,427) (106) (21,462) (24,995)

Cash flows from financing activities:
Net increase in revolving credit facility - - 3,000 3,000
Issuance of Industrial Revenue Bond - - 4,800 4,800
Proceeds from long tern debt - - 7,707 7,707
Payments on bank term loan - - (3,000) (3,000)
Principal payments on capital lease obligations (328) - (730) (1,058)
---------------------------------------------------------


F-18




Net cash provided by financing activities (328) - 11,777 11,449

Cash and cash Equivalents
Effect of exchange rate changes - - (150) (150)

Increase (decrease) during the year (199) 525 434 760

Cash at beginning of year 196 7 88 291
---------------------------------------------------------
Cash at end of year $ (3) $ 532 $ 522 $ 1,051
=========================================================


In connection with the Recapitalization, the Company entered into bank credit
facilities (the "Senior Credit Facilities") with a group of lenders providing
for $16,000 of term loans (the "Term Loans") and up to $54,000 of revolving
credit loans and letters of credit (the "Revolving Credit Facility"). The
interest rate on the Term Loans is based on LIBOR plus 2.5%. The applicable
interest rate margin is determined on the first day of each fiscal period based
on the Company's leverage ratio, as defined. The rate in effect at March 30,
2002 was 4.41%.

In connection with the purchase of Schaublin, the Company entered into a bank
credit facility (the "Swiss Credit Facility") with Credit Suisse providing for
10,000 Swiss Francs, or approximately $5,734 of term loans (the "Swiss Term
Loans") and up to 1,000 Swiss Francs, or approximately $573, of revolving credit
loans and letters of credit (the "Swiss Revolving Credit Facility").

In connection with the purchase of Tyson, the Company entered into a loan with
the former owner of Tyson for the purchase of certain leasehold improvements,
which are included in the property, plant and equipment assets. This loan bears
interest at 9.0% and is paid monthly. The term of the loan is for 75 months, and
will end in June 2005.

At March 30, 2002, $18,182 of the Revolving Credit Facility was being utilized
to provide letters of credit to secure the Company's obligations relating to
certain Industrial Development Revenue Bonds ($16,905), described below, a
letter of credit securing a captive insurance policy primarily in relation to
workers compensation ($1,058) and trade import letters of credit ($219). A
letter of credit fee of 2.5% per annum payable quarterly in arrears is required
on the outstanding amount of the letter of credit. As of March 30, 2002 the
Company had the ability to borrow up to an additional $7,318 under the Revolving
Credit Facility. Borrowings outstanding under this facility as of March 30, 2002
were $28,500. A commitment fee of 0.5% per annum payable quarterly in arrears is
required on the unused portion of the Revolving Credit Facility. The
weighted-average interest rate for borrowings outstanding on this facility as of
March 30, 2002 was 4.7%.

The Senior Credit Facilities are secured by substantially all of the Company's
assets. Under the terms of the Senior Credit Facility, the Company is required
to comply with various operational and financial covenants, including minimum
EBITDA, minimum fixed charge coverage, total interest coverage and maximum
leverage ratio.

In addition, the Senior Credit Facility places limitations on the Company's
capital expenditures in any fiscal year, restricts its ability to pay dividends,
requires the Company to obtain the lenders' consent to certain acquisitions and
contains mandatory prepayment provisions which include prepayments from the sale
of the Company's stock and 50% of excess cash flow, as defined. The Company
incurred approximately $7,605 of fees primarily related to costs associated with
the issuance of the Notes as well as the Senior Credit Facilities. These costs
have been capitalized as deferred financing costs and are being amortized over
the terms of the Notes and Term Loans.

Proceeds from these borrowings were used to repay certain existing indebtedness
as well as to pay a dividend to Holdings in order to consummate the
Recapitalization described in Note 1.

During fiscal 1995, the Company entered into a loan agreement with the South
Carolina Jobs Economic Development Authority ("SC JEDA") which provides for
borrowings up to $10,700 under two industrial development revenue bonds and
during fiscal 1999 the Company entered into an additional loan agreement with
the SC JEDA which provides for borrowings up to $3,000 under an industrial
development revenue bond (the "Bonds" or "IRBs"). Additionally, during

F-19


fiscal 2000, the Company entered into a loan agreement with the California
Infrastructure and Economic Development Bank which provides for borrowings up to
$4,800 under an industrial development revenue bond. The proceeds from the Bonds
are restricted for working capital requirements and capital expenditure
purposes. On March 1, 2002, the Company retired the unused portion of the fiscal
1999 SC JEDA of $1,845, thereby reducing the debt and the restricted marketable
securities balances by this amount. As of March 30, 2002, $17,000 of the
proceeds have been expended, and the remaining $1,255 (including accumulated
interest of $1,600) is invested by the trustee in marketable securities. The
Series 1994 A and B and the Series 1999 SC JEDA Bonds are secured by an
irrevocable direct-pay letter of credit issued by one of the Company's lenders.
The letter of credit is equal to the aggregate principal amounts of the bonds
plus not less than forty-five days' interest thereon, calculated at 12% per
annum ($12,026). The Series 1999 California Infrastructure and Economic
Development Bank bond is likewise secured by an irrevocable direct-pay letter of
credit issued by one of the Company's lenders. The Company's obligation to its
lenders is secured pursuant to the provisions of the Credit Facility and is
equal to the aggregate principal amounts of the bond plus not less than fifty
days' interest thereon, calculated at 12% per annum ($4,879).

F-20


The balances payable under all borrowing facilities are as follows:



MARCH 30, 2002 MARCH 31, 2001
-------------- --------------

SENIOR SUBORDINATED NOTES PAYABLE $ 110,000 $ 110,000

CREDIT FACILITY

Term Loan, payable in quarterly installments of $250, commencing September 30,
1997, increasing annually thereafter to $1,375 from September 20, 2001 with
final payment due June 30, 2002; bears interest at variable rates, payable
monthly and quarterly for prime and LIBOR-based elections, respectively 1,375 6,625

Revolving Credit Facility borrowings outstanding 28,500 19,500

SWISS CREDIT FACILITY

Term Loan, payable in quarterly installments of approximately $287, commencing
March 2001, increasing thereafter to approximately $430 from March 2004 with
final payment due December 31, 2004; bears interest at variable rates, payable
quarterly 4,470 5,461

SCHAUBLIN NOTE

Term Loan, due December, 2001, bears interest at 5% -- 454

OTHER LOANS 729 876

INDUSTRIAL DEVELOPMENT REVENUE BONDS

Series 1994 A due in annual installments of $180 beginning September 1, 2006,
graduating to $815 on September 1, 2014 with final payment due on September 1,
2017; bears interest at a variable rate, payable monthly through December 2017 7,700 7,700

Series 1994 B bears interest at a variable rate, payable monthly
through December 2017 3,000 3,000

Series 1998 tax-exempt industrial development bonds; bear interest at
variable rates, payable monthly through December 2021 1,155 3,000

Series 1999 tax-exempt industrial development bonds; bearing
interest at variable rates, payable monthly through April 2024 4,800 4,800
-------------- --------------

TOTAL DEBT 161,729 161,416

LESS: CURRENT PORTION 31,594 26,631
-------------- --------------

LONG-TERM DEBT $ 130,135 $ 134,785
============== ==============


F-21


Maturities of long-term debt during each of the following five fiscal years and
thereafter are as follows:



2003 $ 31,594
2004 1,812
2005 1,602
2006 66
2007 -
Thereafter 126,655
---------
Total $ 161,729
=========


6. OBLIGATIONS UNDER CAPITAL LEASES

Machinery and equipment additions under capital leases amounted to $0, $79 and
$750 in fiscal 2002, 2001 and 2000, respectively. The average imputed rate of
interest on these leases at year end is 6.7%, 7.2% and 7.2% in fiscal 2002, 2001
and 2000, respectively.

Included in property, plant and equipment are the following assets held under
capital leases as of:



MARCH 30, MARCH 31,
2002 2001
------------ ------------

Machinery and equipment $ 6,496 $ 7,581
Accumulated depreciation (5,022) (5,459)
------------ ------------
Net capital lease assets $ 1,474 $ 2,122
============ ============


Future minimum lease payments of assets under capital leases at March 30, 2002
are as follows:



2003 $ 564
2004 148
2005 4
2006 -
------------
Total minimum lease payments $ 716
Less: amount representing interest 35
------------
Present value of net minimum lease payments 681
Less: current maturities 533
------------
Non-current capital lease obligations $ 148
============


7. PENSION PLANS

At March 30, 2002, the Company has noncontributory defined benefit pension plans
covering union employees in its Heim division plant in Fairfield, Connecticut,
its Nice subsidiary plant in Kulpsville, Pennsylvania, its Bremen subsidiary
plant in Bremen, Indiana and its Tyson subsidiary plant in Glasgow, Kentucky.

Plan assets are comprised primarily of U.S. government securities, corporate
bonds, and stocks. The plans provide benefits of stated amounts based on a
combination of an employee's age and years of service.

F-22


The following tables set forth net periodic benefit cost of the Company's plans,
and total pension benefit expense for the three fiscal years in the period ended
March 30, 2002:



2002 2001 2000
------------ ----------- ----------

Components of net periodic benefit cost:
Service cost $ 276 $ 283 $ 288
Interest cost 864 813 718
Actual return on plan assets (984) (1,039) (979)
Amortization of prior service cost and deferrals (29) (29) (59)
Amortization of (gains) losses 38 (43) --
Plan administrative expenses 54 103 79
-----------------------------------------
Net periodic benefit cost of the Company's plans $ 219 $ 88 $ 47
=========================================


The following tables set forth the funded status of the Company's pension
benefit plans, the amount recognized in the balance sheets of the Company at
March 30, 2002 and March 31, 2001 and the principal weighted-average assumptions
inherent in their determination:



2002 2001
------------ -----------

Change in benefit obligation:
Benefit obligation at beginning of year $ 11,592 $ 10,129
Service cost 276 283
Interest cost 864 813
Actuarial loss 578 953
Benefits paid (626) (586)
---------------------------
Benefit obligation at end of year 12,684 11,592

Change in plan assets:
Fair value of plan assets at beginning of year 11,162 11,854
Actual return on plan assets (493) (77)
Employer contributions 352 71
Benefits paid (626) (586)
Administrative expense (54) (100)
---------------------------
Fair value of plan assets at end of year 10,341 11,162

Reconciliation of funded status at end of year:

Funded status (2,343) (430)
Unrecognized prior service cost (219) (248)
Unrecognized actuarial net loss 2,326 359
---------------------------
Accrued benefit cost $ (236) $ (319)
===========================


Benefits under the union plans are not a function of employees' salaries; thus,
the accumulated benefit obligation equals the projected benefit obligation.

The assumptions used in determining the funded status information were as
follows:

F-23




2002 2001 2000
-----------------------------------------

Discount rate 7.50% 7.50% 7.75%
Expected long-term rate of return on plan assets 9.00% 9.00% 8.50%


In addition, the Company has a defined contribution plan under Section 401(k) of
the Internal Revenue Code for all of its employees not covered by a collective
bargaining agreement. The plan is funded by eligible participants through
employee contributions and by Company contributions equal to a percentage of
eligible employee compensation. Employer contributions under this plan amounted
to $602, $1,055 and $1,026 in fiscal 2002, 2001 and 2000, respectively.
Effective October 1, 2001 the Company suspended matching contributions to this
plan.

Effective September 1, 1996 the Company adopted a non-qualified Supplemental
Executive Retirement Plan ("SERP") for a select group of highly compensated
management employees designated by the Board of Directors of the Company. The
SERP allows eligible employees to elect to defer until termination of their
employment the receipt of up to 25% of their current salary. The Company makes
contributions equal to the lesser of 50% of the deferrals or 3.5% of the
employees' annual salary, which vest in full after three years of service
following the effective date of the SERP. Employer contributions under this plan
amounted to $69, $88 and $87 in fiscal 2002, 2001 and 2000, respectively.

8. POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS

The Company, for the benefit of employees at its Heim, West Trenton, Nice and
Bremen facilities, sponsors contributory defined benefit health care plans that
provide postretirement medical benefits to union employees who have attained
certain age and/or service requirements while employed by the Company. The plans
are unfunded and costs are paid as incurred. Postretirement benefit obligations
are included in "Other noncurrent liabilities" within the Consolidated Balance
Sheets.



---------------------------
FISCAL YEAR FISCAL YEAR
2002 2001
---------------------------

Accrued Benefit Cost at Beginning of Year $ 2,798 $ 2,694
Net Periodic Benefit Cost 404 270
Actual Benefit Payments (223) (166)
---------------------------
Accrued Benefit Cost at Year End $ 2,979 $ 2,798
===========================


The net periodic postretirement benefit costs are as follows:



FISCAL YEAR ENDED
-----------------------------------------
MARCH 30, MARCH 31, APRIL 1,
2002 2001 2000
-----------------------------------------

Service cost $ 61 $ 53 $ 59
Interest cost 317 256 233
Prior service cost amortization (71) (88) (22)
Amount of loss/(gain) recognized 97 50 --
-----------------------------------------
$ 404 $ 271 $ 270
=========================================


The Company has contractually capped its liability for certain groups of future
retirees. As a result, there is no health care trend associated with these
groups. The effect of a 1% annual increase in the assumed cost trend rate would
increase the accumulated postretirement benefit obligation by approximately 4.8%
for these plans; the annual service and interest cost components in the
aggregate would not be materially affected. The discount rate used in
determining the accumulated postretirement benefit obligation for the plans was
7.5% for fiscal 2002, 7.5% for fiscal year 2001 and 7.75% for fiscal year 2000.

F-24


9. INCOME TAXES

The Company is included in the consolidated tax return of Holdings and
calculates its provision for income taxes on a separate entity basis.

The Company's effective income tax rate is reconciled to the U.S. Federal
statutory tax rate as follows:



FISCAL YEAR ENDED
---------------------------------------
MARCH 30, MARCH 31, APRIL 1,
2002 2001 2000
---------------------------------------

Federal statutory tax rate 34.0% 34.0% 34.0%
State income taxes - net of federal tax benefit 3.2% 3.5% 1.1%
Amortization of non-deductible goodwill 1.6% 1.5% 3.5%
Other non-deductible items 4.0% 0.8% 0.8%
---------------------------------------
Effective tax rate 42.8% 39.8% 39.4%
=======================================


The income tax provision consisted of:



FISCAL YEAR ENDED
----------------------------------------
MARCH 30, MARCH 31, APRIL 1,
2002 2001 2000
----------------------------------------

Current:
Federal $ 3,574 $ 3,299 $ 2,878
State 553 503 724
Foreign 276 276 80
----------------------------------------
Total Current 4,403 4,078 3,682
Deferred 747 1,155 2,695
----------------------------------------
Total $ 5,150 $ 5,233 $ 6,377
========================================


The net deferred tax asset, for which no valuation allowance has been
established, consists of the following:



FISCAL YEAR ENDED
----------------------------
MARCH 30, MARCH 31,
2002 2001
----------------------------

Postretirement benefits $ 1,379 $ 1,272
Employee compensation accruals 859 777
Property, plant and equipment (3,619) (2,890)
Unremitted foreign earnings (1,647) (1,117)
Amortizable excess purchase price (519) (380)
Other, net 4,922 4,459
----------------------------
Net deferred tax asset $ 1,375 $ 2,121
============================


In fiscal 2002 and fiscal 2001, a component of deferred tax assets was related
to the recording of certain liabilities in connection with purchase accounting.

F-25


10. STOCKHOLDER'S EQUITY

The Company has 100 shares of Common Stock par value $.01 per share outstanding,
all of which is owned by Holdings.

All issuances to, and redemptions of equity by, Holdings are shown on the
financial statements of the Company as dividends paid to and capital
contributions from Holdings.

A summary of the status of Holdings' warrants and stock options outstanding as
of March 30, 2002, March 31, 2001 and April 1, 2000 (including activity other
than related to compensation) and changes during the years ending on those dates
is presented below. All historical and current shares have been adjusted for a
100 for 1 split approved by the Board of Directors and the stockholders of
Holdings in July 2001.



NUMBER OF CLASS A
COMMON STOCK
ARRANTS/OPTIONS
-------------------

Outstanding April 3, 1999 1,620,000

Awarded fiscal 2000 20,100
-------------------

Outstanding, April 1, 2000 1,640,100

Awarded fiscal 2001 10,600

Exercised fiscal 2001 (1,205,660)

Cancelled fiscal 2001 (5,620)

Converted from Class B fiscal 2001 166,667
-------------------

Outstanding, March 31, 2001 606,087

Awarded fiscal 2002 0

Exercised fiscal 2002 0

Cancelled fiscal 2002 (1,310)
-------------------

Outstanding March 30, 2002 604,777
===================




NUMBER OF
SUPERVOTING CLASS B
COMMON STOCK WARRANTS
---------------------

Outstanding April 3, 1999 1,007,740

Awarded fiscal 2000 0
---------------------

Outstanding, April 1, 2000 1,007,740

Awarded fiscal 2001 0

Converted to Class A fiscal 2001 (166,667)

Exercised fiscal 2001 (291,927)
---------------------

Outstanding March 31, 2001 549,146

Exercised fiscal 2002 0

Cancelled fiscal 2002 0
---------------------

Outstanding March 30, 2002 549,146
=====================


F-26


In connection with the Recapitalization, as described in Note 1, Holdings issued
warrants to purchase 125,000 shares of Class B Common Stock, par value $.01 per
share, of Holdings at an exercise price of $5.14 per share to the Company's
Chairman. In addition, a new group of investors (who were not previously
stockholders of Holdings) were issued 673,100 warrants to purchase Class A
Common Stock of Holdings. In fiscal 2000 and fiscal 2001, an additional 3,350
and 10,600 warrants were issued, respectively, to this new group of investors in
respect of an anti-dilution protection pursuant to issuance of options under the
stock option plan. These warrants were exercised in fiscal 2001.

STOCK BASED COMPENSATION

Management participates in Holdings' stock compensation plan. Holdings has
issued warrants to purchase shares of Class B Supervoting Common Stock to
Dr. Hartnett. All other warrants and options are to purchase Class A common
stock.

In fiscal 2000, Holdings issued 20,100 options to acquire Class A Common Stock
to management. The term of the options are 10 years from the date of issuance
and they are exercisable at $5.14 per share, the estimated fair market value at
the time of grant.

No options were issued to management in fiscal 2001. Certain members of
management left during fiscal 2001 without exercising the vested portion of
5,620 options.

Certain members of management left during fiscal 2002 without exercising the
vested portion of 1,310 options.

Options granted under the plan generally vest over a period of three years.

The following table summarizes information about compensation related stock
options and warrants outstanding at March 30, 2002:



OPTIONS/WARRANTS OUTSTANDING OPTIONS/WARRANTS EXERCISABLE
- ---------------------------------------------------------------------------------------------------
EXERCISE PRICE OPTIONS/WARRANTS WEIGHTED AVERAGE OPTIONS/WARRANTS WEIGHTED AVERAGE
OUTSTANDING CONTRACTUAL LIFE EXERCISABLE EXERCISE PRICE
- ---------------------------------------------------------------------------------------------------

CLASS A
$ 1.00 476,847 10 years 476,847 $ 1.00
$ 5.14 127,930 10 years 127,930 $ 5.14
CLASS B
$ 1.00 424,146 10 years 424,146 $ 1.00
$ 5.14 125,000 10 years 125,000 $ 5.14


The Company accounts for these options and warrants using the intrinsic value
method pursuant to Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," under which no compensation cost has been recognized
since all grants were issued at the fair market value of Holding's common stock
at the date of the grant. Had compensation cost for these plans been determined
based on the fair value at the grant dates consistent with SFAS No. 123,
"Accounting for Stock-Based Compensation," the Company's net income would have
been reduced to the following pro forma amounts:



NET INCOME
------------------------------
2001 2000
------------------------------

As Reported $ 7,894 $ 10,018

Pro Forma $ 7,858 $ 9,975


F-27


The fair value for the Holdings warrants was estimated at the date of grant
using a Black-Scholes warrant pricing model with the following weighted-average
assumptions: risk free interest rate used was 5.7% for fiscal 2000; dividend
yields of 0%, volatility factors of expected market price of Holdings common
stock of .44% and a weighted-average expected life of the warrants of three
years. There were no issuances during fiscal 2002 or 2001 that qualified for
measurement as compensatory options or warrants.

The Black-Scholes warrant pricing model was developed for use in estimating the
fair value of traded warrants which have no vesting restrictions and are fully
transferable. In addition, warrant valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Holdings warrants have characteristics significantly different from those of
traded warrants, and because changes in the subjective input assumptions can
materially affect the fair value, estimate, in management's opinion, the
existing models do not necessarily provide a reliable single measure of the fair
value of its warrants.

11. COMMITMENTS AND CONTINGENCIES

The Company leases factory facilities under non-cancelable operating leases,
which expire on various dates through February 2009 with rental expense
aggregating $1,403, $1,204 and $779 in fiscal 2002, 2001and 2000, respectively.

The Company also has non-cancelable operating leases for transportation,
computer and office equipment, which expire at various dates. Rental expense for
2002, 2001 and 2000 aggregated $759, $815 and $481, respectively.

The Company entered into an agreement with Whitney whereby a quarterly
management services fee is paid for certain consulting and management advisory
services, as directed by the board of directors of the Company and agreed to by
Whitney. Such ongoing fees aggregated $188 and $0 for fiscal 2002 and 2001,
respectively.

The aggregate future minimum lease payments under operating leases are as
follows:



2003 2,038
2004 1,660
2005 1,379
2006 1,164
2007 1,142
Thereafter 2,122
--------
Total $ 9,505
========


The Company enters into government contracts and subcontracts that are subject
to audit by the government. In the opinion of the Company's management, the
results of such audits, if any, are not expected to have a material impact on
the financial statements of the Company.

Certain types of property transactions in Connecticut and New Jersey may trigger
investigation and cleanup obligations under the Connecticut Transfer Act (the
"CTA") or the New Jersey Industrial Site Recovery Act (the "ISRA"),
respectively. In connection with the purchase of its Fairfield, Connecticut
facility in 1996, the Company was required by the CTA to submit an investigation
and remediation plan for known environmental contamination at that facility.
Although this known contamination had been the result of operations conducted by
the facility's prior owner, the Company agreed to assume responsibility for
completing cleanup efforts previously initiated by that owner. In 1996, the
Company submitted and obtained regulatory approval for its investigation and
remediation plan as required by the CTA. The results of this investigation
revealed the continued presence of certain low level soil and groundwater
contamination, the remediation of which had been commenced by the previous owner
of the facility. In March 1998, the Company submitted these findings to
Connecticut Department of Environmental Protection ("CTDEP"). In April 1999,
CTDEP responded to this submission and requested that the Company develop a
workplan for additional investigation, analysis and possible remediation to
address the isolated, low level residual contamination at this facility. Since
then, the Company has been working with CTDEP in an effort to develop data
showing that no further remedial action is necessary. The Company submitted data
to CTDEP in November and December 2001 intended to show that contamination has
not migrated off the property. CTDEP has requested additional information, which
the Company is in the process of developing. While the

F-28


Company believes that its total investigation and cleanup costs will not exceed
$0.2 million, Connecticut regulators may require additional cleanup or
monitoring of the residual contamination at this facility. If such activities
are required, there can be no assurance that the Company's total investigation
and remediation costs will not exceed its $200 estimate.

The Company's Recapitalization in 1997 also triggered ISRA obligations at its
West Trenton facility, obligating the Company to investigate all possible past
hazardous substances releases, and to cleanup any resulting contamination, at
that facility. Under ISRA, investigation requirements for facilities that are
currently being remediated pursuant to an earlier ISRA-triggering transaction
may be merged into that ongoing ISRA investigation. In this case, the West
Trenton facility has been the subject of an ongoing ISRA (and its predecessor
statute) groundwater investigation and remediation by the facility's prior owner
since the Company's acquisition of the facility in 1987. Accordingly, the New
Jersey regulatory authorities have informed the Company that its ISRA
obligations triggered by the 1997 Recapitalization are being satisfied by the
prior owner's ongoing ISRA investigation and remediation. That investigation has
not found any additional contamination that would require remediation beyond
that which continues to be performed by the facility's prior owner.

There are various claims and legal proceedings against the Company relating to
its operations in the normal course of business, none of which the Company
believes is material to its financial position or results of operations. The
Company currently maintains insurance coverage for product liability claims. The
Company is subject to various federal, state and local environmental laws,
ordinances and regulations. State agencies are currently overseeing
investigation and/or remediation activities at various Company facilities. In
addition, the previous owners of certain facilities are undertaking cleanup and
limited remediation in each case in fulfillment of certain indemnification
obligations. The Company believes it is currently in material compliance with
all applicable requirements of environmental laws.

Currently, collective bargaining agreements with the United Auto Workers (UAW)
cover substantially all of the hourly employees at the Company's West Trenton,
New Jersey, Fairfield, Connecticut, and Bremen, Indiana plants, and collective
bargaining agreements with the United Steelworkers (USWA) cover substantially
all the hourly employees at the Company's Kulpsville, Pennsylvania and Glasgow,
Kentucky plants. A collective bargaining agreement with the Association of Swiss
Engineering Employers (ASM) covers substantially all of the hourly employees at
the Company's Delemont, Switzerland plant. Within the next twelve months, the
Bremen agreement, covering 56 hourly employees, expires on June 30, 2002 and the
Kulpsville agreement, covering 53 hourly employees, expires on October 25, 2002.
The Company considers its relations with its employees to be satisfactory and
has not experienced a significant work stoppage in over fourteen years. However,
there can be no assurance that additional employees who are not represented by
unions will not elect to be so represented in the future or that any of the
collective bargaining agreements will be renewed when they expire or that the
Company will not experience strikes, work stoppages or other situations.

12. OTHER EXPENSE, NET OF OTHER INCOME

Other expense, net of other income, is comprised of the following:



FISCAL YEAR ENDED
-----------------------------------------------
MARCH MARCH 31, APRIL 1,
30, 2002 2001 2000
-----------------------------------------------

Amortization of goodwill and
certain intangible assets $ 801 $ 801 $ 801
Royalty income -- (19) (76)
Management fee 188 -- --
Other income/expense (52) (6) (16)
-----------------------------------------------
Total $ 937 $ 776 $ 709
===============================================


F-29


13. SEGMENT INFORMATION

In 1998, SFAS No. 131, "Disclosures About Segments of an Enterprise and Related
Information" was issued. The objective of this Statement is to present
disaggregated information about segments of a business enterprise to produce
information about the types of activities in which and enterprise is engaged in
and the economic environment in which those activities are carried out. The
Company operates in a single reportable segment; the manufacture and
distribution of various types of bearing products. No detailed segment data is
required to be disclosed under this pronouncement. As it relates to geographical
data, during fiscal years 2002, 2001 and 2000, the Company's Schaublin
operations, based in Delemont, Switzerland, produced $14.9 million, $16.0
million and $8.7 million in foreign sales, respectively, and had long-lived
assets of $2.9 million and $3.2 million at March 30, 2002 and March 31, 2001,
respectively.

The Company's non-guarantor subsidiaries (Note 5) are substantially all of its
foreign operations.

14. SUBSEQUENT EVENTS

SENIOR SECURED CREDIT FACILITY

The Company and its domestic subsidiaries entered into a $94 million senior
secured credit facility, dated May 30, 2002, with General Electric Capital
Corporation as agent and lender, Congress Financial Corporation (Western) as
lender, GECC Capital Markets Group as lead arranger and other lenders signatory
thereto from time to time, consisting of a $40 million term loan and a $54
million revolving credit facility. In connection with the new credit facility
the Company and its domestic subsidiaries granted liens and mortgages on
substantially all of their existing and after-acquired personal and real
property. In addition, the Company pledged all of its capital stock in its
domestic subsidiaries and a portion of its capital stock in its directly owned
foreign subsidiaries.

The proceeds of the term loan were used to pay off the Company's senior credit
facility, dated June 23, 1997, by and between the Company, Credit Suisse First
Boston, as administrative agent and the lenders thereto, to pay fees and
expenses with respect to the new credit facility and for other corporate
purposes. The revolving credit facility is available for issuances of letters of
credit and for loans in connection with acquisitions, working capital needs or
other general corporate purposes.

DISSOLUTION OF FSC

On or about May 29, 2002, the Company dissolved its wholly owned foreign sales
subsidiary, Roller Bearing Company, FSC, Inc.

SALE OF CLASS B EXCHANGEABLE CONVERTIBLE PARTICIPATING PREFERRED STOCK

During July 2002, Whitney and Dr. Michael J. Hartnett, the Company's
President, Chief Executive Officer and Chairman of the Board, purchased an
aggregate of 240,000 shares of Holdings Class B Exchangeable Convertible
Participating Preferred Stock in exchange for gross proceeds of $24,000. In
connection with the purchase, Holdings paid a fee of $750 to Whitney and
amended the terms of a management services agreement. Following the closing
of the sale, Holdings utilized the proceeds of the sale and certain of the
Company's cash on hand to repurchase approximately $30,400 in principal
amount at maturity of certain debt issued in connection with the
Recaptilization (Note 1). This repurchase satisfied Holdings' obligation to
make a scheduled redemption payment relating to such debt in December 2002.
Holdings will recognize a pretax gain on the extinguishment of this debt
obligation of approximately $780, net of transaction expenses of $406.

The holders of Holdings' Class B Preferred Stock are entitled to an 8% per annum
accumulating dividend and are further entitled to participate in any dividends
paid to the holders of shares of Holdings' Common Stock. The Class B Preferred
Stock is subject to conversion by Holdings or exchange by the holders thereof.
In either situation, each share of Class B Preferred would yield a number of
shares of Holdings' Class A Common Stock determined by reference to a formula
set forth in Holdings' Amended and Restated Certificate of Incorporation, a
number of shares of Holdings' Class C Redeemable Preferred Stock also determined
by reference to a formula set forth in Holdings' Amended and Restated
Certificate of Incorporation and one share of Class D Preferred Stock. Any
holders of Class C Preferred Stock would be entitled to an 8% per annum
accumulating dividend. The Class C Preferred Stock is subject to redemption by
Holdings at its option, but is not subject to mandatory redemption. The Class D
Preferred Stock entitles the holders thereof, upon liquidation to a payment
determined by reference to a formula set forth in Holdings' Amended and Restated
Certificate of Incorporation.

On August 6, 2002, the Company obtained a waiver from its senior secured
facility lender extending its obligation to deliver annual financial
statements.

15. RELATED PARTY TRANSACTIONS

In connection with the Recapitalization, Holdings loaned Dr. Michael J.
Hartnett, the Company's President and Chief Executive Officer, $500 to purchase
shares of capital stock of Holdings. The loan does not bear interest and is due
on the earlier of (i) June 23, 2007, (ii) the consummation of a Sale of Holdings
or (iii) the consummation of an initial public offering of Holdings. The loan is
secured by a pledge of Dr. Hartnett's shares in Holdings.

See "Sale of Class B Exchangeable Convertible Preferred Stock" under Note 14
Subsequent Events.

16. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

Year Ended March 30, 2002:



Q1 Q2 Q3 Q4 FISCAL 2002

Net Sales $ 40,170 $ 41,831 $ 38,675 $ 47,655 $ 168,331
Operating income $ 6,509 $ 6,522 $ 5,564 $ 8,618 $ 27,213
Net income $ 1,394 $ 1,546 $ 1,166 $ 2,757 $ 6,863


F-30


Year Ended March 31, 2001:



Q1 Q2 Q3 Q4 FISCAL 2001

Net Sales $ 43,861 $ 41,160 $ 40,150 $ 51,264 $ 176,435
Operating income $ 7,653 $ 6,877 $ 6,187 $ 11,686 $ 32,403
Net income (loss) $ 2,355 $ 1,979 $ (642) $ 4,202 $ 7,894


Year Ended April 1, 2000:



Q1 Q2 Q3 Q4 FISCAL 2000

Net Sales $ 42,971 $ 41,228 $ 41,326 $ 51,623 $ 177,148
Operating income $ 5,747 $ 7,491 $ 6,509 $ 11,692 $ 31,439
Net income $ 1,459 $ 2,137 $ 1,576 $ 4,846 $ 10,018


F-31


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

On May 22, 2002, the Company dismissed Arthur Andersen LLP
("Arthur Andersen") as the Company's independent accountants. The Company
engaged Ernst & Young LLP ("E&Y") as its new independent accountants effective
immediately. The decision to change the Company's independent accountants was
recommended by the Company's Board of Directors.

Arthur Andersen's reports on the financial statements of the Company
for the fiscal years ended March 31, 2001 and April 1, 2000 did not contain any
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope, or accounting principles.

During the two years ended March 31, 2001 and through the subsequent
interim period preceding the decision to change independent accountants, there
were no disagreements with Arthur Andersen on any matter of accounting principle
or practices, financial statement disclosure, or auditing scope or procedure,
which disagreement(s), if not resolved to the satisfaction of Arthur Andersen,
would have caused it to make reference thereto in its report on the financial
statements for such years.

During the two years ended March 31, 2001 and through the subsequent
interim period preceding the decision to change independent accountants, there
were no "reportable events" (as defined below) requiring disclosure pursuant to
Item 304(a)(1)(v) of Regulation S-K, promulgated under the Securities Act of
1934, as amended. As used herein, the term "reportable events" means any of the
items listed in paragraphs (a)(1)(v)(A)-(D) of Item 304 of Regulation S-K.

Effective May 22, 2002, the Company engaged E&Y as its independent
accountants. During the two years ended March 31, 2001 and through the
subsequent interim period preceding the decision to change independent
accountants, neither the Company nor anyone acting on its behalf consulted E&Y
regarding either the application of accounting principles as to a specified
transaction, either completed or proposed, or the type of audit opinion that
might be rendered on the Company's consolidated financial statements, nor has
E&Y provided to the Company a written report or oral advice regarding such
principles or audit opinion.

30


PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth certain information concerning the
directors and executive officers of Holdings, the Company and the Company's
subsidiaries. Each director is elected for a one year term or until such
person's successor is duly elected and qualified.



Dr. Michael Hartnett 56 Chairman, President and Chief Executive Officer of
Holdings and the Company, Chairman and President of
ITB, President of Nice and LLP, Director of the
Company, ITB, Nice, LLP, Bremen, Miller, Tyson and
Schaublin

Anthony S. Cavalieri 55 Vice President and Chief Financial Officer of
Holdings and the Company, Chief Financial Officer
of ITB, Nice, LLP, Bremen, Miller, Tyson and
Schaublin

Michael S. Gostomski 51 Executive Vice President, Mergers and Acquisitions
of Holdings, the Company, ITB, Nice and LLP,
Executive Vice President of Bremen, Miller, Tyson
and Schaublin, Secretary of Nice and LPP

Richard J. Edwards 46 Vice President of Holdings and the Company, General
Manager of the RBC division

Christopher Thomas 47 Vice President, Business Development of Holdings
and the Company

Edward J. Trainer 58 Secretary of Holdings, the Company and ITB

Kurt B. Larsen 38 Director of Holdings and the Company

Robert Anderson 82 Director of Holdings and the Company

William E. Myers, Jr. 42 Director of Holdings and the Company

Richard R. Crowell 47 Director of Holdings and the Company

Mitchell I. Quain 50 Director of Holdings and the Company

William Killian 67 Director of Holdings and the Company

Michael Stone 39 Director of Holdings and the Company


31


DR. MICHAEL J. HARTNETT has been president and Chief Executive Officer of
the Company since April 1992 and Chairman since June 1993. Prior to that,
Dr. Hartnett served as Vice President and General Manager of ITB from 1990,
following eighteen years at Torrington Company, one of the three largest
bearings manufacturers in the United States. While at Torrington, Dr.
Hartnett held the position of Vice President and General Manager of the
Aerospace Business Unit and was, prior to that, Vice President of the
Research and Development Division. Dr. Hartnett holds an undergraduate
degree from University of New Haven, a Masters degree from Worcester
Polytechnic Institute, and a Ph.D. in Applied Mechanics from the University
of Connecticut. Dr. Hartnett has also developed numerous patents, authored
more than two dozen technical papers and is well known for his
contributions to the field of Tribology (the study of friction). Dr.
Hartnett currently serves as a director of Aftermarket Technology Company,
a publicly held company in the business of re-manufacturing aftermarket
components for automobiles.

ANTHONY S. CAVALIERI joined the Company in July 1996 as Vice President and
Chief Financial Officer. From August 1990 to November 1995 he was Vice
President and Chief Financial Officer of Duro-Test Corporation, a medium
sized lighting products manufacturer. From December 1995 through June 1996,
Mr. Cavalieri provided management and financial consulting services to
various entities. Prior to that he was a controller at the Mennen Company
and before that on the audit staff of Price Waterhouse, LLP. Mr. Cavalieri
holds a B.S. in Accounting from St. John's University and a M.B.A. from
Fordham University. He is also a certified public accountant (CPA) as well
as a certified management accountant (CMA), certified internal auditor
(CIA), certified in financial management (CFM) and certified in production
and inventory management (CPIM).

KURT B. LARSEN is currently the Managing Partner of Black Diamond Capital
Partners, LLC, a Park City, Utah based merchant banking firm. Mr. Larsen
also serves as Chairman of Global Promo Group, Incorporated, Chairman of
ProMost, Incorporated and as a Director of Altius Health Plans, SBI and
Company, Incorporated and Annexus Mobile Solutions Incorporated. From 1992
to 1997, Mr. Larsen worked for Aurora Capital Partners L.P., a private
equity fund, where he oversaw and executed investments in several
companies. Prior to Aurora, Mr. Larsen worked as an associate at both WSGP
Partners, a leveraged buy-out firm and Drexel Burnham Lambert Incorporated.

WILLIAM E. MYERS, JR. served as a Director of the Company from March 1992
to May 1997 and from June 1997 to the present. From November 1989 through
April 1998 he was the Chairman and Chief Executive Officer of W.E. Myers &
Company, a merchant bank which specialized in industry consolidations. Mr.
Myers has been employed as the Chairman and Chief Executive Officer of
Consolidation Partners, Inc., which is engaged in consolidating various
manufacturers of components industries.

MITCHELL I. QUAIN joined the Company as a Director in June 1997. Since May
1997 he has served as an Executive Vice President and member of the Board
of Directors of ING Baring Furman Selz, LLC, an investment banking and
brokerage company. From June 1975 to May 1997 he served as a Managing
Director of Schroeder Wertheim & Company, an investment banking company. He
also serves on the Board of Directors of a number of publicly-held
companies, including Allied Products Corporation, a diversified
manufacturing company, Mechanical Dynamics, Inc., a software company,
Strategic Distribution, Inc., a company in the business of industrial
distribution, and Titan International, manufacturer of off-highway
components. He chairs the Board of Overseers of the School of Engineering
at the University of Pennsylvania as well as serving on the Board of
Trustees of Penn.

ROBERT ANDERSON has served as Chairman Emeritus of Rockwell Corporation
since February 1990. He also serves as a director of Aftermarket Technology
Corporation and is a member of the Caltech Board of Trustees and the
Anderson Graduate School of Management.

32


RICHARD R. CROWELL is President and a Managing General Partner of Aurora
Capital Group, a private equity investment firm. Prior to establishing
Aurora in 1991, Mr. Crowell was a Managing Partner of Acadia Partners, a
New York-based investment fund formed with The Robert M. Bass Group. From
1983 to 1987, he was a Managing Director, Corporate Finance for Drexel
Burnham Lambert. He serves on the Board of Directors for Aftermarket
Technology Corp.; Impaxx, Inc.; Tartan Textile Services, Inc.; ADCO Global,
Inc. and Quality Distribution Service Partners, Inc. Mr. Crowell earned a
BA in English Literature from the University of California, Santa Cruz, and
an MBA from the Anderson School of the University of California, Los
Angeles. Mr. Killian holds a Bachelor of Chemical Engineering degree
from Georgia Tech and a Master of Engineering Administration from the
university of Utah.

MICHAEL STONE directs the fund management activities of Whitney and
oversees the Growth Industries group. He also focuses on investments in
Financial Services. He has been with Whitney for over a decade and has been
a senior investor in each outside equity funds. Previously, he was with
Bain & Company where he worked with manufacturing and pharmaceutical
clients and Bain Capital-owned entities. He is a graduate of Duke
University, BA and Harvard Business School, MBA.

WILLIAM P. KILLIAN joined the Company as a director in 2002. Mr. Killian
has reported to and directly advised CEOs of Fortune 500, NYSE corporations
on strategy, corporate growth, acquisitions and divestitures for 25
years. From 1985 until his retirement in 2000, Mr. Killian was corporate
VP, Development and Strategy for Johnston Controls, an $18 billion global
market leader in automotive systems and facility management and controls.
Currently, he serves as a member of the board of directors of Aqua-Chem,
Inc. and Premix, Inc. Mr. Killian holds a Bachelor of Chemical
Engineering degree from Georgia Tech and a Master of Engineering
Administration from the University of Utah.

MICHAEL S. GOSTOMSKI, the Company's Executive Vice President, Mergers and
Acquisitions joined the Company in September 1993. From January 1991
through August 1993, he served as President and Chief Executive Officer for
Transnational Industries, a publicly held manufacturer of components for
commercial and military aircraft. Mr. Gostomski holds a B.S. in Accounting
and a M.B.A. in Finance from the University of Connecticut. He is also a
certified public accountant (CPA). Mr. Gostomski currently serves as
director of a number of publicly held companies, including Transnational
Industries, Seatek, a publicly held manufacturer of small tools for the
electronics industry, Protopak Corporation, a packaging equipment
manufacturer and New Jersey Steel, a specialty steel manufacturer.

RICHARD J. EDWARDS joined the Company in February 1990 as Manufacturing
Manager in the Hartsville, South Carolina plant. He then became Plant
Manager of the Hartsville facility, Director of Operations of the RBC
division, and has been the Vice President and General Manager of the RBC
division since 1998. Prior to joining the Company, he spent six years with
Torrington as Materials Manager and then Plant Superintendent at their
Tyger River plant. Mr. Edwards holds a B.S. in Production Operations
Management from Arizona State University and a CPIM certification from
APICS.

CHRISTOPHER THOMAS joined the Company in October 1997 as Vice President,
Business Development. From March 1997 through October 1997, he served as
Business Manager of the Needle Bearing Division of Torrington, a
manufacturer of needle bearings. Mr. Thomas served as a Managing Director
of NASTECH Europe, Ltd., located in Coventry, England, a joint venture
between Torrington and NSK Ltd., a Japanese bearing and automotive
component manufacturer from April 1995 until March 1997. Prior to that, Mr.
Thomas was the Chairman of the Joint Task Force for the formation of
NASTECH Europe Ltd from June 1994 until March 1995. From May 1990 through
June 1994, Mr. Thomas served as the Business Manager of Precision
Components, a division of Torrington. Mr. Thomas received a B.S. degree in
Mechanical Engineering from Worcester Polytechnic Institute and a M.B.A.
from the University of Michigan.

33


EDWARD J. TRAINER has been employed by the Company since 1967. He served
from 1987 to January 1995 as Vice President of Human Resources and has
served as Director of International Sales since January 1995. Mr. Trainer
was named Secretary of the Company in 1993.

The Boards of Directors of Holdings and the Company currently consist of
Dr. Hartnett and Messrs. Larsen, Myers, Quain, Anderson, Crowell, Stone and
Killian. Dr. Hartnett is the sole director of ITB, Nice, LPP, Bremen,
Miller and Tyson.

Members of the Boards of Directors of Holdings and the Company currently
do not receive any compensation for their service as directors but are
reimbursed by the Company for any expenses incurred in attending meetings
of the Boards or otherwise performing their duties for the Company and
Holdings.

34


ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth the cash and other compensation paid by the
Company in fiscal years 2002, 2001 and 2000 to Dr. Hartnett, its Chairman,
President and Chief Executive Officer, and the next four highly paid executive
officers of the Company (the "Named Executive Officers"). (Amounts shown below
are in dollars.)

SUMMARY COMPENSATION TABLE



LONG TERM ALL OTHER
ANNUAL COMPENSATION COMPENSATION COMPENSATION
SECURITIES
FISCAL OTHER ANNUAL UNDERLYING
NAMES & PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS


DR. MICHAEL J. HARTNETT, 2002 $ 413,437(b) $ 50,684(c) $ 18,062(f)
CHAIRMAN, PRESIDENT AND 2001 $ 493,706(a)(b) $ 333,168(d) $ 34,718(g)
CHIEF EXECUTIVE OFFICER 2000 $ 432,186(a)(b) $ 393,750(e) $ 35,856(h)

MICHAEL S. GOSTOMSKI, 2002 $ 159,500(a) - $ 11,658(i)
EXECUTIVE VICE PRESIDENT, 2001 $ 160,407(a) $ 35,000(d) $ 14,791(j)
MERGERS & ACQUISITIONS 2000 $ 159,500(a) $ 90,000(e) $ 14,377(k)

ANTHONY S. CAVALIERI, 2002 $ 154,350(a)(b) $ 40,000(c) $ 15,932(l)
VICE PRESIDENT AND CHIEF 2001 $ 154,350(a)(b) $ 60,000(d) $ 21,810(m)
FINANCIAL OFFICER 2000 $ 151,900(a)(b) $ 40,000(e) $ 17,797(n)

RICHARD J. EDWARDS, 2002 $ 171,071(a)(b) $ 25,000(c) $ 17,344(o)
VICE PRESIDENT AND GENERAL 2001 $ 148,000(a)(b) $ 75,000(d) $ 18,219(p)
MANAGER, RBC & TYSON 2000 $ 142,000(a)(b) $ 30,000(e) $ 16,851(q)
DIVISIONS

CHRISTOPHER THOMAS 2002 $ 162,138(a)(b) $ 35,000(c) $ 16,335(r)
VICE PRESIDENT - 2001 $ 154,783(a)(b) $ 42,500(d) $ 17,867(s)
BUSINESS DEVELOPMENT 2000 $ 148,000(a)(b) $ 32,000(e) $ 18,033(t)


(a) Includes amounts deferred by the executive pursuant to the Company's 401(k)
Plan (as defined herein).

(b) Includes amounts deferred by the executive pursuant to the Company's SERP
(as defined herein).

(c) Bonus earned in fiscal 2001 and paid in fiscal 2002. Bonus for fiscal 2002
will be paid in fiscal 2003.

(d) Bonus earned in fiscal 2000 and paid in fiscal 2001. Bonus for fiscal 2001
was paid in fiscal 2002.

(e) Bonus earned in fiscal 1999 and paid in fiscal 2000. Bonus for fiscal 2000
will be paid in fiscal 2001.

(f) Consists of (i) $10,104 paid by the Company to lease a car for
Dr. Hartnett's use and (ii) $7,958 contributed by the Company to
Dr. Hartnett's SERP account.

35


(g) Consists of (i) $20,523 paid by the Company to lease vehicles for
Dr. Hartnett's use and (ii) $2,666 contributed by the Company to
Dr. Hartnett's 401(k) Plan account and (iii) $11,529 contributed by the
Company to Dr. Hartnett's SERP account.

(h) Consists of (i) $10,104 paid by the Company to lease a car for
Dr. Hartnett's use and (ii) $5,240 contributed by the Company to
Dr. Hartnett's 401(k) Plan account and (iii) $20,512 contributed by the
Company to Dr. Hartnett's SERP account.

(i) Consists of (i) $9,664 contributed by the Company to lease a car for
Mr. Gostomski's use and (ii) $1,994 contributed by the Company to
Mr. Gostomski's 401(k) plan.

(j) Consists of (i) $9,906 contributed by the Company to lease a car for
Mr. Gostomski's use and (ii) $4,885 contributed by the Company to
Mr. Gostomski's 401(k) plan.

(k) Consists of (i) $10,390 contributed by the Company to lease a car for
Mr. Gostomski's use and (ii) $3,987 contributed by the Company to
Mr. Gostomski's 401(k) plan.

(l) Consists of (i) $8,601 paid by the Company to lease a car for
Mr. Cavalieri's use and (ii) $1,929 contributed by the Company to
Mr. Cavalieri's 401(k) plan account and (iii) $5,402 contributed by the
Company to Mr. Cavalieri's SERP account.

(m) Consists of (i) $7,308 paid by the Company to lease a car for
Mr. Cavalieri's use and (ii) $5,250 contributed by the Company to
Mr. Cavalieri's 401(k) plan account and (iii) $6,915 contributed by the
Company to Mr. Cavalieri's SERP account.

(n) Consists of (i) $6,305 paid by the Company to lease a car for
Mr. Cavalieri's use and (ii) $4,798 contributed by the Company to
Mr. Cavalieri's 401(k) plan account and (iii) $6,695 contributed by the
Company to Mr. Cavalieri's SERP account.

(o) Consists of (i) $12,083 paid by the Company to lease a car for
Mr. Edwards's use, (ii) $2,094 contributed by the Company to Mr. Edwards'
(401(k) plan account, and (iii) $3,167 contributed by the Company to
Mr. Edwards' SERP account.

(p) Consists of (i) $10,387 paid by the Company to lease a car for
Mr. Edwards's use, (ii) $5,703 contributed by the Company to Mr. Edwards's
401(k) plan account and (iii) $2,129 contributed by the Company to
Mr. Edwards's SERP account.

(q) Consists of (i) $9,439 paid by the Company to lease a car for Mr. Edwards's
use, (ii) $4,302 contributed by the Company to Mr. Edwards' (401(k) plan
account, and (iii) $3,110 contributed by the Company to Mr. Edwards' SERP
account.

(r) Consists of (i) $9,292 paid by the Company to lease a car for Mr. Thomas's
use (ii) $1,943 contributed by the Company to Mr. Thomas's 401(k) Plan
account, and (iii) $5,100 contributed by the Company to Mr. Thomas's SERP
account.

(s) Consists of (i) $8,224 paid by the Company to lease a car for Mr. Thomas's
use (ii) $4,943 contributed by the Company to Mr. Thomas's 401(k) Plan
account and (iii) $4,700 contributed by the Company to Mr. Thomas's SERP
account.

(t) Consists of (i) $9,000 paid by the Company to lease a car for Mr. Thomas's
use (ii) $4,521 contributed by the Company to Mr. Thomas's 401(k) Plan
account and (iii) $4,512 contributed by the Company to Mr. Thomas's SERP
account.

OPTION GRANTS IN LAST FISCAL YEAR

36


No options were granted to any of the Named Executive Officers in fiscal
2002.

AGGREGATED STOCK OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

The following table sets forth the number of exercisable and unexercisable
options and warrants held by each of the Named Executive Officers at March 30,
2002. No securities of the Company or Holdings were acquired upon the exercise
of stock options by the Named Executive Officers. All the numbers in the table
set forth below have been adjusted for Holding's 100 for 1 stock split on
March 4, 2002.

FISCAL YEAR-END OPTION AND WARRANT VALUES



NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AND WARRANTS AT IN-THE-MONEY
FISCAL YEAR-END OPTIONS AND WARRANTS AT
EXERCISABLE/ FISCAL YEAR-END
UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(a)
- ---------------------------------------------------------------------------------------------

Dr. Michael J. Hartnett (b) 725,063/0 $20,471,032/$0
Michael S. Gostomski 0/0 $0/$0
Anthony S. Cavalieri 130,300/0 $323,925/$0
Richard J. Edwards 625,200/0 $1,771,680/$0
Christopher Thomas 31,500/0 $658,790/$0
Edward J. Trainer 0/0 $0/$0


(a) Based upon a per share price of $30.00.

(b) The options and warrants are held directly by Dr. Hartnett and indirectly
through Hartnett Family Investments, L.P. Dr. Hartnett beneficially owns
such options and warrants.

EMPLOYMENT AGREEMENT

The Company entered into an Employment Agreement with its President and Chief
Executive Officer, Dr. Michael J. Hartnett in December 2000. The stated term of
the Employment Agreement will expire December 17, 2005. The Employment Agreement
provides for an initial base salary of $450,000 and provides for a bonus based
upon the Company's EBITDA. Dr. Hartnett is also entitled to receive certain
insurance coverages and other benefits. The Employment Agreement contains a
non-competition undertaking from Dr. Hartnett.

STOCK OPTION PLANS

1998 STOCK OPTION PLAN

Effective, February 18, 1998, Holdings adopted the Roller Bearing Holding
Company, Inc. Stock Option Plan (the "1998 Stock Option Plan"). The terms of the
1998 Stock Option Plan provide for the grant of options to purchase up to
356,934.6 shares of Class A Common Stock to officers and employees of, and
consultants (including members of the board of directors) to, Holdings and its
subsidiaries. Options granted may be either incentive stock options (under
Section 422 of the Internal Revenue Code) or non-qualified stock options. The
1998 Stock Option Plan, which expires on December 31, 2008, is to be governed by
the board of directors of Holdings (the "Holdings Board"), or a committee to
which the Board delegates its responsibilities.

The purpose of the 1998 Stock Option Plan is to provide incentives which
will attract and retain highly competent persons as officers, employees and
directors of, and consultants to, Holdings and its subsidiaries, by providing
them opportunities to acquire shares of Class A Common Stock.

The exercise price of options granted under the 1998 Stock Option Plan
shall be determined by the Board, but in no event less than 100% of the Fair
Market Value (as defined in the Stock Option Plan) of the Class A Common Stock
on the date of grant.

Options granted under the 1998 Stock Option Plan may be exercised during
the period set forth in the agreement pursuant to which the options are granted,
but in no event more than ten years following grant.

37


Incentive stock options granted under the 1998 Stock Option Plan may only
be granted to employees of Holdings and subject to further limitations set forth
in the 1998 Stock Option Plan.

The number of shares of Class A Common Stock for which options may be
granted under the 1998 Stock Option Plan shall be increased, and the number of
shares for which outstanding options shall be exercisable, and the exercise
price thereof, shall be adjusted upon the happening of stock dividends, stock
splits, recapitalizations and certain other capital events regarding Holdings or
the Class A Common Stock. Upon any merger, consolidation or combination of
Holdings where shares of Class A Common Stock are converted into cash securities
or other property, outstanding options shall be converted into the right to
receive upon exercise the consideration as would have been payable in exchange
for the shares of Class A Common Stock underlying such options had such options
been exercised prior to such event.

Options granted under the 1998 Stock Option Plan are not transferable by
the holders thereof except by the laws of descent and distribution.

The Holdings Board has the right to establish such rules and regulations
concerning the 1998 Stock Option Plan, and to make such determinations and
interpretations of the terms thereof as it deems necessary or advisable.

As of August 3, 2002, there were outstanding options to purchase 157,026.5
shares of Class A Common Stock granted under the Stock Option Plan, all of
which were exercisable.

2001 STOCK OPTION PLAN

During fiscal 2002, Holdings adopted the Roller Bearing Holding Company,
Inc. 2001 Stock Option Plan (the "2001 Stock Option Plan"). The terms of the
2001 Stock Option Plan provide for the grant of options to purchase up to
458,269 shares of Class A Common Stock to officers and employees of, and
consultants (including members of the board of directors) to, Holdings and its
subsidiaries. Options granted may be either incentive stock options (under
Section 422 of the Internal Revenue Code) or non-qualified stock options. The
2001 Stock Option Plan, which expires in July, 2011, is to be governed by the
Holdings Board, or a committee to which the Board delegates its
responsibilities.

The purpose of the 2001 Stock Option Plan is to provide incentives which
will attract and retain highly competent persons as officers, employees and
directors of, and consultants to, Holdings and its subsidiaries, by providing
them opportunities to acquire shares of Class A Common Stock.

The exercise price of options granted under the 2001 Stock Option Plan
shall be determined by the Board, but in no event less than 100% of the Fair
Market Value (as defined in the 2001 Stock Option Plan) of the Class A Common
Stock on the date of grant.

Options granted under the 2001 Stock Option Plan may be exercised during
the period set forth in the agreement pursuant to which the options are granted,
but in no event more than ten years following grant.

Incentive stock options granted under the 2001 Stock Option Plan may only
be granted to employees of Holdings and subject to further limitations set forth
in the 2001 Stock Option Plan.

The number of shares of Class A Common Stock for which options may be
granted under the 2001 Stock Option Plan shall be increased, and the number of
shares for which outstanding options shall be exercisable, and the exercise
price thereof, shall be adjusted upon the happening of stock dividends, stock
splits, recapitalizations and certain other capital events regarding Holdings or
the Class A Common Stock. Upon any merger, consolidation or combination of
Holdings where shares of Class A Common Stock are converted into cash securities
or other property, outstanding options shall be converted into the right to
receive upon exercise the consideration as would have been payable in exchange
for the shares of Class A

38


Common Stock underlying such options had such options been exercised prior to
such event.

Options granted under the 2001 Stock Option Plan are not transferable by
the holders thereof except (i) by the laws of descent and distribution, (ii)
transfers to members of any holder's immediate family (which for purposes of the
2001 Stock Option Plan shall be limited to the participant's children,
grandchildren and spouse), (iii) to one or more trusts for the benefit of such
family members, or (iv) to partnerships or limited liability companies in which
such family members and/or trusts are the only partners or members; provided,
that options may be transferred pursuant to sections (ii) through (iv) hereof
only if the option expressly so provides, or as otherwise approved by the CEO or
the board of directors in their discretion.

The Holdings Board has the right to establish such rules and regulations
concerning the 2001 Stock Option Plan, and to make such determinations and
interpretations of the terms thereof as it deems necessary or advisable.

As of August 3, 2002, there were outstanding options to purchase 89,096.5
shares of Class A Common Stock granted under the 2001 Stock Option Plan,
29,401.85 of which were exercisable.

401(K) PLAN

The Company maintains the Roller Bearing Company of America 401(k)
Retirement Plan (the "401(k) Plan"), a plan established pursuant to Section
401(k) of the Internal Revenue Code, for the benefit of its non-union employees.
All non-union employees who have completed six months of service with the
Company are entitled to participate. Subject to various limits, employees are
entitled to defer up to 15% of their annual salary on a pre-tax basis and up to
an additional 10% of their annual salary on an after tax basis. The Company
matches 50% of an employee's pre-tax contribution up to 10% of annual salary.
Effective October 1, 2001 the Company suspended matching contribution to the
401(k) Plan. Employees vest in the Company's contributions ratably over three
years.

SUPPLEMENTAL RETIREMENT PLAN

Effective September 1, 1996, the Company adopted a non-qualified
supplemental retirement plan ("SERP") for a select group of highly compensated
and management employees designated by the Board of Directors of the Company.
The SERP allows eligible employees to elect to defer until termination of their
employment the receipt of up to 25% of their current salary. The Company makes
contributions equal to the lesser of 50% of the deferrals or 3.5% of the
employee's annual salary, which vest in full after three years of service
following the effective date of the SERP. Accounts are paid, either in a lump
sum or installments, upon retirement, death or termination of employment.
Accounts are generally payable from the general assets of the Company although
it is intended that the Company set aside in a "rabbi trust" invested in annuity
contracts amounts necessary to pay benefits. Employees' rights to receive
payments are subject to the rights of the creditors of the Company.

39


COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

In fiscal 2002, there was no compensation committee of the Board of
Directors of Holdings (the "Board"). No member of the Board was involved in an
interlocking relationship or insider participation with respect to the
compensation committee of any other entity.

40


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of August 3, 2002, there were 100 shares of common stock, par value $.01
per share, of the Company outstanding, all of which were owned by Holdings and
pledged by Holdings to the holders of the Discount Debentures. The following
table lists, as of August 3, 2002, all shares of Holdings Class A Common Stock
and Holdings Class B Common Stock beneficially owned by (i) each director of the
Company, (ii) the Named Executive Officers, (iii) each person known by the
Company to beneficially own more than 5% of the outstanding shares of any class
of common stock of Holdings at such date and (iv) all directors and executive
officers of Holdings and the Company as a group (12 persons). As of August 3,
2002, there were 2,475,460.8 shares of Holdings Class A Common Stock and 100
shares of Holdings Class B Common Stock outstanding. Additionally, as of such
date, there were outstanding (a) warrants and options to purchase up to an
additional 693,873.5 shares of Holdings Class A Common Stock, of which options
and warrants to purchase 634,178.85 shares of Holdings Class A Common Stock are
currently exercisable, and (b) shares of Class B Exchangeable Convertible
Participating Preferred Stock of Holdings, convertible into 738,558 share of
Holdings Class A Common Stock, and (c) warrants and options to purchase 549,146
shares of Holdings Class B Common Stock, all of which are currently exercisable.



STOCKHOLDER(a) NUMBER OF SHARES(a) PERCENTAGE OF CLASS
-------------- ------------------- -------------------

Dr. Michael J. Hartnett(b) 755,936(c) 23.39%(d)

Michael S. Gostomski 0 *

Anthony S. Cavalieri 13,030(e) *

Richard J. Edwards 62,520(f) 2.46%

William E. Myers 103,030(g) 2.84%
Two North Lake Avenue
Pasadena, California 91101

William P. Killian 3,001.85(h) *
Unit 1801/1802
888 Boulevard of the Arts
Sarasota, Florida 34236

Kurt Larsen 16,980(i) *
P.O. Box 692547
Park City, Utah 84068

Mitchell Quain 27,310(j) 1.09%
55 East 52nd Street
37th Floor
New York, New York 10055

Robert Anderson 6,470(k) *

Richard Crowell 6,470(l) *

Christopher Thomas 28,150(m) 1.12%

Edward J. Trainer 2,863.4 *

Whitney Acquisition II, Corp. 3,076,050 96.63%
177 Broad Street
Stamford, Connecticut 06901


41




Michael Stone 3,076,050(n) 96.63%
177 Broad Street
Stamford, Connecticut 06901

All directors and officers as a group 4,101,811.25(o) 99.48%
(12 persons)


*Less than 1%

(a) Except where otherwise indicated, (i) shares of common stock are of
Holdings Class A Common Stock (ii) warrants and options are to purchase
shares of Holdings Class A Common Stock and (iii) the address for each
stockholder is c/o the Company at 60 Round Hill Road, P.O. Box 430,
Fairfield, Connecticut 06430. All share numbers have been adjusted for the
100 for 1 stock split effective as of March 4, 2002.
(b) The shares are held directly by Dr. Hartnett and indirectly through
Hartnett Family Investments, L.P. Dr. Hartnett beneficially owns such
shares.
(c) Consists of (i) 100 shares of Holdings Class B Common Stock, (ii) warrants
to purchase up to 549,146 shares of Holdings Class B Common Stock, (iii)
options granted under the 1998 Stock Option Plan to purchase up to 9,250
shares of Holdings Class A Common Stock and (iv) warrants to purchase
166,667 shares of Holdings Class A Common Stock, and (v) 10,000 shares of
Class B Exchangeable Convertible Participating Preferred Stock of Holdings,
which are currently convertible inter alia, into 30,773 shares of Class A
Common Stock.
(d) The 100 shares of Class B Common Stock entitle Dr. Hartnett to 51% of the
voting power of all voting securities of Holdings. See "Item 13. Certain
Relationships and Related Transactions.
(e) Consists of shares of Holdings Class A Common Stock issuable upon exercise
of stock options that are currently exercisable or exercisable within 60
days of August 3, 2002.
(f) Consists of shares of Holdings Class A Common Stock issuable upon exercise
of stock options and warrants that are currently exercisable or exercisable
within 60 days of August 3, 2002.
(g) Consists of shares of Holdings Class A Common Stock issuable upon exercise
of warrants that are currently exercisable.
(h) Consists of shares of Holdings Class A Common Stock issuable upon exercise
of stock options that are currently exercisable or exercisable within 60
days of August 3, 2002.
(i) Includes (i) 6,470 shares of Holdings Class A Common Stock issuable upon
exercise of stock options that are currently exercisable or exercisable
within 60 days of August 3, 2002, (ii) 5,210 shares of Class A Common Stock
held by Kristen Larsen, the wife of Mr. Larsen, which may be deemed to be
owned by Mr. Larsen and (iii) 5,300 shares of Class A Common Stock held by
the Aurora Capital Partners 401(k) Plan for the benefit of Mr. Larsen.
(j) Consists of shares of Holdings Class A Common Stock issuable upon exercise
of stock options and warrants that are currently exercisable or exercisable
within 60 days of August 3, 2002.
(k) Consists of shares of Holdings Class A Common Stock issuable upon exercise
of stock options that are currently exercisable or exercisable within 60
days of August 3, 2002.
(l) Consists of shares of Holdings Class A Common Stock issuable upon exercise
of stock options that are currently exercisable or exercisable within 60
days of August 3, 2002.
(m) Consists of shares of Holdings Class A Common Stock issuable upon exercise
of stock options that are currently exercisable or exercisable within 60
days of August 3, 2002.
(n) Consists of (i) 2,368,265 shares of Class A Common Stock and (ii) 230,000
shares of Class B Exchangeable Convertible Participating Preferred Stock of
Holdings, which are currently convertible, inter alia into 707,785 shares
of Class A Common Stock owned by Whitney Acquisition II, Corp. and Whitney
V, L.P. To the extent that the stockholder participates in the process to
vote or to dispose of any shares or warrants held by Whitney Acquisition
II, Corp., he may be deemed under such circumstances for the purposes of
Section 13 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to be the beneficial owner of such securities. Mr. Stone
disclaims beneficial ownership of securities held by Whitney Acquisition
II, Corp.

42


(o) Includes (i) 432,368.85 shares of Holdings Class A Common Stock issuable
upon exercise of stock options and warrants that are currently exercisable
or exercisable within 60 days of August 3, 2002 and 549,156 shares of
Holdings Class B Common Stock issuable upon exercise of currently
exercisable options and warrants and (ii) the shares of Class A Common
Stock held by Whitney Acquisition II, Corp. and (iii) 738,558 shares of
Holdings Class A Common Stock issuable to Whitney V, L.P. upon conversion
of its shares of Class B Exchangeable Convertable Participating Preferred
Stock which may be deemed to be beneficially owned by Mr. Stone. Mr. Stone
disclaims beneficial ownership of securities held by Whitney Acquisition
II, Corp.

43


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Set forth below is a summary of certain agreements and arrangements, as well as
other transactions between the Company and related parties which have taken
place during the Company's most recent fiscal year.

HARTNETT LOAN

In connection with the Recapitalization, Holdings loaned Dr. Michael J.
Hartnett, the Company's President and Chief Executive Officer, $500,000 to
purchase shares of capital stock of Holdings. The loan does not bear interest
and is due on the earlier of (i) June 23, 2007, (ii) the consummation of a sale
of Holdings or (iii) the consummation of an initial public offering of Holdings.
The loan is secured by a pledge of Dr. Hartnett's shares in Holdings.

STOCK OPTION PLAN

Effective July 2001, Holdings adopted the 2001 Stock Option Plan and issued
options thereunder to certain of its directors, officers and employees. See
"Item 11. Executive Compensation".

SALE OF CLASS B EXCHANGEABLE CONVERTIBLE PREFERRED STOCK

During July 2002, Whitney, a principal Stockholder in Holdings, and Dr.
Michael J. Hartnett, the President, Chief Executive Officer and Chairman of
the Board of the Company, purchased an aggregate of 240,000 shares of Class B
Exchangeable Convertible Participating Preferred Stock of Holdings for an
aggregate of $24,000,000. Whitney acquired 230,000 shares for $23,000,000 and
Dr. Hartnett acquired 10,000 shares for $1,000,000. In connection with the
sale of the shares, Whitney received a $750,000 fee.

The proceeds from the sale and certain cash on hand at the Company were used
to repurchase approximately $30,400,000 in principal amount at maturity of
the Discount Debentures. This repurchase satisfied Holdings' obligation to
make a scheduled redemption payment relating to the Discount Debentures in
December 2002.

44


PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT, SCHEDULES AND REPORTS ON FORM 8-K



Consolidated Statement of Operations for Each of the Fiscal Years
in the Three-Year Period Ended March 30, 2002 Part II Item 8

Consolidated Balance Sheet at March 30, 2002 and March 31, 2001 Part II Item 8

Consolidated Statement of Cash Flows for Each of the Fiscal Years
in the Three-Year Period Ended March 30, 2002 Part II Item 8

Consolidated Statement of Stockholder's (Deficit) Equity and
Comprehensive Income for Each of the Fiscal Years
in the Three-Year Period Ended March 30, 2002 Part II Item 8

Notes to Consolidated Financial Statements Part II Item 8

Report of Independent Auditors Part II Item 8

Schedule II Valuation and Qualifying Accounts Part II Item 8


45


ITEM 21. EXHIBITS AND FINANCIAL SCHEDULES

(a) Exhibits.

EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT

3.1* Amended and Restated Certificate of Incorporation, dated
June 23, 1997, of Roller Bearing Company of America, Inc.
("RBCA").

3.2** Bylaws of RBCA.

3.2(a)*** Amendment to the Bylaws of RBCA.

3.3# Amended and Restated Certificate of Incorporation dated
July 29, 2002, of Holdings.

3.4# Bylaws of Holdings.

4.1** Indenture, dated as of June 15, 1997 between RBCA and the
United States Trust Company of New York ("Trustee") with
forms of Outstanding Note and Exchange Note.

4.1(a)** Supplemental Indenture, dated as of August 8, 1997 by and
between Bremen and the Trustee.

4.2** Global Note Issued to Depository Trust Co., duly
authenticated by RBCA and the Trustee.

4.3** Registration Rights Agreement dated June 17, 1997 between
RBCA, the Subsidiary Guarantors named therein and CSFB.

4.4*** Stock Option Plan of Holdings, dated as of February 18, 1998
with form of agreement.

4.5*** Form of Stock Transfer Restriction Agreement between
Holdings and certain of its stockholders.

4.6*** Form of Amended and Restated Warrant of Holdings.

4.7# 2001 Stock Option Plan of Holdings, dated July, 2001, with
form of agreement.

10.1** Purchase Agreement, dated June 17, 1997 among RBCA, the
Subsidiary Guarantors named therein and the CSFB

10.2** Redemption and Warrant Purchase Agreement by and among
Holdings, Certain Stockholders of Holdings, and Michael J.
Hartnett, as purchaser representative, dated as of May 20,
1997, as amended by that certain Amendment No. 1, dated as
of June 23, 1997.

10.3** Credit Agreement dated as of June 23, 1997, among RBCA, the
Lenders named therein and CSFB, as Administrative Agent.

10.4** Pledge Agreement dated as of June 23, 1997, among RBCA, each
Subsidiary of RBCA named therein and CSFB.

10.5** Security Agreement dated as of June 23, 1997, among RBCA,
each Subsidiary of RBCA named therein and CSFB.

10.6** Guarantee Agreement dated as of June 23, 1997, among each of
the subsidiaries named therein of RBCA and CSFB.

10.7** Asset Purchase Agreement by and among BFM Aerospace
Corporation, Ground Support, Inc., RBC Transport Dynamics
Corporation and Holdings, dated as of October 26, 1992.

46


EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT

10.8** Asset Purchase Agreement by and among BFM Aerospace
Corporation, BFM Transport Dynamics Corporation, RBC
Transport Dynamics Corporation and Holdings, dated as of
October 26, 1992.

10.9** Agreement and Plan of Reorganization among RBCA, Roller
Bearing Acquisition Company, Inc., Holdings and the
Stockholders of RBCA, dated March 31, 1992.

10.10** Agreement of Merger between Roller Bearing Acquisition
Company, Inc. and RBCA, dated March 31, 1992.

10.11** Asset Sale Agreement by and between IMO Industries Inc. and
RBCA, dated as of May 10, 1993.

10.12** Asset Purchase Agreement by and among BPP Acquisition
Corporation, Beaver Precision Products, Inc., RBCA, and
Lloyd J. Baretz, dated as of October 18, 1998.

10.13** Asset Purchase Agreement By and Among SKF USA Inc., Nice and
RBCA, dated as of February 28, 1997.

10.14** Lease between General Sullivan Group, Inc. and RBC Bearings,
dated July 11, 1995, for West Trenton, New Jersey premises.

10.15** Lease between Industrial Development Group and RBCA, dated
March 12, 1998 for Waterbury, Connecticut premises.

10.16** Letter of Credit Agreement, dated as of September 1, 1994,
between RBCA and Heller Financial, Inc. ("Heller").

10.17** Termination, Release and Enhancement Letter of Credit
Documents Continuation Agreement dated June 23, 1997, by and
between Heller, RBCA and ITB.

10.18** Executed counterpart of the Pledge and Security Agreement,
dated as of September 1, 1994, between RBCA, Heller and the
Trustee.

10.19** Loan Agreement, dated as of September 1, 1994, between the
South Carolina Job - Economic Development Authority, ("the
Authority") and RBCA with respect to the Series 1994A Bonds.

10.20*** Agreement between Bremen, Indiana Plant of SKF USA, Inc and
International Union Automobile, Aerospace and Agricultural
Workers of America, U.A.W., Local 1368, effective July 20,
1998.

10.21** Trust Indenture, dated as of September 1, 1994, between the
Authority and Mark Twain Bank, ("Bond Trustee"), with
respect to the Series 1994A Bonds.

10.22** Loan Agreement, dated as of September 1, 1994, between the
Authority and RBCA, with respect to the Series 1994B Bonds.

10.23** Trust Indenture, dated as of September 1, 1994, between the
Authority and Bond Trustee, with respect to the Series 1994B
Bonds.

47


EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT

10.24** Tax Sharing Agreement effective as of June 23, 1997, by and
among Holdings and RBCA, ITB, LPP and Nice.

10.25** Asset Purchase Agreement by and among SKF USA Inc., Bremen
and RBCA dated as of August 8, 1997.

10.26*** Real Estate Purchase Agreement for the Walterboro, South
Carolina facility, dated March 27, 1998 by and between
Linear Precision Products, Inc., RBCA and Dana Corporation.

10.27*** Amendment to the Letter of Credit Agreement, dated as of
June 23, 1998 between RBCA and Heller Financial Inc.

10.28*** Supplement No. 1 to Guarantee Agreement, dated as of August
8, 1997, by and between Bremen and CSFB.

10.29*** Supplement No. 1 to Indemnity, Subrogation and Contribution
Agreement, dated as of August 8, 1997, by and between Bremen
and CSFB.

10.30*** Supplement No. 1 to Security Agreement, dated as of August
8, 1997, by and between Bremen and CSFB.

10.31*** Supplement No. 1 to Pledge Agreement, dated as of August 8,
1997, by and between Bremen and CSFB.

10.32*** Agreement of Lease, dated as of November 1, 1964, between
Bremen, Inc. and SKF Industries, Inc. with Assignment and
Agreement of Lease, dated August 8, 1997, between SKF USA,
Inc. and Bremen Bearings.

10.33*** Asset Purchase Agreement, dated as of June 3, 1998, by and
among Miller Acquisition Corporation, Miller Bearing Company
and the Shareholders of Miller Bearing Corporation.

10.34*** Supplement No. 2 to Guarantee Agreement dated as of June 3,
1998, by and between Miller Acquisition Corporation and
CSFB, as Collateral Agent.

48


EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT

10.35*** Supplement No. 2 to Indemnity, Subrogation and Contribution
Agreement, dated as of June 3, 1998, by and between Miller
Acquisition Corporation and CSFB.

10.36*** Supplement No. 2 to Security Agreement, dated as of June 3,
1998, by and between Miller Acquisition Corporation and
CSFB.

10.37*** Supplement No. 2 to Pledge Agreement, dated as of June 3,
1998, by and between Miller Acquisition Corporation and
CSFB.

10.38**** Asset Purchase Agreement By and Among SKF USA Inc., Tyson
Bearing Company, Inc. and Roller Bearing Company of America,
Inc. dated as of June 11, 1999.

10.39+++ Loan Agreement, dated as of April 1, 1999, by and between
California Infrastructure and Economic Development Bank and
Roller Bearing Company of America, Inc.

10.40+++ Indenture Of Trust, dated as of April 1, 1999, between
California Infrastructure and Economic Development Bank and
U.S. Bank Trust National Association, as Trustee

10.41+++ Remarketing Agreement, dated as of April 1, 1999, by and
between The Chapman Company and Roller Bearing Company of
America, Inc.

10.42+++ Tax Regulatory Agreement, dated as of April 1, 1999, by and
among California Infrastructure and Economic Development
Bank, U.S. Bank Trust National Association, as Trustee, and
Roller Bearing Company of America, Inc.

10.43++ Asset And Stock Purchase Agreement, dated as of December 17,
1999, by and among Schaublin France SA, Schaublin USA Inc.,
Schaublin SA, And RBC Schaublin SA and RBC Schaublin SA.

10.44++ Lease Agreement, dated as of December 17, 1999, between
Schaublin SA and RBC Schaublin SA.

10.45++ Credit Agreement, dated as of December 27, 1999, between RBC
Schaublin S.A. Delemont and Credit Suisse.

10.46# Asset Purchase Agreement, dated September 28, 2001, by and
between OBB Acquisition Corp. and Congress Financial
Corporation (Southwest)

10.47# Asset Purchase Agreement, dated September 28, 2001, by and
between OBB Acquisition Corp. and Prime Financial
Corporation

10.48# Credit Agreement, dated May 30, 2002, by and among the
Company, certain of its domestic subsidiaries, General
Electric Capital Corporation, as agent and lender and GECC
Capital Markets Group, Inc.

10.49# Security Agreement, dated May 30, 2002, by and among the
Company, certain of its domestic subsidiaries and General
Electric Capital Corporation, as agent for Lenders.

10.50# Pledge Agreement, dated May 30, 2002, by and among the
Company, certain of its domestic subsidiaries and General
Electric Capital Corporation, as agent for Lenders.

49


EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT

10.51# Employment Agreement, dated December 18, 2002, between
RBCA and Dr. Michael J. Hartnett.

10.52# Amended and Restated Stockholders Agreement, dated
July 29, 2002, by and among Holdings, Dr. Michael J.
Hartnett, Hartnett Family Investments, L.P., Whitney RBHC
Investor, LLC and Whitney V, L.P.

10.53# Amended and Restated Management Services Agreement, dated
July 29, 2002, by and among the Company and Whitney & Co.

10.54# Preferred Stock Purchase Agreement, dated July 25, 2002,
by and among RBCA, Holdings, Dr. Michael J. Hartnett and
Whitney V, L.P.

16.2** Letter of Ernst & Young LLP regarding Change in Certifying
Accountant.

21.*** Subsidiaries of RBCA.


*Incorporated by reference to the Registration Statement on Form S-4,
filed with the Securities and Exchange Commission by RBCA
and its subsidiaries on August 8, 1997.
**Incorporated by reference to Amendment No. 1 to the Registration
Statement on Form S-4, filed with the Securities and
Exchange Commission by RBCA and its subsidiaries on October
31, 1997.
***Incorporated by reference to the Company's Annual Report on Form 10-K
for the year ended April 3, 1999.
****Incorporated by reference to the Company's Current Report on Form 8-K,
dated June 11, 1999.
# Filed herewith.
+ Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended June 26, 1999.

++ Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended December 25, 1999.

50


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

ROLLER BEARING COMPANY OF AMERICA, INC.

By: /s/ Michael J. Hartnett
---------------------------------
Michael J. Hartnett
President and Chief Executive Officer
Chairman of the Board of Directors
(Principal Executive Officer)


By: /s/ Anthony S. Cavalieri
---------------------------------
Anthony S. Cavalieri
Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)

Pursuant to the requirement of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

August 6, 2002 By: /s/ Michael J. Hartnett
-----------------------------------------
Michael J. Hartnett
Chairman of the Board of Directors,
President and Chief Executive Officer

August 6, 2002 By: /s/ Kurt B. Larsen
-----------------------------------------
Kurt B. Larsen
Director

August 6, 2002 By: /s/ William E. Myers
-----------------------------------------
William E. Myers, Jr.
Director

August 6, 2002 By: /s/ Mitchell I. Quain
-----------------------------------------
Mitchell I. Quain
Director

August 6, 2002 By: /s/ Robert Anderson
-----------------------------------------
Robert Anderson
Director

August 6, 2002 By: /s/ Richard R. Crowell
-----------------------------------------
Richard R. Crowell
Director

August 6, 2002 By: /s/ Michael J. Stone
-----------------------------------------
Michael J. Stone
Director

August 6, 2002 By: /s/ William P. Killian
-----------------------------------------
William P. Killian
Director

51


SCHEDULE II
Valuation and Qualifying Accounts
(dollars in thousands)






For the year ended March 30, 2002

Column A Column B Column C Column D Column E
- ----------- ---------------- ------------------------ ---------------- ------------------
Description Balance at Balance
beginning of at end of
period Additions Deductions period
- ----------- ---------------- ------------------------ ---------------- ------------------


Charged to Charged to
Costs and other
Expenses accounts
- ----------- --------- ------------- ------------- ---------------- --------------
Bad Debt Reserve $257 $364 $ - $ - $621

- --------------------------------------------------------------------------------------------------------

For the year ended March 31, 2001


Column A Column B Column C Column D Column E
- ----------- ---------------- ------------------------ ---------------- ------------------
Description Balance at Balance
beginning of at end of
period Additions Deductions period
- ----------- ---------------- ------------------------ ---------------- ------------------


Charged to Charged to
Costs and other
Expenses accounts
- ----------- --------- ------------- ------------- ---------------- -----------------
Bad Debt Reserve $279 $ $ - $ 22 $257

- --------------------------------------------------------------------------------------------------------

For the year ended April 1, 2000


Column A Column B Column C Column D Column E
- ----------- ---------------- ------------------------ ---------------- ------------------
Description Balance at Balance
beginning of at end of
period Additions Deductions period
- ----------- ---------------- ------------------------ ---------------- ------------------


Charged to Charged to
Costs and other
Expenses accounts
- ----------- --------- ------------- ----------- ---------------- --------------
Bad Debt Reserve $168 $117 $ -- $ 6 $279


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